PEOPLE OF THE STATE OF CALIFORNIA ex rel. TIG Insurance Company v. BRAD CULPEPPER, DOES, 1-100, inclusive

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PEOPLE OF THE STATE OF
CALIFORNIA ex rel. TIG Insurance
Company et al.,
Plaintiffs-Appellants,
v.
BRAD CULPEPPER, DOES, 1-100,
inclusive,
Defendants-Appellees.
No. 16-56639
D.C. No. 8:16-cv-01555-CJC-JCG
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding
Argued and Submitted April 10, 2018
Pasadena, California
Before: BEA, MURGUIA Circuit Judges; KEELEY, ** District Judge
Brad Culpepper, Defendant-Appellee, is a former professional football
player for the Chicago Bears. Plaintiff-Appellant TIG Insurance Company
* This disposition is not appropriate for publication and is not precedent except
as provided by Ninth Circuit Rule 36-3.
** The Honorable Irene Keeley, Senior United States District Judge for the
Northern District of West Virginia, sitting by designation.
FILED
APR 30 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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(Relator) is successor by merger to Fairmont Premier Insurance Company
(Fairmont), the former workers’ compensation provider for the Chicago Bears. In
November 2010, Culpepper filed a claim for workers’ compensation benefits
before the California Workers’ Compensation Appeals Board (WCAB) in
connection with injuries he allegedly suffered playing professional football. In
2000, Culpepper played six games in California while a member of the Chicago
Bears, making him eligible for California workers’ compensation benefits.
Culpepper demanded $180,000 in workers’ compensation. Fairmont settled with
Culpepper for $175,000, which settlement was approved by the WCAB in the form
of an Order Approving Compromise and Release (OACR).
Relator alleges that not long after the settlement it learned that Culpepper’s
insurance claim was fraudulent. According to Relator’s Complaint, shortly after
the settlement Culpepper became a contestant on the reality television show
Survivor, a show which can be physically demanding on its contestants. Relator
further alleges that during the pendency of Culpepper’s workers’ compensation
claim, Culpepper engaged in activities such as running and kickboxing that were
inconsistent with his claimed disability. Relator alleges Culpepper misled the
medical examiners hired as part of the claim process to evaluate his condition.
On December 21, 2015 Relator filed the instant action in California state
court under California’s Insurance Fraud Prevention Act (IFPA) § 1871.7(e)(1).

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Culpepper removed to federal court on the basis of diversity,1 and moved to
dismiss under Fed. R. Civ. P. 12(b)(1). Culpepper argued that California Labor
Code (CLC) § 5901 divests the court of jurisdiction to hear this case. CLC § 5901
divests courts of jurisdiction to consider causes of action “arising out of any final
order, decision or award” of the WCAB until after the WCAB has had an
opportunity to reconsider its prior ruling.2 The district court granted Culpepper’s
motion and dismissed the suit because it concluded that the instant qui tam suit
“arises out of” the OACR, which is a “final order” per § 5901, and because Relator
had not asked the WCAB to reconsider the OACR prior to filing this suit. We
review the district court’s grant of a motion to dismiss under Fed. R. Civ. P.
1 Culpepper is a citizen of Florida. Plaintiffs are citizens of California and New
Hampshire. The amount in controversy is greater than $75,000. See 28 U.S.C. §
1332.
2 The statute states as follows:
§ 5901. Prerequisites to court action
No cause of action arising out of any final order, decision or award
made and filed by the appeals board or a workers’ compensation
judge shall accrue in any court to any person until and unless the
appeals board on its own motion sets aside the final order, decision, or
award and removes the proceeding to itself or if the person files a
petition for reconsideration, and the reconsideration is granted or
denied. Nothing herein contained shall prevent the enforcement of any
final order, decision, or award, in the manner provided in this
division.

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12(b)(1) de novo. Pakootas v. Teck Cominco Metals, Ltd., 646 F.3d 1214, 1218
(9th Cir. 2011). We reverse.
IFPA § 1871.7(b) authorizes a relator to bring a qui tam claim on behalf of
the State of California when the relator discovers violations of, inter alia, CPC §
550.3 CPC § 550 in turn prohibits “knowingly present[ing] or caus[ing] to be
presented any false or fraudulent claim” for insurance. Relator alleges Culpepper
violated CPC § 550 when he “presented” a fraudulent claim for insurance.
Relator’s claim therefore arises from Culpepper’s allegedly fraudulent presentation
of his claim for insurance benefits, not from the settlement of that claim or from
the WCAB’s approval of that settlement. Even if no settlement had ever been
reached, a suit under CPC § 550 may still be available so long as the relator has
discovered the presentation of a fraudulent claim. This suit therefore does not arise
from the OACR, and the trial court has subject matter jurisdiction to hear it. We
will not construe the term “arising out of” beyond its plain meaning as Culpepper
suggests. See Martinez v. Combs¸ 49 Cal. 4th 35, 51 (Cal. 2010). The WCAB also
does not have exclusive jurisdiction over this appeal because this is an action on
3 In relevant part, IFPA §1871.7(b) subjects to liability “[e]very person who
violates any provision of this section or Section 549, 550, or 550 of the [California]
Penal Code. . .” In turn, IFPA § 1871.7(e) contains the qui tam provision, which
states that “[a]ny interested persons, including an insurer, may bring a civil action
for a violation of this section for the person and for the State of California. The
action shall be brought in the name of the state.”

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behalf of the State of California, not an action for benefits against an employer.
People ex rel. Alzayat v. Hebb, 18 Cal. App. 5th 801, 830 (Cal. Ct. App. 2017).
REVERSED.

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