NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 24 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
BNSF RAILWAY COMPANY, Relator; No. 23-35507 UNITED STATES OF AMERICA, D.C. No. 9:19-cv-00040-DLC Plaintiffs-Appellees,
v. MEMORANDUM*
CENTER FOR ASBESTOS RELATED DISEASE, INC.,
Defendant-Appellant.
Appeal from the United States District Court for the District of Montana Dana L. Christensen, District Judge, Presiding
Argued and Submitted August 21, 2024 Portland, Oregon
Before: CHRISTEN, NGUYEN, and HURWITZ, Circuit Judges.
The Center for Asbestos Related Disease (CARD) appeals a judgment in
favor of relator BNSF Railway Company (BNSF) in this qui tam action filed
pursuant to the False Claims Act (FCA), 31 U.S.C. §§ 3729–30. The jury found
CARD liable for 337 false claims. The parties are familiar with the facts, so we do
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. not recount them here. We have jurisdiction pursuant to 28 U.S.C. § 1291. We
affirm.
1. The district court did not err in denying CARD’s motion for summary
judgment on the falsity, scienter, and materiality elements of the FCA claims, see
United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d 890, 898–99 (9th Cir.
2017), nor on the applicable statute of limitations, 31 U.S.C. § 3731(b).1 Only the
legal issues CARD challenged at the summary judgment level are properly before
us, as “factual issues addressed in summary-judgment denials are unreviewable on
appeal.” Dupree v. Younger, 598 U.S. 729, 735 (2023).
The district court correctly denied summary judgment on falsity, scienter,
and materiality because each required fact-specific inquiries that remained for the
jury: whether CARD submitted false or fraudulent information (falsity), whether
its statements reflected “honestly held” opinions (scienter), and what the relevant
federal agencies knew about the claims CARD submitted (materiality). See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The statute of limitations issue was also fact-bound because it depended on
when the relevant government official knew or should have known of the material
1 CARD also argues that the district court erred by denying its Rule 50(a) motion on these issues, but CARD waived this argument by failing to file a Rule 50(b) motion after the jury verdict. Fed. R. Civ. Pro. 50(b); Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 401–04 (2006).
2 facts underlying the claims CARD submitted. See 31 U.S.C. §3731(b)(2); e.g.
United States ex rel. Purcell v. MWI Corp., 254 F. Supp. 2d 69, 78 (D.D.C. 2003).
The district court did not err at the summary judgment stage by concluding that the
earliest alleged false claim was not barred by the statute of limitations.
2. CARD also challenges several jury instructions. We review de novo
whether the jury instructions correctly state the law. Peralta v. Dillard, 744 F.3d
1076, 1082 (9th Cir. 2014) (en banc). “Jury instructions must be supported by the
evidence, fairly and adequately cover the issues presented, correctly state the law,
and not be misleading.” Id. An instruction error requires reversal “unless the error
is more probably than not harmless.” Clem v. Lomeli, 566 F.3d 1177, 1182 (9th
Cir. 2009) (quoting Dang v. Cross, 422 F.3d 800, 811 (9th Cir. 2005)).
a. CARD’s appeal involves 112 claims for which CARD submitted
Medicare eligibility forms certifying that the patients had been diagnosed with an
asbestos-related disease, even though no CARD doctor had made that diagnosis.2
2 Although CARD challenges only 112 claims, BNSF presented evidence of more than 1,000 claims of fraud to the jury. The jury found CARD liable for 337 claims, and the verdict form did not specify which claims comprised the verdict. But there are 333 claims for which there was no radiologist read identifying a possible asbestos-related disease. The governing statute, 42 U.S.C. § 1395rr-1, requires radiographic support. Id. § 1395rr-1(e)(2)(B)(i)(I). There are two claims for diagnoses signed by a nurse but no physician, and several other claims submitted for CARD staff members without radiographic support. CARD does not challenge these sets of claims. “Because we cannot determine one way or another” whether the jury’s verdict rested in part on the 112 claims CARD challenges, “we cannot
3 For each of these claims, CARD relied on radiological reads from an outside “B-
Reader.”
CARD argues on appeal that the Affordable Care Act, 42 U.S.C. § 1395rr-
1(e)(2)(B)(i), permitted it to submit these forms based solely on the positive “B-
Read,” and therefore challenges the district court’s definition of “diagnosis” in
Instruction F-24. There is no dispute, however, that the statute requires a
diagnosis by someone.3 42 U.S.C. § 1395rr-1(e)(2)(A)(i) (“An individual
described in this paragraph is any individual who . . . is diagnosed with 1 or more
conditions described in subparagraph (B)[.]”). But CARD conceded before trial
that “B-Readers do not diagnose,” and that “an abnormality detected by a B-reader
is not considered a diagnosis of asbestos related disease.”4 Given the statutory
requirement for a diagnosis and CARD’s stipulations, any error in the F-24
say that the verdict would have been the same” without the district court’s alleged errors. Clem, 566 F.3d at 1183. 3 CARD’s briefing in part argued that the text of the statute was ambiguous and required Chevron deference to agency interpretations. We no longer recognize Chevron deference after Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2254 (2024). But even if we were to give agency interpretations persuasive effect, Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), CARD’s argument fails for the reasons stated herein. We thus deny as moot CARD’s Motion for Judicial Notice of a purported agency interpretation, Dkt. No. 35. 4 The evidence at trial also showed that CARD sent letters to many of the “B-read only” patients for whom it filed Medicare claims stating that they “had no diagnosis of asbestos related disease.”
4 instruction was harmless.5 See Clem, 566 F.3d at 1183.
b.
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS SEP 24 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
BNSF RAILWAY COMPANY, Relator; No. 23-35507 UNITED STATES OF AMERICA, D.C. No. 9:19-cv-00040-DLC Plaintiffs-Appellees,
v. MEMORANDUM*
CENTER FOR ASBESTOS RELATED DISEASE, INC.,
Defendant-Appellant.
Appeal from the United States District Court for the District of Montana Dana L. Christensen, District Judge, Presiding
Argued and Submitted August 21, 2024 Portland, Oregon
Before: CHRISTEN, NGUYEN, and HURWITZ, Circuit Judges.
The Center for Asbestos Related Disease (CARD) appeals a judgment in
favor of relator BNSF Railway Company (BNSF) in this qui tam action filed
pursuant to the False Claims Act (FCA), 31 U.S.C. §§ 3729–30. The jury found
CARD liable for 337 false claims. The parties are familiar with the facts, so we do
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. not recount them here. We have jurisdiction pursuant to 28 U.S.C. § 1291. We
affirm.
1. The district court did not err in denying CARD’s motion for summary
judgment on the falsity, scienter, and materiality elements of the FCA claims, see
United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d 890, 898–99 (9th Cir.
2017), nor on the applicable statute of limitations, 31 U.S.C. § 3731(b).1 Only the
legal issues CARD challenged at the summary judgment level are properly before
us, as “factual issues addressed in summary-judgment denials are unreviewable on
appeal.” Dupree v. Younger, 598 U.S. 729, 735 (2023).
The district court correctly denied summary judgment on falsity, scienter,
and materiality because each required fact-specific inquiries that remained for the
jury: whether CARD submitted false or fraudulent information (falsity), whether
its statements reflected “honestly held” opinions (scienter), and what the relevant
federal agencies knew about the claims CARD submitted (materiality). See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The statute of limitations issue was also fact-bound because it depended on
when the relevant government official knew or should have known of the material
1 CARD also argues that the district court erred by denying its Rule 50(a) motion on these issues, but CARD waived this argument by failing to file a Rule 50(b) motion after the jury verdict. Fed. R. Civ. Pro. 50(b); Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 401–04 (2006).
2 facts underlying the claims CARD submitted. See 31 U.S.C. §3731(b)(2); e.g.
United States ex rel. Purcell v. MWI Corp., 254 F. Supp. 2d 69, 78 (D.D.C. 2003).
The district court did not err at the summary judgment stage by concluding that the
earliest alleged false claim was not barred by the statute of limitations.
2. CARD also challenges several jury instructions. We review de novo
whether the jury instructions correctly state the law. Peralta v. Dillard, 744 F.3d
1076, 1082 (9th Cir. 2014) (en banc). “Jury instructions must be supported by the
evidence, fairly and adequately cover the issues presented, correctly state the law,
and not be misleading.” Id. An instruction error requires reversal “unless the error
is more probably than not harmless.” Clem v. Lomeli, 566 F.3d 1177, 1182 (9th
Cir. 2009) (quoting Dang v. Cross, 422 F.3d 800, 811 (9th Cir. 2005)).
a. CARD’s appeal involves 112 claims for which CARD submitted
Medicare eligibility forms certifying that the patients had been diagnosed with an
asbestos-related disease, even though no CARD doctor had made that diagnosis.2
2 Although CARD challenges only 112 claims, BNSF presented evidence of more than 1,000 claims of fraud to the jury. The jury found CARD liable for 337 claims, and the verdict form did not specify which claims comprised the verdict. But there are 333 claims for which there was no radiologist read identifying a possible asbestos-related disease. The governing statute, 42 U.S.C. § 1395rr-1, requires radiographic support. Id. § 1395rr-1(e)(2)(B)(i)(I). There are two claims for diagnoses signed by a nurse but no physician, and several other claims submitted for CARD staff members without radiographic support. CARD does not challenge these sets of claims. “Because we cannot determine one way or another” whether the jury’s verdict rested in part on the 112 claims CARD challenges, “we cannot
3 For each of these claims, CARD relied on radiological reads from an outside “B-
Reader.”
CARD argues on appeal that the Affordable Care Act, 42 U.S.C. § 1395rr-
1(e)(2)(B)(i), permitted it to submit these forms based solely on the positive “B-
Read,” and therefore challenges the district court’s definition of “diagnosis” in
Instruction F-24. There is no dispute, however, that the statute requires a
diagnosis by someone.3 42 U.S.C. § 1395rr-1(e)(2)(A)(i) (“An individual
described in this paragraph is any individual who . . . is diagnosed with 1 or more
conditions described in subparagraph (B)[.]”). But CARD conceded before trial
that “B-Readers do not diagnose,” and that “an abnormality detected by a B-reader
is not considered a diagnosis of asbestos related disease.”4 Given the statutory
requirement for a diagnosis and CARD’s stipulations, any error in the F-24
say that the verdict would have been the same” without the district court’s alleged errors. Clem, 566 F.3d at 1183. 3 CARD’s briefing in part argued that the text of the statute was ambiguous and required Chevron deference to agency interpretations. We no longer recognize Chevron deference after Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2254 (2024). But even if we were to give agency interpretations persuasive effect, Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), CARD’s argument fails for the reasons stated herein. We thus deny as moot CARD’s Motion for Judicial Notice of a purported agency interpretation, Dkt. No. 35. 4 The evidence at trial also showed that CARD sent letters to many of the “B-read only” patients for whom it filed Medicare claims stating that they “had no diagnosis of asbestos related disease.”
4 instruction was harmless.5 See Clem, 566 F.3d at 1183.
b. Instruction F-23 read, in part, “Certification of a person as eligible for
Medicare coverage . . . who does not satisfy these requirements is a false claim.”
CARD contends this instruction compelled the jury to find CARD liable for false
statements without finding scienter. But CARD did not make this objection at
trial.6 Fed. R. Civ. P. 51(c)(1). Thus, we review only for plain error. Fed. R. Civ.
P. 51(d)(2); Skidmore v. Led Zeppelin, 952 F.3d 1051, 1065 (9th Cir. 2020) (en
banc). We find none. Instruction F-23 pertained to the falsity element of the FCA,
not the scienter element. Jury instructions are reviewed “as a whole.” Led
Zeppelin, 952 F.3d at 1065. The district court properly instructed the jury that
CARD was liable only if BNSF could prove each of the required elements of the
FCA, including scienter, and the court separately instructed the jury on scienter.
c. CARD also argues that Instruction F-20 erroneously stated the law and
precluded the jury from considering CARD’s contention that it lacked scienter
when it submitted the “B-Read only” claims because it thought it was following
5 Nothing in this memorandum should be construed to deny Medicare eligibility or benefits to the patients listed in BNSF’s claims against CARD. We consider eligibility only through the lens of the FCA, and do not reach whether these patients are, in fact, Medicare eligible. 6 CARD’s sole objection to Instruction No. F-23 was that the last sentence should be omitted because “these are the requirements, but the summary is not one of the requirements of the diagnosis.”
5 agency directives. Instruction F-20 stated: “In evaluating a defendant’s
knowledge, you may consider that parties who seek public funds are expected to
know the law and may not rely on the conduct of Government agents contrary to
law.” This instruction accurately recites the law. Heckler v. Cmty. Health Servs.
of Crawford Cnty., Inc., 467 U.S. 51, 63 (1984) (“Protection of the public fisc
requires that those who seek public funds act with scrupulous regard for the
requirements of law . . . . [T]hose who deal with the Government are expected to
know the law and may not rely on the conduct of Government agents contrary to
law.”). Instruction F-20 also states the “good faith” rule central to CARD’s
defense: “A defendant who relies on a good faith interpretation of a regulation is
not subject to liability under the Act, even if that interpretation is objectively
unreasonable.” Instructions F-18 and F-19 further detail the scienter element.
Viewing the jury instructions “as a whole,” Led Zeppelin, 952 F.3d at 1065, the
instructions accurately explained the scienter element and the jury was free to
make its own determination of whether CARD’s “B-Read only” practice was
“honestly held.” See Winter ex rel. United States v. Gardens Reg’l Hosp. and Med.
Ctr., Inc., 953 F.3d 1108, 1117–18 (9th Cir. 2020).
3. The district court did not err by excluding testimony of Senator Baucus
pursuant to Evidence Rule 403 because it carried a high risk of unfairly prejudicing
the jury. District courts have “wide discretion” to determine the admissibility of
6 evidence, and “[t]his is particularly true with respect to Rule 403 since it requires
an on-the-spot balancing of probative value and prejudice[.]” Sprint/United Mgmt.
Co. v. Mendelsohn, 552 U.S. 379, 384 (2008). The district court also reasoned that
it was the court’s role to instruct the jury on the controlling law, which was the
subject of the proposed testimony. Moreover, CARD was able to present
alternative evidence of its subjective beliefs and purported “good faith
interpretations” of the ACA.
AFFIRMED.