Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Relators’ daughter was being treated by counselors at Arbour Counseling Services in Lawrence, Massachusetts when she was prescribed a medication for her purported bipolar disorder. The daughter experienced an adverse reaction to the drug and eventually suffered a fatal seizure. Relators filed this action against Defendant Universal Health Services, Inc., Arbour’s owner and operator, under both the federal and Massachusetts False Claims Acts, alleging that Arbour, in submitting reimbursement claims to the state Medicaid agency for services rendered by the staff members who treated their daughter, fraudulently misrepresented that those staff members were properly licensed and supervised, as required by law. Specifically, Relators alleged that Arbour’s alleged noncompliance with supervision and licensure requirements rendered its reimbursement claims actionably false. The district four dismissed the complaint for failure to state a claim. The First Circuit reversed the dismissal of the complaint with one limited exception, holding (1) a healthcare provider’s noncompliance with conditions of payment is sufficient to establish the falsity of a claim for reimbursement; and (2) Relators appropriately stated a claim with particularity under the False Claims Act. View "United States, ex rel. Escobar v. Universal Health Servs., Inc." on Justia Law

Kenneth Jones filed this qui tam action pursuant to the False Claims Act alleging that, in submitting a grant application to the National Institute on Aging (NIA), Dr. Ronald Killiany and Dr. Marilyn Albert (together, Defendants) knowingly made false statements and knowingly falsified certain scientific data, which influenced the NIA’s decision to award more than $12 million in federal funds to Massachusetts General Hospital and Brigham and Women’s Hospital. The district court initially granted summary judgment for Defendants. The First Circuit vacated that order and remanded the case for trial. A jury found for Defendants. The First Circuit affirmed, holding (1) Jones failed to preserve his argument that he was entitled to judgment as a matter of law, but even if he had, there was sufficient evidence for the jury to find in favor of Defendants; and (2) the district court did not err in denying Defendants' motion for a new trial. View "United States v. Brigham & Women's Hosp." on Justia Law

In 1995, a number of government agencies opened investigations into the dealings of Fresenius Medical Care Holdings, Inc. with various federally funded health-care programs. In 2000, Fresenius entered into a series of criminal plea and civil settlement agreements with the government. The civil settlement agreements released several claims against Fresenius, including claims made under the False Claims Act (FCA). Those agreements eschewed any tax characterization. Thereafter, the parties began disputing the tax treatment of the balance of the civil settlements. Fresenius commenced a tax refund action for the purpose of determining the deductibility of the amount in dispute. The district court concluded that where the parties had eschewed any tax characterization, the critical consideration in determining deductibility was the extent to which the disputed payment was compensatory as opposed to punitive. At trial, the court’s jury instructions embodied this conclusion. The jury found that a large chunk of the settlement was deductible. The court accepted this finding and ordered tax refunds totaling more than $50,000,000. The First Circuit affirmed, holding that, “in determining the tax treatment of an FCA civil settlement, a court may consider factors beyond the mere presence or absence of a tax characterization agreement between the government and the settling party.” View "Fresenius Med. Care Holdings, Inc. v. United States" on Justia Law

Santana-Concepcion underwent exploratory brain surgery around a “symptomatic arachnoid cyst” during which a neurosurgeon placed a shunt to relieve pressure created by the cyst. Santana-Concepcion, along with her husband and four children, later filed suit against the neurosurgeon and the hospital at which the surgery was performed, alleging medical malpractice and lack of informed consent. The district court granted summary judgment to Defendants, holding (1) the claims of Santana-Concepcion and her adult children were time-barred; (2) the medical malpractice claim of Santana-Concepcion’s minor children was foreclosed by the “error of judgment” defense; and (3) the informed consent claim of the minor children failed on the element of causation. The First Circuit affirmed, holding that the district court properly granted summary judgment on (1) the medical malpractice claims of Santana-Concepcion and her adult children and the informed consent claims of the adult children, as they were not filed within the limitations period; (2) the minor plaintiffs’ medical malpractice claims, as they were unable to generate a genuine issue of material fact as to the application of the “error of judgment” defense; and (3) the informed consent claims of the minor plaintiffs for lack of causation. View "Santana-Concepcion v. Centro Medico del Turabo, Inc." on Justia Law

Plaintiff sought insurance coverage for gastric lap band surgery. Defendant, a health-care insurer that covered Plaintiff by virtue of Plaintiff’s husband’s employment with the federal government, refused to cover the full cost of the surgery. Plaintiff brought tort and breach of contract claims against Defendant in the Puerto Rico Court of First Instance. Defendant removed the action to the federal district court, asserting, inter alia, that the Federal Employees Health Benefits Act of 1959 (FEHBA) completely preempted Plaintiff’s local-law claims, thus conferring original jurisdiction on the federal court. Defendant then moved to dismiss the case, arguing that the FEHBA demanded exhaustion of administrative remedies. Plaintiff, in the meantime, requested that the district court remand the case to the Court of First Instance. The district court (1) denied Plaintiff’s motion to remand, holding that the FEHBA completely preempted Plaintiff’s claims and, thus, federal jurisdiction attached; and (2) dismissed the action for Plaintiff’s failure to exhaust administrative remedies. The First Circuit Court of Appeals reversed the district court’s judgment of dismissal and its order denying remand, holding that the court erred in concluding that the FEHBA afforded complete preemption. View "Lopez-Munoz v. Triple-S Salud, Inc. " on Justia Law

Marilyn Davidson, an intellectually disabled individual, was in the care of the Massachusetts Department of Developmental Services (DDS) most of her life. In 1985, Marilyn was transferred to the Fernald Developmental Center, an intermediate care facility (ICF). In 2003, the Commonwealth of Massachusetts decided to close Fernald. DDS planned to transfer Marilyn to the Wrentham Developmental Center, another ICF. Plaintiffs, Marilyn’s guardians, filed a complaint in the federal district court, alleging that Marilyn’s transfer violated the federal Medicaid statute and various implementing regulations. Plaintiffs also sought a motion for a preliminary injunction. The district court denied the injunction and held that the statutory and regulatory provisions cited in the complaint did not create a private right of action. Marilyn was subsequently transferred to Wrentham, and Fernald was closed. The First Circuit Court of Appeals remanded the case to the district court with instructions to dismiss Plaintiffs’ complaint, holding (1) Plaintiffs’ claim for damages was barred by the Commonwealth’s Eleventh Amendment immunity from suit for damages in federal court; and (2) Plaintiffs’ claims for declaratory and injunctive relief were moot. View "Davidson v. Howe" on Justia Law

Appellant, on behalf of the United States, brought a qui tam action under the False Claims Act (FCA) against Guidance Corporation and Boston Scientific Corporation (BSC), alleging they engaged in a kickback scheme to promote the sale and use of their cardiac rhythm management devices. However, a former employee of BSC had previously filed a qui tam action against BSC, which was later dismissed, alleging similar claims. The district court dismissed Appellant's complaint for lack of subject matter jurisdiction on the basis that the earlier-filed complaint barred consideration of Appellant's complaint under the first-to-file rule of the FCA, 31 U.S.C. 3730(b)(5). Appellant appealed, arguing that the earlier-filed complaint could not serve as a preclusive first-filed complaint to trigger the first-to-file bar because it did not meet the heightened pleading standard under Fed. R. Civ. P. 9(b). The First Circuit Court of Appeals affirmed, holding that section 3730(b)(5) does not require the first-filed complaint to meet the heightened pleading standards of Rule 9(b) to bar a later-filed complaint. View "United States ex rel. Heineman-Guta v. Guidant Corp." on Justia Law

Plaintiff filed a disparate screening claim in the U.S. district court alleging that she arrived at the emergency department of Hospital with an emergency medical condition as defined by the Emergency Medical Treatment and Active Labor Act (EMTALA), that Hospital failed to screen her appropriately, and that Hospital failed to stabilize or properly transfer her before release, thus violating the requirements of EMTALA. The district court dismissed Plaintiff's complaint as stating facts limited to a medical malpractice claim and holding that EMTALA does not create a federal cause of action for medical malpractice. The First Circuit Court of Appeals vacated the district court's dismissal, holding that Plaintiff presented sufficient evidence to show that a trialworthy issue existed as to her disparate screening claim. Remanded for trial on Plaintiff's EMTALA claim as well as her Puerto Rico law claims. View "Cruz-Vazquez v. Mennonite Gen. Hosp., Inc." on Justia Law

Relator brought a federal False Claims Act (FCA) suit against Millennium Laboratories of California (Millennium) and several physicians, alleging that Millennium encouraged physicians to bill the government multiple times for single drug tests and to perform excessive, medically unnecessary original and confirmation tests. Prior to the filing of the complaint, Millennium filed a suit against Relator's employer, Calloway Laboratories (Calloway), in California state court. Millennium attached emails from from Calloway employees to third parties suggesting fraudulent activity in Millennium's billing practices. The district court dismissed Relator's complaint, finding that the prior disclosure constituted a jurisdictional bar to Relator's suit. The First Circuit Court of Appeals held that the court erred in dismissing all of Relator's claims when only some of them had been disclosed by way of being substantially similar to the information contained in Millennium's prior California suit. Remanded for the district court's consideration of whether Relator's remaining FCA claim was sufficiently pled. View "United States ex rel. Estate of Cunningham v. Millennium Labs. of Cal., Inc." on Justia Law

Kaiser Foundation Health Plan and Kaiser Foundation Hospitals (together, Kaiser), Aetna, Inc. and Guardian Life Insurance Company (Guardian) filed a coordinated complaint against Pfizer, Inc. and Warner-Lambert Company (together, Pfizer). The coordinated plaintiffs asserted violations of, inter alia, the Racketeer Influenced and Corrupt Organizations Act (RICO) and the California Unfair Competition Law (UCL). Ultimately, Kaiser prevailed, and Aetna and Guardian's claims were dismissed on summary judgment. After a jury trial, the district court entered judgment in favor of Kaiser on its RICO and state UCL claims. The court subsequently denied Pfizer's motion for a new trial or, in the alternative, to alter or amend judgment. The court awarded Kaiser damages and ordered Defendants to pay restitution. Finding no error, the First Circuit Court of Appeals affirmed the verdicts for Kaiser. View "Kaiser Found. Health Plan v. Pfizer, Inc." on Justia Law