United States v. Planned Parenthood Fed'n of Am.

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UNITED STATES OF AMERICA, et al., Plaintiffs, v. PLANNED PARENTHOOD FEDERATION OF AMERICA, et al., Defendants.

No. 2:21-CV-022-Z

United States District Court, N.D. Texas, Amarillo Division

July 1, 2024

MEMORANDUM OPINION AND ORDER

MATTHEW J. KACSMARYK UNITED STATES DISTRICT JUDGE

Before the Court are parties' competing motions for summary judgment. Plaintiffs filed their motions for summary judgment (“Motions”) (ECF Nos. 473, 474), on January 6 2023. Defendants filed their motions for summary judgment (“Cross-Motions”) (ECF Nos. 465, 470), on the same day. Having found that Affiliate Defendants are obligated to return the Medicaid overpayments to Texas and Louisiana and that the Planned Parenthood Federation of America is entitled to summary judgment on Affiliate Defendants' alleged reverse false claims, the Court GRANTS the Motions and Cross-Motions IN PART.^[1]

BACKGROUND

Planned Parenthood Federation of America (“PPFA”) is a nonprofit corporation with nearly $400 million in annual revenue and $500 million in assets. ECF No. 391 at 19. Healthcare centers branded as “Planned Parenthood” are owned and operated by PPFA's 49 affiliates. Id. at 20; ECF No. 414-1 at 6. Several of those affiliates operate clinics in Texas and/or Louisiana: Planned Parenthood Gulf Coast (“PPGC”), Planned Parenthood of Greater Texas (“PPGT”) Planned Parenthood of Cameron County (“PPCC”) Planned Parenthood South Texas (“PPST”), and Planned Parenthood of San Antonio (“PPSA”) (collectively, “Affiliate Defendants”), Id. at 1.

Between 2013 and 2015, Relator Alex Doe engaged in an undercover investigation of Planned Parenthood's procurement and sale of fetal tissue. Id. al 25. During the investigation, Relator met and recorded conversations with various PPFA and PPGC employees who discussed the possibility of providing fetal cadavers for research and altering abortion procedures to provide intact or mostly intact specimens. Id. During one such meeting, a PPFA employee jokingly said she “want[ed] a Lamborghini” when discussing the price per specimen. ECF No. 2 at 24. That employee also discussed the possibility of altering abortion procedures to be “less crunchy” to obtain more intact specimens. Id. Similarly, a different PPFA employee said:

So then you're just kind of cognizant of where you put your graspers, you try to intentionally go above and below the thorax, so that, you know, we've been very good at getting heart, lung, liver, because we know that, so I'm not gonna crush that part, I'm going to basically crush below, I'm gonna crush above, and I'm gonna see if I can get it all intact.

ECF No. 81 at 43. On another occasion, PPGC employees escorted Relator on a laboratory tour to demonstrate the types of specimens they could procure. ECF No. 391 at 25. Among the specimens displayed, Relator viewed fetal body parts from a recent second-trimester abortion in a Pyrex dish. Id. These PPGC employees stated they could avoid federal and state partial-birth abortion laws by claiming they did not intend to procure intact or mostly intact specimens. Id. at 26.

Wearing a hidden camera, Relator captured these conversations on video and provided the footage to Texas in late May or early June of 2015. Id.^[2] Texas then shared the information with Louisiana, and both states - along with the Department of Justice and the United States Congress - opened investigations into Planned Parenthood. Id.

On September 15, 2015, the Louisiana Department of Health and Hospitals (“LDH”) sent letters informing PPGC of the State's intent to terminate or revoke PPGC's Medicaid provider agreements. Id. at 26-27. Those letters noted that PPGC was entitled to an administrative review of the decision within 30 days. Id. at 27. Nevertheless, PPGC declined to request an administrative hearing and instead filed suit in Louisiana federal court, with PPFA representing PPGC and several of PPGC's patients. Id. These PPGC patients obtained a preliminary injunction that temporarily prevented Louisiana from giving effect to PPGC's termination. See id. at 28; Planned Parenthood Gulf Coast, Inc. v. Kliebert, 141 F.Supp.3d 604 (M.D. La. 2015). Thus, PPGC continued to file claims for Medicaid reimbursement while the injunction was pending and was paid by the State. Id.

After Texas conducted its investigation, the Texas Office of the Inspector General (“OIG”) sent a preliminary Notice of Termination to Affiliate Defendants on October 19, 2015. Id. That letter also notified Affiliate Defendants of their right to an administrative appeal, and - as in Louisiana - they chose not to engage in the administrative process. Id. at 29. OIG sent the Affiliate Defendants a Final Notice of Termination of all provider agreements on December 20, 2016, and Defendants obtained a preliminary injunction in the Western District of Texas^[3] on February 21, 2017. Id. at 29-31. Defendants thereafter continued to file claims for reimbursement with Texas Medicaid that were paid by the state due to the injunction. Id. at 31.

The federal termination litigation culminated on November 23, 2020, with an en banc decision by the United States Court of Appeals for the Fifth Circuit. See Kauffman, 981 F.3d 347. That decision held that the individual beneficiary plaintiffs had no right of action to challenge Affiliate Defendants' termination and vacated the injunction. Id. at 368-70. After Affiliate Defendants asked Texas for a six-month “grace period” to remain a participant in the Medicaid program, Texas sent a letter on January 4, 2021, denying that request but allowing 30 days for Affiliate Defendants to transition patients to new providers. ECF No. 391 at 32. The day before that period expired, Affiliate Defendants filed a lawsuit in Travis County District Court in Austin, Texas and obtained a temporary restraining order (“TRO”). Id. On March 10, 2021, Judge Livingston denied the requested relief after finding no authority that a federal injunction stays administrative deadlines. Id. at 33. Affiliate Defendants billed Texas Medicaid for services until March 10 or 12 of 2021. See ECF Nos. 81 at 3, 417 at 22. They have not paid back the money received during the preliminary injunctions or under the state court's TRO. ECF No. 391 at 33.

On February 5, 2021, Relator filed the instant quitain action against Defendants, alleging that they violated state and federal law by (1) falsely certifying their compliance with Texas and Louisiana Medicaid rules and regulations and by (2) failing to repay the government millions of dollars of Medicaid funds that they knew or should have known they were obligated to repay. See generally ECF No. 2. To those ends, Relator seeks civil penalties and treble damages under the False Claims Act (“FCA”), the Texas Medicaid Fraud Prevention Act (“TMFPA”), and the Louisiana Medical Assistance Programs Integrity Law (“LMAPIL”) on behalf of the United States, Texas, and Louisiana. Id. On November 1, 2021, Texas notified the Court of its election to intervene in the suit. ECF No. 16. On November 3, 2021, the United States declined to intervene. ECF No. 18. Louisiana has neither elected nor declined to intervene.

Plaintiffs' expert Donald E. Lochabay, Jr. determined that Affiliate Defendants submitted 45,181 false claims to the Texas Medicaid program and 99,230 false claims to the Louisiana Medicaid program.^[4] ECF No. 391 at 36. Plaintiffs allege there were $8,962,161 in false claims submitted to the Texas Medicaid program and $8,059,229 in false claims submitted to the Louisiana Medicaid program. Id. at 36-37. The current minimum penalty for violating the FCA is $12,537 per violation, with a maximum penalty of $25,076 per violation. See Civil Monetary Penalties Inflation Adjustments for 2022, 87 Fed.Reg. at 27515 (May 9, 2022).

LEGAL STANDARD

A court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED, R, CIV. P. 56(a). A fact is “material” if its existence or non-existence “might affect the outcome of the suit under the governing law,” and the dispute about a material fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson R Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Similarly, “[o]n cross-motions for summary judgment, the Court review[s] each party's motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party.” Texas v. Rettig, 987 F.3d 518, 526 (5th Cir. 2021). And importantly, courts cannot make “credibility determinations” when considering conflicting evidence or competing inferences. Anderson, 477 U.S. at 255. If “reasonable minds could differ as to the import of the evidence” on a disputed allegation, the court must deny the motion. Id. at 250.

ANALYSIS

A. Affiliate Defendants' Liability for Submitting “Reverse False Claims”

“In a reverse False Claims Act suit, there is no improper payment by the government to a defendant, but rather [] an improper reduction in the defendant's liability to the government.” United States ex rel. Marcy v. Rowan Cos., Inc., 520 F.3d 384, 390 (5th Cir. 2008); United States ex rel. Guth v. Roedel Parsons Koch Blache Balhoff & McCallister, 626 Fed.Appx. 528, 534 (5th Cir, 2015), Accordingly, any person who “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government” may be liable. 31 U.S.C. § 3729(a)(1)(G); see also Kane ex rel. United States v. Healthfirst, Inc., 120 F.Supp.3d 370, 394 (S.D.N.Y. 2015) (“[T]o retain - to not return - an overpayment constitutes a violation of the FCA,”),^[5]

The term “obligation” means “an...