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Uehling v. Millennium Laboratories, Inc.

United States District Court, S.D. California

May 10, 2018

RYAN UEHLING, Plaintiff,


          Hon M. James Lorenz, United States District Judge.

         Pending before the Court is Defendant Millennium Laboratories, Inc.'s (“Millennium”) motion for summary judgment. (MSJ [Doc. 119].) Pursuant to Civil Local Rule 7.1(d)(1), the Court decides the matter on the papers submitted and without oral argument. For the reasons stated below, the Court DENIES Millennium's motion.

         I. Background

         Millennium is in the business of providing drug testing products and services for medical providers concerned with pain management. One of Millennium's products is a urine Point of Collection cup (“POC cup”) that comes lined with multiple test strips. When exposed to a urine sample, the test strips will indicate whether the sample tests positive for certain drugs. If a provider wants to confirm the onsite result produced by a POC cup, he or she can send the sample to Millennium for laboratory testing.

         Millennium required that medical providers using its laboratory testing services fill out a Custom Profile form by checking boxes next to the names of certain drugs for which Millennium offers testing. When a provider would submit a urine sample to Millennium for laboratory testing and check a box labeled “Use Custom Profile”, Millennium would test, and bill, for each drug checked in that provider's Custom Profile.

         In 2011, Millennium directed its sales force to pressure providers to include at least twelve drugs on their Custom Profiles. Thus, inclusion of at least twelve drugs became a condition to providers opening an account with Millennium; continuing an existing account with Millennium; and receiving free POC cups. Because this strategy involved encouraging use of default custom profiles on all of a provider's patients, it does not appear that this sales push was concerned with providing for individual patients' specific medical needs. Rather, the purpose appears to have been a desire to increase profit margins, as Millennium earns more per sample by billing for more tests.

         Millennium, as a Medicare Part B biller, harvested a substantial amount of revenue by billing the federal government for laboratory testing performed in accordance with Custom Profiles that did not account for individual patients' needs. It is illegal to bill Medicare for drug testing that is not necessary or specifically targeted to the needs of a patient. 42 U.S.C. § 1395y(a)(1)(a). Accordingly, Plaintiff Ryan Uehling (“Plaintiff”), Millennium's Western Regional Sales Director at the time, approached Millennium's President Howard Appel (“Appel”) on two occasions with concerns regarding the legality of this practice.

         Approximately one month after Plaintiff and Appel's second conversation, Millennium fired Plaintiff. Plaintiff then approached the government with evidence that Millennium was submitting false claims and, as a qui tam plaintiff, filed a complaint against Millennium with the United States District Court, District of Massachusetts, alleging violations of the Federal False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., through, inter alia, fraudulent billing and retaliation in the form of firing him for engaging in FCA protected activity. U.S.A. ex rel Ryan Uehling, v. Millennium, 1:12-cv-10631-NMG (D. Mass.) The government elected to intervene, and Millennium paid $256 million to settle the fraudulent billing claims against it. (Settlement Agreement [Doc. 125-8].) That settlement did not resolve Plaintiff's retaliation claim, which the Massachusetts court severed and transferred to this Court. (Severance [Doc. 1]; Transfer [Doc. 26].) Millennium now moves for summary judgment. (MSJ [Doc. 119].) Plaintiff opposes. (Opp'n [Doc. 125].)

         II. Legal Standard

         Summary judgment is appropriate under Rule 56(c) where the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 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, 477 U.S. at 248.

         The party seeking summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Id. at 322-23. “Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

         “[T]he district court may limit its review to the documents submitted for the purpose of summary judgment and those parts of the record specifically referenced therein.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 2001). Therefore, the court is not obligated “to scour the record in search of a genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (citing Richards v. Combined Ins. Co. of Am., 55 F.3d 247, 251 (7th Cir. 1995). If the moving party fails to discharge this initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party meets this initial burden, the nonmoving party cannot defeat summary judgment merely by demonstrating “that there is some metaphysical doubt as to the material facts.” Matsushita Elect. Indus. Co., Ltd. v Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, the nonmoving party must “go beyond the pleadings” and by “the depositions, answers to interrogatories, and admissions on file, ” designate “specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324 (quoting Fed.R.Civ.P. 56(e)).

         When making this determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita, 475 U.S. at 587. “Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, ...

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