United States of America, Ex Rel. Marc Osheroff v. Humana, Inc., et al

Filing 172

ORDER denying 137 Relator's Motion for Reconsideration. See attached ORDER for details. Signed by Judge Robert N. Scola, Jr. on 1/31/2013. (jky)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO.: 10-24486-cv-SCOLA

UNITED STATES OF AMERICA
ex rel. MARC OSHEROFF, et al.,
Plaintiff-Relator,
v.
HUMANA, INC., et al.,
Defendants.
_________________________________/
ORDER ON RELATOR’S MOTION FOR RECONSIDERATION
THIS MATTER is before the Court on Plaintiff-Relator’s Motion for Reconsideration of
the Court’s Order on Certain Defendants’ Motions to Dismiss, filed on October 25, 2012 [ECF
No. 137] (the “Order”). The Court has carefully reviewed the applicable law and the parties’
submissions. For the reasons that follow, the Motion for Reconsideration is denied.
I.

BACKGROUND
On September 28, 2012, following extensive briefing and oral argument, the Court

granted Humana, Inc.’s motion to dismiss, finding Relator’s claims barred by the “public
disclosure bar” of the False Claims Act (“FCA”) [ECF No. 129]. See 31 U.S.C. § 3730(e).
Humana’s motion was joined by several of its affiliated companies, also defendants (collectively
the “Humana Defendants”), and by Pasteur Medical Centers, Inc. (“Pasteur”). For the reasons
described in the Order, the Amended Complaint was dismissed with prejudice as to the Humana
Defendants and Pasteur, but not as to defendant MCCI Group Holding, LLC (“MCCI”).1
Dissatisfied with the Court’s ruling, Relator now seeks reconsideration of the Order, arguing that
it was “manifest error” to find that Relator’s claims were substantially similar to (and based
upon) allegations and transactions that had already been publicly disclosed.

1

MCCI filed a similar motion to dismiss [ECF No. 67], but later advised the Court that the claims against it had
been settled, subject to approval from the United States Attorney General. Accordingly, the Court denied MCCI’s
motion, but indicated that it would entertain a new motion should settlement fail. The enforceability of the parties’
agreement is presently the subject of a Motion to Enforce [ECF No. 130], which remains under consideration.

II.

LEGAL STANDARD
The decision to grant or deny a motion for reconsideration is committed to the district

court’s sound discretion. See Chapman v. AI Transport, 229 F.3d 1012, 1023-24 (11th Cir.
2000) (reviewing reconsideration decision for abuse of discretion). Reconsideration is
appropriate only in very limited circumstances, such as where “the Court has patently
misunderstood a party, where there is an intervening change in controlling law or the facts of a
case, or where there is manifest injustice.” Vila v. Padron, No. 04-20520-CIV, 2005 WL
6104075, at *1 (S.D. Fla. Mar. 31, 2005) (Altonaga, J.). “Such problems rarely arise and the
motion to reconsider should be equally rare.” Id. (citations omitted). In order to obtain
reconsideration, “the party must do more than simply restate its previous arguments, and any
arguments the party failed to raise in the earlier motion will be deemed waived.” Id. “[A]
motion for reconsideration should not be used as a vehicle to present authorities available at the
time of the first decision or to reiterate arguments previously made.” Z.K. Marine Inc. v. M/V
Archigetis, 808 F. Supp. 1561, 1563 (S.D. Fla. 1992) (Hoeveler, J.).
III.

ANALYSIS
Relator asks the Court to reconsider its holding that his claims against the Humana

Defendants and Pasteur were precluded by the public disclosure bar, arguing that the bar does
not apply where the disclosures at issue do not allege that the defendants “actually engaged in
wrongdoing.”

The disclosures at issue in this case, Relator maintains, revealed only that the

Humana Defendants and Pasteur offered gifts of “nominal” value to potential Medicare
enrollees—i.e., conduct that, on its face, would appear to be protected under one of several
statutory “safe harbors.”

Relator complains that, in dismissing his claims under these

circumstances, the Court’s decision effectively “shields all Medicare providers from allegations
of kickbacks by public disclosure of any remuneration.” [ECF No. 158 at 2] (emphasis in
original). The Court disagrees. Upon re-reviewing Relator’s arguments—arguments that have
already been raised and thoroughly considered—the Court once again finds Relator’s position
unavailing.
At bottom, Relator’s principal contention is that the Court erred in its interpretation of
Cooper v. Blue Cross and Blue Shield of Florida Inc., 19 F.3d 562, 567 (11th Cir. 1994), a qui
tam action wherein the Eleventh Circuit found that certain disclosures regarding the defendant’s
Medicare practices were insufficient to trigger the public disclosure bar. The relevant section of
the Eleventh Circuit’s opinion provides as follows:

The first disclosure is a 1987 GAO report on intermediaries and
[Medicare secondary payer (“MSP”)] laws. This report does name
BCBSF, but only in the context of its role as an intermediary
responsible for monitoring payment to hospitals under the MSP
laws. The report criticizes BCBSF’s plan for monitoring payments
to hospitals under the MSP laws and notes a potential conflict of
interest when BCBSF is also a primary insurer for the working
aged. But the report does not allege that BCBSF in its capacity as
a primary insurer actually engaged in wrongdoing. This report
does not constitute a “public disclosure of allegations or
transactions” that BCBSF knowingly violated MSP laws.
BCBSF was also mentioned (as a primary insurer) in a House
subcommittee hearing on industry-wide MSP fraud. Cooper’s
counsel was present at the hearing which took place in July 1990,
five weeks before Cooper’s action was filed. This hearing was a
public disclosure of allegations. So, we must consider whether
Cooper’s suit was based on the information disclosed. We
conclude that it was.
Id. (emphasis added, footnote omitted). Quoting only isolated language from the Eleventh
Circuit’s opinion, Relator cites Cooper for the general proposition that the public disclosure bar
applies only where the disclosures allege that the qui tam defendant “actually engaged in
wrongdoing.”

Thus, Relator reasons, because it was not apparent from the face of the

disclosures that Defendants’ conduct was in fact illegal—that is, within the reach of the AntiKickback Statute (“AKS”) and the Civil Monetary Penalties Law (“CMPL”) and not protected
by an applicable safe harbor—the public disclosure bar does not apply.
Cooper must not be read in a vacuum. As explained in the Order, “the Eleventh Circuit
[in Cooper] did not hold that the public disclosure bar requires, in every case, specific allegations
of wrongdoing.” Order at 12 [ECF No. 129] (emphasis in original). It “merely held that one of
the many disclosures relied upon by the defendant, a Government Accountability Office report,
did not allege that the defendant actually engaged in wrongdoing ‘in its capacity as a primary
insurer’ (the capacity in which it was acting when it allegedly defrauded the government).” [Id.]
(emphasis in original).

Thus, under Cooper, the public disclosure only applies where the

conduct described in the public disclosure is substantially similar to the conduct giving rise to the
relator’s complaint. [Id.] Relator’s Motion for Reconsideration does not touch upon this crucial
aspect of the Court’s opinion. Nor does Relator show how the Court “patently misunderstood”
his position.

Instead, Relator’s motion merely supplies hyperbolic illustrations of how the Court’s
decision, in his view, could lead to unintended consequences. For example, Relator argues that,
under the Court’s ruling, “a Medicare Advantage provider paying $1,000 to every enrollee in its
plan . . . could immunize itself from qui tam prosecution by publicly advertising that it provides
free coffee and pastries to beneficiaries.” [ECF No. 137 at 2]. See also [ECF No.158 at 2]
(making the same argument, but with “$1,000 in pre-paid Starbucks cards”). This is not so.
Allegations that a Medicare provider paid $1,000 to prospective enrollees are not “substantially
similar” to allegations that the provider gave prospective enrollees free coffee and pastries.
Further, the public disclosure bar does not “immunize” defendants from prosecution. It merely
provides that certain actions involving fraud upon the Government—namely, those cases in
which the aid of private parties was not needed to identify and eliminate the fraud—may only be
maintained by the Government itself, and not by qui tam plaintiffs.
In any event, even if Cooper limited the application of the public disclosure bar to
instances where the disclosure involved allegations that the defendant “actually engaged in
wrongdoing,” the disclosures here meet that standard. As noted in the Order, “since the AKS
and CMPL are implicated upon the mere offering of any remuneration, it follows that the public
disclosures cited by Defendants—which reveal that Defendants offer existing and prospective
Medicare recipients free unlimited transportation, free food, and free salon services—were
sufficient to bring the Defendants’ fraud to the Government’s attention.”2 [Id. at 12-13]. For the
bar to apply, it is not necessary, as Relator contends, that the disclosed information definitively
establish that Defendants in fact “committed fraud” or that there was an “illegal purpose” to
Defendants’ activities. [ECF No. 137 at 3–4]. To so hold would establish an impossibly high
threshold for application of the public disclosure bar—a threshold that would undermine
Congress’s expressed concern of preventing “parasitic” lawsuits. See Cooper, 19 F.3d at 565
(citing False Claims Act Implementation: Hearing Before the Subcomm. on Admin. Law and
Gov. Relations of the House Comm. on the Judiciary, 101st Cong., 2d Sess. 3 (1990)).3

2

This is not to say, of course, that the offering of free unlimited transportation, free food, and free salon services is,
in and of itself, a violation of the AKS and the CMPL. The Court chose its words carefully. This conduct
“implicate[s]” the prohibitions of the AKS and CMPL—i.e., it may be found unlawful if the Defendant possessed
the requisite intent and does not otherwise have a meritorious defense under the safe harbor provisions. Order at 12
[ECF No. 129]. In this way, Relator’s reliance on United States ex rel Armfield v. Gills, 8:07-cv-2374, slip op.
(M.D. Fla. Oct. 17, 2012), is misplaced.
3

The Court recognizes, as pointed out by Relator, that materiality is an element of an FCA claim. As the statute
makes clear, however, the FCA’s materiality requirement pertains only to the tendency of the defendant’s statements

IV.

CONCLUSION
The history of the FCA and Cooper establish that district courts do not have jurisdiction

to entertain qui tam suits where the relator’s complaint is based upon or substantially similar to
information that, because of the manner in which it was disseminated, could have brought the
defendant’s alleged wrongdoing to the Government’s attention. See Order at 10–14 [ECF No.
129]. Whether a defendant may ultimately prevail on the basis that his or her conduct was
protected by a statutory safe harbor—a question to be resolved in the merits—has no bearing on
the Court’s public disclosure bar analysis.4
In sum, “[i]t is an improper use of the motion to reconsider to ask the Court to rethink
what the Court . . . already thought through—rightly or wrongly[.]” Z.K. Marine, Inc., 808
F. Supp. at 1563 (citations and bracketing omitted). As Relator’s motion seeks only a second
bite at the apple, the Court finds no cause to revisit its prior decision.
Accordingly, for the reasons set forth above, it is hereby ORDERED and ADJUDGED
that Relator’s Motion for Reconsideration of this Court’s Order on Certain Defendants’ Motions
to Dismiss [ECF No. 137] is DENIED.
DONE and ORDERED in chambers at Miami, Florida on January 31, 2013.

_________________________________
ROBERT N. SCOLA, JR.
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record 

to influence the Government’s decision to pay or approve the defendant’s allegedly false claim. See 31 U.S.C. §
3729(b)(4). No party disputes that the Defendants’ representations that they were in compliance with federal law
was material to the Government’s payment decisions in this case.
4

The Court agrees with Relator that a defendant who publicly disseminates false information to “throw[] the
government off of the trail of the fraud” might not be able to rely on the public disclosure bar as a defense. But that
would be because the occurrence of actual fraud would, as a result of the defendant’s actions, be less likely to be
uncovered by the Government through publicly available information. Here, the disclosures reveal the very conduct
that Relator alleges is illegal—namely, that Defendants sought to attract new enrollees, in part, by offering them free
transportation, free meals, and free salon services. That the disclosures did not divulge as much detail as alleged by
Relator in his Amended Complaint (e.g., that Defendants allegedly provided their patients with transportation to
such locations as Wal-Mart and casinos) does not mean that the information that was divulged was “innocuous.”