                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAY 20 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

FRANK ADOMITIS, Relator; ex. rel.               No.    18-56422
United States of America,
                                                D.C. No.
                Plaintiff-Appellant,            5:17-cv-00002-JGB-KK

 v.
                                                MEMORANDUM*
SAN BERNARDINO MOUNTAINS
COMMUNITY HOSPITAL DISTRICT;
DOES, 1 through 20, inclusive,

                Defendants-Appellees.


                   Appeal from the United States District Court
                       for the Central District of California
                    Jesus G. Bernal, District Judge, Presiding

                     Argued and Submitted February 14, 2020
                              Pasadena, California

Before: BYBEE and COLLINS, Circuit Judges, and MOSKOWITZ,*** District
Judge.

      Relator Frank Adomitis appeals following the dismissal of his third amended

complaint with prejudice for failure to state a claim upon which relief can be


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Barry Ted Moskowitz, United States District Judge for
the Southern District of California, sitting by designation.
granted against Defendant-Appellee San Bernardino Mountains Community

Hospital District (SBMCHD). Because the parties are familiar with the facts, we

will not recite them here except where necessary.1 We affirm.

      The grant of a motion to dismiss pursuant to Federal Rule of Civil Procedure

12(b)(6), in connection with the heightened pleading requirements of Rule 9(b), is

reviewed de novo. United States ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d

1048, 1051 (9th Cir. 2001). Dismissal may be affirmed on any basis supported by

the record, regardless of whether the district court reached the issue or relied on

different grounds or reasoning. Steckman v. Hart Brewing, Inc., 143 F.3d 1293,



1
  Relator asks us to take judicial notice of several documents on appeal pursuant to
Federal Rule of Evidence 201(b). App. Dkt. No. 13. While we generally “consider
only the record that was before the district court,” we may make “exceptions to this
general rule in three situations: (1) to ‘correct inadvertent omissions from the
record,’ (2) to ‘take judicial notice,’ and (3) to ‘exercise inherent authority . . . in
extraordinary cases.’” United States v. W.R. Grace, 504 F.3d 745, 766 (9th Cir.
2007) (alteration in original) (quoting Lowry v. Barnhart, 329 F.3d 1019, 1024 (9th
Cir. 2003)). Defendant does not deny that each document for which judicial notice
is sought is “not subject to reasonable dispute” for certain purposes because, at least
for those purposes, their accuracy “cannot reasonably be questioned.” Fed. R. Evid.
201(b); see, e.g., United States v. Perea-Rey, 680 F.3d 1179, 1182 n.1 (9th Cir. 2012)
(taking judicial notice of a Google map and satellite image); Transmission Agency
of N. Cal. v. Sierra Pac. Power Co., 295 F.3d 918, 924 n.3 (9th Cir. 2002) (taking
judicial notice of federal administrative law judge’s published decision); Nugget
Hydroelectric, L.P. v. Pac. Gas & Elec. Co., 981 F.2d 429, 435 (9th Cir. 1992)
(taking judicial notice of existence of state administrative agency’s published
decisions). Like the district court, however, we take judicial notice of the Google
map only for general information concerning the nature of the route in question, and
not for purposes of determining distance. Subject to that limitation, we grant
Plaintiff’s request for judicial notice. See Fed. R. Evid. 201(c)(2).

                                           2                                    18-56422
1295 (9th Cir. 1998).

      Denial of leave to amend is reviewed for abuse of discretion. SmithKline

Beecham, 245 F.3d at 1051. “A district court acts within its discretion to deny

leave to amend when amendment would be futile, when it would cause undue

prejudice to the defendant, or when it is sought in bad faith.” Chappel v. Lab.

Corp. of Am., 232 F.3d 719, 725–26 (9th Cir. 2000). Nevertheless, dismissal with

prejudice and without leave to amend based upon futility is not appropriate unless

it is clear on de novo review that the complaint could not be saved by amendment.

Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

      1.     The district court did not err when it concluded that Relator failed to

sufficiently plead a violation of the False Claims Act (FCA) by SBMCHD in his

third amended complaint. The essential elements of Relator’s FCA claim are “(1)

a false statement or fraudulent course of conduct, (2) made with scienter, (3) that

was material, causing (4) the government to pay out money or forfeit moneys due.”

United States ex rel. Hendow v. Univ. of Phx., 461 F.3d 1166, 1174 (9th Cir.

2006). Even assuming arguendo that Relator established the other elements of his

claim, he failed to allege sufficient facts to make plausible his conclusory

allegation that SBMCHD was aware — or acted with deliberate indifference or in

reckless disregard as to whether — it did not satisfy the Critical Access Hospital

(CAH) program’s distance requirement. See Universal Health Servs., Inc. v.


                                          3                                    18-56422
United States ex rel. Escobar, 136 S. Ct. 1989, 2004 n.6 (2016) (“False Claims Act

plaintiffs must . . . plead their claims with plausibility and particularity under

Federal Rules of Civil Procedure 8 and 9(b) . . . .”); Bell Atl. Corp. v. Twombly,

550 U.S. 544, 555 (2007) (“Factual allegations must be enough to raise a right to

relief above the speculative level, on the assumption that all the allegations in the

complaint are true (even if doubtful in fact).” (citations omitted)). Although Rule

9(b) allows plaintiffs to allege scienter generally, see In re GlenFed, Inc. Sec.

Litig., 42 F.3d 1541, 1547 (9th Cir. 1994) (en banc), superseded by statute on other

grounds, 15 U.S.C. § 78u-4(b)(2)(A), scienter must still be pled with plausibility

under Rule 8(a). See Ashcroft v. Iqbal, 556 U.S. 662, 686–87 (2009) (“Rule 9[(b)]

merely excuses a party from pleading . . . intent under an elevated pleading

standard. It does not give him license to evade the less rigid—though still

operative—strictures of Rule 8.”).

      While there is merit to Relator’s contention that the district court improperly

narrowed the scope of its scienter inquiry from whether SBMCHD “knew”2 that a

driving route to another hospital did not satisfy the CAH distance requirement to


2
  Under the FCA, “[a] person ‘knowingly’ submits a false claim not only when he
or she ‘has actual knowledge of the information,’ but also when he or she ‘acts in
deliberate ignorance’ or ‘reckless disregard’ of the truth or falsity of the
information.” SmithKline Beecham, 245 F.3d at 1053 (quoting 31 U.S.C. §
3729(b)(1)(A)(i)–(iii)). Further, “the [FCA’s] scienter requirement ‘require[s] no
proof of specific intent to defraud.’” Escobar, 136 S. Ct. at 1999 n.2 (alteration in
original) (quoting 31 U.S.C. § 3729(b)(1)(B)).

                                           4                                     18-56422
whether SBMCHD “knew if the CalTrans designation [of mountainous terrain]

was not properly based on the factors” set forth in federal regulatory guidance

interpreting the CAH distance requirement, Relator’s factual allegations fail to

raise his scienter allegations above mere speculation even under the more-

expansive scienter inquiry. Relator relies on various regulatory guidance issued by

the Centers for Medicare & Medicaid Services (“CMS”), which over time

employed shifting and highly detailed definitions of “mountainous terrain,” and he

alleges that SBMCHD’s senior officials must have known from their own travel on

the relevant segments of State Route 18 that insufficient portions thereof met the

criteria set forth in this regulatory guidance. Even assuming that SBMCHD’s

senior officials were aware of this regulatory guidance and certified compliance

therewith in connection with relevant reimbursement claims, however, Relator’s

allegations about the road characteristics that would be observable to SBMCHD

officials merely from routinely driving the segments in question are too vague and

conclusory to make plausible his conclusion that SBMCHD thereby was, at the

least, reckless or deliberately indifferent to whether sufficient segments of the

route to the nearest hospital satisfied the CAH distance requirement’s

“mountainous terrain” criterion. See United States ex rel. Lee v. Corinthian Colls.,

655 F.3d 984, 996 (9th Cir. 2011) (“Under the False Claim Act’s scienter

requirement, innocent mistakes, mere negligent misrepresentations and differences


                                          5                                    18-56422
in interpretations will not suffice to create liability.” (internal quotation marks and

citations omitted)). That is, Relator has failed to plead sufficient facts that would

warrant a plausible inference that SBMCHD knew, recklessly disregarded, or was

deliberately ignorant of, the claimed mismatch between the segment in question

and CMS’s guidance. See United States ex rel. Hochman v. Nackman, 145 F.3d

1069, 1073–74 (9th Cir. 1998).

      Further, Relator’s allegation that SBMCHD “purposefully conducted no

survey or audit to certify, re-certify or otherwise verify all CAH Conditions of

Participation (including the distance requirement)” does not suffice because such

allegation is limited to “the time of [Relator’s] employment” with SBMCHD,

namely July 1, 2007 through November 24, 2008, and Relator admits that

SBMCHD was originally certified as a CAH in July 2002 and the “[t]he relevant

time period for [his] claims [is] January 3, 2011 through the present.”3 Moreover,

Relator’s allegations concerning SBMCHD’s involvement in litigation in the mid-

nineties, which dealt with the validity of a different federal regulation issued in

connection with a different Medicare program, see San Bernardino Mountains

Cmty. Hosp. Dist. v. Sec'y of Health & Human Servs., 63 F.3d 882, 887 (9th Cir.

1995), are irrelevant to whether SBMCHD knew — or acted in deliberate


3
 Notably, CMS did not require reverification of whether previously-certified CAH
hospitals continued to satisfy the CAH distance requirement until March 2013. See
also CMS, State Operations Manual, App. W, §§ C-0160 & C-0165.

                                           6                                     18-56422
ignorance or reckless disregard of whether — it did not satisfy the CAH distance

requirement when it submitted the relevant reimbursement claims. In light of our

conclusion that Relator’s third amended complaint failed to plausibly allege

scienter, we need not reach the issues of falsity and materiality.

2.    The district court did not err when it denied Relator leave to amend his third

amended complaint. In denying Relator leave to amend his third amended

complaint, the district court held that “further efforts to amend [Relator’s]

pleadings are unlikely to develop [his] allegations into cognizable legal claims.”

While the district court’s conclusion of futility was made in the context of its

materiality analysis, we think it equally applies to the scienter element of Relator’s

claim given our preceding analysis. Further, Relator admitted at oral argument that

the information he would add to his complaint if granted leave to amend are: (i)

SBMCHD’s original 2002 application for CAH certification; and (ii) a

Transportation Concept Report for California State Road 18 issued by CalTrans in

March 2002. Because Relator makes no attempt to explain how these documents

and the information contained therein would establish scienter in this matter,

however, we are left to speculate as to their import. Given the dearth of well-

pleaded facts plausibly supporting Relator’s conclusory allegation of scienter and

his failure to identify in his briefing or at oral argument sufficient additional facts

that could plausibly support scienter, we conclude that Relator cannot save his


                                            7                                     18-56422
claims via amendment and therefore the district court did not abuse its discretion in

denying him leave to amend.

      AFFIRMED.




                                         8                                    18-56422
                                                                            FILED
Adomitis ex rel. U.S. v. San Bernardino Mountains Cmty. Hosp. Dist.,
No. 18-56422                                                                 MAY 20 2020
                                                                         MOLLY C. DWYER, CLERK
COLLINS, Circuit Judge, concurring:                                       U.S. COURT OF APPEALS


         I concur in the court’s memorandum and in its conclusion that Relator failed

adequately to allege that Defendant’s officials’ driving of the route in question is

enough to give rise to a plausible inference of scienter. In doing so, however, I

place dispositive weight on my view that, because the lesser 15-mile distance

standard applies to the extent that the drive between hospitals involves either

“mountainous terrain” or “areas with only secondary roads available,” 42 U.S.C.

§ 1395i-4(c)(2)(B)(i)(I), a hospital may satisfy that 15-mile requirement by a

combination of mountainous terrain and secondary roads. That is the most natural

reading of the language, and Relator’s contrary construction—that the 15-mile

drive must be entirely mountainous or entirely secondary roads—makes no logical

sense.

         That reading of the statute makes this an easy case. Relator’s operative

complaint states that there are at least “12.4 miles of secondary roads” in the final

segments of travel from the nearest hospital to Defendant’s hospital.1 As Relator

acknowledges, most of the remainder of the travel on that route consists of a 9.47



1
 Relator asks us to take judicial notice that the distance is actually 11.57 miles, not
12.4, but the court properly declines to do so. See Memorandum at 2 n.1. In any
event, Relator’s allegations are insufficient regardless of which number is correct.
mile segment of State Route 18, which involves a number of turns as the road rises

in elevation and which, as Relator puts it, allows vehicles to “go[] up and down the

mountain.” Accordingly, Defendant’s hospital meets the distance requirement if

2.6 miles of this 9.47-mile segment involves “mountainous terrain.” Even

assuming that the various guidance documents should have warned Defendant

away from a reading of the statute and regulations that differed from that of the

guidance, cf. Safeco Ins. Co. v. Burr, 551 U.S. 47, 70 (2007), Relator has failed to

allege scienter as to whether a sufficient portion of this winding, elevation-gaining

9.47-mile segment that (as Relator describes it) “begins traversing through the

mountainous areas of the San Bernardino National Forest” counts as “mountainous

terrain.”




                                          2
