Plaintiff filed numerous lawsuits in federal courts across the country, claiming the Medicare Secondary Payer (MSP) Act, 42 U.S.C. § 1395y(b), was a qui tam statute entitling him to sue, as a private attorney general, healthcare entities for failing to reimburse Medicare for expenses incurred. The district courts rejected this novel legal claim and held Plaintiff lacked standing to assert it.
Plaintiff subsequently filed qui tam actions under the MSP Act in the United States District Court for the Eastern District of Tennessee, which were also dismissed for lack of standing. The United States Court of Appeals for the Sixth Circuit affirmed the district court’s decision and determined that sanctions against Plaintiff and his counsel were appropriate in light of Plaintiff”””””””’’s “utterly frivolous” claims. The Court of Appeals stated that Plaintiff cited no legal authority for his contention that MSP is a qui tam statute and concluded that the claims were filed for an improper purpose, namely, to profit at the expense of Defendants. Following the appeal, Defendants moved for sanctions. The court found that Plaintiff and his law firm acted in bad faith and should be jointly and severally liable for attorney’s fees based on the court’s inherent authority. The court granted sanctions against Plaintiff totaling $276,589.00.
Date of Decision: February 2, 2010
Stalley v. Mt. States Health Alliance, 2010 U.S. Dist. LEXIS 8643 (E.D. Tenn. Feb. 2, 2010) (Collier, J.)