USA, et al v. State Farm Mutual Automobile I, No. 09-35819 (9th Cir. 2010)

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FILED NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS OCT 01 2010 MOLLY C. DWYER, CLERK U .S. C O U R T OF APPE ALS FOR THE NINTH CIRCUIT UNITED STATES OF AMERICA, ex rel, Plaintiff, No. 09-35819 D.C. No. 1:07-cv-00297-EJL and MEMORANDUM * EUGENE MASON and PATRICK D. BROWN, Plaintiffs - Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, AKA State Farm Insurance Group, Defendant - Appellee. Appeal from the United States District Court for the District of Idaho Edward J. Lodge, District Judge, Presiding * This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. Submitted September 2, 2010 ** Seattle, Washington Before: HAWKINS, McKEOWN, and BEA, Circuit Judges. Eugene Mason brought suit under the False Claims Act, 31 U.S.C. § 3729(a)(7), against State Farm Mutual Automobile Insurance Company. Mason sought to recover damages on behalf of the U.S. government for an allegedly false statement caused by State Farm: that Medicare owed the costs of Mason s operation to St. Luke s hospital, when it was really State Farm, not Medicare, which owed St. Luke s. Indeed, after St. Luke s invoiced Medicare, State Farm withdrew its claim that there was no coverage, and conceded liability for sixty percent of Mason s hospital bill. The district court granted State Farm s motion to dismiss, with prejudice, pursuant to Federal Rule of Civil Procedure 12(b)(6). We have jurisdiction over Mason s appeal under 28 U.S.C. § 1291. We affirm.1 We review de novo the grant of a Rule 12(b)(6) motion to dismiss. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). To survive a motion to dismiss, a ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 1 Because the parties are familiar with the facts of the case, we will repeat them here only to the extent necessary to explain our decision. 2 complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1948 (2009) (quotations omitted). Even if State Farm caused St. Luke s to submit a payment invoice to Medicare, Mason has not stated a claim that State Farm caused to be made a false statement as required for liability under the False Claims Act. 31 U.S.C. § 3729(a)(1)(G). The St. Luke s invoice was not false, because it was based on a statutorily-created liability of Medicare. See United States ex rel Hochman v. Nackman, 145 F.3d 1069, 1075 (9th Cir. 1998) (for False Claims Act purposes, a statement authorized by statute is not false). Under the Medicare Secondary Payer statute, 42 U.S.C. § 1395y(b)(2)(B)(i), Medicare is liable as a secondary insurer to a Medicare service provider when it does not appear the primary insurer will make payment within 120 days of the service. State Farm Mason s primary insurer initially contested its liability for Mason s surgery on the basis that Mason s bad back was a pre-existing condition and was not caused by Mason s auto accident. Thus, at the time St. Luke s presented the bill to Medicare, State Farm was not likely to pay within 120 days. As a result, Medicare was liable to St. Luke s under the Medicare Secondary Payer statute. Hence, the invoice was not a false statement. 3 Even if the invoice were false, State Farm cannot be liable under the False Claims Act, because State Farm had no obligation to reimburse Medicare at the time St. Luke s submitted its bill to Medicare. A False Claims Act plaintiff must demonstrate that [the government] was owed a specific, legal obligation at the time that the alleged false record or statement was made[.] United States v. Bourseau, 531 F.3d 1159, 1169 (9th Cir. 2008) (emphasis added). The obligation cannot be merely a potential liability. Id. Under the Medicare Secondary Payer statute, a primary insurer here, State Farm becomes liable to Medicare only when the primary insurer s liability is established by judgment, concession, or other means. 42 U.S.C. § 1395(y)(2)(B)(ii). State Farm conceded liability for sixty percent of Mason s bill nine months after St. Luke s submitted its invoice to Medicare. State Farm thus had no legal obligation to the government at the time the St. Luke s invoice was submitted. AFFIRMED. 4

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