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Federal Appeals Court Dismisses Fraud Case Against Planned Parenthood

Jessica Mason Pieklo

The lawsuit brought by conservative legal advocates accused the health-care provider of over $200 million in fraudulent billings.

A federal appeals court has upheld the dismissal of a lawsuit brought by a former Planned Parenthood executive who claimed the organization had overcharged federal and state health programs by more than $200 million in fees for birth control for low-income patients.

P. Victor Gonzalez is a former chief financial officer for Planned Parenthood of Los Angeles, where he worked for about two years before the organization fired him. Gonzalez says the organization let him go because he raised concerns about its practice of marking up the cost of the drugs it purchased under a federal drug-pricing discount program. Planned Parenthood denied Gonzalez’s allegations.

More than a year after he was fired, Gonzalez filed a qui tam suit, which is a type of fraud claim brought by individuals against government contractors and is designed to protect public finances, under both the federal False Claims Act (FCA) and the California False Claims Act. He alleged that Planned Parenthood had “fraudulently billed” state and federal family planning programs in this mark-up that cost taxpayers more than $200 million. A type of whistleblower claim, qui tam actions allow individuals who claim to have knowledge about fraud committed by contractors against the government to sue on behalf of the government to recover money lost due to the alleged fraudulent practices. Successful claims under federal and state false claim acts usually allow a claimant to receive a portion of any funds recovered, which can range anywhere from 15 to 25 percent.

Gonzalez amended his complaint three times to try and assert a fraud claim against Planned Parenthood. A lower court finally dismissed Gonzalez’s claims, finding he couldn’t make out a fraud case against Planned Parenthood under federal law and that his claims under California law were barred by that law’s three-year statute of limitations. The U.S. Court of Appeals for the Ninth Circuit affirmed that decision, finding little if any factual basis for Gonzalez’s allegations to begin with.

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“Here, Gonzalez did not plausibly state a claim under the FCA because his assertion that Planned Parenthood knowingly submitted false claims for reimbursement is compellingly contradicted by a series of letters he attached to his complaint,” the Ninth Circuit held. “In the first exchange of letters, from 1997 to 1998, the [California Department of Human Services] expressed concern over Planned Parenthood’s billing practices, but remained silent when Planned Parenthood explicitly described its billing practices and rationale.” The opinion continued, “[t]he State did not even pursue money owed by Planned Parenthood, let alone suggest that Planned Parenthood had made knowingly false claims.”

Among the attorneys representing Gonzalez was Jay Sekulow of the American Center for Law and Justice, a conservative legal advocacy organization. Sekulow has built a career out of representing religious conservatives and anti-choice activists like Operation Rescue, and is better known for bringing First Amendment claims on behalf of abortion clinic protesters and student Christian groups for access to public schools. But Gonzalez’s claims fit within the group’s larger opposition to reproductive rights and health care generally, as well as the right’s overall goal to defund Planned Parenthood, either through legislation or litigation.

Religious conservatives frequently accuse Planned Parenthood of defrauding taxpayers, and Gonzalez’s lawsuit is another variation of that theme. But accusing an organization of fraud in the court of public opinion and proving fraud it in a court of law are two very different things—a point the Ninth Circuit stressed in affirming the dismissal of Gonzalez’s claims. “Gonzalez’s allegation that Planned Parenthood knowingly submitted false claims is only ‘merely possible rather than plausible,’” the court wrote. “[A]nd he cannot overcome the plausible and obvious explanation that Planned Parenthood did not knowingly submit false claims.”

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