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Campbell v. Redding Med. Ctr.

United States Court of Appeals for the Ninth Circuit

July 14, 2005, Argued and Submitted, San Francisco, California ; August 22, 2005, Filed

No. 03-17082

Opinion

 [*818]  SILVERMAN, Circuit Judge:

] The False Claims Act provides that "no court shall have jurisdiction" over a qui tam action based on allegations of fraud that already have been publicly disclosed, unless the relator was an "original source" of the information. 31 U.S.C. § 3730(e)(4)(A). In addition, the Act precludes any person from filing a subsequent "related action based on the facts underlying the pending action" when a qui tam action already has been filed. Id. § 3730(b)(5). This is known as the first-to-file bar. The question before us is whether the first-to-file bar prevents the filing [**2]  of a subsequent related action when the first action is jurisdictionally defective because the relator was not an original source of publically disclosed information. We hold today that it does not. ] If the first-filed qui tam action was not filed by an original source and is therefore not jurisdictionally cognizable, it does not constitute the first-filed complaint for the purposes of § 3730(b)(5).

I. Factual and Procedural Background

This lawsuit arises out of a scheme involving the performance of thousands of unnecessary invasive cardiac procedures at the Redding Medical Center ("RMC") for the purposes of fraudulently billing Medicare. On October 30, 2002, Magistrate Judge Peter Nowinski issued a medical records search warrant authorizing the FBI to investigate RMC and the medical offices of the defendant doctors. The FBI executed the search warrant at RMC that same day. The U.S. Attorney's Office also  [*819]  released the Search Warrant Affidavit to the public and the press on October 30.

On November 5, 2002, John Corapi, a former RMC patient, and Joseph Zerga, his friend, filed a sealed qui tam complaint pursuant to the False Claims Act, 31 U.S.C. § 3729-3733 [**3]  ("FCA"), and the California False Claims Act in the United States District Court for the Eastern District of California against RMC; Tenet Healthcare Corporation; Chae Moon, RMC's director of Cardiology; and Fidel Realyvasquez, the Chairman of RMC's Cardiac Surgery Program. The Corapi/Zerga complaint alleged that the defendants had submitted false claims to federal and state medical insurance programs and stated that they had direct and independent knowledge of the facts underlying the complaint and had brought that information to the attention of the United States government. The Corapi/Zerga suit was assigned to Judge William Shubb.

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421 F.3d 817 *; 2005 U.S. App. LEXIS 17980 **

PATRICK CAMPBELL, M.D., United States of America and State of California ex rel., Plaintiff-Appellant, UNITED STATES OF AMERICA, Intervenor-Appellee, v. REDDING MEDICAL CENTER, a California corporation; TENET HEALTHCARE CORPORATION, a Nevada corporation; CHAE HYUN MOON, M.D.; THOMAS RUSS, M.D.; FIDEL REALYVASQUEZ, M.D.; TENET HEALTHSYSTEM HOSPITALS, INC., a Delaware corporation; CARDIOLOGY ASSOCIATES OF NORTHERN CALIFORNIA; RICARDO MORENO CABRAL, M.D., dba Cardiac Thoracic and Vascular Surgery Medical Group, Defendants.

Prior History:  [**1]  Appeal from the United States District Court for the Eastern District of California. D.C. No. CV-02-02457-DFL. David F. Levi, District Judge, Presiding.

Disposition: REVERSED AND REMANDED.

CORE TERMS

qui tam, original source, first-to-file, suits, district court, false claim, public disclosure, allegations, whistleblowers, jurisdictionally, opportunistic, pending action, related action, insiders, publicly, purposes, legislative history, fraudulent scheme, essential facts, encouraging, settlement, intervene, alerted, cases

Labor & Employment Law, Wrongful Termination, Whistleblower Protection Act, General Overview, False Claims Act, Scope & Definitions, Jurisdictional Bar, Original Source, Qui Tam Actions, Civil Procedure, Appeals, Standards of Review, De Novo Review, Subject Matter Jurisdiction, Jurisdiction Over Actions, Appellate Jurisdiction, Final Judgment Rule, Business & Corporate Compliance, Remedies, Civil Penalties, Healthcare Law, Employment Issues, Retaliatory Discharge