United States v. Applied Pharmacy Consultants, Inc., and Charles Shuster

Summary

The United States sought to recover Medicare payments allegedly exceeding the value of ostomy devices supplied by Applied Pharmacy Consultants, Inc. After the jury rejected the False Claims Act claim, the district court awarded the government $242,622 on an unjust-enrichment theory. The Eighth Circuit held that the existence of a general Medicare-provider contract did not bar unjust-enrichment recovery under these circumstances and affirmed the judgment against Applied and Charles Shuster.

Holdings

1. An express contract does not categorically bar recovery under unjust enrichment. The bar applies when unjust-enrichment recovery would be inconsistent with the contract or would allow recovery of something more or different from what the contract provides; it does not apply where the reason for the rule is absent, including where the contract claim has been abandoned and the unjust-enrichment recovery is substantively equivalent to the contract recovery.
2. Federal law governs the interpretation and consequences of the contract between the United States and Applied and the determination of the United States' rights under the nationwide Medicare program, with Arkansas common law supplying the rule of decision where appropriate.
3. The district court did not clearly err in finding that Applied supplied products different from those billed and that the resulting excess payment was $242,000, resulting in a $242,622 judgment.
4. The court declined to address the challenge to the judgment against Shuster because the argument was not raised until the appellants' reply brief.

Questions Presented

1. Whether the existence of an express contract between Applied Pharmacy and the United States categorically barred recovery under a theory of unjust enrichment.
2. What law governed the interpretation and consequences of the contract and the United States' rights under the nationwide Medicare program.
3. Whether the district court clearly erred in finding that Applied supplied less expensive products than those billed and that the resulting excess payment was $242,622.
4. Whether the appellate court should address the challenge to the judgment against Charles Shuster when that argument was raised for the first time in the appellants' reply brief.

Disposition

affirmed