United States Ex Rel. Vuyyuru v. Jadhav
Full Opinion (html_with_citations)
Affirmed by published opinion. Senior Judge HAMILTON wrote the opinion, in which Judge KING joined. Judge REIDINGER wrote a dissenting opinion.
OPINION
Relator Lokesh B. Vuyyuru (Relator Vuyyuru) appeals the district courtâs dismissal of, for lack of subject matter jurisdiction, his Third Amended Complaint, which complaint alleges various claims under the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733, and Virginia state law. He also challenges the district courtâs award of attorneysâ fees and costs to one of the defendants. We affirm.
I.
On March 13, 2006, Relator Vuyyuru filed this qui tarn action under the FCA. After amending the complaint three times, Relator Vuyyuru ultimately named Gopi-nath Jadhav, M.D. (Dr. Jadhav), Southside Gastroenterology Associates, Ltd. (the SGA Practice), Petersburg Hospital Com
Of relevance in the present appeal, in his Third Amended Complaint, Relator Vuyyuru alleged three separate counts under the FCA. In the first count, Relator Vuyyuru alleged Defendants âknowingly presented, or caused to be presented and filed, a false or fraudulent claim for payment or approval with the United States Government,â in violation of 31 U.S.C. § 3729(a)(1). (J.A. 139). In the second count, Relator Vuyyuru alleged Defendants âknowingly made [or] used or caused to be made or used a false record or statement to get a false or fraudulent claim paid or approved by the Government,â in violation of 31 U.S.C. § 3729(a)(2). (J.A. 139). In the third count, Relator Vuyyuru alleged that Defendants âconspired to defraud the United States government in violation of 31 U.S.C. § 3729(a)(3) by getting false or fraudulent claims allowed or paid to the damage of the United Statesâ government.â (J.A. 140). With respect to these three counts, Relator Vuyyuru sought an undetermined amount âduly trebled in addition to a fine of not less than $5,000 per violation and not more than $10,000 together with attorneysâ fees and costs.â (J.A. 142).
According to the Third Amended Complaint, Dr. Jadhav is a gastroenterologist, who practices medicine in Virginia at Southside Regional Medical Center
We note, as did the district court, that the Third Amended Complaint is inartfully drafted. Nonetheless, we state with fair assurance that the crux of Relator Vuyyu-ruâs claims under the FCA is that Defendants fraudulently billed the government, through the Medicare and Medicaid programs, for unnecessary or incomplete medical procedures performed by Dr. Jad-hav. With respect to the nature of the alleged unnecessary medical procedures, the Third Amended Complaint alleges: (1) through March 2005, Dr. Jadhav, while performing colonoscopies, routinely took an unnecessary biopsy of the Ileocecal Valve (IC Valve) when he was unable to find a polyp; (2) Dr. Jadhav unnecessarily performed an EDG on a patient and a PEG tube replacement on consecutive days, when the two procedures could have been performed on the same day for a lower rate; (3) during sometime in the first half of 2002, Dr. Jadhav performed an unnecessary colonoscopy and biopsy of the IC Valve on a sixty-five year old female;
With respect to the procedures allegedly not completed by Dr. Jadhav, but for which Defendants allegedly fraudulently billed the government, the Third Amended Complaint offers no information regarding individual patients. Rather, it alleges in general that âDr. Jadhav frequently billed for the procedure of a colonoscopy and upper-endoscopy when Dr. Jadhav failed to complete the procedure.â (J.A. 134). Moreover, almost as an aside, the Third Amended Complaint alleges:
Defendant Dr. Jadhav for a period of nearly 10 years failed to dictate the required consult note before billing, making minor notations only in the chart, while billing for a level 3 to 5 consult. At SRMC (different than his practice at JRMC) [] Dr. Jadhav routinely and in most cases did not provide a dictation for consults and failed to perform general multi-system examinations failing to follow CMS guidelines since 1997 for which he billed or caused to be billed to the United States Government as though the CMS guidelines were being met.
(J.A. 136).
Of relevance to the issues in the present appeal, on October 6, 2006, Defendants moved to dismiss the Third Amended Complaint under Federal Rule of Civil Procedure 12(b)(1), contending that the jurisdictional bar set forth in 31 U.S.C. § 3730(e)(4) operated to bar Relator Vuyyuruâs FCA claims.
(e) Certain Actions barred.â
(4)(A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions ... from the news media, unless ... the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, âoriginal sourceâ means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.
Id.
In support of their motion to dismiss for lack of subject matter jurisdiction, Defen
With respect to the public disclosure issue, Defendants contended that the allegations in the Third Amended Complaint were derived from numerous articles appearing in the Virginia Times newspaper prior to Relator Vuyyuruâs initial filing of this action. At all times relevant to the allegations of the Third Amended Complaint, Relator was the publisher of the Virginia Times. Defendants attached the articles as exhibits to their Consolidated Memorandum of Law in support of their Rule 12(b)(1) motion, which memorandum of law stated the following on the subject:
On March 30, 2005, roughly a year before Plaintiff filed his Complaint, the Virginia Times newspaper published a front-page article titled âAlleged insurance, quality-of-eare fraud at SRMC.â (A copy of the article is attached as Ex. G.) The article, written by Dorothy Row-ley, a staff writer for the newspaper, described an allegedly fraudulent scenario involving IC-Valve procedures and colonoscopies allegedly performed in less than five minutes by Dr. Jadhav [at] SRMC. See id. Notably, Ms. Rowley cited â[n]ursing sources who worked with Jadhavâ as providing the factual details contained in the article. Id. The Virginia Times also published a flurry of other articles alleging fraud by Dr. Jad-hav, SRMC, and JRMC, all of which asserted improper Medicare and Medicaid billing. (Copies of the Articles are attached as Ex. H.).
(J.A. 174-75). Defendants also pointed the district court to an excerpt from a deposition given by Relator Vuyyuru in a state court malpractice action against him and Columbia/HCA John Randolph, Inc. (owner and operator of JRMC) just ten days after he initially filed the present qui tarn action. When asked during the deposition whether he had provided or been a source for several articles in the Virginia Times, Relator Vuyyuru responded:
No, they may ask-the reporters, if they have something, they donât understand something in medicine or something like that, they may ask me some kind of medical expertise, they may ask sometimes, but I donât recall all the particular details, you know, I have medical discussions with reporters. But most of the time, they publish these articles talking to various people, various hospital people and all this stuff.
If you want, you have to go directly to the reporters about that. Iâm only the publisher.
(J.A. 318).
Relator Vuyyuruâs response to Defendantsâ Rule 12(b)(1) motion focused almost exclusively upon the original source exception to § 3730(e)(4)(A)âs public disclosure jurisdictional bar. With respect to his deposition testimony, Relator Vuyyuru argued that Defendants were taking such testimony out of context. As far as extrinsic evidence goes, Relator Vuyyuru attached two items of extrinsic evidence to his written response. Notably, prior to the morning of the subsequent hearing on Defendantsâ Rule 12(b)(1) motion, Relator Vuyyuru did not request discovery of any kind in order to respond to Defendantsâ Rule 12(b)(1) motion.
The first attachment to Relator Vuyyu-ruâs written response was his own sworn declaration, in which the following statements arguably went to his burden to establish subject matter jurisdiction: (1) âLong before the March 30, 2005 front-
The second attachment is a copy of a page of the Virginia Times, publishing a letter, dated April 22, 2005, by Donald F. Case, Jr., to the Virginia Times, in which Mr. Case explains that Dr. Jadhav performed a colonoscopy upon him without his permission. Notably, Mr. Case stated that he was in his â50âs.... â (J.A. 366).
Approximately two months after Defendants moved to dismiss the Third Amended complaint for lack of subject matter jurisdiction, Relator Vuyyuru served subpoenas on several pathologists seeking records related to colonoscopy with biopsy procedures, performed or reviewed by Dr. Jadhav and the respective pathologist since January 1, 1997. Defendants moved to quash the subpoenas, inter alia, on the basis that the parties had not yet conducted a Rule 26(f) discovery conference, see Fed.R.Civ.P. 26(d), (f), and on the basis that the subpoenas constituted an improper attempt by Relator Vuyyuru to investigate his false claim allegations before establishing subject matter jurisdiction. As part of the motion, Defendants requested entry of a protective order precluding Relator Vuyyuru âfrom further attempts at obtaining discovery from any source prior to the Courtâs ruling on Defendantsâ Motions to Dismiss [Relator Vuyyuruâs] claims pursuant to Rules 12(b)(1) and 12(b)(6) and the partiesâ Rule 26(f) conference .... â (J.A. 393-94). Relator Vuyyuru filed a response, requesting the motion be denied. A fair reading of Relator Vuyyu-ruâs response makes clear that he served the subpoenas on the pathologists in order to seek evidence to support the merits of his FCA claims, not to seek evidence to support the jurisdictional allegations of the Third Amended Complaint.
During this back and forth over the subpoenas, this action was assigned to United States District Judge Richard L. Williams. As best we can discern from the appellate briefs and the record below, Judge Williams (through his law clerk) informed the parties that he would not issue a pretrial order, which sets forth discovery deadlines for the merits of the action, until after disposition of the motions to dismiss had occurred.
On January 26, 2007, approximately two and one-half months after Defendants had filed their Rule 12(b)(1) motion, the district court held a hearing on such motion. By
On the morning of the hearing, in support of his opposition to Defendantsâ Rule 12(b)(1) motion, Relator Vuyyuru submitted a supplement to his earlier declaration. After the district court commented that such supplemental declaration was â[h]ardly timely,â Relator Vuyyuru stated that the âmost important part of [the supplemental declaration] comes from a report that was received yesterday from the DMAS, the Department of Medical Assistance Services for the State of Virginia.â (J.A. 476) (emphasis added). According to the supplemental declaration, DMAS administers Medicaid money to providers, including Dr. Jadhav, and the report contains âinformation regarding the billings made by [Dr. Jadhav] to DMAS from and payments from DMAS to [Dr. Jadhav].â (J.A. 427). Relator Vuyyuru attached the report as an exhibit to his supplemental declaration. The report contains no patient names or ages; instead it lists, in a spreadsheet format, various procedure codes relating to colonoscopies, amounts billed and corresponding amounts paid.
Additionally, Relator Vuyyuruâs supplemental declaration states that, in 2001, he was the director of endoscopy at JRMC, and later assistant director. Worth mentioning for purposes of this appeal, he also declared that: (1) he was on the medical staff at SRMC from 1997 until 2004; (2) from 1997 through 2005, he monitored and investigated work performed by Dr. Jad-hav, including reviewing his charts; (3) he observed that Dr. Jadhav failed to perform and record comprehensive history and physical examinations on the majority of his patients who would qualify for use of current procedural terminology code (CPT code) 99253, which code, according to Relator Vuyyuru, is defined, inter alia, as âa detailed history; a detailed examination; and medical decision making of low complexity,â (J.A. 428); (4) his interviews with individuals who performed billing services under the direction of Dr. Jadhav and his review of Dr. Jadhavâs patient records confirmed that Dr. Jadhav âbilled both Medicaid and Medicare and further that the most common code that he used was CPT code 99253,â (J.A. 429); (5) based upon his observation of Dr. Jadhavâs practice, and âinvestigation, including the review of his charts, [he] determined that [Dr. Jadhav] did not provide the services required to bill patients for CPT code 99253 as he did,â id.; (6) by reviewing Dr. Jadhavâs patient charts, he observed a pattern by which if a patient did not have a polyp, it was Dr. Jadhavâs regular practice to perform a biopsy of the IC-Valve; (7) Relator Vuyyuru performed colonoscopies upon several of Dr. Jadhavâs patients, after Dr. Jadhav had already performed incomplete colonoscopies upon such patients, and found polyps and tumors that Dr. Jadhav failed to observe; (8) the DMAS billing report shows ninety-three billings from 2001 to 2005 for which Dr. Jadhav billed the government for biopsied IC-Valves; and (9) in his investigation, he âobserved that at no time did [Dr. Jadhav] biopsy the IC-Valve when he was able to bill for removing a polyp or AVM or other legitimate pathology, evidencing that his biopsies of IC-Valve was done solely to increase billing,â which practice is reflected in the attached DMAS billing report. (J.A. 430-31).
During the hearing, Relator Vuyyuru, for the first time, requested leave to conduct discovery on the jurisdictional issues raised in Defendantsâ Rule 12(b)(1) motion, in an effort to prove the facts necessary to avoid dismissal of his FCA claims pursuant to § 3730(e)(4)(A)âs public disclosure juris-
[Pjrior to the January 27, 2007 hearing on the defendantsâ Motions ... [pursuant to Rules 12(b)(1) and 12(b)(6), the plaintiff did not request a period of discovery in order to respond to that motion, or an evidentiary hearing to prove jurisdiction.... Only at the end of that hearing, after failing to provide any specific facts in response to the Courtâs request to do so at the hearing, did plaintiff request more time to provide them. Plaintiff, however, had over ten months to provide such facts. He filed four different iterations of a complaint. He also was on notice for over three months that defendants were challenging subject matter jurisdiction in this case.... Plaintiff, therefore, had ample opportunity to gather the type of evidence required to demonstrate to the Court that subject matter jurisdiction exists in this case. He did not gather any.
(J.A. 565 n. 3).
Through colloquy with counsel, the district court was able to establish several significant facts during the hearing, which were relevant to the jurisdictional issues of fact under § 3730(e)(4)(A)-(B). Relator Vuyyuru withdrew from practicing medicine at SRMC in March 2003, followed by SRMCâs official suspension of his privileges to practice medicine at its facility in March 2004. Moreover, JRMC suspended Relator Vuyyuruâs privileges to practice medicine at its facility in April 2005.
On March 28, 2007, the district court granted Defendantsâ Rule 12(b)(1) motion. Specifically, the district court dismissed Relator Vuyyuruâs FCA claims pursuant to § 3730(e)(4)(A)âs public disclosure jurisdictional bar. In ruling on the motion, the district court expressly made a finding that the allegations in the Third Amended complaint, pertaining to the FCA claims, âwere actually derived fromâ the Virginia Times articles. (J.A. 560) (internal quotation marks omitted). Moreover, the district court also expressly held that Relator Vuyyuru âhas not demonstrated the specific facts required for the Court to grant him âoriginal sourceâ status.â Id. The district court dismissed Relator Vuyyuruâs remaining state law claims for lack of federal question jurisdiction, see 28 U.S.C. § 1331, and for lack of diversity jurisdiction, id. § 1332.
On April 11, 2007, The Cameron Foundation moved for an award of $100,112.50 in attorneysâ fees and costs on the ground that Relator Vuyyuruâs claim that the district court possessed subject matter jurisdiction and the FCA claims themselves were clearly frivolous, clearly vexatious, and clearly brought primarily for the purposes of harassment. Relator Vuyyuru opposed the motion on the following grounds: (1) neither his claim to proper relator status nor his FCA claims were clearly frivolous, clearly vexatious, or brought for the purposes of harassment; (2) the fees sought were excessive; and (3) he lacked the ability to pay. On May 14, 2007, the district court ordered The Cameron Foundation to submit a revised fee application, itemizing attorneysâ fees in such a manner that lists entries only relating to the FCA claims and documenting âthe reasonableness of the claimed hourly rate by proofs from sources outside the law firm of which [The Cameron Foundationâs] counsel are members.â (J.A. 707). The district court also ordered Relator Vuyyuru to provide specific financial infor
In its revised fee application, The Cameron Foundation sought $68,228.75 in attorneysâ fees and costs. The district court determined this amount to be reasonable and supported by the evidence. Accordingly, on August 27, 2007, the district court ordered Relator Vuyyuru to pay The Cameron Foundation $68,228.75 in attorneysâ fees and costs under 31 U.S.C. § 3730(d)(4).
Relator Vuyyuru separately noted timely appeals of the district courtâs order of dismissal and its fees/costs award. Those appeals have been consolidated for our review.
II.
We first address Relator Vuyyuruâs challenge to the district courtâs dismissal of his FCA claims for lack of subject matter jurisdiction. Relator Vuyyuruâs challenge has two prongs. The first contends the district court erred in the manner in which it viewed the evidence. The second contends the district court erred by ruling on the Defendantâs Rule 12(b)(1) motion without affording him the opportunity to conduct discovery on the jurisdictional issues of fact. Neither has merit.
In the first prong of Relator Vuyyuruâs challenge to the district courtâs Rule 12(b)(1) dismissal of his FCA claims, Relator Vuyyuru takes issue with the district courtâs deciding 31 U.S.C. § 3730(e)(4)âs âbased uponâ and âoriginal sourceâ issues as a trier of fact, without giving him the benefit of viewing the evidence in the record on those issues in the light most favorable to him and drawing all reasonable inferences from such evidence in his favor. According to Relator Vuyyuru, he was entitled to such a favorable viewing, because § 3730(e)(4)âs âbased uponâ and âoriginal sourceâ issues are jurisdictional issues inextricably intertwined with the merits of his FCA claims. Moreover, according to Relator Vuyyuru, when the record evidence regarding § 3730(e)(4)âs âbased uponâ and âoriginal sourceâ issues is viewed in the light most favorable to him and all reasonable inferences are drawn in his favor, the conclusion looms that his FCA claims should have survived Defendantsâ Rule 12(b)(1) motion.
Before specifically addressing Relator Vuyyuruâs individual arguments and contentions as just set forth, we endeavor to review the appropriate legal framework under which we must consider them. The district courts of the United States are courts of limited subject matter jurisdiction. Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). They possess only the jurisdiction authorized them by the United States Constitution and by federal statute. Bowles v. Russell, 551 U.S. 205, 127 S.Ct. 2360, 2365, 168 L.Ed.2d 96 (2007) (âWithin constitutional bounds, Congress decides what cases the federal courts have jurisdiction to consider.â); Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Thus, when a district court lacks subject matter jurisdiction over an action, the action mustâ be dismissed. Arbaugh v. Y & H Corp., 546 U.S. 500, 506-07, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006).
When, as here, a defendant challenges the existence of subject matter jurisdiction in fact, the plaintiff bears the burden of proving the truth of such facts by a preponderance of the evidence. See Adams v. Bain, 697 F.2d 1213, 1219 (4th
In the case at hand, 31 U.S.C. § 3730(e)(4) sets forth the jurisdictional facts of which Relator Vuyyuru bore the burden of proving by a preponderance of the evidence in order to survive Defendantsâ Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Rockwell Intâl Corp. v. United States, 549 U.S. 457, 468, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007) (§ 3730(e)(4) is a âjurisdiction-removing provisionâ). Once Defendants challenged the district courtâs subject matter jurisdiction under § 3730(e)(4), when considered in light of the record below, Relator Vuyyuru first bore the burden of proving that the allegations underpinning his FCA claims were not âbased uponâ the Virginia Times articles. Id. If he carried this burden, § 3730(e)(4)(A)âs public disclosure jurisdictional bar would not apply. However, if he failed to carry this burden, he then bore the separate and distinct burden of proving himself entitled to original source status, which burden required him to prove that he was âan individual who has direct and independent knowledge of the information on which the allegations [in the Third Amended Complaint] are based and has voluntarily provided the information to the Government before fil
Hoping to avoid appellate review of the district courtâs jurisdictional findings under the clearly erroneous standard, Relator Vuyyuru baldly asserts that the jurisdictional issues are intertwined with the factual issues central to the merits of his FCA claims. We disagree. A direct comparison of the nature of the jurisdictional issues with the factual issues central to the merits of Relator Vuyyuruâs FCA claims dispels any notion of such intertwining. Relator Vuyyuruâs FCA claims arise under 31 U.S.C. § 3729(a)(l)-(3). In seriatim, these statutory subsections impose liability on any person who âknowingly presents, or causes to be presented, to [the government] a false or fraudulent claim for payment or approval,â id. § 3729(a)(1), âknowingly 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 [gjovernment,â id. § 3729(a)(2); or âconspires to defraud the [gjovernment by getting a false or fraudulent claim allowed or paid,â id. § 3729(a)(3).
In Allison Engine Co., Inc. v. United States ex rel. Sanders, â U.S.-, 128 S.Ct. 2123, 170 L.Ed.2d 1030 (2008), the Supreme Court recently clarified the differing proof requirements of these three subsections. As the plain language of § 3729(a)(1) suggests, liability under subsection (a)(1) requires proof that the defendant actually presented or caused to be presented a false or fraudulent claim to the government. Allison Engine Co., Inc., 128 S.Ct. at 2129. Although subsection (a)(2) has no such requirement, it does require proof âthat the defendant made a false record or statement for the purpose of getting âa false or fraudulent claim paid or approved by the [gjovernment.â â Allison Engine Co., Inc., 128 S.Ct. at 2130. With respect to subsection (a)(3), where as here, âthe conduct that the conspirators are alleged to have agreed upon involved the making of a false record or statement, it must be shown that the conspirators had the purpose of âgettingâ the false record or statement to bring about the [gjovernmentâs payment of a false or fraudulent claim.â Allison Engine Co., Inc., 128 S.Ct. at 2130. Moreover, under subsection (a)(3), âit must be established that they agreed that the false record or statement would have a material effect on the Governmentâs decision to pay the false or fraudulent claim.â Allison Engine Co., Inc., 128 S.Ct. at 2130-31.
Logic dictates that whether (1) any of the Defendants ever presented or caused to be presented a false or fraudulent claim to the government, (2) made a false record or statement for the purpose of getting a false or fraudulent claim paid or approved by the government, or (3) conspired for the purpose of using a false record or statement to bring about the governmentâs payment of a false or fraudulent claim, are not issues intertwined with whether (1) the allegations in the Third Amended Complaint were based upon the Virginia Times articles or (2) Relator Vuyyuru had direct and independent knowledge of Defendantsâ alleged conduct giving rise to FCA liability, i.e., the substantive issues. In the words of the Third Circuit:
The jurisdictional requirements of the FCA involve assessing whether the allegations and transactions constituting the bases of the claims were publicly dis*350 closed and whether, if they were, the relator is an original source â meaning that he has direct and independent knowledge of the information. 31 U.S.C. §§ 3730(e)(4)(A)-(B). If a relator gets over these hurdles, he must then make his substantive case.
United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 515 (3d Cir.2007). The proof required to establish the substantive elements of Relator Vuyyuruâs claims under § 3729(a)(l)-(3) is wholly distinct from that necessary to survive Defendantsâ jurisdictional challenge under § 3730(e)(4). See Atkinson, 473 F.3d at 515. See also United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., 528 F.3d 292, 309 (4th Cir.2008) (remanding qui tam action to district court with instructions to make the necessary jurisdictional findings of fact pertaining to § 3730(e)(4)âs jurisdictional bar, after âpermit[ting] the parties to submit additional evidence as may be necessary for the court to make the factual determinations upon which the jurisdictional questions turnâ).
Having determined that the jurisdictional issues are not intertwined with the central merits of Relator Vuyyuruâs FCA claims, we now turn to review the district courtâs jurisdictional findings of fact under the clearly erroneous standard of review. Under this deferential standard of review, we will not overturn a district courtâs finding of fact âsimply because we would have decided the case differently.â Easley v. Cromartie, 532 U.S. 234, 242, 121 S.Ct. 1452, 149 L.Ed.2d 430 (2001) (internal quotation marks omitted). Rather, we will only overturn a district courtâs finding of fact as clearly erroneous âwhen although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.â United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948).
The first jurisdictional finding of fact under review is the district courtâs finding that the allegations of the Third Amended Complaint pertaining to the FCA claims were based upon, i.e., actually derived from, the Virginia Times articles. United States ex rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1348 (4th Cir.1994) (â[A] relatorâs action is âbased uponâ a public disclosure of allegations only where the relator has actually derived from that disclosure the allegations upon which his qui tam action is based.â). After reviewing the relevant evidence on this issue ourselves, we are not left with the definite and firm conviction that a mistake has been committed-far from it. The district court correctly observed that many of the substantive allegations in the Third Amended Complaint pertaining to the FCA claims were substantially similar to the allegations in the newspaper article written by reporter Dorothy Rowley and published on the front page of the Virginia Times almost one year prior to Relator Vuyyuruâs filing of this action. Given that: (1) the newspaper article preceded Relator Vuyyuruâs filing of this action by almost a year; (2) Relator Vuyyuru denied under oath that he had been a source for several articles in the Virginia Times and essentially stated under oath that he had only ever given news reporters background medical information and then only did so when asked to help the reporter understand a medical issue; and (3) Relator Vuyyuru offered no evidence, in the form of a sworn affidavit or otherwise, stating that he was the source of the March 30, 2005 newspaper article by Dorothy Rowley or any of the other Virginia Times articles, the district court logically reasoned that â[t]he remarkable similarities between the
Relator Vuyyuru does not dispute that the allegations in the March 30, 2005 newspaper article by Dorothy Rowley are remarkably similar to the substantive allegations pertaining to his FCA claims. Rather, he takes issue with the district courtâs reasoning that the remarkable similarities serve as significant proof that the substantive allegations pertaining to his FCA claims are actually derived from the article, arguing that â[t]here is nothing in the record to show that [he] was not a source for that article.â (Relator Vuyyu-ruâs Opening Br. at 32). Relator Vuyyu-ruâs argument is factually wrong and logically flawed. His argument is factually flawed, because, as we have already mentioned, Relator Vuyyuru denied under oath that he had been a source for several articles in the Virginia Times and essentially stated under oath that he had only given news reporters background medical information and then only did so when asked to help the reporter understand a medical issue. While such deposition testimony is not alone conclusive evidence that he was not a source of the Rowley article, it strongly suggests that he was not. Relator Vuyyuruâs argument is logically flawed, because it ignores the fact that he bears the burden of proving the necessary jurisdictional facts and begs the question as to why he did not simply offer his own sworn statement to the district court unequivocally stating that he was the primary source for the Rowley article.
In his last shot at attacking the district courtâs factual finding that his substantive allegations pertaining to the FCA claims were derived from a public disclosure within the meaning of § 3730(e)(4)(A), Relator Vuyyuru points us to the fact that he wrote and published an editorial in the Virginia Times on March 30, 2005, which editorial outlines some of the same allegations against Dr. Jadhav that he makes in his Third Amended Complaint. Relator Vuyyuru complains that the district courtâs analysis ignored the fact that he wrote this editorial. Assuming arguendo that the district courtâs analysis did ignore the fact that Relator Vuyyuru wrote the editorial, such action is of no benefit to Relator Vuyyuruâs cause on appeal. This is because the editorial says absolutely nothing about Dr. Jadhav defrauding the government by presenting or causing to be presented even a single false or fraudulent claim for payment to the government, which is the sin qua non of a § 3729(a)(1) violation. United States ex rel. Clausen v. Lab. Corp. of Am., Inc., 290 F.3d 1301, 1311 (11th Cir.2002); Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 785 (4th Cir.1999). Similarly, the editorial says nothing about the Defendants knowingly making, using, or causing to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government nor anything about the Defendants conspiring to defraud the government by getting a false or fraudulent claim allowed or paid. Thus, even under the best-case-scenario for Relator Vuyyuru, which is that some of the allegations in his Third Amended Complaint pertaining to the FCA claims were not based upon a public disclosure, e.g., Dr. Jadhav performed colonoscopies in less than five minutes when they normally take fifteen minutes, he still cannot show that the district courtâs âbased uponâ finding is clearly erroneous. Section 3730(e)(4)(A)âs public disclosure jurisdictional bar encompasses actions even partly based upon pri- or public disclosures. See United States ex rel. Boothe v. Sun Healthcare Group, Inc., 496 F.3d 1169, 1176 n. 6 (10th Cir.
The second and last jurisdictional finding of fact under review is the district courtâs finding that Relator Vuyyuru is not entitled to original source status under § 3730(e)(4)(B).
First, although the Third Amended Complaint alleges that Dr. Jadhav and SRMC carried on their fraudulent billing scheme involving the unnecessary biopsy of the IC Valve through March 2005, Relator Vuyyuru cannot be a direct and independent source with respect to any allegations of fraud involving SRMC or its facilities after March 2003, because, by that time, Relator Vuyyuru had withdrawn from practicing medicine at SRMC.
Second, with respect to § 3729(a)(1), there is a glaring lack of evidence to establish that, at the time Relator Vuyyuru filed this action on March 13, 2006 (or even by the time he filed the Third Amended Complaint on August 30, 2006), he had direct and independent knowledge that any Defendant in this case had ever presented or caused to be presented a particular false or fraudulent claim to the government or that he had voluntarily provided the government with such information before filing this action. At most, and this characterization is a stretch, Relator Vuyyuruâs evidence on this issue shows that he had direct and independent knowledge that: (1) Dr. Jadhav billed Medicaid and Medicare in general, often using CPT code 99253, which requires the doctor to have performed a detailed medical history; a detailed examination; and medical decision making of low complexity; (2) Dr. Jadhav failed to perform and record a comprehensive history and perform physical examinations on the majority of his patients that would qualify for use of CPT code 99253; and (3) Dr. Jadhav performed an unnecessary biopsy upon his (Relator Vuyyuruâs) patient Donald F. Case, Jr. and created a history and physical in the patientâs chart after the procedure. The disconnect between this information and Relator Vuyyu-ruâs burden of establishing original source status is obvious. Relator Vuyyuru never connected his knowledge of any underper-formance of medical care by Dr. Jadhav with an actual claim upon the public fisc by any of the Defendants. Indeed, the single patient which Relator Vuyyuru identifies by name and gives some detailed information, ie., patient Donald F. Case, was not Medicare eligible and Relator Vuyyuru offered no evidence to establish that he was eligible for any other federal health-care assistance program under which any of the Defendants could have made a claim upon the public fisc. Relator Vuyyuruâs mere suspicion that there must be a false or fraudulent claim lurking around somewhere simply does not carry his burden of proving that he is entitled to original source status.
Moreover, our analysis does not, as the dissent contends, require that Relator Vuyyuru âprove the particulars of the individual Medicare or Medicaid claims as a condition to proving how he had direct and independent knowledge of the facts giving rise to those claims.â Post at 362. Rather, our analysis requires, quite logically, that Relator Vuyyuru prove that he has direct and independent knowledge of the facts giving rise to his FCA claims. Therefore, in the case of an (a)(1) claim against a particular defendant, our analysis requires the relator to prove that he has direct and independent knowledge that the defendant had presented or caused to be presented a particular false or fraudulent claim to the government.
Third, Relator Vuyyuruâs evidentiary exhibit which he presented for the first time the day of the hearing on Defendantsâ Rule 12(b)(1) motion to dismiss, the DMAS billing report, is of no aid to him whatsoever. Assuming arguendo that such report was somehow probative evidence that Defendants actually submitted false or fraudulent claims for payment to the government, such evidence does nothing to carry Relator Vuyyuruâs burden of proving what he knew, at the time he filed this action. Likewise, such evidence does nothing to carry his burden of proving, with respect
There is also a glaring lack of evidence to establish Relator Vuyyuruâs original source status with respect to his allegations pertaining to his § 3729(a)(2) and (a)(3) claims. Allison Engine Co., Inc., 128 S.Ct. at 2129. Suffice it to say that Relator Vuyyuru has offered no more than a scintilla of evidence that he had direct and independent knowledge that any of the Defendants in this case actually made a false record or statement for the purpose of getting a false or fraudulent claim paid or approved by the government, 31 U.S.C. § 3729(a)(2), nor more than a scintilla of evidence that he had direct and independent knowledge that Dr. Jadhav conspired with any of the Defendants to make a false record or statement with the purpose of having a material effect in bringing about the governmentâs payment of a false or fraudulent claim, id. at § 3729(a)(3); Allison Engine Co., Inc., 128 S.Ct. at 2130-31.
In the second prong of Relator Vuyyu-ruâs challenge to the district courtâs dismissal of his FCA claims for lack of subject matter jurisdiction, Relator Vuyyuru contends the district court erred by dismissing his entire action for lack of subject matter jurisdiction without affording him the opportunity to conduct discovery on the jurisdictional issues of fact. In support of this contention, Relator Vuyyuru further contends that when United States District Court Judge Richard L. Williams, communicating through his law clerk, ordered the parties to hold up on discovery until after the pretrial conference, it meant that he was prohibited from conducting discovery on jurisdictional issues of fact necessary to survive Defendantsâ Rule 12(b)(1) motion.
Relator Vuyyuruâs contentions are without merit. First, our review of the record discloses that Relator Vuyyuru had ample notice that Defendantsâ attack on the basis of the district courtâs subject matter jurisdiction was a factual attack rather than a facial one. Defendants attached multiple evidentiary exhibits to their Memorandum of Law in support of their Rule 12(b)(1) motion. Relator Vuyyuru acknowledged this fact by stating in his Memorandum in Opposition to Defendantsâ Rule 12(b)(1) motion that â[t]he [Defendants essentially ask the court to look outside the pleadings and then to view the evidence in the light most favorable to the moving party....â (J.A. 343). Moreover, Relator Vuyyuru attached two evidentiary exhibits to his Memorandum of Law in Opposition to Defendantsâ Rule 12(b)(1) motion-(l) his own sworn declaration; and (2) a copy of a page of the Virginia Times, publishing Donald F. Caseâs April 22, 2005 letter to the Virginia Times-and, just prior to the district courtâs hearing on the Rule 12(b)(1) motion, Relator Vuyyuru submitted two more evidentiary exhibits in support of his opposition to such motion. As for Judge Richard L. Williamsâ order to hold up discovery until after the pretrial conference in the case, such order in no way prevented Relator Vuyyuru from conducting discovery on jurisdictional issues of fact, which are wholly separate from issues of fact on the merits. Indeed, if Relator Vuyyuru was unclear as to whether he needed to seek leave to conduct discovery on jurisdictional issues of fact, he could have requested clarification from the district court long before the hearing on Defendantsâ Rule 12(b)(1) motion, which he did not do. Moreover, the district court did not abuse its discretion in refusing to grant Relator Vuyyuru additional time to conduct discovery on the jurisdictional issues of fact.
In sum, we hold the district courtâs findings with respect to the jurisdictional issues of fact under § 3730(e)(4) are not clearly erroneous, and thus, the district court did not err as a matter of law in dismissing the Third Amended Complaint for lack of subject matter jurisdiction. Accordingly, we affirm such dismissal.
III.
We next address Relator Vuyyuruâs challenge to the district courtâs award of attorneysâ fees and costs to The Cameron Foundation. Relator Vuyyuruâs challenge is without merit.
Upon motion by The Cameron Foundation, the district court awarded it the sum of $68,228.75 in attorneysâ fees and costs under 31 U.S.C. § 3730(d)(4), which statutory subsection provides that, where the government does not proceed with an FCA claim and the relator conducts the action,
the court may award to the defendant its reasonable attorneysâ fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.
Id. From our careful reading of the district courtâs August 27, 2007 Memorandum Opinion addressing The Cameron Foundationâs motion for an award of attorneysâ fees and costs, we are convinced that the district court based its attorneysâ fees/ costs award upon its findings that The Cameron Foundation prevailed in this action, and that Relator Vuyyuruâs claim of subject matter jurisdiction over his FCA claims was clearly frivolous.
Relator Vuyyuru first attacks the district courtâs attorneysâ fees/costs award on the basis that the district court erroneously ignored the appropriate standard in determining whether he was a proper relator under § 3730(e)(4). In this regard, Relator Vuyyuru makes much the same arguments that he made in challenging the district courtâs Rule 12(b)(1) dismissal of the Third Amended Complaint. According to Relator Vuyyuru, the district courtâs action in ignoring the appropriate standard in determining whether he was a proper relator under § 3730(e)(4) warrants reversal of the dismissal order, which reversal, in turn, ânecessitates reversal of the attorney fees award.â (Relator Vuyyuruâs Opening Br. at 49). Relator Vuyyuru then goes on to argue that:
even without a reversal of the dismissal, it is error on the record in this case to find that [he] clearly had no reasonable chance of success proving that he had direct and independent knowledge of the information on which the allegations were based and had voluntarily provided information to the Government before*356 filing this action under the FCA based on the information.
Id.
We address each of Relator Vuyyuruâs arguments in turn, reviewing the district courtâs decision to award The Cameron Foundation attorneysâ fees and costs under § 3730(d)(4) and the amount of such award for abuse of discretion. Mikes v. Straus, 274 F.3d 687, 704 (2d Cir.2001) (âWe review for abuse of discretion both the decision to grant attorneysâ fees under § 3730(d)(4) of the False Claims Act and the amount.â). âOur review of the district courtâs award is sharply circumscribed; we have recognized that because a district court has close and intimate knowledge of the efforts expended and the value of services rendered, the fee award must not be overturned unless it is clearly wrong.â Plyler v. Evatt, 902 F.2d 273, 277-78 (4th Cir.1990) (internal quotation marks and alterations omitted).
The FCA does not define the term âclearly frivolous,â as that term is found in § 3730(d)(4). For purposes of this appeal only, we accept Relator Vuyyuruâs suggested definition and ask whether, on the record in this case, when viewed objectively, did Relator Vuyyuruâs claim that he qualified as a proper relator under § 3730(e)(4), clearly have no reasonable chance of success? Mikes, 274 F.3d at 705 (upholding award of attorneysâ fees under § 3730(d)(4)âs clearly frivolous element on the basis that plaintiffs allegations clearly had no chance of success, because they were bereft of any objective factual support). Without a doubt, we answer this question in the affirmative. As we have already extensively outlined the momentous failings of Relator Vuyyuruâs evidence pertaining to his burden of establishing himself as a proper relator in order to avoid § 3730(e)(4)âs public disclosure jurisdictional bar, we will not reiterate such analysis here. Suffice it to say, that, when the evidence in the record is viewed objectively, Relator Vuyyuruâs claim that he qualified as a proper relator clearly had no reasonable chance of success. In sum, we hold the district court did not abuse its discretion in deciding to award The Cameron Foundation attorneysâ fees and costs under § 3730(d)(4).
Turning to the question of whether the district court abused its discretion regarding the amount of attorneysâ fees and costs that it awarded, we hold that such amount is not excessive. In calculating an appropriate attorneysâ fee award, a district court must first determine the lodestar amount (reasonable hourly rate multiplied by hours reasonably expended), applying the Johnson/Barber factors when making its lodestar determination. Barber v. Kimbrellâs Inc., 577 F.2d 216, 226 (4th Cir.1978) (adopting twelve factor test set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974), overruled on
This court has summarized the Johnson factors to include: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorneyâs opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorneyâs expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneysâ fees awards in similar cases.
Spell v. McDaniel, 824 F.2d 1380, 1402 n. 18 (4th Cir.1987).
In making its lodestar calculation, the district court used the $310 per hour figure for attorney Rita Davis sought by The Cameron Foundation. Our review of the record discloses that the district court did not abuse its discretion in using this figure. The declarations and submissions attached to The Cameron Foundationâs Revised Fee Application documented the hourly rates actually paid by The Cameron Foundation, provided evidence of attorney Rita Davisâ actual billing practices, and established that $310 per hour for Rita Davis was reasonable in light of the standard charges for like services by the law firm Hunton & Williams in similar cases and for the fees customarily charged in the relevant market for attorneys of Rita Davisâ experience and performance level.
Finally, although Relator Vuyyuru attempts to nitpick the number of hours the district court determined that attorneys for The Cameron Foundation reasonably expended in defending against his FCA claims, our review of the record discloses that the district court did not abuse its discretion in this regard.
IV.
In conclusion, we hold the district court did not err by: (1) dismissing the Third Amended Complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1); and (2) awarding The Cameron Foundation $68,228.75 in attorneysâ fees and costs under 31 U.S.C. § 3730(d)(4).
AFFIRMED
. The United States of America (the government) timely notified the district court that it declined to intervene as a plaintiff, thus leaving Relator Vuyyuru to proceed in the action as the sole plaintiff. See 31 U.S.C. § 3730(b)(4)(B).
. According to the Third Amended Complaint, defendant The Cameron Foundation, a Virginia non-profit corporation, is the successor in interest to the Hospital Authority of the City of Petersburg, which hospital authority operated SRMC until its sale in or about 2003 to defendant Petersburg Hospital Company, LLC, which limited liability company then owned and operated SRMC during the remaining time relevant to the Third Amended Complaint.
.According to the Third Amended Complaint, defendant Columbia/HCA John Randolph, Inc., a Virginia corporation, owned and operated JRMC during all times relevant to the Third Amended Complaint.
. CMS is an abbreviation for the Centers for Medicare and Medicaid Services, which is the agency of the Department of Health and Human Services responsible for administering the Medicare program.
. At the same time, Defendants moved to dismiss the Third Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Such motion is not at issue on appeal.
. We note that the dissent takes the position that the district court decided the original source issue in terms of a facial as opposed to a factual challenge to subject matter jurisdiction. Post at 358, 360-61. A full review of the transcript of the hearing on the Rule 12(b)(1) motion and the district courtâs Memorandum Opinion granting such motion make abundantly clear that the district court ultimately decided the original source issue in terms of a factual challenge to subject matter jurisdiction. For example, in its Memorandum Opinion, the district court observed that Relator Vuyyuru
has had ample opportunity to supply the Court with the specific facts â as opposed to mere conclusions â showing how and when he obtained direct and independent knowledge of the fraudulent acts that he alleges in his complaint, and to support those allegations with competent proof. He has, however, utterly failed to do so.
(J.A. 565) (internal citation, quotation marks, and ellipsis omitted). See also (J.A. 565 n. 3, District Court's March, 28, 2007 Mem. Op.) ("Plaintiff ... had ample opportunity to gather the type of evidence required to demonstrate to the Court that subject matter jurisdiction exists in this case. He did not gather any.â). The irony of the situation is that Relator Vuyyuru also views the district court's ruling on the original source issue as one deciding such issue in terms of a factual challenge to subject matter jurisdiction. Indeed, he repeatedly argues that the district court erred in refusing to grant him additional time to conduct discovery in order to obtain actual fraudulent bills for the purpose of proving, through extrinsic evidence, his entitlement to original source status.
. Our dissenting colleague asserts that the district court was presented with evidence casting doubt on the timing of Relator Vuyyu-ruâs departure from SRMC as being March 2003 (such that Relator Vuyyuru would no longer be in a position to gain direct and independent knowledge of any FCA-violative conduct by SRMC after that time). We disagree. First, below, Relator Vuyyuru never disputed defense counsel's statement at the hearing on the Rule 12(b)(1) motion that Relator Vuyyuru "actually withdrew from practicing medicine at [SRMC] in March of '03.â (J.A. 498). Moreover, when given the opportunity on appeal to challenge such statement, Relator Vuyyuru did not. Instead, in his Opening Brief on appeal, Relator Vuyyuru stated, in the Statement of the Facts section, that he was "a member of the department of medicine at [SRMC] from 1997 to 2003.â (Relator Vuyyuru's Opening Br. at 7). Relator Vuyyuru again made this same statement, in the Argument section of his Opening Brief, in support of his argument that the district court had ignored the fact that he first obtained the information that was not available to the public by reviewing nonpublic medical records. As evidentiary support for such statement, Relator Vuyyuru cited paragraph 5 of his March 2006 Declaration, stating "From on or about 1997 to 2003, I was a member of
. For the first time in this appeal, Relator Vuyyuru argues in his Reply Brief that The Cameron Foundation did not "prevail[]â in this action, as that term is used in § 3730(d)(4). We do not address this argument, because having been raised for the first time on appeal in Relator Vuyyuru's Reply Brief, the argument is abandoned. See Youse-fi v. INS, 260 F.3d 318, 326 (4th Cir.2001) (concluding that petitioner abandoned argument on appeal raised for the first time in reply brief by failing to raise it in opening brief); Edwards v. City of Goldsboro, 178 F.3d 231, 241 n. 6 (4th Cir.1999) (concluding that claim not properly raised in appellant's opening brief is deemed abandoned).
. We also reject as without merit Relator Vuyyuruâs challenge to the district court's granting of The Cameron Foundation's motion to strike a supplemental brief and supporting declaration filed by Relator Vuyyuru on August 8, 2007, in which he made various assertions about The Cameron Foundationâs authority to indemnify Petersburg Hospital Company, L.L.C. As the district court cogently explained in ruling on the motion, it never granted Relator Vuyyuru leave to file the brief and the issues raised in it were not raised in his original brief in opposition to The Cameron Foundationâs motion for attorneysâ fees and costs, "even though it was clear in that application that The Cameron Foundation had assumed the defense of Petersburg Hospital Company LLC." (J.A. 928-29). Moreover, â[t]he time entries at issue were also in the original fee application and Plaintiff made no objection to them." (J.A. 929).
. To the extent we have not specifically addressed any remaining argument by Relator Vuyyuru in challenge to the district courtâs dismissal of the Third Amended Complaint or the fees/costs award, we find such arguments without merit.