This proceeding arises out of a qui tam action against Bristol-Myers Squibb Co. to impose civil penalties for violation of the Insurance Fraud Prevention Act (IFPA), Insurance Code section 1871 et seq. The relators allege Bristol-Myers employed runners and cappers to induce physicians to prescribe its drugs to their patients.
We conclude that for the assessment of monetary penalties (but not the imposition of other available remedies), Insurance Code section 1871.7 requires proof of resulting claims that are in some manner deceitful, though not necessarily containing express misstatements of fact, and that causation may be established under the standard substantial-factor test, not the but-for test. Accordingly, we grant the writ and reverse the trial court's order.
Michael Wilson, a former Bristol-Myers Squibb Co. sales representative, on behalf of the People of the State of California, filed the underlying qui tam action
The lawsuit alleges, in a factually detailed pleading, that in marketing its drugs, BMS engaged in a course of illegal and fraudulent conduct aimed at doctors, health care providers, pharmacists, and insurance companies. It alleges BMS targeted high-prescribing physicians, members of formulary committees,
BMS has not yet answered, but in its return to the petition it denies the complaint's material allegations. For example, BMS denies "any assertion that its sales representatives gave doctors items of value to try to influence prescription decisions;" that "either the promise to provide or the provision of an item of value to a doctor constitutes a `kickback;'" or that "its sales representatives or the doctors they called on constitute `runners, cappers,
This petition concerns the proof required to establish a violation of subdivision (a) of Insurance Code section 1871.7, a portion of the IFPA that relates to health insurance and workers' compensation insurance fraud, informally entitled, "Employment of persons to procure clients or patients."
Insurance Code section 1871.7, subdivision (b) prescribes civil penalties and other remedies for violation of either subdivision (a) of that section or Penal Code sections 549, 550, or 551, which target insurance and workers' compensation fraud.
The parties submitted below a stipulated motion for summary adjudication pursuant to subdivision (s) of Code of Civil Procedure section 437c, which
Question 1 postulated three hypothetical facts:
i. BMS provided or promised to provide an item or service of value to a physician;
ii. one purpose of BMS providing or promising the item or service was to influence the physician to prescribe BMS drugs;
iii. subsequent to BMS providing or promising the item or service, the physician prescribed a medically appropriate BMS drug.
Question 1 asked whether there can be a violation of subdivision (a) or (b) under these hypothetical facts absent proof that the item or service caused the prescription.
Question 2 postulated two additional hypothetical facts:
iv. express factual assertions on the claim submitted to the third party for payment of a health care benefit were not misstated;
v. the claim for payment does not disclose the item or service provided or promised to the physician.
Question 2 asked whether subdivision (a) or (b) is violated under these facts.
BMS argued that both questions should be answered, "no." As to question 1, BMS contended that a violation of subdivisions (a) or (b) requires proof that but for the provision of the benefit to a physician, the insurer would not
The trial court (Kenneth Freeman, Judge) agreed with BMS. It looked to subdivision (b)'s final sentence, which states that "[t]he penalty prescribed in [subdivision (b)] shall be assessed for each fraudulent claim presented to an insurance company and not for each violation." (Italics added.) The court held that under that language it is not enough to prove that the unlawful conduct was a substantial factor resulting in the prescription. The court held this language permits the assessment of penalties only if the prescription would not have been written but for the unlawful conduct; that the prescriptions must be shown on a prescription-by-prescription and claim-by-claim basis to have been a quid pro quo for value provided by BMS;
Ruling on the summary adjudication motion, the trial court held that subdivision (b)'s penalties cannot be assessed under the facts postulated in the summary adjudication motion. Under these rulings, neither the conduct made unlawful by Insurance Code section 1871.7, subdivision (a), nor even much of the conduct that is unlawful under Penal Code section 550, can constitute the fraud that is a prerequisite to the assessment of Insurance Code section 1871.7, subdivision (b)'s penalties.
The trial court filed and served its ruling on September 23, 2013, stating as part of its order that pursuant to Code of Civil Procedure section 166.1, appellate resolution of the issues raised by the summary adjudication "may materially assist in the resolution of the litigation."
On October 23, 2013, petitioners applied for a writ of mandate or other appropriate relief in this court, filing supporting exhibits and a request for judicial notice of certain documents. On November 13, we requested opposition to the petition, which we received on November 25, along with
An order granting summary adjudication is appealable only after entry of final judgment. (Code Civ. Proc., § 904.1; Fisherman's Wharf Bay Cruise Corp. v. Superior Court (2003) 114 Cal.App.4th 309, 319 [7 Cal.Rptr.3d 628].) However, mandate may be available to review such an order where the petition presents significant issues of first impression (Marron v. Superior Court (2003) 108 Cal.App.4th 1049, 1056 [134 Cal.Rptr.2d 358]), or where an erroneous ruling creates a likelihood that, unless interim review of issues of law is granted, two trials will be necessary rather than one. (Code Civ. Proc., § 437c, subd. (m)(1); Intrieri v. Superior Court (2004) 117 Cal.App.4th 72, 81 [12 Cal.Rptr.3d 97].)
The writ petition in this proceeding was timely filed on October 23, 2003. The order granting summary adjudication had been entered September 23, 2013. On October 9, 2013, the trial court granted an extension of the statutory 20-day time within which to petition for an extraordinary writ, to October 24, 2013, as subdivision (m)(1) of Code of Civil Procedure section 437c gives it discretion to do.
The trial court's interpretation of section 1871.7 on undisputed facts raises pure issues of law. It therefore is subject to independent review. (Pugliese v. Superior Court (2007) 146 Cal.App.4th 1444, 1448 [53 Cal.Rptr.3d 681]; California Teachers Assn. v. Governing Bd. of Golden Valley Unified School Dist. (2002) 98 Cal.App.4th 369, 375 [119 Cal.Rptr.2d 642].) We view the evidence — the parties' stipulated hypothetical facts, and any reasonable inferences that may be drawn from them — "in the light most favorable to" the plaintiffs and petitioners. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 [107 Cal.Rptr.2d 841, 24 P.3d 493].)
We granted writ review in part due to the dearth of appellate review of matters involving interpretation of section 1871.7, and because the parties and trial court urged that resolution of issues raised by the motion may in the long run ease the expense of the underlying litigation and its burden on the court.
Petitioners request judicial notice of the Senate Committee on Criminal Procedure, Analysis of Senate Bill No. 465 (1995-1996 Reg. Sess.), relating to amendments to section 1871.7. Respondent contends the document is irrelevant but interposes no objection to judicial notice. We grant the request.
Petitioners request judicial notice of an excerpt from the Legislative Counsel's Digest relating to Assembly Bill No. 1050 (1999-2000 Reg. Sess.). We have received no opposition to the request, which we grant.
Petitioners also request judicial notice of a notice of intervention filed by the Commissioner in another matter, as well as pleadings and settlement documents from other cases, apparently in order to counter contentions that their interpretations of section 1871.7 are unprecedented. These requests we deny as irrelevant under the de novo standard of review that applies here.
The parties and the trial court agreed to summary adjudication of questions "whether subdivision (a) or (b) is violated" under the postulated facts. The answers to those literal questions are straightforward. But the trial court's ruling on them is somewhat less so.
The conduct made unlawful by subdivision (a) is identified by a single verb: To employ.
Questions 1 and 2 ask also whether there can be a violation of subdivision (b) under the postulated facts. But subdivision (b) does not itself make any conduct unlawful; it merely prescribes the remedies that may follow violations of subdivision (a) and the referenced Penal Code provisions.
However, the trial court's rulings involve not so much whether there can be a violation of these provisions under the postulated facts, but the proof that is required to justify the assessment of civil penalties under subdivision (b). We discuss these underlying issues below.
Contrary to the trial court, we conclude:
(1) The "fraudulent claim" requirement refers broadly to claims that are in some manner deceitful, and is not limited to claims that contain an express misstatement of fact.
(3) Subdivision (b)'s requirement of claims "presented to an insurance company" refers to claims that have in some manner resulted from the conduct proscribed by subdivisions (a) and (b). The requirement is a prerequisite to the assessment of subdivision (b)'s penalties, but not an element of the offense for which the penalties are assessed. It is not necessarily limited to claims written strictly as a quid pro quo for items of value received from BMS, nor to prescriptions that would not have been written and claims that would not have been presented in the absence of the proscribed conduct.
(4) The postulated fact that the prescriptions for which claims are presented are medically appropriate neither compels nor precludes determinations that the claims are in some manner deceitful, or that the unlawful conduct was a substantial factor in causing them to be written.
Until 1999, subdivision (b)'s first sentence provided the direction for its application: "Every person who violates any provision of this section or Section 549, 550, or 551 of the Penal Code shall be subject" to its civil penalties, as well as to any other available penalties. The language of this provision remained unchanged when subdivision (b) was amended to add its final sentence in 1999, but that amendment affected its application. The added sentence provided for the first time that subdivision (b)'s penalties are to be assessed and measured by the number of fraudulent claims presented to an insurer, rather than for each instance in which subdivision (a) or the incorporated Penal Code provisions have been violated. (Ins. Code, former § 1871.7, amended Stats. 1999, ch. 885, § 2, 6345; see Amendments, Deering's Ann. Ins. Code (2009 ed.) foll. § 1871.7, p. 274.)
The actual impact of the amended language, as interpreted by the trial court in this case, apparently will be the opposite of that intention. Section 1871.7 provides for a system of enforcement incentives in which qui tam plaintiffs — typically whistleblowers, as in the underlying proceeding — file the action, to be joined by the Commissioner. (Ins. Code, § 1871.7, subds. (d), (e), (f); Gov. Code, § 12652, subd. (c).) Such procedures (modeled on those of the False Claims Act; Gov. Code, § 12650 et seq.) enable and encourage the enforcement of regulatory provisions, such as section 1871.7, that would otherwise be beyond the resources of public entities to enforce. (State ex rel. Harris v. PricewaterhouseCoopers, LLP (2006) 39 Cal.4th 1220, 1231 [48 Cal.Rptr.3d 144, 141 P.3d 256]; see State of California ex rel. Metz v. Farmers Group, Inc. (2007) 156 Cal.App.4th 1063, 1071 [67 Cal.Rptr.3d 842] [subdivision (b) was "'designed to encourage insurers to bring section 1871.7 actions'"].) Without these procedures to involve potential whistleblowers in the enforcement of regulatory provisions such as section 1871.7, the Commissioner would lack the evidence and the resources to discover violations and to prosecute actions such as these.
The likely impact of the final sentence of subdivision (b), as interpreted by the trial court, would be to render the imposition of penalties difficult or impossible, thereby removing from section 1871.7 much of the incentive for
The final sentence of subdivision (b) limits the assessment of its penalties to something less than "[e]very person" who is guilty of the unlawful conduct, however. Under it, the "penalty prescribed in this paragraph" may be assessed only "for each fraudulent claim presented to an insurance company," and not for each act that violates subdivision (a) or the incorporated penal provisions. The "penalty prescribed in this paragraph" is the "civil penalty of not less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000)," and the "assessment of not more than three times the amount of each claim for compensation ...." But it does not encompass the "other equitable relief" that is authorized by subdivision (b), including injunction, disgorgement, costs, and attorneys fees, nor the "other penalties that may be prescribed by law." Those additional remedies (which are outlined but not specifically defined) are not within the meaning of the "penalty prescribed by this paragraph."
The petitioners contend, with some justification, that this interpretation of subdivision (b), requiring proof of resulting fraudulent claims for the assessment of its penalties, will effectively condone and immunize conduct that the Legislature plainly intended to proscribe. Proof that a claim for payment of a prescription resulted directly from bribery and fraud used to induce the prescription, they contend, is an almost impossible burden, rendering subdivision (b) toothless to civilly prosecute or regulate drug companies' use of prohibited means to procure prescriptions and profits. And they contend that the error of this interpretation is shown by the fact that it renders Insurance Code section 1871.7, subdivision (a) superfluous, because under Penal Code section 550 proof of a fraudulent claim would alone be sufficient
But the requirement that fraudulent claims resulted from the unlawful conduct does not render subdivision (a) wholly superfluous, although it does limit the application of subdivision (b) to far less than the petitioners urge. Subdivision (b) leaves the court with equitable and other remedies (such as injunction and disgorgement) to address violations that cannot be causally connected with fraudulent claims. Subdivision (a) remains a viable identification of running or capping activity as conduct that the Legislature has found to be unlawful, and to be "almost always" a harbinger of fraud. (Sen. Com. on Crim. Proc, Analysis of Sen. Bill No. 465 (1995-1996 Reg. Sess.) p. 5.)
In adding the final sentence to subdivision (b), the Legislature could (and presumably did) conclude that the employment of runners and cappers that does not result in claims, or that results only in nonfraudulent claims, may appropriately be remedied by equitable devices, but that when the result is the presentation of fraudulent claims, the additional consequence of subdivision (b)'s monetary penalties is justified. This is consistent with the clear words of the statute, and "`"we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history."'" (Ennabe v. Manosa, supra, 58 Cal.4th at p. 719.) If the resulting remedies are less vigorous than the Legislature intended, it is there that correction must be sought.
Relying on subdivision (b)'s requirement that penalties must be assessed on the basis of fraudulent claims to insurers, the trial court ruled that subdivision (b) cannot be violated unless claims presented for payment are themselves independently fraudulent, and that the fraud must consist of an express misstatement of fact contained in the claim. It reasoned that "[i]f the express factual assertions on the claim were not misstated, then the claim
The statute does not justify the prerequisites that this ruling imposes on the assessment of penalties under subdivision (b). Under the trial court's interpretation, the requisite fraud cannot be established by proof of the sort that would ordinarily be sufficient to prove deceit, such as the intentional concealment or nondisclosure of material facts; it cannot be established by proof of communications or a course conduct apart from the contents of the particular claim; and it cannot be inferred from the commission of acts that are unlawful under subdivision (a) or the incorporated Penal Code provisions. It can be established only by proof of an express factual assertion on the face of the claim. We disagree.
A substantial purpose for subdivisions (a) and (b)'s enactment is to enable the assessment of civil penalties for unlawful running and capping activities, without the practically impossible showing that a particular claim resulted from a particular violation. Such a showing, if it were possible, would likely be sufficient to establish not just violations of subdivision (a) and Penal Code section 550, but also bribery or illegal kickbacks in violation of Business and Professions Code section 650 (and undoubtedly other provisions of law). While section 1871.7 nowhere defines the conduct identified in subdivision (a) as necessarily fraudulent or deceitful, neither is there any indication that such conduct is categorically free of fraud when it is characterized by deceit, dishonesty, or trickery, perpetrated to gain some unfair or dishonest advantage. (Webster's College Dict., supra, at p. 529.) The Legislature has found that conduct to be unlawful, and "almost always" to be identified with fraud. (Sen. Com. on Crim. Proc., Analysis of Sen. Bill No. 465 (1995-1996 Reg. Sess.) p. 5.) The Legislature is unquestionably justified in seeking to curb that conduct, not because it is itself necessarily fraudulent or deceitful (though it often may be), but because of the difficulties of proving the fraudulent nature of either the conduct or its consequences.
Subdivision (a) identifies certain running and capping activities as unlawful without regard to whether the resulting services are competently rendered. Running and capping activities are disfavored and unlawful not just because they may often result in services that are excessive or unnecessary, but also because their purpose is to unfairly (and perhaps deceptively) obtain the benefits (clients, patients, prescriptions, claims, etc.) that otherwise might have gone to others who did not use the prohibited methods. In enacting section 1871.7, the Legislature could have concluded that using runners and cappers for the prohibited purpose tends to result in additional insurance claims and payments, that have substantial social costs despite their inability
Upon proof of a cause of action for deceit, the plaintiffs would be entitled to the damages resulting from the defendant's wrongful conduct. But subdivision (b) is not a substitute for a civil tort action for deceit. It provides civil penalties for conduct that is made unlawful by other provisions of law; the plaintiffs in an action for its penalties are not direct victims, they did not rely on any misstatements or nondisclosures, and they suffered no resulting harm — apart from that suffered by insurance policyholders and society as a whole.
This context gives ample reason to interpret subdivision (b)'s requirement of fraudulent claims broadly, to encompass claims that result from deceit or conduct that is done with an intention to gain unfair or dishonest advantage. (Webster's College Dict., supra, p. 529.) There is no reason to conclude as a matter of law that the Legislature intended the term "fraudulent" in subdivision (b) to have a narrower meaning.
California law recognizes many circumstances in which the proof required to show fraud requires far less than would be required to establish a civil cause of action for fraud. (E.g., Hughes v. Board of Architectural Examiners (1998) 68 Cal.App.4th 685, 692-693 [80 Cal.Rptr.2d 317] [fraud or deceit
The parties have postulated for the purpose of their summary adjudication motion that items or services of value have been provided in order to induce prescriptions of BMS drugs, that BMS drugs were thereafter prescribed, and that the claims for payment did not disclose those facts. But beyond that sparse outline, the actual facts remain unknown at this stage of the trial court proceedings. Contrary to the parties' urging, we conclude that the postulated facts do not provide a sufficient factual basis on which to conclude that BMS's conduct either does, or does not, constitute the fraud that is required for the assessment of penalties under subdivision (b).
Contrary to the petitioners' urging, we are unable to find anything in the statutory language or history of section 1871.7 that defines the nature of the fraud that is required for the assessment of penalties, or that equates subdivision (a)'s unlawful conduct with fraudulent claims. By the same token, however, we discern no basis on which to conclude that the conduct that is unlawful under subdivision (a) could not, upon a sufficient factual showing, be found to be fraudulent within the meaning of subdivision (b). The Legislature could have defined subdivision (a)'s unlawful conduct as
Subdivision (b) says nothing at all concerning the countless forms that fraud and deceit may take, nor to limit the evidence by which it might be proved. Various possible factual circumstances might strengthen, weaken, or wholly negate any inference of deceit that could arise from the drug company's conduct. These factors might include the magnitude of the unlawful conduct, whether the BMS drug is medically preferred, and whether the nature and extent of the drug companies' incentives have been disclosed, for example.
The trial court interpreted subdivision (b) to require proof of causation as a predicate to assessment of subdivision (b)'s penalties, relying on the provision in subdivision (b)'s final sentence, that its penalties may be assessed only "for each fraudulent claim presented" to an insurer. Although petitioners dispute that subdivision (b) requires proof that specific claims resulted from specific violations, they nevertheless correctly concede, at least implicitly, that there must be some manner of causal relationship between the unlawful conduct and its results. The penalties cannot be imposed merely because claims for prescriptions of BMS drugs have been presented sometime after BMS engaged in the proscribed conduct.
We agree that to justify subdivision (b)'s penalties, there must be a causal relationship between the prohibited conduct and the prescriptions; the unlawful conduct must be shown to have been a substantial factor resulting in the claims for BMS prescriptions. And while an inference of causation may often arise when one event follows another, that temporal relationship may not alone be sufficient.
Notwithstanding the petitioners' apparent understanding that a causal relationship must exist between the unlawful conduct and its results, they dispute the trial court's ruling that causation must be shown on a but-for basis, however. They argue the requisite causation may be proof that BMS's unlawful conduct was a substantial factor leading to the claims. This might be established, for example, by showing that the unlawful conduct strongly influenced the physician (or his or her decision maker) in determining what medication to prescribe. BMS argues that petitioners must prove more however — they must prove not just that BMS's unlawful conduct strongly influenced the result, but that without the unlawful conduct, the physician would not have written the prescriptions and the claims for payment would not have been presented.
The trial court agreed with BMS, concluding that the proof must in all cases show not only that unlawful conduct was a substantial factor influencing physicians to write prescriptions, but also that without that conduct the prescriptions would not have been written. The court reasoned that such proof is required by the final sentence of subdivision (b), and the decision in Viner v. Sweet (2003) 30 Cal.4th 1232 [135 Cal.Rptr.2d 629, 70 P.3d 1046]. We conclude this requirement fails to take into account the possibility of concurrent independent causes for the physician's conduct.
The Viner v. Sweet decision therefore does not support the trial court's ruling that causation necessarily must be established on a but-for basis. (See Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 976-977 [64 Cal.Rptr.2d 843, 938 P.2d 903] [to show that plaintiff's damages resulted from defendant's misrepresentation, "`[i]t is not ... necessary that [a plaintiff's] reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor in influencing his conduct.... It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision.' (Rest.2d Torts, § 546, com. b, p. 103.)"].) This reasoning is reflected also in In re Tobacco II Cases (2009) 46 Cal.4th 298, 326 [93 Cal.Rptr.3d 559, 207 P.3d 20], in which the Supreme Court reiterated the Engalla decision's analysis of the causation requirement. (Engalla v. Permanente Medical Group, Inc., supra, 15 Cal.4th at pp. 976-977). Although proof of causation often requires proof that the plaintiff would not have acted as he or she did in the absence of the fraud, under the fraud prong of the unfair competition law (Bus. & Prof. Code, § 17200 et seq.). "`"It is not ... necessary that [the plaintiff's] reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor in influencing his conduct.... It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision." [Citation.]'" (In re Tobacco II Cases, supra, 46 Cal.4th at p. 326.)
Here, the stipulated facts expressly assume a physician prescribes a medically appropriate drug. Given a choice among two or more medically appropriate drugs, the reasons why a physician would prescribe one over another could include many possible factors, including not just the physician's independent medical judgment as to the particular prescription, but also, for example, patient requests and preferences, direct advertising, relative costs of alternative treatments and drugs, dictates of institutional formularies,
These potential causes can be, and in some respects must be, independent. Benefits provided to a physician by a drug company (such as tickets for the physician's family to attend amusement parks, sporting events, or vacation spas) do not implicate the physician's medical knowledge or judgment in selecting which drugs to prescribe. Patient's preferences might or might not reasonably influence physicians' medical judgments. Institutional formularies might impose requirements that influence or override physicians' independent judgments, based on economy and other factors, which might themselves be influenced by unearned benefits received from a drug company. Logic does not dictate that these causes necessarily combine with or depend on one another. They might (and, as a matter of motivational diversity alone, probably do) militate toward conflicting results.
The trial court's reliance on Viner v. Sweet as the controlling authority on the causation issue assumes that BMS's conduct could operate as a causative factor only in combination with these forces, not independently or at odds with them. Based on that assumption, the trial court concluded that petitioners must establish not only that BMS's unlawful conduct was a substantial factor resulting in the prescriptions, but that it also was essential to the result; that if the prescription would have been written even without BMS's unlawful inducement, the unlawful conduct cannot be found to have caused the prescription and claim. In other words, it would be nearly impossible to establish the causation required by subdivision (b) if a physician's medically appropriate judgment would justify a prescription for the same BMS drug, notwithstanding that BMS had provided the physician with substantial benefits and items of value, given for the purpose of influencing his or her decision to prescribe the BMS drug.
While plaintiffs are required to show a causal relationship between the unlawful conduct and the resulting claims, at this stage of the case — before defendants have filed an answer, before discovery, and before the identification of the evidence — it would be premature to conclude that proof of causation necessarily requires proof that the prescriptions would not have been written in the absence of the unlawful conduct. We do not think the law necessarily requires so heavy a burden.
We also reject the trial court's decision that proof of causation must be on a prescription-by-prescription and claim-by-claim basis. The court held on the issue of causation that section 1871.7 is violated only if the physician's reasons for writing a particular prescription amounted to a quid pro quo
Courts regularly resolve factual issues, including issues of causation, using statistical and other expert conclusions drawn from group behavior. (See In re Vioxx Class Cases, supra, 180 Cal.App.4th at p. 129 [evidence may show causation of harm resulting from unlawful representations on group rather than individual basis].) For this reason we reject the trial court's conclusion that the requisite causation can be established only on an individual-prescription or individual-claim basis.
BMS argues that both the underlying complaint and the petition before this court rest on the incorrect assumption that the conduct allegedly done by BMS constitutes the employment of runners or cappers within the meaning of subdivision (a). However, the question whether the alleged conduct can be construed to constitute running and capping in violation of subdivision (a) was the subject of an earlier demurrer, the trial court's denial of which BMS challenged by writ petition to this court, which was denied summarily. It was not raised in the summary adjudication motion that is before us in this proceeding. As to BMS's contention that physicians who write medically appropriate prescriptions are categorically unable to be runners or cappers within the meaning of subdivision (a), the matter is one of proof, not of law.
The trial court erred by concluding (1) that in no case can conduct be actionable under subdivision (b) without proof that a prescription was written and a fraudulent claim presented to an insurer as a result of the unlawful conduct; (2) that in order to justify assessment of monetary penalties under subdivision (b) the proof must necessarily establish that the prescription for which payment is claimed would not have been written and the claim for payment would not have been presented but for BMS's unlawful conduct; and (3) that in order to justify assessment of monetary penalties under subdivision (b) the proof must necessarily establish that the claim contains on its face an affirmative misstatement of fact.
The petition for writ of mandate is granted. Respondent court is ordered to set aside its ruling on the motion for summary adjudication and to enter a modified ruling that comports with this opinion. Petitioners are to recover their costs in this proceeding.
Johnson, J., and Miller, J.,
Penal Code section 549 proscribes various forms of insurance fraud. Penal Code section 550 identifies numerous unlawful acts relating to presentation of insurance claims. Penal Code section 551 relates only to automobile insurance, and is not relevant to this case.
