Adelstein v. Peacehealth, Inc.

── Adelstein v. Peacehealth, Inc. ── Court: Court of Appeals for the Ninth Circuit Date: April 17, 2026 Category: General NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 17 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT JONATHAN ADELSTEIN, relator, No. 25-605 D.C. No. Plaintiff - Appellant, 3:22-cv-05499-TMC and MEMORANDUM* JESSICA BRUNELLE, relator, Plaintiff, v. PEACEHEALTH, INC., a Washington nonprofit corporation; ROBERT AXELROD, Defendants - Appellees. Appeal from the United States District Court for the Western District of Washington Tiffany M. Cartwright, District Judge, Presiding Submitted April 14, 2026** Portland, Oregon Before: OWENS, VANDYKE, and SUNG, Circuit Judges. * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).  Dr. Jonathan Adelstein (“Plaintiff”) appeals the district court’s grant of summary judgment to his employer, PeaceHealth, Inc., and supervisor, Robert Axelrod (collectively, “Defendants”) on claims that Defendants retaliated against him for raising concerns about fraudulent billing practices. We have jurisdiction under 28 U.S.C. § 1291. Reviewing de novo, Oswalt v. Resolute Indus., Inc., 642 F.3d 856, 859 (9th Cir. 2011), we vacate the district court’s grant of summary judgment to Defendants on Plaintiff’s retaliation claims and remand for further proceedings. 1. The district court correctly determined that Plaintiff’s internal complaint expressing concerns about fraudulent billing at Saint John’s Medical Center (“SJMC”) and his comments to Defendant Axelrod about “Medicaid fraud” constituted protected activity under the False Claims Act (“FCA”), 31 U.S.C. § 3730(h). Plaintiff presented evidence that a colleague (“Dr. Shoemaker”) told Plaintiff that he had billed for a patient he had not seen, that Plaintiff believed based on his review of Shoemaker’s perfunctory patient notes that Shoemaker had a pattern of false reporting, and that a significant proportion of SJMC’s patients were involuntarily committed patients covered by Medicaid. This evidence is sufficient to raise a genuine dispute that Plaintiff reasonably and in good faith believed that Shoemaker was regularly billing for patients he had not seen, and that at least one of those patients may have had Medicaid coverage. See Moore v. Cal. 2 25-605 Inst. of Tech. Jet Propulsion Lab’y, 275 F.3d 838, 845 (9th Cir. 2002) (“[A]n employee engages in protected activity where (1) the employee in good faith believes, and (2) a reasonable employee in the same or similar circumstances might believe, that the employer is possibly committing fraud against the government.”). On appeal, Defendants do not dispute that they knew about Plaintiff’s protected activity as of July 12, 2021. However, the district court erred when it held that Plaintiff failed to establish a genuine dispute that Defendants retaliated against him because of his protected activity. Deposition and declaration testimony, as well as email records, show that Axelrod was unwilling to consider retaining Plaintiff to fill staffing shortages at SJMC after he became aware of Plaintiff’s protected activity. Indeed, Axelrod rejected multiple administrators’ suggestions that Plaintiff should continue to wo