U.S. ex rel. Taylor-Vick v. Smith, 06-51386.

Decision Date04 January 2008
Docket NumberNo. 06-51386.,06-51386.
Citation513 F.3d 228
PartiesUNITED STATES of America ex rel. Margaret TAYLOR-VICK, Plaintiff-Appellant, v. Medical Doctor J. Scott SMITH; Medical Doctor Donald W. Floyd; Medical Doctor David J. Power; Medical Doctor Daniel G. Nelson; Orthopaedic Center of Midland, Professional LLC, doing business as Southwest Orthopaedic and Spine Center, Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Gerald Kendall Fugit (argued), Law Offices of Gerald K. Fugit, Odessa, TX, for Plaintiff-Appellant.

David Wayne Lauritzen, W. Bruce Williams (argued), Cotton, Bledsoe, Tighe & Dawson, Midland, TX, for Defendants-Appellees.

Appeal from the United States District Court for the Western District of Texas.

Before KING, GARZA and BENAVIDES, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Relator-Appellant Margaret Taylor Vick ("Vick" or "Relator") appeals the decision of the District Court, which granted summary judgment in favor of Defendants-Appellees: J. Scott Smith, MD; Donald W. Floyd, MD; David J. Power, MD; Daniel G. Nelson, MD (collectively, "Doctors"); and the Orthopedic Center of Midland Professional LLC d/b/a Southwest Orthopedic and Spine Center ("Southwest"). The District Court finally disposed of all Vick's claims under the False Claims Act, 31 U.S.C. §§ 3729-33 ("FCA"). We affirm.

I

Southwest is a medical facility that provides orthopedic care. Vick was Southwest's officer manager from January 1997 until she was terminated in June 2002. Defendants Smith, Floyd, Power, and Nelson are medical doctors who specialize in orthopedics and provide medical care at Southwest. This appeal arises from allegedly improper Medicare billing practices at Southwest.

During the course of her employment at Southwest, Vick came to suspect that the Doctors, in particular Smith, were "upcoding" their patient visits to obtain higher Medicare payments for the services provided during those visits.1 According to Vick, the codes used by Smith required that he spend fifteen minutes with each patient. This, however, would have been impossible because, according to Vick, Smith saw 50 to 80 patients each day. Vick further alleged that Power and Floyd were made aware of Smith's allegedly improper billing practices and that, in response, they instructed Southwest staff to "down-code" some of his claims.

In June 2002, Vick took her concerns about the billing practices at Southwest to the FBI. Vick spoke with the FBI and provided certain information and documents, which she claimed substantiated her allegations. Later that month, Southwest placed Vick on a trial separation from her position as office manager; Southwest ultimately terminated her. During her trial separation, Vick remained employed by Southwest but no longer had access to the documents that she had been providing to the FBI.

In August 2002, Vick filed this lawsuit. The United. States declined to intervene on March 31, 2003. Because she had no direct knowledge of actual instances of "upcoding," Vick sought to make her case through circumstantial evidence. Specifically, Vick employed an expert witness ("Britton") to analyze Defendants' billing records and determine whether there was a pattern of "up-coding" from which the Court could draw an inference of scienter under the FCA. Defendants likewise employed an expert ("Ellis") to analyze their billing records.

After analyzing Defendants' billing records, Britton testified repeatedly that she "did not know what the intent of the physicians was," but that she believed there was a pattern sufficient to indicate that false claims may be occurring. Ellis, in contrast, did not find "a pattern of billing improprieties" or "any fraudulent claims." Ellis did, however, determine that the Defendants had "some documentation issues that need improvement," but that, "in general," they "undercode[d]" more often than they "upcode[d]" thereby "costing the practice revenue" and actually undercharging Medicare rather than overcharging Medicare. Britton, too, found evidence of "undercoding" during her analysis of Defendants' records.

After three and a half years of discovery, the District Court granted summary judgment in favor of Defendants. Specifically, the District Court found that "Relator has not produced any evidence which creates a fact issue concerning, the ... scienter element" of her FCA claim, and that, "[a]t the most, Relator has shown innocent mistakes and negligence," which are not FCA violations. Accordingly, the District Court held that summary judgment was proper because Vick had "presented no evidence ... to sustain the scienter element of her claim."

II

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). The moving party "bears the initial responsibility of informing the District Court of the basis of its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrates the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing Fed.R.Civ.P. 56(c)). Once the moving party fulfills this responsibility, the non-moving party must "go beyond the pleadings and by her own affidavits, or by `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue of material fact for trial. Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(e)). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We review a grant of summary judgment de novo, viewing all evidence in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party's favor. See Crawford v. Formosa Plastics Corp., Louisiana, 234 F.3d 899, 902 (5th Cir.2000).

A

The first issue is whether Defendants had the requisite knowledge or scienter to be liable under the FCA. The FCA provides for civil liability against:

Any person who—(1) knowingly presents or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; [or] (3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid . . . .

31 U.S.C. § 3729(a) (emphasis added). For the purposes of the FCA, the term "knowingly" means:

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). With respect to the scienter issue, the District Court found that Vick "had no actual knowledge of false claims knowingly presented by the Defendants" and that, instead, her claim "relie[d] .on the review of patient medical records by her expert witness, Wendy Britton." Taking into consideration "the review of records by her expert, Ms. Britton," the District Court concluded that the "Relator has presented no evidence . . . to sustain the scienter element of [her] claim." Accordingly, the District Court held that "the Relator has failed to show. any evidence supporting the requisite scienter on the part of Defendants necessary to bring a claim under the False Claims Act."

Vick raises several arguments in support of her contention that there is a genuine issue of material fact as to whether Defendants had the requisite scienter. First, Vick contends that this Court disfavors granting summary judgment on an issue that turns on a state-of-mind determination, like scienter. Second, Vick contends that, although she has no direct evidence of scienter, she has provided adequate circumstantial evidence of scienter. Specifically, Vick contends that the evidence analyzed by her expert, Ms. Britton, shows a pattern of erroneous billing, which, when combined with Vick's testimony that the Doctors were aware of certain billing anomalies, adds up to an inference of scienter. Finally, Vick argues that unless the Defendants can point to evidence establishing the absence of scienter, then the summary judgment standard requires that we draw an inference of scienter in her favor.

Defendants counter that Vick has no knowledge or direct evidence of scienter and that, at most, she could identify only negligent billing errors and mistakes which are not offenses under the FCA. Defendants further contend that neither Vick nor her expert Britton presented circumstantial evidence sufficient to support an inference of scienter.2 Finally, in the alternative, Defendants argue that Vick did not even allege, let alone prove, scienter on the part of Defendants Floyd, Power, and Nelson. Because we find that there is no genuine issue of material fact suggesting that the Doctors had the requisite scienter to create FCA liability, we need not address this alternative argument.

It is indeed well-settled, as Vick points out, that we hesitate to grant summary judgment when a case turns on a state of mind determination. See International Shortstop, Inc. v. Rally's Inc., 939 F.2d 1257, 1265 (5th Cir.1991) ("we have emphasized repeatedly that cases which turn on the "moving party's state of mind are not well-suited for summary judgment"). It also is possible for an FCA relator, like Vick, to...

To continue reading

Request your trial
44 cases
  • Waldmann v. Fulp
    • United States
    • U.S. District Court — Southern District of Texas
    • October 12, 2016
    ...demonstrate guilty knowledge of a purpose on the part of the defendant to cheat the Government, or knowledge of guilty intent." 513 F.3d 228, 231 (5th Cir. 2008). They provide testimonial evidence from Dr. Fulp that, while he does review the "operative report," he does not review individual......
  • Ranolls v. Dewling
    • United States
    • U.S. District Court — Eastern District of Texas
    • September 22, 2016
    ...with questions of motive and intent." Williams v. Upjohn Co. , 153 F.R.D. 110, 116 (S.D. Tex. 1994) ; see United States ex rel. Taylor–Vick v. Smith , 513 F.3d 228, 231 (5th Cir. 2008) (stating that "we hesitate to grant summary judgment when a case turns on a state of mind determination");......
  • Nola Spice Designs, L. L.C. v. Haydel Enters., Inc.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • April 8, 2015
    ...the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. United States ex rel. Taylor–Vick v. Smith, 513 F.3d 228, 230 (5th Cir.2008). We may affirm a grant of summary judgment “based on any rationale presented to the district court for cons......
  • United States ex rel. Spay v. CVS Caremark Corp.
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • September 22, 2015
    ...While courts should be hesitant to grant summary judgment when a case turns on a state of mind determination, U.S. ex rel. Taylor-Vick v. Smith, 513 F.3d 228, 232 (5th Cir. 2008), they are not prohibited from doing so in an FCA case when there is no genuine dispute as to whether the defenda......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT