FILED NOT FOR PUBLICATION JAN 17 2023 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANI GHARIBIAN, Relator; ex rel United No. 21-56253 States of America, D.C. No. Plaintiff-Appellant, 2:16-cv-04777-MCS-PLA
and MEMORANDUM* UNITED STATES OF AMERICA; et al.,
Plaintiffs,
v.
VALLEY CAMPUS PHARMACY, INC., DBA TNH Advanced Speciality Pharmacy; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California Mark C. Scarsi, District Judge, Presiding
Argued and Submitted November 17, 2022 Pasadena, California
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: TASHIMA and NGUYEN, Circuit Judges, and FITZWATER,** District Judge.
Appellant Ani Gharibian (“Gharibian”) appeals the dismissal under Federal
Rule of Civil Procedure 12(b)(6) of her qui tam action alleging False Claims Act
violations and related state-law claims. We have jurisdiction under 28 U.S.C. § 1291,
and we affirm.
Gharibian, as a qui tam relator, sued Defendants-Appellees Valley Campus
Pharmacy, Inc., d/b/a TNH Advanced Specialty Pharmacy (“TNH”), Diplomat
Pharmacy, Inc., and OpumRx, Inc. (collectively, “Appellees”), alleging that they had
engaged in a fraudulent course of conduct that violated the federal False Claims Act,
31 U.S.C. §§ 3729-3733 (“FCA”), and various analogous state laws. In sum,
Gharibian, a former TNH employee, alleged that Appellees had instructed their
employees to misrepresent who their employers were and to falsify patient records in
order to procure prior authorizations for prescription medications from insurance
providers. After dismissing Gharibian’s complaint and granting her leave to amend,
the district court dismissed Gharibian’s second amended complaint (“SAC”) for
failure to state a claim. Gharibian appeals the judgment dismissing her SAC.
** The Honorable Sidney A. Fitzwater, United States District Judge for the Northern District of Texas, sitting by designation. 2 The district court dismissed Gharibian’s claims related to Appellees’ instructing
their employees to misrepresent who their employers were on the grounds that the
SAC did not adequately plead materiality and that most of the alleged
misrepresentations did not involve claims made to government payors. The district
court dismissed the allegations pertaining to falsifying patient records on the ground
that they lacked specificity.
We review de novo the grant of a motion to dismiss for failure to state a claim.
E.g., Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). We presume that
all factual allegations in the operative complaint are true, and we view them in the
light most favorable to the appellant, but we disregard conclusory allegations. Id. “In
reviewing the dismissal of a complaint, we inquire whether the complaint’s factual
allegations, together with all reasonable inferences, state a plausible claim for relief.”
United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054
(9th Cir. 2011). “We can affirm a 12(b)(6) dismissal on any ground supported by the
record, even if the district court did not rely on the ground.” United States v.
Corinthian Colls., 655 F.3d 984, 992 (9th Cir. 2011) (internal quotation marks
omitted).
“[A] plaintiff must plead FCA claims with particularity under Federal Rule of
Civil Procedure 9(b).” Winter ex rel. United States v. Gardens Reg’l Hosp. & Med.
3 Ctr, Inc., 953 F.3d 1108, 1116 (9th Cir. 2020) (internal quotation marks omitted). “In
alleging fraud or mistake, Rule 9(b) requires a party to state with particularity the
circumstances constituting fraud or mistake, including the who, what, when, where,
and how of the misconduct charged.” Ebeid ex rel. United States v. Lungwitz, 616
F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and alteration omitted).
In the context of the FCA, “it is sufficient to allege particular details of a
scheme to submit false claims paired with reliable indicia that lead to a strong
inference that claims were actually submitted.” Id. at 998-99 (internal quotation
marks omitted). “Rule 9(b) does not require a relator to allege the details of every
false claim submitted to the federal government for reimbursement.” United States
ex rel. Solis v. Millennium Pharms., Inc., 885 F.3d 623, 628-29 (9th Cir. 2018). But
allegations made on the basis of “information and belief,” such as those in the instant
SAC, must also state the factual basis for the belief. Neubronner v. Milken, 6 F.3d
666, 672 (9th Cir. 1993).
The FCA is “intended to reach all types of fraud, without qualification, that
might result in financial loss to the Government.” United States v. Neifert-White Co.,
390 U.S. 228, 232 (1968) (emphasis added). The elements of an FCA claim are “(1)
a false statement or fraudulent course of conduct, (2) made with scienter, (3) that was
material, causing (4) the government to pay out money or forfeit moneys due.” United
4 States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166, 1174 (9th Cir. 2006)
(emphasis added). Accordingly, to plead a plausible FCA claim and a claim under
state-law analogues, a complaint must adequately allege that the claim was made to
a government payor.
1. With respect to all but two allegations, the SAC does not adequately plead
that a false claim was made to a government payor. The inadequate parts of the SAC
are insufficient either because they specifically identify a private insurer—for
instance, “‘Anthony’ called Express Scripts for Anthem,” or “[i]n an August 1, 2016
phone call to BlueCross Blue Shield of Michigan”—or because they are
conclusory—for example, asserting that Appellees “regularly made false and
fraudulent statements to government and private insurers.” The former category of
allegations fails to plead a government payor. The latter category is based on
“information and belief” and does not adequately state the factual basis for the belief.
For these reasons, all but two allegations of the SAC fail to plead a plausible claim for
relief.
2. The remaining two allegations are also insufficient, but for a different
reason: they fail to adequately allege materiality. Materiality, like the existence of a
government payor, is an essential element of an FCA claim. Hendow, 461 F.3d at
1174. “Under the [FCA], the misrepresentation must be material to the other party’s
5 course of action.” Universal Health Servs., Inc. v. United States ex rel. Escobar, 579
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FILED NOT FOR PUBLICATION JAN 17 2023 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANI GHARIBIAN, Relator; ex rel United No. 21-56253 States of America, D.C. No. Plaintiff-Appellant, 2:16-cv-04777-MCS-PLA
and MEMORANDUM* UNITED STATES OF AMERICA; et al.,
Plaintiffs,
v.
VALLEY CAMPUS PHARMACY, INC., DBA TNH Advanced Speciality Pharmacy; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California Mark C. Scarsi, District Judge, Presiding
Argued and Submitted November 17, 2022 Pasadena, California
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: TASHIMA and NGUYEN, Circuit Judges, and FITZWATER,** District Judge.
Appellant Ani Gharibian (“Gharibian”) appeals the dismissal under Federal
Rule of Civil Procedure 12(b)(6) of her qui tam action alleging False Claims Act
violations and related state-law claims. We have jurisdiction under 28 U.S.C. § 1291,
and we affirm.
Gharibian, as a qui tam relator, sued Defendants-Appellees Valley Campus
Pharmacy, Inc., d/b/a TNH Advanced Specialty Pharmacy (“TNH”), Diplomat
Pharmacy, Inc., and OpumRx, Inc. (collectively, “Appellees”), alleging that they had
engaged in a fraudulent course of conduct that violated the federal False Claims Act,
31 U.S.C. §§ 3729-3733 (“FCA”), and various analogous state laws. In sum,
Gharibian, a former TNH employee, alleged that Appellees had instructed their
employees to misrepresent who their employers were and to falsify patient records in
order to procure prior authorizations for prescription medications from insurance
providers. After dismissing Gharibian’s complaint and granting her leave to amend,
the district court dismissed Gharibian’s second amended complaint (“SAC”) for
failure to state a claim. Gharibian appeals the judgment dismissing her SAC.
** The Honorable Sidney A. Fitzwater, United States District Judge for the Northern District of Texas, sitting by designation. 2 The district court dismissed Gharibian’s claims related to Appellees’ instructing
their employees to misrepresent who their employers were on the grounds that the
SAC did not adequately plead materiality and that most of the alleged
misrepresentations did not involve claims made to government payors. The district
court dismissed the allegations pertaining to falsifying patient records on the ground
that they lacked specificity.
We review de novo the grant of a motion to dismiss for failure to state a claim.
E.g., Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). We presume that
all factual allegations in the operative complaint are true, and we view them in the
light most favorable to the appellant, but we disregard conclusory allegations. Id. “In
reviewing the dismissal of a complaint, we inquire whether the complaint’s factual
allegations, together with all reasonable inferences, state a plausible claim for relief.”
United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054
(9th Cir. 2011). “We can affirm a 12(b)(6) dismissal on any ground supported by the
record, even if the district court did not rely on the ground.” United States v.
Corinthian Colls., 655 F.3d 984, 992 (9th Cir. 2011) (internal quotation marks
omitted).
“[A] plaintiff must plead FCA claims with particularity under Federal Rule of
Civil Procedure 9(b).” Winter ex rel. United States v. Gardens Reg’l Hosp. & Med.
3 Ctr, Inc., 953 F.3d 1108, 1116 (9th Cir. 2020) (internal quotation marks omitted). “In
alleging fraud or mistake, Rule 9(b) requires a party to state with particularity the
circumstances constituting fraud or mistake, including the who, what, when, where,
and how of the misconduct charged.” Ebeid ex rel. United States v. Lungwitz, 616
F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and alteration omitted).
In the context of the FCA, “it is sufficient to allege particular details of a
scheme to submit false claims paired with reliable indicia that lead to a strong
inference that claims were actually submitted.” Id. at 998-99 (internal quotation
marks omitted). “Rule 9(b) does not require a relator to allege the details of every
false claim submitted to the federal government for reimbursement.” United States
ex rel. Solis v. Millennium Pharms., Inc., 885 F.3d 623, 628-29 (9th Cir. 2018). But
allegations made on the basis of “information and belief,” such as those in the instant
SAC, must also state the factual basis for the belief. Neubronner v. Milken, 6 F.3d
666, 672 (9th Cir. 1993).
The FCA is “intended to reach all types of fraud, without qualification, that
might result in financial loss to the Government.” United States v. Neifert-White Co.,
390 U.S. 228, 232 (1968) (emphasis added). The elements of an FCA claim are “(1)
a false statement or fraudulent course of conduct, (2) made with scienter, (3) that was
material, causing (4) the government to pay out money or forfeit moneys due.” United
4 States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166, 1174 (9th Cir. 2006)
(emphasis added). Accordingly, to plead a plausible FCA claim and a claim under
state-law analogues, a complaint must adequately allege that the claim was made to
a government payor.
1. With respect to all but two allegations, the SAC does not adequately plead
that a false claim was made to a government payor. The inadequate parts of the SAC
are insufficient either because they specifically identify a private insurer—for
instance, “‘Anthony’ called Express Scripts for Anthem,” or “[i]n an August 1, 2016
phone call to BlueCross Blue Shield of Michigan”—or because they are
conclusory—for example, asserting that Appellees “regularly made false and
fraudulent statements to government and private insurers.” The former category of
allegations fails to plead a government payor. The latter category is based on
“information and belief” and does not adequately state the factual basis for the belief.
For these reasons, all but two allegations of the SAC fail to plead a plausible claim for
relief.
2. The remaining two allegations are also insufficient, but for a different
reason: they fail to adequately allege materiality. Materiality, like the existence of a
government payor, is an essential element of an FCA claim. Hendow, 461 F.3d at
1174. “Under the [FCA], the misrepresentation must be material to the other party’s
5 course of action.” Universal Health Servs., Inc. v. United States ex rel. Escobar, 579
U.S. 176, 191 (2016). The FCA defines materiality as “having a natural tendency to
influence, or be capable of influencing, the payment or receipt of money or property.”
31 U.S.C. § 3729(b)(4). “Under any understanding of the concept, materiality looks
to the effect on the likely or actual behavior of the recipient of the alleged
misrepresentation.” Escobar, 579 U.S. at 193 (internal quotation marks and
alterations omitted).
Both remaining allegations pertain to Appellees’ practice of instructing their
employees to misrepresent the identities of their employers when seeking prior
authorizations for prescription medications from insurance providers. The allegations
of the SAC do not plausibly plead that this practice was material to an insurer’s
decision to grant prior authorization. The SAC does not allege that insurers would
have refused to pay had they known that the request was coming from a pharmacy
rather than from a physician’s office.
Gharibian’s authorities supporting the proposition that physicians are supposed
to be the ones obtaining prior authorizations do not establish that the caller’s identity
is information that would influence the decision-making of insurance providers. The
Supreme Court has held that “when evaluating materiality under the False Claims Act,
the Government’s decision to expressly identify a provision as a condition of payment
6 is relevant, but not automatically dispositive.” Escobar, 579 U.S. at 194. Some
Medicare regulations appear, in fact, to contemplate that individuals other than
physicians or their representatives will be the ones obtaining prior authorizations on
behalf of patients. See, e.g., 42 C.F.R. § 423.566(b).
Because the SAC fails to adequately plead materiality with respect to the two
remaining allegations, the district court did not commit reversible error in dismissing
the SAC in its entirety.
AFFIRMED.