EMILIO M. GARZA, Circuit Judge:
Plaintiff-Appellant Rebecca Gonzalez ("Relator") brought a qui tam action under the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., against Defendants-Appellees Fresenius Medical Care North America, Fresenius Medical Care Holdings, Inc., Bio-Medical Applications of Texas, Inc. (collectively, "Fresenius"), and Alfonso Chavez, M.D. Relator also brought retaliation claims against Fresenius and her former supervisor Larry Ramirez. The district court granted in part and denied in part the defendants' motions for judgment as a matter of law, and the jury returned a
Fresenius is a provider of dialysis services to patients with end stage renal disease (ESRD).
The district court consolidated Relator's qui tam and retaliation actions, and Fresenius and Chavez filed motions to dismiss portions of Relator's complaints. The court granted the motions, leaving the following causes of action from the FCA Complaint viable at the start of trial: Count 1 (knowingly presenting fraudulent or false claims in violation of the FCA, § 3729(a)(1)); Count 2 (knowingly making a false record or statement in presentation of false claims in violation of the FCA, § 3729(a)(2)); Count 3 (presenting false claims for Medicare reimbursement for services rendered in violation of the Stark Law, 42 U.S.C. § 1395nn); Count 6 (presenting false claims for Medicare reimbursement for services rendered in violation of the Anti-Kickback Act, 42 U.S.C. § 1320a-7b(b)); and Count 7 (conspiring to submit false claims in violation of the FCA, § 3729(a)(3)). The following causes of action from the Retaliation Complaint were viable at the start of trial: Count 1 (retaliation in violation of the FCA, § 3730(h)), as against Fresenius; Count 2 (retaliatory constructive discharge in violation of the FCA, § 3730(h)), as against Fresenius; and Count 3 (intentional infliction of emotional distress) as against Fresenius and Ramirez. Relator, Fresenius, and Chavez all filed motions for summary judgment, which the court carried through trial.
At the close of Relator's case-in-chief, Fresenius and Chavez moved for judgment as a matter of law. The district court granted the motions in part and denied
Following the entry of judgment, all of the defendants moved for attorney's fees. Fresenius and Ramirez requested fees arising from their defense of Relator's retaliation claim, and Chavez requested fees for the entire lawsuit. The court awarded Fresenius $15,360 in attorney's fees from Relator's counsel under § 1927, finding that counsel unreasonably and vexatiously multiplied proceedings with respect to the retaliation suit. Relator timely appealed the district court's judgment in the FCA/retaliation case, and Relator's counsel separately appealed the award of attorney's fees. We consolidated the two appeals.
Relator first contends that the district court erred in granting Fresenius judgment as a matter of law on Count 1 of the FCA Complaint (knowingly presenting false claims, § 3729(a)(1)). She bases her argument on two separate legal theories: (1) that Fresenius falsely certified compliance with applicable statutes and regulations and (2) that Fresenius assisted in the presentation of claims that were "grounded in fraud."
The False Claims Act is designed to permit "suits by private parties on behalf of the United States against anyone submitting a false claim to the Government." Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 941, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). The FCA imposes liability on an individual who:
31 U.S.C. § 3729(a)(1)-(3) (2008).
"[C]laims for services rendered in violation of a statute do not necessarily constitute false or fraudulent claims under the FCA." United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902 (5th Cir.1997). However, under a false certification theory, a defendant may be liable where "the government has conditioned payment of a claim upon a claimant's certification of compliance with, for example, a statute or regulation" and the claimant "falsely certifies compliance with that statute or regulation." Id. Relator alleged that Fresenius submitted claims based on a referral scheme that violated the Anti-Kickback Act, the Stark Law, and a host of federal and state regulations that govern dialysis facilities. According to Relator, Fresenius falsely certified compliance with these statutes and regulations in its annual cost reports.
On the record before us, Fresenius's cost reports would present a difficult basis for FCA liability. Evidence adduced at trial showed that, although the cost reports were a condition of Medicare participation and failure to submit accurate cost reports would trigger Medicare's remedial scheme, the cost reports would not cause payment to be withheld. Only two witnesses
This challenging factual predicate for FCA liability, based on these attenuated cost report submissions, need not be resolved because we affirm the district court's separate and sufficient conclusion that the Relator did not demonstrate that Fresenius and Chavez violated the FCA by falsely certifying that they were in compliance with the Anti-Kickback Statute because the Relator did not provide legally sufficient evidence that Fresenius and Chavez knowingly and willfully entered into an illegal kickback scheme involving dialysis referrals. As the district court explained:
Gonzalez, 748 F.Supp.2d at 113 n. 31. Specifically, the assistants only worked with Chavez in 2000-2001 and 2005-2006. Chavez referred the same number of patients to Fresenius's clinics whether or not he had these assistants working for him. Chavez also referred patients to Fresenius when he had a licensed medical assistant working for him. Additionally, the assistants were employed and paid by Chavez; not Fresenius. The district court did not err in concluding that there is insufficient evidence to establish that the assistants' ability to work at the clinic induced Chavez to refer patients to Fresenius. For these reasons, we also uphold the district court's grant of judgment on the Relator's Anti-Kickback Act claim.
Alternatively, Relator argues that Fresenius's claims were false because they were "grounded in fraud" and "per se tainted," even if Fresenius did not certify statutory compliance. At the district court, Relator based this theory on this court's statement in Longhi that "[i]n certain cases, FCA liability may be imposed `when the contract under which payment is made was procured by fraud.'" Longhi, 575 F.3d at 467-68 (quoting United States ex rel. Willard v. Humana Health Plan of
Relator contends that the district court construed her argument too narrowly, and she directs this court to United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443 (1943), in which the Supreme Court explained that the three provisions of § 3729(a) "considered together, indicate a purpose to reach any person who knowingly assisted in causing the government to pay claims which were grounded in fraud, without regard to whether that person had direct contractual relations with the government." Hess, 317 U.S. at 544-45, 63 S.Ct. 379 (emphasis added). Relator contends that in United States ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370 (5th Cir.2004),
Relator reads too much into Hess, Riley, and Grubbs. In Hess, the Supreme Court stated that the three FCA provisions considered together evidence a congressional intent for the FCA to reach all parties knowingly involved in a fraudulent scheme. See Hess, 317 U.S. at 544, 63 S.Ct. 379. In this case, the FCA did in fact reach Fresenius. Relator's claims against Fresenius under (a)(2) and (a)(3) proceeded to the
We also reject Relator's argument that the district court improperly instructed the jury. Because Relator's counsel timely objected to the instruction at trial, we review for abuse of discretion. See Price v. Rosiek Constr. Co., 509 F.3d 704, 708 (5th Cir.2007). "A challenge to jury instructions must demonstrate that the charge as a whole creates substantial and ineradicable doubt whether the jury has been properly guided in its deliberations." Id. (quoting Thomas v. Tex. Dep't of Criminal Justice, 297 F.3d 361, 365 (5th Cir. 2002)). The contested jury instruction read as follows:
On appeal, Relator does not contend that any of the instruction is legally erroneous. Indeed, the language of the instruction quotes verbatim Texas Occupations Code § 157.001. Relator instead contends that the issue of delegation of duties by a physician is irrelevant, and that the jury, having returned a verdict in less than ninety minutes, was obviously misled by the instructions. In other words, Relator seems to contend that the instruction distracted the jury from the issue of whether Chavez falsely billed Medicare for services provided by Devora and Orozco, and led the jury to end its inquiry upon deciding that Chavez was allowed by law to delegate.
We turn to Relator's retaliation claims and the resultant award of attorney's fees. Section 3730 of Title 31 provides the relevant cause of action:
31 U.S.C. § 3730(h) (2008). The district court concluded that, even if Relator had been threatened, harassed, and discriminated against, she had nevertheless produced insufficient evidence that Fresenius or Ramirez actually knew of her qui tam action, and granted the defendants' motion for judgment as a matter of law. On appeal, Relator again offers a bald assertion that management knew of the lawsuit and argues in the alternative that we should presume knowledge because her FCA complaint was unsealed prior to her termination. Relator does not offer evidence or authority in support of either proposition. Additionally, Relator expressly disclaimed in attorney fee proceedings her contention, central to her retaliation claim, that Ramirez ordered her to assist in the alleged fraud.
Relator's counsel also appeals the district court's award of sanctions under § 1927 in connection with Relator's retaliation suit. Section 1927 provides:
28 U.S.C. § 1927. Section 1927 sanctions are not to be awarded lightly. They require "evidence of bad faith, improper motive, or reckless disregard of the duty owed to the court." Edwards v. Gen. Motors Corp., 153 F.3d 242, 246 (5th Cir. 1998). This court reviews the district court's award of sanctions under § 1927 for abuse of discretion. Cambridge Toxicology Group, Inc. v. Exnicios, 495 F.3d 169, 180 (5th Cir.2007).
Relator's story then changed during discovery. When asked in deposition testimony if she had ever been asked to lie to Medicare auditors or ever felt like it was a job requirement that she assist in fraud, Relator replied in the negative. After the deposition, Relator's counsel submitted an errata sheet containing 101 corrections to Relator's testimony, some of which again changed Relator's answers to match her original complaint allegations that her supervisors wanted her to lie to Medicare authorities.
The defendants then moved to strike the errata sheet from the record and to re-depose Relator. They also requested sanctions under § 1927. The magistrate judge denied in part and granted in part the defendants' motion, determining that the errors were presumably made in good faith, that sanctions were unnecessary, and that the errata sheet need not be stricken from the record. The magistrate judge also ordered that Relator be re-deposed at no cost to the defendants. During her second deposition, Relator maintained that her July 3 letter accurately reflected the situation at Fresenius.
At trial, Relator's story changed yet again. She testified that she had never been asked to lie, and that her answers in the first deposition had been accurate. She testified that her attorney had "literally word[ed]" some of the errata sheet changes and had also helped her write the July 3 letter referenced in her complaint. The district court inferred bad faith on the part of counsel, concluding that counsel had helped Relator push a meritless claim to trial. On this basis, the district court awarded sanctions.
Counsel argues on appeal that Relator was entitled to submit an errata sheet and make substantive changes to her deposition under Federal Rule of Civil Procedure 30(e). We do not necessarily disagree, but the only question for our purposes is whether the district court abused its discretion in concluding that Relator's counsel unreasonably and vexatiously multiplied proceedings. We find no abuse of discretion. The district court assumed good faith in the initial filing of the complaint but noted that counsel should at least have developed questions about the merits of Relator's claim when she disclaimed a critical allegation from her complaint in the first deposition. Additionally, Relator's testimony at trial supported the district court's conclusion that counsel exerted improper influence over the drafting of the errata sheet. Although clients do sometimes make substantive missteps in deposition testimony which may be corrected with an errata sheet, attorneys may not use an errata sheet to push a case to trial where the client no longer adheres to the allegations supporting the claim. See Norelus v. Denny's, Inc., 628 F.3d 1270, 1281-82 (11th Cir.2010). The evidence in the record before us supports the district court's conclusion that Relator's counsel did just that.
Lastly, we reject counsel's assertion that the district court did not afford due process before awarding sanctions. We have held that where counsel "does not contend that any factual dispute exists with respect to his actions for which § 1927 sanctions were imposed" and "those actions appear in the record and briefs before the district court," a hearing may not be helpful. See Travelers Ins. Co. v. St. Jude Hosp. of Kenner, La., Inc., 38 F.3d 1414, 1418 (5th Cir.1994). Furthermore, the judge who awarded sanctions was the same judge who presided over Relator's FCA and retaliation cases and had become familiar with all facets of the litigation. See id. ("[B]y having presided over the underlying action, as well as related actions, the district court was most familiar with ... the parties, and the litigation."); United States v. Nesglo, Inc., 744 F.2d 887, 891 (1st Cir.1984) ("Another factor that militates towards finding that a hearing was unnecessary is the degree of familiarity the court had with the parties and the litigation."). Relator's counsel received notice that the district court was considering sanctions in the form of opposing counsel's motion, and Relator's counsel responded to the motion. No hearing was necessary.
To summarize, the district court was correct to grant the defendants' motion for judgment as a matter of law on Relator's FCA claims, and the district court's FCA jury instructions were not in error. Neither did the district court err in granting the defendants' motion for judgment as a matter of law on Relator's retaliation claims. Finally, the district court did not abuse its discretion in awarding sanctions under § 1927. We AFFIRM.
Relator also appeals the denial of her motion for summary judgment. "We have held repeatedly that orders denying summary judgment are not reviewable on appeal where final judgment adverse to the movant is rendered on the basis of a subsequent full trial on the merits." Johnson v. Sawyer, 120 F.3d 1307, 1316 (5th Cir.1997). The exception to this general rule that Relator cites is not applicable in this case. See Becker v. Tidewater, Inc., 586 F.3d 358, 365 (5th Cir.2009) (basing its review of the denial of summary judgment on the fact that the lower court conducted a bench trial).