John Williams, Sr. v. Medical Support Los Angeles

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 20, 2023
• Docket: 22-55979
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 20 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JOHN M. WILLIAMS, Sr., M.D., M.P.H., No. 22-55979 Relator, D.C. No. Plaintiff-Appellant, 8:20-cv-00198-CBM-DFM

v. MEMORANDUM * MEDICAL SUPPORT LOS ANGELES, AKA MSLA, a medical corporation; MSLA MANAGEMENT, LLC,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California Consuelo B. Marshall, District Judge, Presiding

Argued and Submitted December 6, 2023 Pasadena, California

Before: WARDLAW and BUMATAY, Circuit Judges, and KENNELLY,** District Judge.

John M. Williams, Sr., appeals the district court’s dismissal of his Second

Amended Complaint (“SAC”) asserting a False Claims Act action against Medical

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Matthew F. Kennelly, United States District Judge for the Northern District of Illinois, sitting by designation. Support Los Angeles, Inc. and MSLA Management, LLC (“MSLA”). He alleges

MSLA defrauded the Department of Veterans Affairs (“VA”) by: (1) falsely

certifying compliance with contractual requirements for payment and (2)

fraudulently inducing the VA to contract with MSLA. We have jurisdiction under

28 U.S.C. § 1291. We review grants of a motion to dismiss de novo. Manzarek v.

St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1030 (9th Cir. 2008). We affirm.

1. The district court did not err by dismissing Williams’s claim for false

certification. Williams alleges MSLA falsely certified three key tasks: (1) “C-File”

review, (2) ancillary test scheduling, and (3) “unlocked” medical disability exam

(“MDE”) reporting. But the SAC contains no facts alleging that MSLA made an

express or implied false statement to the VA.

First, Williams alleges that MSLA defrauded the VA by sending MDE

examiners only certain records rather than a veteran’s entire “C-File.” At most,

Williams alleges a contractual dispute not cognizable under the FCA. See Cafasso,

United States ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1057 (9th Cir.

2011). Williams does not allege that MSLA made any express certification to the

VA that its examiners reviewed the “C-Files” in their entirety in connection with a

request for payment. See United States v. Kitsap Physicians Serv., 314 F.3d 995,

1002 (9th Cir. 2002) (requiring “an actual false claim for payment being made to

the Government”) (quoting United States ex rel. Clausen v. Lab. Corp. of Am., 290

2 F.3d 1301, 1311 (11th Cir. 2002)). And even under an implied false certification

theory, we still require the claim to “not merely request payment, but also make[]

specific representations about the goods or services provided.” United States ex rel.

Rose v. Stephens Inst., 909 F.3d 1012, 1018 (9th Cir. 2018) (quoting Universal

Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 190 (2016)).

Williams points to no specific representations by MSLA to the VA on its “C-File”

review process.

Second, Williams alleges that MSLA defrauded the VA by having improperly

credentialed staff schedule ancillary testing. Even if the contracts required

examiners with proper credentials to request and schedule tests, this again amounts

to no more than breach of contract. See Cafasso, 637 F.3d at 1057. Williams does

not allege that MSLA made false statements or implied false certifications to the VA

regarding its scheduling of tests in connection with a claim for payment.

Third, Williams alleges that MSLA defrauded the VA by failing to “lock”

MDE reports, which meant that MSLA staff could edit these documents. These

allegations do not meet Rule 9(b)’s heightened pleading standard. Williams does

not allege that any specific report was edited, who edited it, or if any edits were

substantive. This misses the “who, what, when, [and] where” required to satisfy

Rule 9(b). Vess v. Ciba-Gelgy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)

3 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). Nor does he allege

that MSLA made statements to the VA that no MSLA staffer edited a MDE report.

2. The district court did not err by dismissing Williams’s fraudulent

inducement claim. Williams alleges that MSLA never intended to perform the

contract with the VA and that it misrepresented its capacity to comply with the

contract. Both arguments fail.

Williams alleges that MSLA misrepresented that it would conduct certain

“key tasks” to secure a contract with the VA. But Williams provides no specific

allegations—beyond vague accusations and mere speculation—showing that MSLA

did not intend to comply with the contracts when they were signed. See United

States ex rel. Hendow v. Univ. of Phx., 461 F.3d 1166, 1172 (9th Cir. 2006)

(requiring statements be “false when made”). And Williams does not plausibly

allege his knowledge of MSLA’s supposed fraud. Williams never worked for

MSLA and the VA awarded MSLA its most recent contract in 2016—two years

before Williams interviewed with MSLA. So Williams did not participate in

contract bids for MSLA.

Williams also alleges that MSLA misrepresented its “network capacity” to

induce the VA into the contract. But Williams’s claim is largely based on a VA

Office of Inspector General (“OIG”) Report, which summarized an investigation

into MSLA’s network capacity. The OIG Report found no fraud. It is implausible

4 that a person with no way of knowing MSLA’s actual network capacity could find

fraud where a government investigation found none. Even so, Williams alleges no

facts showing MSLA knew it could not meet the contractual capacity requirements.

The public disclosure bar also dooms this claim. See 31 U.S.C.

§ 3730(e)(4)(A)(ii). The same 2019 VA OIG report that Williams relies on

specifically evaluated MSLA’s network capacity, and Williams does not materially

add to the publicly disclosed information. See United States ex rel. Mateski v.

Raytheon Co., 816 F.3d 565, 573 (9th Cir. 2016) (The public disclosure bar

precludes claims when allegations are “substantially similar” to a prior public

disclosure.). Nor does he show how he was an “original source” for the disclosure.

31 U.S.C. § 3730(e)(4)(B).

AFFIRMED.