United States of America et al v. Staten Island University Hospital et al

Filing 190

ORDER granting in part and denying in part 165 Motion for Summary Judgment. For the reasons given in the attached order, summary judgment is granted to the government in part and denied in part, and the defendant's summary judgment motion [168 ] is denied. A bench trial will be held on Monday, September 8, 2014 at 9:30 a.m. to decide whether Lederman acted with a culpable mental state, subjecting him to liability on the government's False Claims Act claim, and to determine the amount of damages on the government's common law claims (and FCA claim if necessary). A status conference will be held on Wednesday, May 28, 2014 at 11:00 a.m. to discuss next steps in the case. Ordered by Judge John Gleeson on 5/13/2014. (Aronoff, Peter)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

FOR ONLINE PUBLICATION ONLY

UNITED STATES OF AMERICA,
Plaintiff,

MEMORANDUM
AND ORDER

ex rel. ELIZABETH RYAN,
Relator,
- versus -

04-CV-2483

GILBERT LEDERMAN and
GILBERT LEDERMAN, M.D., P.C.,
Defendants.

APPEARANCES:
LORETTA E. LYNCH
United States Attorney
Eastern District of New York
271 Cadman Plaza East
Brooklyn, NY 11201
By:
Laura D. Mantell, Assistant U.S. Attorney
Attorney for Plaintiff
TRACY & STILWELL, P.C.
1688 Victory Boulevard
Staten Island, New York 10314
By:
John J. Tracy, Esq.
Attorneys for Defendants

JOHN GLEESON, United States District Judge:
In this action, the United States claims that Gilbert Lederman, a doctor working at
the Staten Island University Hospital (“SIUH”), improperly billed for medical procedures. It
seeks damages under both the False Claims Act, 31 U.S.C. §§ 3729-3733, and common law.
Both sides have moved for summary judgment. For the reasons given below, the government’s
motion is granted in part and denied in part, and Lederman’s is denied.

BACKGROUND
A.

Factual Background
Unless otherwise noted, the following facts are taken from the parties’ Local Rule

56.1 statements and affidavits and are uncontroverted.
Lederman is a doctor who has performed various radiological procedures –
usually for cancer treatment – since the 1980s. In 1987, he became Director of Radiation
Oncology at Staten Island University Hospital, a position he held through the period relevant to
this lawsuit (1996 through 2003). Lederman performed both conventional radiation treatment
and stereotactic radiosurgery. The latter procedure, key to the dispute in this case, “is a form of
radiation therapy that focuses high-power energy on a small area of the body.” U.S. National
Library of Medicine, “Stereotactic radiosurgery – Gamma Knife,” at
http://www.nlm.nih.gov/medlineplus/ency/article/007577.htm (last visited May 13, 2014);
accord Stone Decl., ECF No. 166, Ex. 4 and 5.
This case centers on allegations that the federal government was improperly billed
for health services under Medicare. As I previously described in deciding a motion of third-party
defendants to dismiss in this case,
The Medicare program was established by enactment of Title
XVIII of the Social Security Act. Part B of the Medicare program
provides federal funding for certain physician services provided to
Medicare beneficiaries. Claims under Part B for Medicare payment
for physician services are administered by private carriers (“Part B
carriers”), which enter into contracts with the Secretary of Health
and Human Services. Physicians bill their services to these carriers
using standard 5-digit billing codes, which are based on codes
designated by the American Medical Association . . . called
“Physicians’ Current Procedural Terminology” (“CPT”) codes.
Part B carriers determine the reimbursement amount of each claim
based on the lesser of the actual charge and a standardized fee
schedule for the appropriate CPT code.

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U.S. ex rel. Ryan v. Staten Island Univ. Hosp., 04-CV-2483 JG CLP, 2011 WL 1841795, at *1
(E.D.N.Y. May 13, 2011) (“Ryan I”).
By statute, “no payment may be made” under Medicare coverage for services that
are not “reasonable and necessary for the diagnosis or treatment of illness or injury.” 42 U.S.C.
§ 1395y(a)(1)(A). Deciding what is “reasonable and necessary” is delegated in the first instance
to the Secretary of Health and Human Services (“HHS”), and HHS may decide whether to
exclude certain types of treatments by promulgating national coverage determinations (“NCDs”).
42 U.S.C. §§ 1395y, 1395ff; see also State of N.Y. on Behalf of Bodnar v. Sec’y of Health &
Human Servs., 903 F.2d 122, 124-25 (2d Cir. 1990). HHS contracts with Part B carriers to
provide services, and carriers may create more refined guidelines. These are now called “local
coverage determinations” (“LCDs”), but were previously known as “local medical review
policies” (“LMRPs”). See 42 C.F.R. § 400.202. “LMRP’s, which are now known as Local
Coverage Determinations, set regional coverage determinations that govern in the absence of or
as an adjunct to a national policy.” United States v. Prabhu, 442 F. Supp. 2d 1008, 1012 (D.
Nev. 2006) (citing 68 Fed.Reg. 63,692, 63,693 (Nov. 7, 2003)). “Once an LMRP is adopted by
the carrier, it acts as a filter, or screen, to ensure that only claims meeting the LMRP criteria for
medical necessity are paid.” Arruejo v. Thompson, CV-00-2402(JG)(SMG), 2001 WL 1563699,
at *4 (E.D.N.Y. July 3, 2001), adopted, ECF No. 33 (Aug. 28, 2001).
The Part B carrier for the claims in this case, Empire Medical Services
(“Empire”), issued two significant LMRPs related to stereotactic radiosurgery. First, on October
21, 1996, Empire issued an LMRP that, among other things, defines stereotactic radiosurgery as
“high doses of ionizing radiation to a small intracranial target, usually 4 cm or less in diameter”
delivered while the patient “wears a stereotactic frame affixed to the skull.” Stone Decl., Ex. 4,

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at 1. The LMRP also lists eight conditions for which stereotactic radiosurgery would be covered
(along with corresponding ICD-9 codes1). Id. at 1-2. Second, on August 31, 2001, Empire
issued an LMRP defining stereotactic radiosurgery as “a form of computer-assisted radiation
therapy for intracranial and some extracranial lesions . . . .” Stone Decl., Ex. 5, at 1. Notably,
the second LMRP states under “limitations” that “treatment of below the neck diseases such as
lung carcinoma with stereotactic radiosurgery is considered investigational at this time.” Id. at 2.
The government has not made entirely clear which claims for payment were
allegedly improper, and the issue will be further developed at a trial on damages. For this
motion, it is enough to note that, between 1996 and 2003, the government claims that Lederman
performed and submitted unauthorized claims to Empire for at least 300 below-the-neck
stereotactic radiosurgeries. See Govt.’s Corrected 56.1 Statement ¶ 33, ECF No. 172. Lederman
does not dispute the 300 figure. See Lederman 56.1 Counterstatement ¶ 33.
B.

Procedural History
In 2004, Elizabeth Ryan filed a False Claims Act complaint under seal in this

Court; she brought claims against Lederman, his incorporated professional practice, and SIUH.
See ECF No. 1. In 2008, the case was unsealed when the government filed a complaint in
intervention as to some of the claims. See ECF Nos. 8, 9, 16. Shortly thereafter, the government
settled all claims against SIUH for about $25 million. See ECF No. 30.
After substantial discovery, the parties filed cross motions for summary judgment
in December of 2013. I heard argument on the motions on March 21, 2014.

1

ICD-9-CM codes refer to “The International Classification of Diseases, Ninth Revision, Clinical
Modification,” which is “the official system of assigning codes to diagnoses and procedures associated with hospital
utilization in the United States.” Centers for Disease Control and Prevention, “International Classification of
Diseases, Ninth Revision, Clinical Modification,” at http://www.cdc.gov/nchs/icd/icd9cm.htm (last visited May 13,
2014).

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DISCUSSION
A.

Summary Judgment Standard
A court may grant summary judgment where “the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). A fact is “material” if its resolution “might affect the outcome of
the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
dispute is “genuine” when “the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” Id. In determining whether there are genuine disputes of material fact,
the court must “resolve all ambiguities and draw all permissible factual inferences in favor of the
party against whom summary judgment is sought.” Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir.
2003).
The mere fact that I have been presented with cross motions for summary
judgment does not require that I grant judgment to one side or the other; rather, I must evaluate
each motion separately, each time resolving ambiguities in favor of the non-moving party. See,
e.g., Schwabenbauer v. Bd. of Ed. of City Sch. Dist. of City of Olean, 667 F.2d 305, 313-14 (2d
Cir. 1981).
B.

The False Claims Act
As relevant here, the False Claims Act creates liability for “any person who

knowingly presents, or causes to be presented, a false or fraudulent claim for payment or
approval,” 31 U.S.C. § 3729(a)(1)(A), or who “knowingly makes, uses, or causes to be made or
used, a false record or statement material to a false or fraudulent claim,” id. § 3729(a)(1)(B).
The Second Circuit has interpreted the statute to require five elements: the plaintiff must show
that a defendant “(1) made a claim, (2) to the United States government, (3) that is false or

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fraudulent, (4) knowing of its falsity, and (5) seeking payment from the federal treasury.” Mikes
v. Straus, 274 F.3d 687, 695 (2d Cir. 2001).
Although both sides have moved for summary judgment, I will consider their
motions together where possible. I address each of these five elements below.
1. Undisputed Elements
The parties do not dispute that Lederman made claims seeking payment from the
federal government, satisfying elements 1, 2, and 5 of the Mikes framework. Essentially, any
time a doctor bills a Part B provider for services under Medicare, these elements are satisfied,
since the doctor causes to be submitted a claim for payment to the federal government seeking
federal funds. See, e.g., Mikes, 274 F.3d at 695 (finding submission of Medicare reimbursement
forms known as CMS/HCFA 1500 Forms, or their electronic equivalent, to satisfy these
elements).
2. Falsity
The parties do disagree about whether any of Lederman’s claims were false. The
government advances two theories on which some of the claims for payment were false. First,
the government argues that the claims were false because Lederman sought payment for
treatments that were categorically not covered by Medicare. Second, the government argues that
the claims were false because Lederman misrepresented the nature of the services for which he
was billing. I find both theories meritorious. Because the determination of falsity depends only
on disputed legal questions, including the interpretation of documents, it is appropriate to resolve
them now, on summary judgment.
a. Procedures Not Covered

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The government’s first argument – that Lederman billed for procedures that were
simply not covered by Medicare – centers on the two LMRPs discussed above. According to the
government, both the October 1996 and the August 2001 LMRPs exclude from coverage
stereotactic radiotherapy performed on parts of the body below the neck. A straightforward
reading of the text of these LMRPs confirms the government’s view. Rather than contest the
government’s reading, however, Lederman makes two arguments contesting the relevance of
these LMRPs.
First, he argues that LMRPs are not controlling as a general matter. According to
Lederman, LMRPs offer only “some guidance” as to whether a particular procedure will be
covered. Lederman apparently relies on an HHS guidance document from 2000, which states:
In order to provide some guidance to beneficiaries and health care
providers and suppliers regarding which items and services will (or
will not) be covered in a particular area in the absence of an NCD,
our contractors may make an LCD. An LCD would provide
guidance, in the absence of, or as an adjunct to, an NCD by
describing the clinical circumstances and settings under which an
item or service is available (or is not available) to a beneficiary
under section 1862(a)(1)(A) of the Act. This notice seeks only to
define the criteria for how we would make an NCD and our
contractors would make an LCD.
An LCD is not binding on a contractor in another area of the
country or on an ALJ who decides cases at higher stages of the
appeal process. Still, an LCD provides a service to the public by
giving some advance notice about an item or service a contractor is
likely to cover or not cover. If a local contractor makes an
affirmative finding through a published LCD that an item or
service is reasonable and necessary under the statute, beneficiaries
and providers could reasonably expect that the service is available
to the beneficiaries in that jurisdiction for the circumstances
described in the LCD.

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Medicare Program, Criteria for Making Coverage Decisions, 65 Fed. Reg. 31124, 31126 (2000).2
Lederman emphasizes the phrase “some guidance,” but in context, I do not believe that means
that LCDs are advisory or not authoritative. Rather, the statement explains that LCDs are gapfillers: where there is no national rule, a local contractor may make its own rules. Thus, LCDs
as a whole provide additional rules, which together create more “guidance” than the NCDs do
alone. (Put another way, “guidance” can be mandatory.)
My view is reinforced by statutory and administrative text. Federal law defines a
local coverage determination as
a determination by a fiscal intermediary or a carrier under part A of
this subchapter or part B of this subchapter, as applicable,
respecting whether or not a particular item or service is covered on
an intermediary- or carrier-wide basis under such parts, in
accordance with [the determination of what is “reasonable and
necessary” under] section 1395y(a)(1)(A) of this title.
42 U.S.C. § 1395ff(f)(2)(B). That is exactly the gap-filling role discussed above. The text gives
no indication that particular LCDs are anything other than conclusive on matters they address.
The government also offers another set of HHS guidance (from before the name
change from LMRP to LCD) that confirms this view:
Medicare contractors review and adjudicate claims for services to
assure that Medicare payments are made only for services that are
covered under Medicare Part A or Part B. In the absence of a
specific national coverage decision, coverage decisions are made at
the discretion of the local contractors.
Contractors may also publish local medical review policies
(LMRPs) to provide guidance to the public and medical
community within a specified geographic area. These LMRPs
explain when an item or service will be considered “reasonable and
necessary” and thus eligible for coverage under the Medicare
statute. If a contractor develops an LMRP, its LMRP applies only
2

This regulation refers to the appeal process by which individuals denied coverage may seek review
of the denial in front of an administrative law judge (ALJ). While NCDs are binding on ALJs, LCDs are not.
Neither party has argued that this difference is significant.

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within the area it serves. While another contractor may come to a
similar decision, we do not require it to do so. An LMRP may not
conflict with a national coverage decision once the national
coverage decision is effective. If a national coverage decision
conflicts with a previously made LMRP, the contractor must
change its LMRP to conform it to the national coverage decision.
A contractor may, however, make an LMRP that supplements a
national coverage decision.
Medicare Program, Procedures for Making National Coverage Decisions, 64 FR 22619, 22621
(April 27, 1999). The passage makes clear that LCDs are mandatory for areas they cover. Thus,
I reject Lederman’s argument that the LCDs are merely advisory and therefore irrelevant to the
question of whether his billings were false.
Lederman argues in the alternative that even if the October 1996 and August 2001
LMRPs cited above did not authorize the procedures he performed, a third LMRP bearing the
subject “Radiation Oncology,” effective May 30, 2000, did authorize them. The May 2000
LMRP is a sort of omnibus regulation encompassing many different techniques used in many
different types of radiation therapy. See Tracy Decl., ECF No. 171, Ex. H. For example, the
LMRP lists a number of CPT codes for services that “are bundled into the radiation treatment
management codes” and should not be separately billed – such as codes for the use of IVs or
catheterization, and codes for office visits. Id. at 11. Elsewhere, the LMRP gives general
guidance about coding radiation therapy properly depending on the energy level administered to
the patient and the frequency of the treatments. Id. at 7-8.
The government argues – and I agree – that the May 2000 LMRP gives only
general guidance. Where (as here) more specific regulations exist, they control. That principle
governs not only judges and lawyers, but anyone who must interpret complicated regulations.
The October 1996 and August 2001 LMRPs discuss only stereotactic radiosurgery, not other,
more general issues related to radiation therapy more broadly. The May 2000 LMRP discusses
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issues that may arise in any of a number of different types of treatment (for example, whether
catheterization may be separately billed) as well as issues that may arise in the delivery of
traditional radiation therapy (for example, different codes scaled to different energy levels). But
other than in an introductory paragraph that discusses the many types of radiation therapy, the
May 2000 LRMP never mentions stereotactic radiosurgery. And it never specifically mentions
the CPT codes at issue here: 61793, for stereotactic radiosurgery, and 77432, for radiation
treatment of cerebral lesions (though this code falls within a range of covered codes).
To the extent that Lederman argues that procedures were covered because,
according to Lederman, they were medically “reasonable and necessary,” he is mistaken. It is up
to HHS and its designees, such as Empire, to decide which types of treatment will be covered.
As one court put it in denying a defendant’s motion to dismiss a False Claims Act case, “[if]
physician determinations” of reasonableness and necessity “controlled claim payment, there
would be no need for a claim reimbursement process at all.” United States v. Vascular Solutions,
Inc., Case No. 1:10-cv-00883-SS, ECF No. 44, at *7 (W.D. Tex. March 7, 2013).
In sum, then, I find that the government has proven as a matter of law that
Lederman submitted claims that were false because they were not covered by his Medicare Part
B carrier.
b. Misrepresentation of Claims
In addition, the government contends – and I agree – that Lederman’s claims for
payment were false because they embodied misrepresentations of the procedures Lederman
performed.
A claim is straightforwardly false when it includes an “‘incorrect description of
goods or services provided or a request for reimbursement for goods or services never

10

provided.’” United States v. Sci. Applications Int’l Corp., 626 F.3d 1257, 1266 (D.C. Cir. 2010)
(quoting Mikes, 274 F.3d at 697 (2d Cir. 2001)). Here, according to the government, Lederman
billed for services under certain CPTs when, in actuality, he was performing different services.
Specifically, Lederman billed below-the-neck stereotactic radiosurgery under CPT codes 61793
and 77432. According to the American Medical Association, which promulgates CPT codes,
code 61793, captioned “Stereotactic radiosurgery (particle beam, gamma ray or linear
accelerator), one or more sessions,” falls under the subheading “Skull, Meninges, and Brain.”
See Stone Decl., Ex. 2, at 1, 3. Similarly, code 77432 is captioned “Stereotactic radiation
treatment management of cerebral lesion(s) (complete course of treatment consisting of one
session).” See Stone Decl., Ex. 3, at 2.
It is clear from these captions that neither code covers procedures performed
below the neck, the procedures at issue here. Furthermore, Lederman does not dispute that some
claims were miscoded: “Defendants concede that some of the coding for the treatments that are
the subject of the complaint were incorrect, but do not agree that they were ‘false’ within the
meaning of the False Claims Act . . . .” Def. Opp., ECF No. 5, at 2.
To be sure, the False Claims Act does not impose liability on doctors who
accidentally or innocently miscode procedures and submit claims for payment to Medicare. But
that is because of the FCA’s mental state requirement, not because such claims are not “false.”
With falsity established, I turn to the final element of the False Claims Act case – knowledge.
3. Knowledge
A culpable mental state is the fourth Mikes element. Under both §§ 3729(a)(1)
and (2), the defendant must act “knowingly.” The statute then defines the term:

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(b) Knowing and knowingly defined. – For purposes of this
section, the terms “knowing” and “knowingly” mean that a person,
with respect to information –
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the
information; or
(3) acts in reckless disregard of the truth or falsity of the
information,
and no proof of specific intent to defraud is required.
31 U.S.C. § 3729(b) (1994).3
The statute thus makes clear that recklessness or deliberate indifference as to the
truth or falsity of claims will suffice for liability, and no specific intent to defraud is necessary.
The determination of Lederman’s mental state requires resolution of factual
disputes, including credibility determinations, and the government therefore faces a difficult task
at the summary judgment stage. While the question is close, I find that the government has not
carried its burden of establishing as a matter of law Lederman’s knowledge of the falsity of his
claims.
The government emphasizes a few key documents. First, it cites a 1992 letter
from an SIUH vice president to several recipients, including Lederman, noting that Lederman
was improperly billing a neurosurgical code (apparently 61793, though it is not mentioned in the
letter) as part of the radiosurgery process. Mantell Decl., ECF No. 167, Ex. 5. At that time,
Lederman was not performing body radiosurgery, but was apparently only assisting in
intracranial radiosurgery. Nonetheless, the government argues that this letter put Lederman on
notice that code 61793 was not appropriate for non-neurosurgical procedures, including any
procedure performed by Lederman, who is not (and never has been) a neurosurgeon.

3

The most current version of the statute, which was amended in 2009, numbers these definitions as
(b)(1), but otherwise (save for very minor changes) leaves the definitions intact.

12

Second, the government points to an October 5, 1998 letter to Lederman from
Medaphis, the billing agent that Lederman had just terminated. See Mantell Decl., Ex. 6. The
letter points out that 55% of Lederman’s billings were for a single code, 61793, and that “many
payers consider this procedure to be experimental, and refuse to reimburse your practice.” While
that sentence likely refers in part to private insurers, the government argues that Empire
(Lederman’s Medicare Part B carrier) also considered below-the-neck stereotactic radiosurgery
to be experimental and therefore not reimbursable. At a minimum, the government argues, this
letter contributed to Lederman’s notice that his use of the procedure – and the code 61793 for it –
was experimental.
Third, the government offers a letter from Empire itself to Advanced Health
Management Services (“AHMS”). After terminating Medaphis, Lederman retained a new billing
agent, Regency, which also served as the billing agent for SIUH itself. Regency hired AHMS to
help resolve some of Lederman’s billing questions, and in December of 1998, AHMS sent a
letter to Empire with several questions about the use of code 77432. Empire wrote back on
January 25, 1999, and explained that
CPT procedure code 77432 is specifically for management of
cerebral lesions. . . . It is specific to cerebral lesions and may not
be used for stereotactic radiation treatment on parts of the body
other than the brain. Currently Empire Medicare Services is
covering stereotactic radiation treatment only on the brain. This
type of treatment on any other part of the body is considered
investigational.
Mantell Decl., Ex. 11.
Fourth, the government points to a conversation – initiated by Lederman – with a
billing consultant, Rebecca Emerick, in August or September of 1999. See Mantell Decl., ¶ 48.

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Lederman asked Emerick about the use of code 61793, and she told him that the code could only
be used for intracranial treatment, and then only once, regardless of the number of sessions.
Fifth, the government offers a report written by Rebecca Emerick a year after her
conversation with Lederman. SIUH independently retained Emerick to analyze billing and
coding issues that arose from body stereotactic radiosurgery. Emerick prepared a report, dated
August 18, 2000, which found
significant evidence of erroneous billing with the radiosurgery
CPT code of 61793 . . . I believe that there is the possibility that
this code was intentionally billed when it was known that the
service could not be appropriate to the billing. . . . There are ethical
issues involved here.
Cover letter to Emerick Report, Mantell Decl., Ex. 15. The report also found significant
problems with medical records indicating a lack of supervision of care by the radiation
oncologist – that is, Lederman. See id. at 8-9.
The government’s case is persuasive, but it is also largely circumstantial.
Although the question is close, I cannot conclude as a matter of law on the current record that
Lederman either knew or acted with reckless disregard of the fact that he was submitting false
claims. In other words, a factfinder might reasonably conclude that Lederman neither personally
knew (nor consciously avoided knowing4) that he was submitting false claims, and might also
reasonably conclude that he did not act with reckless disregard for the truth or falsity of the
claims he was submitting. I suspect that the issue of knowledge or recklessness might look
different on a fuller record with the benefit of live testimony, but any doubts at this stage weigh
heavily against a grant of summary judgment.

4

See United States v. Nazon, 940 F.2d 255, 259 (7th Cir. 1991) (approving use of conscious
avoidance instruction in criminal false claims case).

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To summarize, in order to prove a False Claims Act violation, the plaintiff must
show that the defendant “(1) made a claim, (2) to the United States government, (3) that is false
or fraudulent, (4) knowing of its falsity, and (5) seeking payment from the federal treasury.”
Mikes, 274 F.3d at 695. In this case, elements 1, 2, and 5 are undisputed. I grant summary
judgment to the government on element 3. I reserve decision on element 4 for trial.
C.

Common Law Claims
In addition to its causes of action under the False Claims Act, the government has

also brought common law claims for payment based on a mistake of fact and unjust enrichment.
As I previously explained,
The elements of a claim for payment by mistake are that plaintiff
made a payment under a mistaken apprehension of fact, that
defendant derived a benefit as a result of this mistaken payment,
and that equity demands restitution by defendant to plaintiff. A
claim for unjust enrichment consists of three elements: that (1)
defendant was enriched, (2) at plaintiff's expense, and (3) equity
and good conscience militate against permitting defendant to retain
what plaintiff is seeking to recover.
Ryan I, 2011 WL 1841795 at *5 (internal citation and quotation marks omitted).
The government argues that the miscoded claims were paid only based on a
mistaken fact (i.e., that the claims were for procedures performed above the neck, when they
were actually for procedures below the neck). The government also argues that Lederman was
unjustly enriched by the miscoded claims, for similar reasons.
In opposition, Lederman argues that these claims are barred by the statute of
limitations, since they were first pleaded in the government’s complaint in intervention in 2008.
This argument ignores controlling law and is without merit. The FCA itself specifically provides
that when the government files a complaint in intervention in a case that was earlier initiated
only by a relator,
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For statute of limitations purposes, any such Government pleading
shall relate back to the filing date of the complaint of the person
who originally brought the action, to the extent that the claim of
the Government arises out of the conduct, transactions, or
occurrences set forth, or attempted to be set forth, in the prior
complaint of that person.
31 U.S.C. § 3731(c). It is clear that these common law claims “arise[] out of the conduct,
transactions, or occurrences set forth” in the relator’s 2004 complaint that commenced this
action. The common law claims relate to the same claims for payment.
Because these common law claims essentially duplicate the FCA claims, but do
not require a mental element, I award summary judgment on these claims to the government.
CONCLUSION
For the reasons stated above, the government’s motion for summary judgment is
granted in part and denied in part, and defendant’s summary judgment motion is denied. A
bench trial will be held on Monday, September 8, 2014 at 9:30 a.m. to decide whether Lederman
acted with a culpable mental state, subjecting him to liability on the government’s False Claims
Act claim, and to determine the amount of damages on the government’s common law claims
(and FCA claim if necessary). A status conference will be held on Wednesday, May 28, 2014 at
11:00 a.m. to discuss next steps in the case.

So ordered.

John Gleeson, U.S.D.J.

Dated: May 13, 2014
Brooklyn, New York

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