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Erin Brockovich’s Partner in Litigation Loses Appeal: Sixth Circuit Holds that Medicare Secondary Payer Statute is not a Qui Tam Statute

Erin Brockovich, made famous by the 2000 movie staring Julie Roberts, and her litigation partners, have been suing hospitals and nursing homes for years claiming that those groups violated the Medicare Secondary Payer Statues (MSP) by failing to reimburse Medicare for unspecified conditional payment advances.

In December 2006, the St. Pete Times reported that Brockovich was listed as a plaintiff on 33 such lawsuits in California, and Douglas L. Stalley, a Tampa, FL resident, was listed as a plaintiff on 16 such lawsuits in Florida and three other states.   It was further reported that by November 2006 all but one of the California cases, and all but 4 of the Stalley cases, were dismissed.

On July 8th, 2011, there was a decision on one of the Florida cases.  The U.S. Court of Appeals for the Sixth Circuit upheld a previous lower courts determination to dismiss and grant sanctions in the case of Stalley v. Mountain States Health Alliance.  In this case, as in the others mentioned above, the plaintiff was claiming that the MSP was a qui tam statute, which permits private attorney generals to sue on behalf of the United States.

The Sixth Circuit said “notwithstanding Stalley’s tireless efforts, no court has ever found that the MSP is a qui tam statute, permitting private attorneys general to sue on behalf of the United States”.  The court went on say that “not even so much as a law review article, much less a case, supports Stalley’s claim.”  Finally, the court said, “Stalley cannot point to even a passing reference in the legislative history of the MSP to bolster his position.”

So the Sixth Circuit, after describing the Stalley’s claims as “utterly frivolous”, “unreasonable” and “vexatious” upheld the lower District Courts decision to impose sanctions of $276,589.69 against he plaintiff as a deterrent against anymore similar vexatious law suits.

To view the 7/11/2011, U.S. Court of Appeals decision in Stalley v. Mountain States Health Alliance click here

To view the 2/28/2008, U.S. Court of Appeals decision in Stalley v. Mountain States Health Alliance, et al click here

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