Federal Appeals Court Reinstates Fraud Suit Against Planned Parenthood

A Christian legal group that stepped into a multi-million dollar fraud case against Planned Parenthood affiliates in California is hailing the recent decision by the Ninth Circuit U.S. Court of Appeals to reinstate the dismissed lawsuit.

"While this case is by no means over, winning this appeal means we can now get down to the heart of this case: the alleged fraud," commented Jay Sekulow, chief counsel for the American Center for Law and Justice (ACLJ).

According to P. Victor Gonzalez, the former PP employee that the ACLJ is representing in the case, PP affiliates in California had marked up the supposed cost of various birth control drugs when seeking government reimbursement, resulting in tens of millions of dollars of overbilling-at taxpayer expense.

Under the federal False Claims Act (FCA), government contractors are forbidden from submitting "false or fraudulent" claims for payment. The FCA also authorizes private individuals to bring suit against the offenders to recover the fraudulently obtained funds, as Gonzalez had done.

Attorneys from the law firm representing PP defendants, however, were able to convince a federal district court to dismiss Gonzalez's suit on technical jurisdictional grounds, arguing that he was not an "original source" as he learned of the overbilling when he heard about a government audit, among other reasons.

But ACLJ attorneys insist that Gonzalez is a paradigm whistleblower and an "original source" under the FCA.

They say Gonzalez was "personally and intimately" aware of the defendants' illegal overbilling.

"As part of an inner circle of high-ranking officers at PP affiliates, Gonzalez from the get-go observed – indeed participated in – the intra-PP response to the DHS audit," wrote ACLJ attorneys in their 69-page opening appeal brief, filed nearly a year ago in the Ninth Circuit Appeals Court.

They also say Gonzalez was personally responsible for the review of PPLA's records and the preparation of "cost impact information" regarding the extent and magnitude of the overbilling. Gonzalez also reportedly supervised the preparation of a detailed spreadsheet on the overbilling and drafted recommendations for a remedial course of action.

"The question on appeal was whether the former Planned Parenthood employee is a proper whistleblower under the False Claims Act," said Sekulow in his remarks Friday. "We contended that the answer is yes, and now a three-judge panel of the Ninth Circuit has unanimously agreed with us."

With the appeals court having reversed the lower court's judgment, the federal claim is now remanded for further proceedings.

As the appeals court does not consider the merits of the fraud allegations, a district court will consider whether the state action should be treated differently.

The case is Gonzalez v. Planned Parenthood of Los Angeles.

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