[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 01-16782 September 15, 2003
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 00-00837-CV-N-S
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
versus
BAXTER INTERNATIONAL, INCORPORATED; BAXTER HEALTHCARE
CORPORATION, et al.,
Defendants-Appellees,
PLAINTIFFS' STEERING COMMITTEE,
Defendant-Intervenor-
Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(September 15, 2003)
Before TJOFLAT, ANDERSON and CUDAHY*, Circuit Judges.
ANDERSON, Circuit Judge:
This case grows out of the 1995 settlement of a class-action products liability
suit against manufacturers of silicone breast implants. The settlement resulted in
the creation of a reimbursement mechanism by which several settling
manufacturers agreed to cover certain health care expenses incurred by or on behalf
of qualified members of the plaintiff class. The Government, as intervenor, sought
to recover for medical bills it paid on behalf of Medicare beneficiaries who
received treatment related to silicone breast implants. The district court dismissed
the Government's complaint in intervention for failure to state a claim. We
conclude that the dismissal was in error. We therefore reverse and remand.
I. BACKGROUND
A. Historical Background
The underlying case is result of an order by the Judicial Panel on Multi-
District Litigation, which consolidated all then-pending products liability claims
against the manufacturers of silicone breast implants into a single action before the
United States District Court for the Northern District of Alabama. The exact
*
Honorable Richard D. Cudahy, United States Circuit Judge for the Seventh Circuit,
sitting by designation.
2
details of the underlying claims are not of significance to the disposition of the
appeal before us. It is enough to observe that, in general, the plaintiffs allege that
they suffered, or fear that they will contract, a variety of systemic illnesses
traceable to silicone breast implants, necessitating in some instances that the
implants be surgically removed at considerable expense.
The litigation resulted in a settlement valued at $4.2 billion that initially
involved eight defendant manufacturers (the “Lindsey settlement”). On September
1, 1994, after conducting a fairness hearing, the district court approved the terms of
the Lindsey settlement, with modifications. See In re Silicone Gel Breast Implant
Litig., No. CV 92-P-10000-S, MDL No. 926, Civ. A. No. CV94-P-11558-S, 1994
WL 578353 (N.D. Ala. Sept. 1, 1994) (approving modified settlement and
redefining parameters of class membership). Subsequently, one of the larger
defendants, Dow Corning, declared bankruptcy, and several other defendants
(apparently dissatisfied with the court-imposed modifications) chose not to
participate in the settlement, leaving the following companies as appellees now
before us: Baxter International, Inc.; Bristol-Myers Squibb Co., Minnesota Mining
and Manufacturing Co. (“3M”); Union Carbide Corp.; and Union Carbide
Chemical & Plastics Co.
3
After the modifications were publicized to class members, and after the
settlement was restructured to take account of Dow Corning's bankruptcy filing, the
district court gave final approval to the settlement by order of December 22, 1995.
This became known as the “Revised Settlement Program,” or RSP. The
participating implant manufacturers are referred to collectively as “the RSP
Defendants,” 1 the appellees before us.
The revised settlement class covered personal injury or death claims by
members of a class consisting of: persons who received silicone breast implants
before June 1, 1993; all children born to mothers with breast implants before April
1, 1994; and their spouses or other relatives. The Government,2 as well as a
number of private insurers, moved to intervene prior to approval of the settlement
for purposes of asserting claims for reimbursement of medical claims paid on
behalf of class members. The district court denied these motions as premature. Its
1
The settlement agreement purported to make the class claimants, rather than the RSP
Defendants, liable for reimbursement claims by the Government or by other insurers. The
district court did not, however, render its decision based on any agreement by the parties that the
RSP Defendants were not liable. Wisely, none of the defendants attempts to argue here that
parties could override a statutory right of action afforded to the Government by a contractual
arrangement to which the Government was not a party.
2
When this case was initiated, the agency administering the Medicare program was
known as the Health Care Financing Administration (HCFA), a subunit of the Department of
Health and Human Services (HHS). Subsequently, the unit was renamed as the Centers for
Medicare and Medicaid Services (CMS). For simplicity, we refer to the intervenor/appellant
here as “HHS,” “the Government” or “Medicare.”
4
order stated, in pertinent part: “The court will consider these issues at a later time,
before any distributions... are made, and hopefully on the basis of motions that in
some appropriate manner identify the persons on whose behalf subrogation
claimants have paid medical expenses, rather than simply assert a general claim
against the class.”
In accordance with the settlement, the RSP Defendants created a Claims
Office to review the documentation submitted by prospective class members and
determine what level of benefits, if any, applicants were eligible to receive. Also
as part of the claims process, the district court appointed an Escrow Agent, who is
responsible for overseeing the investment and disbursement of the settlement
proceeds. The position has been held since its inception by Edgar C. Gentile, III.
The district court granted the Escrow Agent, as an agent of the court, “judicial
immunity” for actions taken in his quasi-judicial capacity, unless he acts in the
clear absence of jurisdiction.
The settlement resulted in the creation of two funds relevant to this case.
The principal fund, called the RSP Settlement Fund (or sometimes MDL 926
Settlement Fund) is the account from which claims are paid. The second, the
Common Benefit Fund, was created by a surcharge on the RSP Defendants for
5
purposes of paying legal fees and expenses incurred for the “common benefit” of
all claimants. Both funds are administered by the Escrow Agent.
The RSP Defendants made their first payment into the settlement fund in
January of 1996, and at the direction of the district court, the Escrow Agent began
issuing settlement payments to class members in mid-1996. According to the
Government's Complaint, about 81,000 claimants had received some payment from
the RSP as of April 1999. To date, more than 400,000 women have registered as
potential claimants, and the RSP Defendants have paid more than $1 billion into
the RSP Settlement Fund. More than 52,000 breast implant recipients opted out of
the settlement class, according to the Complaint, and the Defendants have made
payments outside the RSP process to an unspecified number of them.
It is not clear from the record to what extent the RSP Defendants carried
liability insurance coverage (other than “self insurance,” about which more will be
said shortly) for the events giving rise to the class members' claims, or to what
extent these defendants have received compensation from such insurance for
payments made into the two settlement funds. It is apparent that the implant
companies had at least some liability coverage, because the settlement agreement
expressly provides for the Defendants' insurers to have access to the otherwise
6
confidential records of class claimants. We therefore take as established for
purposes of this appeal that some third-party insurance coverage exists.
Beginning in 1995 and continuing through March of 2000, the Government
entered into a series of “tolling agreements” with the RSP Defendants while
negotiating over the Government's access to information about the settlement
participants, for purposes of determining which class members may have received
Government health benefits for which the Government was entitled to
reimbursement. Under these tolling agreements, the Defendants agreed that they
would not argue laches, statute of limitations or similar “timeliness” defenses if the
Government was forced to file suit. In exchange, the Government agreed to forego
filing suit during settlement negotiations. Negotiations between the Government
and the RSP Defendants did not produce an agreement. Consequently, in March of
2000, the Government filed the complaint in intervention giving rise to this appeal.
B. The Medicare Secondary Payer (MSP) Statute
The Government's Complaint initially relied on two distinct but related
statutes and their accompanying regulations: (1) the Medicare Secondary Payer
(“MSP”) statute, 42 U.S.C. § 1395y(b), and (2) the Medical Care Recovery Act
7
(“MCRA”), 42 U.S.C. § 2651. Although all of the Government's claims were
dismissed, it is appealing only the dismissal of the MSP claim. 3
The MSP is actually a collection of statutory provisions codified during the
1980s with the intention of reducing federal health care costs. See Zinman v.
Shalala, 67 F.3d 841, 845 (9th Cir. 1995) (“The transformation of Medicare from
the primary payer to the secondary payer with a right of reimbursement reflects the
overarching statutory purpose of reducing Medicare costs.”); Provident Life &
Accident Ins. Co. v. United States, 740 F. Supp. 492, 498 (E.D. Tenn. 1990) (“The
intent of Congress in shifting the burden of primary coverage from Medicare to
private insurance carriers was to place the burden where it could best be
absorbed.”). In a nutshell, the MSP declares that, under certain conditions,
Medicare will be the secondary rather than primary payer for its insureds.
Consequently, Medicare is empowered to recoup from the rightful primary payer
(or from the recipient of such payment) if Medicare pays for a service that was, or
should have been, covered by the primary insurer. Although the statute is
3
While the MSP statute is directed at recovery from “primary plans,” the MCRA statute is
directed at recovery from tortfeasors. It provides that, where the Government is obliged to pay
for the medical care of a person who is injured “under circumstances creating tort liability upon
some third person... to pay damages therefor,” the Government has the right to recover from the
tortfeasor (or their insurers) the “reasonable value” of the care it provides. 42 U.S.C. § 2651(a);
see United States v. Haynes, 445 F.2d 907, 908-09 (5th Cir. 1971) (discussing history and
purpose of MCRA statute).
8
structurally complex – a complexity that has produced considerable confusion
among courts attempting to construe it – the MSP's function is straightforward. As
we explained in Cochran v. HCFA, 291 F.3d 775, 777 (11th Cir. 2002):
[I]f payment for covered services has been or is reasonably
expected to be made by someone else, Medicare does not have to pay.
In order to accommodate its beneficiaries, however, Medicare does
make conditional payments for covered services, even when another
source may be obligated to pay, if that other source is not expected to
pay promptly.
Medicare originated as a series of amendments to the Social Security Act
enacted in 1965, providing a source of payment for hospital care for those over 65.
The program was, for the most part, the primary source of payment for its
beneficiaries even when another source of coverage existed. However, the 1965
amendments also provided that coverage would be secondary to workers'
compensation benefits, and that any payment to or on behalf of a Medicare
beneficiary eligible for workers' compensation benefits would be contingent upon
reimbursement. See S. Rep. No. 404 at § 1862, 89th Cong., 1st Sess. (1965),
reprinted at 1965 U.S.C.C.A.N. 1965, 2127-28 (“no payment may be made... for
any item or service for which payment has been made, or can reasonably be
expected to be made, under a workman's compensation law or plan of the United
States or a State. Any payment ... with respect to any [such] item or service must
9
be conditioned on reimbursement being made to the appropriate trust fund for such
payment if any when notice or other information is received that payment for such
item or service has been made under such a law or plan.”); see also Parkview
Hosp., Inc v. Roese, 750 N.E.2d 384, 388 (Ind. Ct. App. 2001) (discussing early
history and evolution of MSP statute). That language became the template for the
modern MSP provision.
In pertinent part, the MSP statute in its current form provides:
(A) In general
Payment under this subchapter may not be made, except as
provided in subparagraph (B), with respect to any item or service to
the extent that –
...(ii) payment has been made or can reasonably be
expected to be made promptly (as determined in accordance
with regulations) under a workmen's compensation law or plan
of the United States or a State or under an automobile or
liability insurance policy or plan (including a self-insured plan)
or under no-fault insurance.
In this subsection, the term “primary plan” means... a
workmen's compensation law or plan, an automobile or liability
insurance policy or plan (including a self-insured plan) or no
fault insurance, to the extent that clause (ii) applies.4
(B) Repayment required
4
Part of the dispute in this case revolves around the meaning and scope of the statutory
term “self-insured plan.” Two HHS regulations are pertinent. Under 42 C.F.R. § 411.50(b), a
“self-insured” plan “means a plan under which an individual, or a private or governmental entity,
carries its own risk instead of taking out insurance with a carrier.” Under 42 C.F.R. § 411.21, a
“plan” is defined as “any arrangement, oral or written, by one or more entities, to provide health
benefits or medical care or assume legal liability for injury or illness.”
10
(i) Primary plans
Any payment under this subchapter with respect to any
item or service to which subparagraph (A) applies shall be
conditioned on reimbursement to the appropriate Trust Fund
established by this subchapter when notice or other information
is received that payment for such item or service has been or
could be made under such paragraph.
(ii) Action by United States
In order to recover payment under this subchapter for
such an item or service, the United States may bring an action
against any entity which is required or responsible under this
subsection to pay with respect to such item or service (or any
portion thereof) under a primary plan (and may, in accordance
with paragraph (3)(A) collect double damages against that
entity), or against any other entity (including any physician or
provider) that has received payment from that entity with
respect to the item or service, and may join or intervene in any
action related to the events that gave rise to the need for the item
or service.
(iii) Subrogation rights
The United States shall be subrogated (to the extent of
payment made under this subchapter for such an item or service)
to any right under this subsection of an individual or any other
entity to payment with respect to such item or service under a
primary plan.
42 U.S.C. §1395y(b)(2)(A)-(B). Subparagraph (b)(3)(A), which is referenced
above, provides for a private right of action, with double damages available, if a
primary plan “fails to provide for primary payment (or appropriate reimbursement)
in accordance with” the preceding MSP regulations. See 42 U.S.C. §
1395y(b)(3)(A).
11
Pursuant to these provisions of the MSP statute, HHS has enacted
regulations setting forth the means by which the Government can bring an action to
recoup payments from a primary coverage plan. These regulations read, in
pertinent part:
If a Medicare conditional payment is made, the following rules
apply:
(a) Release of information. The filing of a Medicare claim
by or on behalf of the beneficiary constitutes an express
authorization for any entity, including State Medicaid and
workers' compensation agencies, and data depositories,
that possess information pertinent to the Medicare claim
to release that information to CMS. This information will
be used only for Medicare claims processing and for
coordination of benefit purposes.
(b) Right to initiate recovery. CMS may initiate recovery as
soon as it learns that payment has been made or could be
made under workers' compensation, any liability or no-
fault insurance, or an employer group health plan...
...(e) Recovery from third parties. CMS has a direct right of
action to recover from any entity responsible for making
primary payment. This includes an employer, an
insurance carrier, plan, or program, and a third party
administrator...
...(g) Recovery from parties that receive third party payments.
CMS has a right of action to recover its payments from
any entity, including a beneficiary, provider, supplier,
physician, attorney, state agency, or private insurer that
received a third party payment.
12
(h) Reimbursement to Medicare. If the beneficiary or other
party receives a third party payment, the beneficiary or
other party must reimburse Medicare within 60 days.
(i) Special rules. (1) In the case of liability insurance
settlements and disputed claims under employer group
health plans and no-fault insurance, the following rule
applies: If Medicare is not reimbursed as required by
paragraph (h) of this section, the third party payer must
reimburse Medicare even though it has already
reimbursed the beneficiary or other party.
42 C.F.R. § 411.24. Additionally, the regulations define “prompt” or “promptly,”
when used in connection with third-party payments, to mean “payment within 120
days after receipt of the claim.” 42 C.F.R. § 411.21.
The MSP, in its present form, originated with enactment of the Omnibus
Budget Reconciliation Act (“OBRA”) of 1980, Pub.L. No. 96-499, § 953, 94 Stat.
2599 (1980). OBRA amended the Medicare Act to provide that Medicare
payments “may not be made with respect to any item or service to the extent that
payment has been made, or can reasonably be expected to be made (as determined
in accordance with regulations) ... under an automobile or liability insurance policy
... or under no fault insurance.”5
5
As the measure was originally proposed in the House, Medicare would have been
secondary only to automobile insurance; a Senate amendment, adopted in conference, added no-
fault and liability insurance. See House Confc. Rep. No. 96-14, 96th Cong., 2d Sess. 133,
reprinted in 1980 U.S.C.C.A.N. 5903, 5924.
13
Since enacting the MSP statute, Congress has expanded its reach several
times, making Medicare secondary to a greater array of primary coverage sources,
and creating a larger spectrum of beneficiaries who no longer may look to
Medicare as their primary source of coverage.6 More significantly for our
purposes, Congress has repeatedly clarified and augmented the Government's
powers to recoup conditional Medicare payments from primary sources.
The Deficit Reduction Act (“DERFA”) of 1984 conferred on the
Government a direct right of action to recover its payments from any entity “which
would be responsible for payment” under a “law, policy, plan or insurance,” and
provided that the Government would be subrogated to the right of any individual or
entity to receive payment. DERFA also modified the original wording of the
secondary payment provision by adding the modifier “promptly,” so that the
pivotal phrase dictated that a Medicare payment “may not be made with respect to
any item or service to the extent that payment has been made, or can reasonably be
6
In the Omnibus Budget Reconciliation Act of 1981, Congress augmented the MSP to
provide that Medicare would be secondary to group health coverage for end-stage renal patients.
H. Res. 3982, 97th Cong., 1st Sess., 95 Stat. 357 (1981) at § 2146. In the Tax Equity and Fiscal
Responsibility Act (“TERFA”) of 1982, Congress made Medicare the secondary payer for
“working aged” employees and their spouses between the ages of 65 and 69 belonging to large
employer group health plans (covering twenty or more workers). H. Res. 4961, 97th Cong., 2d
Sess., 96 Stat. 324 (1982) at § 116. In the Omnibus Budget Reconciliation Act (“OBRA”) of
1986, Congress made Medicare the secondary payer for disabled individuals enrolled in large
employer group health plans. H. Res. 5300, 99th Cong., 2d Sess., 100 Stat. 1874 (1986) at §
9319.
14
expected to be made promptly ... with respect to such item or service, under a
workman's compensation plan or plan of the United States or a State or under an
automobile or liability insurance policy or plan (including a self-insured plan) or
no-fault insurance(.)” H. Res. 4170, 98th Cong., 2d Sess., 98 Stat. 494 (1984) at §
2344. In OBRA 1986, Congress added the private right of action for double
damages codified at 42 U.S.C. § 1395y(b)(3)(A). It also added the cross-reference
to that section in § 1395(b)(2)(B)(ii), which enables the Government to collect
double damages “in accordance with” the new private right of action. H. Res.
5300, 99th Cong., 2d Sess., 100 Stat. 1874 (1986) at § 9319.
II. THE DECISION BELOW
The Government's Complaint advanced nine counts: (1) a claim for
reimbursement against the RSP Defendants as third-party payers under the MSP;
(2) double damages against the RSP Defendants as third-party payers under the
MSP; (3) single damages under the MSP against the RSP Defendants as entities
that caused payments to be made, or received such payments, from product liability
insurers; (4) a subrogation claim under the MSP against disbursements from the
MDL Settlement Fund and/or the Common Benefit Fund; (5) a claim for
declaratory relief that the RSP Defendants are liable under the MSP to reimburse
Medicare for past payments to breast implant patients, and are obligated under 42
15
C.F.R. § 411.25 to provide Medicare with notice of all payments to Medicare
beneficiaries; (6) a single damages claim under the MSP against the Escrow Agent
as a person who received payment from the RSP Defendants and/or from product
liability insurers to pay the claimants; (7) a claim for injunctive relief under the
MSP to enjoin the Escrow Agent from making disbursements to Medicare patients
pending resolution of Medicare's MSP claims and to compel disclosure of
identifying information concerning all past or contemplated settlement payments to
Medicare beneficiaries; (8) a claim for injunctive relief similar to Count VII under
the MCRA, and (9) a demand under the MCRA for payment from the MDL
Settlement Fund of the Government's reasonable costs for paying for care of
Medicare patients for injuries alleged to be caused by a breast implant. Thus,
Counts I through VII arose under the MSP or its regulations, while counts VIII and
IX arose under the MCRA. 7
The district court (after first granting the Plaintiffs' Steering Committee the
right to intervene) granted the motions to dismiss filed by the RSP Defendants, the
Escrow Agent, and the Plaintiffs' Steering Committee, finding that the Government
had failed to state a claim upon which relief could be granted.8
7
As noted above, the Government has now abandoned its MCRA claims.
8
The opinion below was published as In re Silicone Gel Breast Implant Products Liability
Litig., 174 F. Supp. 2d 1242 (N.D. Ala. 2001).
16
The court first evaluated whether the Government had a claim for
reimbursement under 42 U.S.C. § 1395y(b), the MSP statute. The court found that
– whether the Government was bringing a direct action in its own right under the
statute or was acting as the subrogee to the patient's rights – an essential element to
state a claim under the MSP was to identify both the services provided and the
patient who received them. In addition to the need for the Defendants to know the
identity of the patients and the amount in dispute, the court noted that the
beneficiaries themselves are interested parties and have the right to challenge the
reimbursement request and to petition the Government to waive its claim.
The court rejected the Government's argument that it was unable to plead the
identity of the beneficiaries in question because of the settlement's confidentiality
provisions. The court found that the Defendants were under no statutory duty to
collect information about the identity of potential claimants, and that absent such a
duty, it was irrelevant whether the settlement was structured with the purpose of
evading disclosure. Because the Government had an alternative means of relief –
like any other insurer, it could file a petition for reimbursement with the RSP
Claims Office – the court found no need to relieve the Government from
compliance with the MSP statute or the pleading standards of Fed. R. Civ. P. 8(a).
17
Next, the court considered whether the Government was entitled to
reimbursement under 42 C.F.R. § 411.24(i), the “double payment” regulation
adopted pursuant to the MSP. Under Section 411.24(i), a “third party payer” may
be required to reimburse Medicare if it paid a provider or a claimant when it knew,
or should have known, that Medicare had made a conditional primary payment as
provided by the MSP. The district court found this regulation inapplicable,
because the relevant portion of the MSP statute applies only to insurers or “self-
insured plans.” The court rejected the Government's contention that the implant
manufacturers could be viewed as “self-insured plans.” The RSP Defendants were
thus outside the coverage of the statute and not subject to the “double payment”
regulation.
Further, the court found that the Government had no direct right of action
against a third-party payer that had already made payment to its insured, because
such a payer was no longer “required or responsible... to pay” as provided by the
MSP statute, § 1395y(b)(2)(B)(ii). The Government may proceed against such an
insurer only in its role as subrogee, the court held. Relying on Health Ins. Ass'n of
America v. Shalala, 23 F.3d 412 (D.C. Cir. 1994) (“HIAA”), and on general
principles of common law, the court held that, as a subrogee, the Government was
required to “plead and prove [that] the third-party payer knew or should have
18
known of Medicare's conditional payments at the time payment was made to the
beneficiary.” Because, in the district court's view, the Government failed to do so,
its claims under the “double payment” provision were fatally flawed.
The court declined to adopt the Government's interpretation that the
existence of the MSP statute itself puts insurers on constructive notice that they
must inquire into whether Medicare has paid a beneficiary before they pay a claim.
Rather, citing HIAA, the court held that “knowledge” requires the Government to
show that, at the time it paid the claim, the insurer had “direct information... or
information necessary to draw the conclusion” that Medicare had made a
conditional payment to the particular recipient. It was insufficient, the court held,
that the Government's prior intervention in the case generally alerted the
Defendants that Medicare might have paid some claims.
The court rejected the Government's contention that the Defendants'
knowledge was a factual matter to be proven at trial. The court observed that the
Government's own complaint alleged that the RSP Defendants “did not ascertain”
whether Medicare had made payments on behalf of any of the RSP claimants. With
that assertion, the court felt that the Government had effectively pled itself out of
court.
19
Next, the court addressed whether the Government could bring a claim in
Count II against the RSP Defendants for double damages pursuant to 42 U.S.C. §
1395y(a)(3)(A) and 42 C.F.R. § 411.24(c)(2). Having held that the Defendants
were not liable even for single damages, the district court summarily rejected the
Government's claim for double damages.
Similarly, the district court summarily rejected the Government's claims for
declaratory relief (Count V) and injunctive relief (Count VII). The court then
considered whether any of the defendants could be liable under the MSP as entities
that “received payment,” as provided in 42 U.S.C. § 1395y(b)(2)(B)(ii). (Although
the court acknowledged that the Government's claim under this section ran against
both the RSP Defendants and the Escrow Agent, its discussion focused almost
exclusively on the role of the Escrow Agent.) First, the court – again relying on
HIAA – held that a mere “pass-through” could not be said to have “received”
payment under any ordinary understanding of that term, since “receipt” suggests a
degree of autonomous control. Further, the court observed that the term “recover”
in the statute suggested that the Government must proceed against an entity
actually in possession of the money – either the ultimate payer or the ultimate
payee – and not an entity that temporarily held the money and relinquished it.
Additionally, the court observed that the Defendants did not fit either the statute's
20
or HHS regulations' illustration of who qualifies as an entity that receives
payment: the statute uses the illustration “any physician or provider,” while 42
C.F.R. § 411.24(g) refers to “a beneficiary, provider, supplier, physician, attorney,
State agency or private insurer that has received a third party payment.” All of
those entities, the court observed, are likely to be ultimate recipients of payment
rather than mere conduits. Where an entity has merely remitted payment as a pass-
through, the court held, that entity is reachable only through 42 C.F.R. §§
411.24(i), which requires proof of knowledge of Medicare's prior payment that is
lacking in this case.
III. DISCUSSION
We review a district court's grant of a motion to dismiss for failure to state a
claim de novo. Abate of Georgia, Inc. v. Georgia, 264 F.3d 1315, 1315 (11th Cir.
2001). A motion to dismiss a complaint in intervention is reviewed under the same
standard applicable to consideration of a motion to dismiss the original plaintiffs'
complaint. Southwest Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 819-20
(9th Cir. 2001). In evaluating the sufficiency of a complaint under Rule 12(b)(6),
courts must be mindful that the Federal Rules require only that the complaint
contain “a short and plain statement of the claim showing that the pleader is
entitled to relief(.)” Fed. R. Civ. P. 8(a). In applying Rule 12(b)(6), "a complaint
21
should not be dismissed for failure to state a claim unless it appears beyond a doubt
that the [complainant] can prove no set of facts in support of his claim which would
entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102
(1957).
The district court granted the motion on two grounds: first, that the
Government's Complaint was defective because it did not include the identity of
the recipients of federal health care benefits and the nature of the expenditures, and
second, that the MSP statute did not entitle the Government to proceed on its
chosen theories against these defendants. Thus, we must consider both whether the
Government has viable claims under the applicable law, and, if so, whether the
Government's pleading was sufficient to invoke the MSP.
A. Sufficiency of Complaint
The district court held that, “at a minimum,” a complaint under the MSP
statute must identify the Medicare beneficiaries for whose care reimbursement is
sought. Because the Complaint here failed to do so, the court held, the MSP counts
were subject to dismissal.
Because the Federal Rules embody the concept of liberalized “notice
pleading,” a complaint need contain only a statement calculated to “give the
defendant fair notice of what the plaintiff's claim is and the grounds upon which it
22
rests.” Conley, 355 U.S. at 47, 78 S.Ct. at 103; see also Caribbean Broad. Sys.,
Ltd. v. Cable & Wireless PLC, 148 F.3d 1080, 1086 (D.C. Cir. 1998) ("[A] plaintiff
need not allege all the facts necessary to prove its claim."). We have observed that
the threshold of sufficiency to which a complaint is held at the motion-to-dismiss
stage is “exceedingly low.” See In re Southeast Banking Corp., 69 F.3d 1539,
1551 (11th Cir. 1995) (“[F]or better or for worse, the Federal Rules of Civil
Procedure do not permit district courts to impose upon plaintiffs the burden to
plead with the greatest specificity they can.”).
Rule 24 requires merely that an intervenor's petition “shall state the grounds
[for intervention] and shall be accompanied by a pleading setting forth the claim or
defense for which intervention is sought.” Fed. R. Civ. P. 24(e). “The
determination of whether the proposed intervenor's complaint states a cause of
action is controlled by the general rules on testing a pleading; the factual
allegations of the complaint are assumed to be true... and the pleading is construed
liberally in support of the pleader.” Pin v. Texaco, Inc., 793 F.2d 1448, 1450 (5th
Cir. 1986) (internal quotes and citation omitted); accord County of Santa Fe v.
Public Serv. Co. of N.M., 311 F.3d 1031, 1035 (10th Cir. 2002).
The Supreme Court has said in the context of a standing determination that
“[a]t the pleading stage, general factual allegations of injury resulting from the
23
defendant's conduct may suffice, for on a motion to dismiss we presume that
general allegations embrace those specific facts that are necessary to support the
claim.” Nat'l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798,
803 (1994) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct.
2130, 2137 (1992)). In Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 511, 122
S.Ct. 992, 997 (2002), the Court held that in the employment discrimination
context, a complaint is not subject to dismissal for failure to state a claim merely
because it fails to “plead facts establishing a prima facie case” of discrimination.
As the Court emphasized there:
The liberal notice pleading of Rule 8(a) is the starting point of a
simplified pleading system. ... Rule 8(a) establishes a pleading
standard without regard to whether a claim will succeed on the merits.
United States v. Baxter International, Incorporated
Court: Court of Appeals for the Eleventh Circuit
Date filed: 2003-09-15
Citations: 345 F.3d 866
Copy CitationsCombined Opinion