Arlen Smith v. Colette Peters

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 14 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARLEN SMITH; et al., No. 20-35385
Plaintiffs-Appellants, D.C. No. 2:14-cv-01982-SU
and
MEMORANDUM*
UNITED STATES OF AMERICA,
Plaintiff,
v.
COLETTE S. PETERS, Director, Oregon
Department of Corrections; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Oregon
Marco A. Hernandez, Chief District Judge, Presiding
Submitted June 10, 2021**
Portland, Oregon
Before: WARDLAW, TALLMAN, and HURWITZ, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Relators Arlen Smith, Jerry Harryman, and Rotish Singh (Relators) appeal
the district court’s dismissal with prejudice of their claims under the False Claims
Act (FCA), 31 U.S.C. §§ 3729–33, against employees of the Oregon Department
of Corrections (ODOC). We have jurisdiction, 28 U.S.C. § 1291, and affirm.
We review de novo the dismissal of claims under the FCA and assume the
facts as alleged in Relators’ third amended complaint are true. United States ex
rel. Campie v. Gilead Scis., Inc., 862 F.3d 890, 898 (9th Cir. 2017). We “examine
only whether [R]elators’ allegations support a cause of action under the False
Claims Act under the theories presented,” id., applying the heightened pleading
standards of Federal Rule of Civil Procedure 9(b), see Ebeid ex rel. United States
v. Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010).
1. Relators first invoke an implied false certification theory to argue
Defendants “knowingly present[ed], or cause[d] to be presented, a false or
fraudulent claim for payment or approval,” 31 U.S.C. § 3729(a)(1)(A). But, to
state a claim under that theory, “specific representations” must have accompanied
the request for payment or property. Universal Health Servs., Inc. v. United States
ex rel. Escobar, 136 S. Ct. 1989, 2001 (2016). No specific representations were
alleged here.
2. Relators’ reverse false claims liability theory also lacks merit. Relators
failed to plead that Defendants “knowingly and improperly avoid[ed] or
2
decreas[ed] an obligation to pay or transmit money or property to the
Government.” 31 U.S.C. § 3729(a)(1)(G). The federal civil forfeiture statute that
Relators invoke, 18 U.S.C. § 981, did not automatically impose an “obligation” on
Defendants to turn over any proceeds they earned from their alleged scheme. That
statute’s relation-back principle may cause courts to deem “[t]itle to real property”
to “‘vest’ in the United States upon commission of the act giving rise to forfeiture,
but vesting is not self-executing.” United States v. Spahi, 177 F.3d 748, 754 (9th
Cir. 1999). “Indeed, under the forfeiture statutes, ‘nothing vests in the government
until some legal step shall be taken for the assertion of its right, after which, for
many purposes, the doctrine of relation carries back the title to the commission of
the offense.’” Id. (quoting United States v. 92 Buena Vista Ave., 507 U.S. 111, 125
(1993) (plurality opinion)). Because Relators never allege that the United States
prevailed in a judicial proceeding to perfect title in Defendants’ allegedly illicit
proceeds, no reverse claims liability exists here.
3. Relators’ remaining allegations are to no avail. Even if the ODOC
overcharges its inmates for postage, that conduct does not wrongly cause the
“government to pay out money or forfeit moneys due.” Gilead Scis., Inc., 862 F.3d
at 899 (emphasis added). Meanwhile, the district court did not abuse its discretion
in declining to consider Relators’ claim premised on fraudulent use of interagency
mail, given that Relators did not raise this argument before the magistrate judge.
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See Akhtar v. Mesa, 698 F.3d 1202, 1208 (9th Cir. 2012).
4. Even if Relators had pled cognizable FCA violations, they failed to plead
those allegations with particularity. Their third amended complaint “lump[s]
together” all of the defendants and “assert[s] that everyone did everything,” even
though the various defendants held different positions at the ODOC and thus
cannot plausibly have all “had the exact same role in [the] fraud.” United States ex
rel. Silingo v. WellPoint, Inc., 904 F.3d 667, 677 (9th Cir. 2018) (internal quotation
marks and citation omitted).1
AFFIRMED.
1
Relators have not challenged the district court’s decision to dismiss their
claims with prejudice and have thus forfeited any argument to that effect. See
Brown v. Rawson-Neal Psychiatric Hosp., 840 F.3d 1146, 1148 (9th Cir. 2016). In
any event, the magistrate and district judges did not abuse their discretion in
dismissing Relators’ third amended complaint with prejudice. See Chinatown
Neighborhood Ass’n v. Harris, 794 F.3d 1136, 1144 (9th Cir. 2015).
4