Yates v. Pinellas Hematology & Oncology, P.A., 20-10276

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Writing for the Court: Jordan, Circuit Judge
• Citation: 21 F.4th 1288
• Parties: Michele YATES, Plaintiff-Appellee, v. PINELLAS HEMATOLOGY & ONCOLOGY, P.A., Defendant-Appellant, Pratibha Desai, an individual, Defendant.
• Docket Number: No. 20-10276,20-10276
• Decision Date: 29 December 2021

21 F.4th 1288

Michele YATES, Plaintiff-Appellee,
v.
PINELLAS HEMATOLOGY & ONCOLOGY, P.A., Defendant-Appellant,

Pratibha Desai, an individual, Defendant.

No. 20-10276

United States Court of Appeals, Eleventh Circuit.

Filed: December 29, 2021

Christopher David Gray, Scott L. Terry, Florin Gray Bouzas Owens, LLC, Lutz, FL, for Plaintiff-Appellee.

Shyam Dixit, Dixit Law Firm, Edward B. Carlstedt, FordHarrison, LLP, Tampa, FL, for Defendant-Appellant.

Michael Shih, U.S. Department of Justice Civil Division, Appellate Staff, Charles W. Scarborough, U.S. Attorney General's Office, Washington, DC, for Amicus Curiae United States of America.

Before Jordan, Newsom, and Tjoflat, Circuit Judges.

Jordan, Circuit Judge:

The jury in this qui tam case found that Pinellas Hematology & Oncology violated

21 F.4th 1295

the False Claims Act, 31 U.S.C. § 3729 et seq., on 214 occasions, and that the United States had sustained $755.54 in damages. Following that verdict, the district court trebled the damages and imposed statutory minimum penalties of $1,177,000 ($5,500 for each of the 214 violations).

On appeal, Pinellas challenges the admission of an exhibit, the jury's verdict on liability and damages, and the monetary award imposed by the district court. After a review of the record, and with the benefit of oral argument, we affirm in part and dismiss in part.

I

We summarize the facts in the light most favorable to the jury's verdict. See Royal Palm Properties, LLC v. Pink Palm Properties, LLC , 950 F.3d 776, 782 (11th Cir. 2020).

A

Pinellas was a medical practice owned by Dr. Pratibha Desai. During the relevant period, Pinellas' headquarters and primary office were located on Park Street in Saint Petersburg, Florida. We refer to this location as Park Place.

Park Place had a clinical laboratory at which, among other things, Pinellas would draw blood from patients and run laboratory tests on those blood samples. For patients who had Medicare coverage, Pinellas would seek reimbursement from the federal government for those tests.

In April of 2015, Pinellas purchased an oncology practice that was located at Bayfront Hospital in Saint Petersburg, Florida. We refer to this practice, which also had its own clinical laboratory, as Bayfront.

Under the Clinical Laboratory Improvement Amendments of 1988 and its regulations, no laboratory can conduct tests on materials derived from the human body unless it has the proper CLIA certificate. See 42 U.S.C. § 263a(b) ; 42 C.F.R. §§ 493.1, .3(a), .15, .43–49; Center for Medicare and Medicaid Services, Medicare Claims Processing Manual, § 70.1 (2020). Both Park Place and Bayfront had the appropriate CLIA certificates prior to the purchase of Bayfront, but Bayfront's CLIA certificate did not transfer to Pinellas. Because each laboratory location must have its own CLIA certificate, see 42 C.F.R. § 493.43(a), Pinellas could not use either of the preexisting CLIA certificates to perform its laboratory tests at Bayfront. Pinellas instead had to obtain a new CLIA certificate for Bayfront linking the latter to it.¹

The problem for Pinellas was that it did not have the proper CLIA certificate for Bayfront from April of 2015 until March of 2016, but it still performed tests at Bayfront during that time. The bigger problem for Pinellas was that it then submitted reimbursement claims to Medicare for those tests. And the biggest problem for Pinellas was that when Medicare rejected those claims, it altered the relevant information and resubmitted them—twice.

Michele Yates, Pinellas' billing manager, filed a qui tam action against Pinellas and Dr. Desai. She alleged that they had violated the FCA by defrauding the United States through the submission of the Bayfront reimbursement claims to Medicare

21 F.4th 1296

and by retaliating against her for attempting to stop their fraudulent conduct. The United States chose not to intervene. See 31 U.S.C. § 3730(b)(2).

Before trial, Pinellas filed a motion in limine to exclude Exhibit 24, a spreadsheet prepared by Ms. Yates which summarized some of the allegedly fraudulent claims submitted to Medicare. The district court denied Pinellas' motion without prejudice.

At trial, Ms. Yates told the jury that, between April and July of 2015, Pinellas had billed Medicare over 2,000 times for laboratory tests performed at Bayfront. Because Bayfront did not have a CLIA certificate at that time, those initial claims did not include a CLIA certificate number. As a result, Medicare denied those claims.

To have Medicare pay the claims, Pinellas altered the information on the claim forms to make it seem as if the laboratory tests had been conducted at Park Place, which did have a valid CLIA certificate linked to Pinellas. When it first resubmitted the claims, Pinellas added Park Place's CLIA certificate number to the Bayfront claim forms. Medicare, however, also denied that second set of claims. So, Pinellas resubmitted the claims once again, this time changing the location of service from Bayfront's address to Park Place's address. Medicare paid some of the claims from the third set.

Documentary evidence corroborated Ms. Yates' testimony. For instance, a May 9, 2015, internal email from Lia Valentin, a Pinellas billing assistant, to Ms. Yates and others read as follows:

Michel[e], I just wanted to remind you that the claims with medicare that have labs in them the location has to be switched to pinellas park because the claim are denying until we have the clia fixed for the bayfront office location. Im correcting the claims that came back that did not get paid & refiling them.

D.E. 201-3 at 2.

Another email sent by Ms. Valentin, on July 14, 2015, stated:

I verify we have not yet added bayfront office ... to Dr. Desai['s] Clia number. the only two offices that are currently ok with the Clia number is park place & largo. For now any denial we receive we change the place of address to Pinellas park address and refile the claim to medicare. [T]hat way we can get the lab paid.

D.E. 201-4 at 5.

Ms. Yates moved during trial to introduce Exhibit 24—the spreadsheet—into evidence, and Pinellas did not object. She testified that Exhibit 24 showed that Pinellas had submitted 214 claims for Bayfront laboratory tests with Park Place's CLIA certificate number and had changed the location of service to Park Place's address. Out of that total, Medicare paid 64 claims totaling $755.54.²

B

The jury found Dr. Desai not liable. As to Pinellas, the jury found it liable for having knowingly submitted 214 materially false claims to Medicare, thereby violating the FCA. The jury also found that the United States had suffered $755.54 in damages.

21 F.4th 1297

Following the verdict, Pinellas filed a renewed motion for judgment as a matter of law and/or remittitur under Rules 50(b) and 59(e) of the Federal Rules of Civil Procedure. In its motion and subsequent filings, Pinellas argued that the evidence presented at trial was insufficient to support the jury's verdict. Pinellas also asserted that, for various reasons, discrete claim subsets should be deducted from the 214 claims for which the jury had found it liable. In the alternative, Pinellas moved for remittitur, submitting that the damages and statutory penalties mandated by the FCA constituted an excessive fine in violation of the Eighth Amendment.

The district court denied Pinellas' renewed motion. It found that the evidence, though contested, was sufficient to support the jury's verdict. As to the damages and statutory penalties, the FCA mandated the imposition of treble damages and statutory penalties of between $5,500 and $11,000 per false claim. See 31 U.S.C § 3729(a)(1) ; 28 C.F.R. § 85.3(a)(9). Accordingly, the court imposed a total monetary award of $1,179,266.62—composed of (i) treble damages of $2,266.62 (3 x $755.54), and (ii) the lowest permissible statutory penalty of $1,177,000.00 (214 x $5,500). Though noting that the amount was "very harsh," the court ultimately held that it did not violate the Eight Amendment's prohibition on excessive fines. See D.E. 227 at 3–4.

On appeal, Pinellas challenges the district court's admission of Exhibit 24, the jury's verdict on liability and damages, and the total monetary award. We address each argument below.

II

Pinellas argues that, for various reasons, the district court abused its discretion in admitting Exhibit 24 at trial. Ms. Yates responds that Pinellas failed to preserve its objection, which in any event lacks merit. We agree with Ms. Yates on the first point.

To preserve a claim that a district court improperly admitted evidence, a party must make a timely objection. See Fed. R. Evid. 103(a)(1)(A). That objection can come before or during trial, and once the district "court rules definitively on the record ... a party need not renew [its] objection ... to preserve a claim of error for appeal." Fed. R. Evid. 103(b). When the objection comes in the form of a motion in limine before trial, a...