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c BACKGROUND
United States District Court,
N.D. California.
UNITED STATES OF AMERlCA, Plaintiff,
v.
ST. LUKE'S SUBACUTE HOSPITAL AND NURSING
CENTRE, INC. and Guy Roland Seaton, Defendants.
No. C 00-1976 MHP.
Dec. 16, 2004.
Alison E. Daw, U.S. Attorney's Office, San Jose, CA,
Sara Winslow, US Department of Justice, Washington,
DC, Gail Killefer, Stephen A. Shefler, AUSA, U.S. At-
torney's Office, Oakland, CA, David W. Shapiro, US
Attorney's Office, San Francisco, CA, for Plaintiff.
Orrin Leigh Grover, Orrin Leigh Grover Law Offices,
Woodburn, OR, Guy Seaton, Hayward, CA, Jonathan C.
Do, Law Offices of Jonathan C. Do, Oakland, CA, for
Defendants.
ORDER
PATEL,].
Re: Plaintiffs Motion for Partial Summary Judgment
*1 On June 2, 2000, the United States brought this civil
action against defendants St. Luke's Subacute Hospital
and Nursing Centre, Inc. and Guy Seaton (collectively
"defendants"), alleging violations of the False Claims
Act ("FCA"), 31 U.S.c. §§ 3729-33, and of the com-
mon law in connection with cost reports that defendants
submitted to Medicare. Now before the court is the
United States' motion for summary adjudication as to
the issue of defendants' liability under the FCA. Having
considered the arguments presented and for the reasons
stated below, the court enters the following memor-
andum and order.
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f~l
FN I. The court's description of the investiga-
tion leading to defendants' indictment is de-
scribed in greater detail in its October IS, 2002
order in the related criminal action against de-
fendants, United States v. St. Luke's Subacute
Hospital and Nursing Centre, Inc., No. CR
02-0044 MHP.
This action arises out of a scheme to defraud Medicare
by inflating reimbursable nursing hours at defendants'
care facility and providing falsified documentation to
federal auditors in order to support such false claims. At
all times relevant to the allegations in the United States'
complaint, defendant S1. Luke's Subacute Hospital and
Nursing Centre, Inc. ("'S1.Luke's") operated a nursing
facility located in San Leandro, California. Defendant
Guy Seaton served as St Luke's chief executive officer
("CEO").
As a "subacute facility," S1. Luke's provided care to pa-
tients with severe illness or injury who required more
intensive services than ordinary nursing care could
provide but did not require hospital acute care. See Cal.
Admin. Code Title 22, § SI124.S. S1. Luke's received
compensation from the Medicare program for some of
the cost of providing services to certain Medicare-eli-
gible patients. In 1995, the Department of Health and
Human Services ("DHS") Office of the Inspector Gen-
eral began an investigation into allegations that S1.
Luke's was fraudulently inflating the cost of the nursing
services that it provided to Medicare beneficiaries. This
investigation revealed evidence of an unusually high al-
location of nursing costs to Medicare patients and fab-
ricated nursing schedules to support defendants' fraudu-
lent claims for reimbursement.
A. The Related Criminal Action
Based on the finding of the DHS investigation, a grand
jury returned a six count indictment against both de-
fendants on May 8, 2002. Winslow Decl., Exh. 2
(hereinafter ·'Indictment"). The indictment charged de-
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fendants with conspiracy to defraud the Medicare pro-
gram in violation of 18 u.s.c. § 371 (Count 1), three
counts of submitting false Medicare claims in violation
of 18 U.s.c. § 287 (Counts 2-4), knowingly and will-
fully making false statements to Medicare auditors in
violation of 18 U.s.c. § 100 I (Count 5), and obstruct-
ing a federal audit in violation of 18 U.s.c. § 1516
(Count 6). Among other things, the indictment alleged
that defendants misrepresented the level of nursing care
provided to Medicare patients in support of false claims
for direct nursing services costs incurred in 1996, 1997,
and J 998. Indictment ~~ 10, 14(a)-(c). These claims
were subsequently paid by Mutual of Omaha, a fiscal
intermediary acting on behalf of the Medicare program.
See Winslow Decl., Exh. 1 at 1277-78 (Testimony of
Charles Potter). The United States also alleged that de-
fendants fabricated payroll reports and time cards by
designating certain employees as working exclusively
with Medicare patients when in fact these employees
also provided care to non-Medicare eligible patients. Id.
~~ 11-12.
*2 On December 19, 2002, a jury found defendants
guilty on all counts charged. Winslow Decl., Exh. 6.
The court entered judgments of conviction against both
defendants on June 9, 2004. Id., Exhs. 3-4. Defendants'
appeal of their conviction is currently pending before
the Ninth Circuit. Defendants also continue to be in-
volved in proceedings before the Medicare Provider Re-
imbursement Board ("PRRB") for the purpose of de-
termining the amount of damages sustained by the
United States.
B. The United States' Civil Claims
On June 2, 2000, the United States filed the instant civil
action against defendants under the FCA, 31 U.s.C. §
3730(a). The allegations, now set forth in the United
States' amended complaint filed on April 21, ::WOO, arise
from the same series of transactions that led to defend-
ants' criminal convictions. As in the criminal action, the
United States alleges that defendants fraudulently in-
flated labor costs incurred in caring for Medicare pa-
tients and that in seeking reimbursement for these costs,
they submitted false and fraudulent claims to the Medi-
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care program. Pl.'s First Amended Compl. (hereinafter
"F AC") ~ 19. Based on these allegations, the amended
complaint pleads three violations of the FCA, asserting
that defendants: (I) knowingly submitted false claims
for payment to the United States in violation of 31
u.s.c. § 3729(a)(I); (2) conspired to defraud the United
States in violation of 31 u.s.c. § 3729(a)(3); and (3)
knowingly made false statements to the United States in
violation of 31 U.s.C. § 3729(a)(2). Id. ~~ 23-28. The
complaint also alleges state law causes of action for
payment by mistake, unjust enrichment, and breach of
contract. Id. ~~ 29-34.
On March 6, 2001, the court ordered that proceedings in
the civil action be stayed pending the resolution of the
criminal proceedings against defendants. The stay re-
mained in place until October 12, 2004, when the court
granted the United States' motion to lift the stay in order
to allow the United States to move for summary adju-
dication on the issue of defendants' liability under the
FCA. That motion is now before the court. The United
States argues that the entry of a final judgment in the
criminal action estops defendants from denying that
they are liable for civil damages and statutory penalties
under the FCA. The court addresses this argument be-
low.
LEGAL STANDARD
Summary judgment is proper when the pleadings, dis-
covery, and affidavits show that there is "no genuine is-
sue as to any material fact and that the moving party is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56( c). Material facts are those which may affect the out-
come of the proceedings. Anderson v. Liherty Lobhy,
Inc, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202
(J 986). A dispute as to a material fact is genuine if there
is sufficient evidence for a reasonable jury to return a
verdict for the nonmoving party. Id The party moving
for summary judgment bears the burden of identitying
those portions of the pleadings, discovery, and affi-
davits that demonstrate the absence of a genuine issue
of material fact. Ce/otex Corp. v. Catrel/, 477 U.S. 317,
323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On an is-
sue for which the opposing party will have the burden
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of proof at trial, the moving party need only point out
"that there is an absence of evidence to support the non-
moving party's case." Id.
*3 Once the moving party meets its initial burden, the
nonmoving party must go beyond the pleadings and, by
its own affidavits or discovery, "set forth specific facts
showing that there is a genuine issue for trial."
Fed.R.Civ.P. 56(e). Mere allegations or denials do not
defeat a moving party's allegations. Id.; see also Gas-
away v. Northwestern Alut. Life Ins. Co., 26 F.3d 957,
960 (9th Cir.1994). The court may not make credibility
detenninations, Anderson. 477 U.S. at 249, and infer-
ences drawn from the facts must be viewed in the light
most favorable to the party opposing the motion. Mas-
son v. N1!I1' Yorker Magazine, 501 U.S. 496, 520, 11 I
S.Ct. 2419, 115 L.Ed.2d 447 (1991). Nonetheless, even
if summary adjudication of an entire claim is not war-
ranted, Federal Rule of Civil Procedure 56(d) allows a
court to grant partial summary judgment, thereby redu-
cing the number of facts at issue in a trial. Fed. R. Civ.
Pro. 56(d); State Farm Fire & Cas. Co. v. Geary, 699
F.Supp. 756, 759 (N.D.CaI.1987) (Patel, 1.).
DISCUSSION
The question presented by the United States' motion for
partial summary judgment is whether the doctrine of
collateral estoppel precludes defendants from denying
their liability for civil damages and statutory penalties
under the FCA. In addition to relying on the common
law doctrine, the United States asserts that the statutory
collateral estoppel provision of the FCA bars relitiga-
tion of the issues determ ined in the criminal proceed-
ings against defendants. Specifically, the United States
cites 31 usc. § 373 led), which states:
Notwithstanding any other provision of law, the Fed-
eral Rules of Criminal Procedure, or the Federal
Rules of Evidence, a final judgment rendered in favor
of the United States in any criminal proceeding char-
ging fraud or false statements, whether upon a verdict
after trial or upon a plea of guilty or nolo contendere,
shall estop the defendant from denying the essential
elements of the offense in any action which involves
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the same transaction as in the criminal proceeding and
which is brought under subsection (a) or (b) of sec-
tion 3730.
There is no question that the instant action alleging vi-
olations of 31 U.S.c. § 3729(a) falls within the scope of
the FCA's statutory estoppel provision. See 31 usc. §
3730(a) (authorizing the enforcement of section 3729
by the Attorney General). Thus, the principal issue to be
resolved is whether the "essential elements" of the of-
fense of which defendants have been convicted are suf-
ficient to establish their liability in the civil action. The
court addresses each of the United States' three FCA
claims below.
I. Submission of False Claims. 29 USC § 3729(a)(l).
The first claim for relief in the United States' amended
complaint alleges violations of 31 U.S.c. § 3729(a)( I),
which imposes liability on any person who "knowingly
presents, or causes to be presented, to an officer or em-
ployee of the United States Government ... a false or
fraudulent claim for payment or approval" and subjects
defendants who submit such false claims to treble dam-
ages and civil penalties. Id. Thus, to prove its claim un-
der section 3 729(a)(l), the United States must prove
three elements: "(1) a 'false or fraudulent' claim; (2)
which was presented, or caused to be presented, by the
defendant to the United States for payment or approval;
(3) with knowledge that the claim was false." United
States v. Mackby, 261 F.3d 821, 826 (9th Cir.200 I)
(quoting 31 USc. § 3729(a)(1»), cert. denied, 541 U.S.
936, 124 S.Ct. 1657, 158 L.Ed.2d 356 (2004).
*4 As noted above, on June 9, 2004, the court entered
judgments of conviction in the criminal proceedings
against defendants following a jury verdict finding de-
fendants guilty on all counts of a six count indictment.
Among the offenses of which defendants were con-
victed were three counts of presenting false claims in
violation of 18 U.S.c. § 287. Winslow Decl., Exh. 6 at
2-3. Section 287 prohibits any person from making or
presenting "any claim upon or against the United States,
or any department or agency thereof, knowing such
claim to be false, fictitious, or fraudulent." Id. The court

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instructed the jury that in order to find defendants guilty
under section 287, the United States must prove beyond
a reasonable doubt that (I) defendants "knowingly
presented ... false claims to [DHS)" and (2) that they
knew those claims were untrue at the time that they
were submitted. Winslow Decl., Exh. 5 at 2257-58. In
returning guilty verdicts on all three counts of present-
ing false claims, the jury found these facts to be true
with respect to the Medicare reimbursement claims that
defendants submitted for the years of 1996, 1997, and
1998. See id., Exh. 6 at 2-3. Thus, because the jury ne-
cessarily found to be true each element of the United
States' claims under 31 U.S.C. § 3729(a)(I), the plain
meaning of the FCNs statutory estoppel provision pre-
cludes defendants from denying their liability in the in-
stant action.
Defendants do not dispute that proof of these facts is
sufficient to establish the elements of the United States'
claim for relief under 31 USC. § 3729(a)( I). Nonethe-
less, they contend that the court should not apply collat-
eral estoppel here because it would be unfair to do so
while defendants' criminal convictions are pending on
appeaL While it may be true that an issue of fairness is
an important consideration in determining whether to
apply the common law doctrine of collateral estoppel
offensively against a defendant, see, e.g., Parklane Ho-
siery Co. v. Shore, 439 U.S. 322, 330-31, 99 S.Ct. 645,
58 L.Ed.2d 552 (1979), such concerns are for the most
part inapposite to the application of the statutory estop-
pel provision of the FCA. Because section 3731 (d) ex-
pressly states that its preclusive effect applies
"[n]otwithstanding any other provision of law," the
prudential limitations on the common law doctrine do
not apply. Thus, absent a degree of unfairness that rises
to the level of a due process violation-which defendants
cannot credibly assert here FN2-the court must interpret
section 3731(d) to mean what it says: namely, that a fi-
nal judgment in any criminal proceeding "shall estop ...
defendant[s] from denying the essential elements" of
any offense in a subsequent civil proceeding brought
under the FCA and arising out of the same transaction
or occurrence. 31 U.S.C. § 373I(d).
FN2. Indeed, the United States seeks to apply
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the FCA's collateral estoppel proVISIOn to pre-
clude defendants from denying facts were
found to be true following a criminal trial by
jury. At trial, defendants had a full and fair op-
portunity to present evidence to rebut the
United States' case-in-chief, and the govern-
ment bore the burden of proving each element
of the offense beyond a reasonable doubt. In
light of these facts, it is difficult to imagine cir-
cumstances where the application of the collat-
eral estoppel doctrine would be more fair.
Nor is there any serious dispute that defendants' convic-
tion is "final" for the purpose of applying the FCA's
statutory estoppel provision. Section 3731 (d) requires
only that the party asserting the estoppel show there has
been "a final judgment in favor of the United States" in
a related criminal action. 31 USc. § 373I(d). Defend-
ants do not contest the fact that this court entered final
judgments against both defendants on June 9, 2004; in-
deed, they must rely on the finality of those judgments
in order to have standing to appeal their conviction. See
28 USC. § 1291. Thus, because all of the requirements
of the FCA's statutory estoppel provision have been sat-
isfied, the court concludes that the judgments against
defendants in the criminal action are sufficient to estop
defendants from denying their civil liability for submit-
ting false claims in violation of 31 USc. § 3729(a)( I).
The court therefore enters summary judgment to that ef-
fect.
II. Conspiracy to Violate False Claims A ct. 31 US'. C. §
3729(a)(3).
*5 Having rejected defendants' attempts to avoid the ap-
plication of the FCNs statutory estoppel provision to
this action, the court turns to the United States' remain-
ing FCA claims. The second claim for relief in the
United States' amended complaint alleges that defend-
ants conspired to defraud the United States in violation
of 31 USc. § 3729(a)(3). Section 3729(a)(3) states that
any person who "conspires to defraud the Government
by getting a false or fraudulent claim allowed or paid"
shall be liable for treble damages and statutory penalties
in a civil action brought by the United States. 31 USc.

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§ 3729(a)(3); see also 31 U.s.c. § 3730(a). General
principles of civil conspiracy apply to this cause of ac-
tion. United States ex rei. Durcholz v. FKW, Inc, 189
F.3d 542, 545 n. 3 (7th Cir.1999). Thus, federal courts
have consistently required a plaintiff seeking relief un-
der section 3729(a)(3) to plead and prove (1) that the
defendant conspired with one or more persons to get a
false or fraudulent claim allowed or paid by the United
States and (2) that one or more conspirators performed
an act to effect the object of the conspiracy. See, e.g,
United States ex reI. Taylor v. Gabe/li, ---F.Supp.2d -
---, No. 03 Civ. 8762, 2004 WL 1719357, at * 10
(S.D.N.Y. July 29, 2004); United States v. President &
Fellows of Harvard Call, No. 00 Civ. 11977, 2004 WL
1447307, at *36 (D.Mass. June 28, 2004); United States
ex reI. Atkins'on v. Pennsylvania Shipbuilding Co. (
"Atkinson /" ), 255 F.Supp.2d 351, 371 (E.D.Pa.2002).
A number of district courts have also also articulated
the premise that plaintiffs who bring FCA civil conspir-
acy claims to prove that the United States suffered dam-
ages as a result of the conspirators' unlawful act or acts.
See, e.g, United Stales ex rei. Biddle v. Board of Trust-
ees, C 91-20618-RMW, 1995 WL 456345, at *1
(N.D.Cal. July 28, 1995) (Whyte, 3.) (quoting Blusal
Meats, Inc. v. United States, 638 F.Supp. 824, 828
(S.D.N.Y.1986», affd, 161 F.3d 533 (9th Cir.1998),
cert. denied, 526 U.S. 1066, 119 S.ct. 1457, 143
L.Ed.2d 543 (1999); see also United States v. Bouchey,
860 F.Supp. 890, 893 (D.D.C.1994) (citing United
States ex rei. Stinson, Lyons, Galin & Bustamante, P.A.
v. Provident Life & Accident Ins. Co., 721 F.Supp.
1247, 1259 (S.D.Fla.1989»; see also John T. Boese, I
Civil False Claims and Qui Tam Actions § 2.0 I [C][5],
at 2-32 to -33 (2d ed. & Supp.2003) ( "The express lan-
guage of Section 3729(c)(3) requires that the 'false or
fraudulent claim' must be 'allowed or paid.' This lan-
guage requires actual payment and thus, actual dam-
ages."). There is no Ninth Circuit precedent directly on
point. This court's observation in Biddle that a plaintiff
seeking to bring an FCA civil conspiracy action bears
the burden of proving "that the United States suffered
damages as a result of the false or fraudulent claim",
1995 WL 456345, at * I, was merely a quotation from
the Southern District of New York's decision in Blusal
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Meats, 638 F.Supp. at 824. Biddle did not reach this is-
sue; it dealt only with whether a false claim had been
paid. Reading further in Blusal Meats that court ex-
pressly states that "[p ]roof that a false claim was actu-
ally presented to or paid by the government as a result
of the conspiracy is not necessary for a defendant to be
held liable for the civil penalty ... under § 3729[aJ(3)."
Id at 828.
*6 Blusal Meats is thus in keeping with this court's in-
terpretation of the plain meaning of section 3729(a)(3).
Section 3729(a)(3) imposes liability on any person
"who conspires to defraud the Government by getting a
false or fraudulent claim allowed or paid" and provides
for civi I penalties of up to $10,000 regardless of the ac-
tual damages suffered by the United States. 31 U.S.c. §
3729(a)(3). That is sufficient to recover civil penalties.
If the United States wishes to recover actual damages
against any person who submits (or conspires to submit)
false claims against the federal government, even
though damages may be difficult or impossible to
prove, it may do so and not limit itself to the statutory
penalties. However, any attempt to read an actual dam-
ages requirement into the statute would negate the de-
terrent effect of this statutory damages provision. Thus,
because a contrary interpretation would contradict both
the plain meaning and the clearly expressed intent of 31
USc. § 3729(a)(3), the court holds that the United
States need not prove actual damages in order to estab-
lish defendants' liability for conspiracy to submit false
claims. FN' Thus, to establish a claim for civil conspir-
acy under the FCA, the United States need only prove
(1) that the defendant conspired with one or more per-
sons to get a false or fraudulent claim allowed or paid
by the United State and (2) that one or more conspirat-
ors performed an act to effect the object of the conspir-
acy. See, eg, Taylor, 2004 WL 1719357, at *10.
FN3. In reaching this conclusion, the court re-
cognizes that a number of district court de-
cisions have implied that state civil conspiracy
laws supply the rules of decision for FCA con-
spiracy claims brought pursuant to 31 U.S.c. §
3729(a)(3). See, e.g, United S'tates ex reI. Re-
agan v. East Tex. Med Or. Reg'l Healthcare

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Sys .. 274 F.Supp.2d 824, 857 (S.D.Tex.2003)
(applying Texas law), affd, 384 F.3d 168 (5th
Cir.2004); United States ex reI. Atkinson v.
Penmylvania Shipbuilding Co. ( "Atkinson 11"
), No. Civ. A. 94-7316, 2004 WL 1686958, at
*4 (E.D.Pa. July 28, 2004) (applying
Pennsylvania law). It is also true that under
California law, a plaintiff seeking to hold a de-
fendant liable on a civil conspiracy theory must
prove that damages resulted from the act or
acts done in furtherance of the conspiracy.
Doctors' Co. v. Superior Court. 49 Ca1.3d 39,
44, 260 Cal.Rptr. 183, 775 P.2d 508 (1989).
However, even assuming that Congress' draft-
ing of section 3729(a)(3) left room for the court
to fill a "gap" in the statute by borrowing the
elements of a state law cause of action, the
rules of decision for filling such gaps are
provided by federal common law. See United
States ex reI. Green v. Northrop Corp .. 59 F.3d
953, 960 (9th Cir.1995) (applying federal com-
mon law to qui tam action), cert. denied. 518
U.S. 1018, 116 S.Ct. 2550, 135 L.Ed.2d 1069
(1996). A Ithough a federal court may borrow
such common law rules from analogous state
law causes of action, a state law rule of de-
cision cannot be permitted to "frustrate specific
objectives of the federal program." Id. at 961
(quoting Mardan Corp. v. CUe. Music. Ltd..
804 F.2d 1454, 1458 (9th Cir.1986)); see also
United States v. Kimbell Foods. Inc .. 440 U.S.
715, 728, 99 S.Ct. 1448, 59 L.Ed.2d 71 I (1979)
. For the reasons stated above, the deterrent ef-
fect of the FCA's statutory damages provision
would be negated if the court adopted Califor-
nia's actual damages requirement. Accordingly,
the court need not address whether borrowing
the elements of a state law cause of action for
purposes of interpreting the FCA would other-
wise be appropriate.
In the criminal proceedings related to this action, de-
fendants were charged with and convicted of conspiring
to submit false claims to the Medicare program and to
obtain fraudulently payment therefrom in violation of
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18 U.S.c. § 371. "Three elements establish a conspiracy
under section 371 :[a]n agreement to achieve an unlaw-
ful objective, an overt act in furtherance of the illegal
purpose, and the requisite intent to defraud the United
States." United States v. Tuohey, 867 F.2d 534, 537 (9th
Cir.1989) (citations omitted). The indictment against
defendants alleged that they "knowingly and intention-
ally conspire[ d) to make false statements and defraud
the United States of its right to have ... federal Medicare
program funds disbursed in accordance with the laws of
the United States." Indictment ~ 9. The court instructed
the jury that proof of the conspiracy charge required the
United States to show that: (I) there was an agreement
between two or more persons to commit the crime
charged in the indictment; (2) defendants became mem-
bers of the conspiracy knowing of at least one of its ob-
jects and intending to accomplish it; and (3) one of the
members of the conspiracy performed at least one overt
act in furtherance of the conspiracy. Winslow Decl.,
Exh. 5 at 2253. The jury found defendants guilty of con-
spiracy. Id.. Exh. 6 at 1-2. The verdict also identified a
number of overt acts committed in furtherance of the
conspiracy, finding that defendants submitted false
claims to the Medicare fiscal intermediary for nursing
services costs incurred in 1996, 1997, and 1998 and that
St. Luke's employees prepared and presented a binder
containing false nursing schedules and logs to Medicare
auditors in August 1999. Id.; Indictment ~ 14(a)-(c), (g).
Under 31 U.S.c. § 373I(d), defendants are estopped
from denying these facts in the instant action. The court
therefore holds as a matter of law that defendants are li-
able for civil conspiracy in violation of 31 USc. §
3729(a)(3) and grants the United States' motion of sum-
mary judgment as to that cause of action.
III. Making False Records. 3 JUS. C § 3 72Y(a) (2).
*7 The United States' final claim for relief under the
FCA alleges that defendants "knowingly mal de], user d],
or causer d] to be made or used, a false record or state-
ment to get a false or fraudulent claim paid or approved
by the Government" in violation of 31 U.S.c. §
3729(a)(2). Jd The requirements for proving a civil
claim for making false records are similar to the ele-
mentsofclaim for relief under 31 U.S.c. § 3729(a)(I)
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discussed in Section I, supra. However, unlike section
3729(a)(I), a person may be liable for making or using
false records under section 3729(a)(2) without proof of
"presentment" to the relevant government agency;
rather, the plaintiff need only show either that the de-
fendant knowingly made or used falsified records in or-
der to obtain payment from the United States or that he
or she directed someone else to make or use such a re-
cord. See United States e.x rel. Riley v. St. Luke:~ Epis-
copal Hospital, 355 F.3d 370, 379 (5th Cir.2004)
(holding that although the parties stipulated that defend-
ants did not file claims for payment, that fact "does not
exonerate them" from liability under section 3729(a)(2) ).
As noted above, the jury in the related criminal action
found that defendants committed a number of overt acts
in furtherance of their conspiracy to defraud Medicare.
Specifically, the jury concluded that defendants submit-
ted false nursing services reimbursement claims in three
separate years and prepared and presented a binder con-
taining false nursing schedules and logs to Medicare
auditors. Winslow Decl., Exh. 6 at 1-2; Indictment ,
14(a)-(c), (g). These findings are sufficient to establish
that defendants knowingly made or used false records
for the purpose of defrauding the United States. Thus,
because defendants are estopped from denying these
facts, the court concludes that there is no material dis-
pute of fact regarding defendants' liability under 31
U.S.c. § 3729(a)(2) and grants the United States' mo-
tion for summary judgment as to that cause of action.
CONCLUSION
For the reasons stated above, plaintiffs motion for par-
tial summary judgment as to the issue of defendants' li-
ability under the FCA is GRANTED. The court ad-
judges defendants liable for violations of the 31 U.S.c.
§ 3729(a)( I)-(3) arising out of the submission of false
Medicare reimbursement claims for nursing services
costs incurred in 1996, 1997, and 1998. Further pro-
ceedings in this action related to determining the
amount of damages for which defendants are liable, in-
cluding plaintiffs request for civil penalties under 31
USc. § 3729(a), shall remain stayed. F'l4
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Page 8 of9
Page 7
FN4. In addition to moving for summary adju-
dication as to liability, the United States urges
the court to impose civil penalties pursuant 31
USc. § 3729(a). As the United States ob-
serves, section 3729(a) directs courts to award
statutory penalties of "not less than $5,000, and
not more than $10,000" for each violation of its
provisions. 31 U.S.c. § 3729(a). However, in
lifting its order to stay proceedings in this ac-
tion, the court observed that it was doing so for
the limited purpose of allowing the United
States to move for summary judgment as to de-
fendants' liability under the FCA. Order Lifting
Stay at 2. In so limiting its order, the court con-
cluded that in the interest of judicial economy,
it would allow proceedings before the PRRB to
move forward before adjudicating the United
States' civil claim for damages. See id at 1-2.
The court sees no reason to abandon that ap-
proach and has no motion before it to do so.
Because the court will be in a better position to
assess the appropriate statutory penalties after
it has determined the amount of compensatory
damages to which the United States is entitled,
the court defers assessing such penalties until
that time.
IT IS SO ORDERED.
* * CERTIFICATE OF SERVICE * *
I, the undersigned, hereby certify that 1 am an employee
in the Office of the Clerk, U.S. District Court, Northern
District of California.
That on December 16, 2004, I SERVED a true and cor-
rect copy(ies) of the attached, by placing said copy(ies)
in a postage paid envelope addressed to the person(s)
hereinafter listed, by depositing said envelope in the
U.S. Mail, or by placing said copy(ies) into an inter-
office delivery receptacle located in the Clerk's office.
 Page 90f9

Page 8
Not Reported in F.Supp.2d, 2004 WL 2905237 (N.D.Cal.), Med & Med GO (CCH) P 301,576
(Cite as: 2004 WL 2905237 (N.D.Cal.»

Sara Winslow, Esq. ABfMHP

United States Attorney's Office
450 Golden Gate Ave., 10th Floor
P.O. Box 36055
San Francisco, CA 94102
*8 Guy Seaton

27253 Greenhaven Rd

Hayward, CA 94502

Jonathan C. Do, Esq.

Law Offices of Jonathan C. Do

864 Walker Ave

Oakland, CA 94610

N .D.Cal.,2004.
U.S. v. St. Luke's Subacute Hospital and Nursing
Centre, Inc.
Not Reported in F.Supp.2d, 2004 WL 2905237
(N.D.Cal.), Med & Med GO (CCH) P 301,576

END OF DOCUMENT

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