US Ex Rel. Hrayr Shahinian, Md v. Kimberly-Clark Corp.

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 4, 2020
• Docket: 18-56532
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION JUN 4 2020 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES ex rel. HRAYR No. 18-56532 SHAHINIAN, M.D., F.A.C.S., an individual; on behalf of the United States D.C. No. of America, the District of Columbia, the 2:14-cv-08313-JAK-JPR City of Chicago, and the states of California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, MEMORANDUM* Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Virginia, Washington, and Wisconsin (collectively, Plaintiff),

Plaintiff-Appellant,

v.

KIMBERLY-CLARK CORPORATION, a Delaware Corporation,

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California John A. Kronstadt, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Submitted April 15, 2020** Pasadena, California

Before: THOMAS, Chief Judge, and FERNANDEZ and W. FLETCHER, Circuit Judges.

Hrayr Shahinian appeals the district court’s judgment in his False Claims

Act1 qui tam action against Kimberly-Clark Corporation (KC) for alleged

misrepresentations about its MICROCOOL* Breathable High Performance

Surgical Gowns. The district court dismissed the action on the ground that

substantially the same allegations and transactions had already been publicly

disclosed from the news media in counterclaims filed in earlier litigation between

KC and Cardinal Health (the Cardinal Counterclaims). See 31 U.S.C.

§ 3730(e)(4)(A)(iii); United States ex rel. Mateski v. Raytheon Co., 816 F.3d 565,

569–70 (9th Cir. 2016). The district court erred. We vacate and remand.

Construed in the light most favorable to Shahinian,2 his complaint made

allegations about a new fraud, one based on subsequent statements made by KC

about a new and different surgical gown. See United States ex rel. Aflatooni v.

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 1 31 U.S.C. §§ 3729–33. 2 See Williams v. Gerber Prods. Co., 552 F.3d 934, 937 (9th Cir. 2008). 2 Kitsap Physicians Servs., 163 F.3d 516, 522–23 (9th Cir. 1999); Wang v. FMC

Corp., 975 F.2d 1412, 1415–16 (9th Cir. 1992), overruled on other grounds by

United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1123 (9th

Cir. 2015) (en banc). Documents judicially noticed by the district court indicate

that these new gowns were made from a different fabric, contained a different film

layer, and were constructed in a manner different from the predecessor gowns.

That Shahinian’s complaint and the Cardinal Counterclaims both generally alleged

that KC made misrepresentations about the permeability of surgical gowns is not

sufficient to bar this qui tam action. See Mateski, 816 F.3d at 577. The Cardinal

Counterclaims “could not have alerted the Government to the specific areas of

fraud alleged” here: a fraud purportedly occurring during a later period and

concerning a different product. Id. at 579; see also United States ex rel. Found.

Aiding The Elderly v. Horizon W., Inc., 265 F.3d 1011, 1016–17 (9th Cir.),

amended by 275 F.3d 1189, 1189–90 (9th Cir. 2001). In light of our conclusion,

we do not reach Shahinian’s alternative argument that the district court erred in

determining that the Cardinal Counterclaims were disclosed “from the news

media.” 31 U.S.C. § 3730(e)(4)(A)(iii); see Found. Aiding The Elderly, 265 F.3d

at 1015. Thus, we vacate and remand the district court’s dismissal of this action.

3 We disagree with KC’s argument that we should affirm the judgment on the

alternative ground that this qui tam action was barred by res judicata. We agree

with the district court that, regardless of Shahinian’s dismissal of his personal,

individual claim in a prior class action case, the government was not a party to that

case. Therefore, res judicata cannot act as a bar to the claim brought on the

government’s behalf in this qui tam case. See Stoner v. Santa Clara Cty. Office of

Educ., 502 F.3d 1116, 1126–27 (9th Cir. 2007); see also Whole Woman’s Health v.

Hellerstedt, __ U.S. __, __, 136 S. Ct. 2292, 2304–05, 195 L. Ed. 2d 665 (2016).

VACATED and REMANDED.