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United States ex rel. Bahnsen v. Boston Scientific Neuromodulation Corp.

United States District Court, D. New Jersey

September 24, 2018

UNITED STATES OF AMERICA, ex rel. WENDY A. BAHNSEN, et al, Plaintiffs,
v.
BOSTON SCIENTIFIC NEUROMODULATION CORPORATION, Defendant.

          OPINION & ORDER

          JOHN MICHAEL VAZQUEZ, U.S.D.J.

         Currently pending before before the Court, in this False Claims Act case, is a motion in limine filed by Defendant Boston Scientific Neuromodulation Corporation ("BSNC" or "Defendant"), which seeks to exclude certain evidence regarding claims data. D.E. 420. Plaintiffs Wendy Bahnsen and Caroline Fuentes (collectively "Plaintiffs") filed a brief in opposition (D.E. 421), to which Defendant replied (D.E. 422).[1] The Court reviewed the submissions made in support and in opposition, and considered this motion without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Local Civil Rule 78.1(b). For the reasons that follow, Defendant's motion is GRANTED in part and DENIED in part.

         INTRODUCTION

         BSNC seeks to exclude certain evidence, such as individual line entries, unprocessable entries, adjusted line entries, voided line entries, and duplicate submissions. BSNC argues that the information does not qualify as "claims" under the False Claims Act ("FCA"), 31 U.S.C. § 3729 et al. The information is apparently derived from spreadsheets that were produced in discovery by a third-party Medicare Administrative Coordinator ("MAC"). Plaintiffs respond that the motion is not appropriate because it addresses an issue that should have been resolved by summary judgment. Alternately, Plaintiff argues that all entries on the spreadsheet are in fact claims under the FCA, or at a minimum, that a jury should decide whether the relevant entries qualify as claims.

         At the outset, the Court does not understand Plaintiffs' argument concerning summary judgment because the Court expressly permitted BSNC to raise this issue by way of a motion in limine rather than deciding it at the summary judgment stage. D.E. 388 at 30. Consequently, Defendant's motion is proper. However, there is additional information that the Court needs in order to definitively rule on the motion at hand. In the Court's view, both parties to some extent advocate for a definition of claim that is not consistent with the FCA. As a result, the Court will review the relevant law as to what constitutes a claim for FCA purposes before turning to the parties' arguments. In addition, the Court will rule on the motion to the extent possible, given the information that is currently available to the Court.

         "CLAIM" UNDER THE FCA The FCA provides, in relevant part, as follows:

[A]ny person who-
(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; is liable to the United States Government for a civil penalty of not less than $5, 000 and not more than $10, 000, . . . plus 3 times the amount of damages which the Government sustains because of the act of that person.

31 U.S.C. § 3729(a). Thus, a violation occurs when a claim is "presented]." Id. In addition, only claims that "cause or would cause economic loss to the government" are subject to the FCA. Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 179 (3d Cir. 2001). Accordingly, attempts are also subject to FCA liability. Id. at 184 (stating that the FCA "seeks to redress fraudulent activity which attempts to or actually causes economic loss to the United States government").

         The FCA imposes two types of financial liability. First, a submitter of a "false or fraudulent claim" (or false record/statement vis-a-vis such a claim) is liable for a civil monetary penalty between $5, 000 to $10, 000 per claim. 31 U.S.C. § 3729(a); United States v. Bornstein, 423 U.S. 303, 313 (1976). This penalty will be imposed for false claims that are actually paid by the government, in addition to attempted false claims. United States ex rel. Schwedt v. Planning Research Corp., 59 F.3d 196, 199 (D.C. Cir. 1995) ("[E]ven if the claim is rejected, its very submission is a basis for liability."). Second, the submitter of the claim is also liable for actual damages, which are trebled under the FCA. 31 U.S.C. § 3729(a)(1)(G); see also United States v. Anchor Mortg. Corp., 711 F.3d 745, 748 (7th Cir. 2013) (stating that the "statute requires treble damages").

         The FCA further defines "claim":

(2) the term "claim"-
(A) means any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that-
(i) is presented to an officer, employee, or agent of the United States; or
(ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government's behalf or to advance a Government program or ...

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