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Hull v. Restore Management Company LLC

United States District Court, N.D. Alabama, Southern Division

June 28, 2017

WANDA HULL, Plaintiff,
v.
RESTORE MANAGEMENT COMPANY LLC, et al., Defendants.

          MEMORANDUM OPINION

          R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE.

         This matter is before the court on Motions to Dismiss filed by Defendants Comfort Care Home Health Services, LLC, Restore Management Company, LLC, and Restore Professionals Company, LLC (Doc. # 39); Defendant Edwin Moyo (Doc. # 40); and Defendant Alan Parker (Doc. # 42). Defendants' Motions are fully briefed. (Docs. # 47, 49, 50, 51). For the reasons stated below, Defendants' Motions are due to be denied.

         I. Analysis

         Plaintiff's Second Amended Complaint states two claims for relief. Count I asserts that Defendants violated the False Claims Act as prohibited by 31 U.S.C. § 3729(a)(1)(A) and (B). Count II alleges that Defendant Comfort Care Home Health Services, LLC retaliated against Plaintiff in violation of the False Claims Act. See 31 U.S.C. § 3730(h). The court will address each of these claims for relief in turn.

         A. Plaintiff's Second Amended Complaint Alleges a Violation of the False Claims Act with the Requisite Particularity

         Typically, the Federal Rules of Civil Procedure require only that a civil complaint state “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a). However, Rule 9(b) applies to actions under the False Claims Act. U.S. ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1308-09 (11th Cir. 2002). In averments alleging fraud or mistake, “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).

         In Clausen, our Circuit noted that the practices of an entity that provides services to the Government may be unwise or even improper, but unless a false claim is actually presented there is no actionable damage as is required by the False Claims Act. Clausen. 290 F.3d at 1311.

As such, Rule 9(b)'s directive that “the circumstances constituting fraud or mistake shall be stated with particularity” does not permit a False Claims Act plaintiff merely to describe a private scheme in detail but then to allege simply and without any stated reason for his belief that claims requesting illegal payments must have been submitted, were likely submitted or should have been submitted to the Government. As in Cooper, and as with every other facet of a necessary False Claims Act allegation, if Rule 9(b) is to be adhered to, some indicia of reliability must be given in the complaint to support the allegation of an actual false claim for payment being made to the Government.

U.S. ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1311 (11th Cir. 2002). Defendants contend that Plaintiff's Second Amended Complaint fails to plead that any Defendant actually submitted fraudulent reimbursement claims, and that that failure prevents Plaintiff's Second Amended Complaint from clearing the hurdle of Rule 9(b). (See Doc. # 39 at pp. 11-13). The court disagrees.

         Plaintiff's Second Amended Complaint alleges four different schemes which she contends amount to violations of the False Claims Act: (1) a scheme involving the misrepresentation and falsification of documents, (2) a scheme involving the submission of claims for non-qualifying, non-homebound patients and the billing of unnecessary therapy services[1], (3) a scheme involving the submission of claims for a separate group of non- qualifying, non-homebound patients[2], and (4) a scheme involving the billing of unnecessary therapy visits. Plaintiff's Second Amended Complaint describes each of these schemes in detail, but admittedly does not identify specific false claims (related to specific patients) that were actually submitted as a result of the alleged misconduct.

         However, this alone is not fatal to Plaintiff's Second Amended Complaint. Indeed, since Clausen, our Circuit has stated that “there is no per se rule that an FCA complaint must provide exact billing data or attach a representative sample claim.” Mastej v. Health Management Associates, Inc., 591 F.App'x 693, 704 (11th Cir. 2014).

Under this Court's nuanced, case-by-case approach, other means are available to present the required indicia of reliability that a false claim was actually submitted. Although there are no bright-line rules, our case law has indicated that a relator with direct, first-hand knowledge of the defendants' submission of false claims gained through her employment with the defendants may have a sufficient basis for asserting that the defendants actually submitted false claims. See U.S. ex rel. Walker v. R & F Properties of Lake County, Inc., 433 F.3d 1349, 1360 (11th Cir. 2005) (holding that Rule 9(b) was satisfied where the relator was a nurse practitioner in the defendant's employ whose conversations about the defendant's billing practices with the defendant's office manager formed the basis for the relator's belief that claims were actually submitted to the government).

Id. “At a minimum, a plaintiff-relator must explain the basis for her assertion that fraudulent claims were actually submitted.” Id.

         Here, Plaintiff has not pled any details as to specific patients for whom false claims were submitted, or any specifics related to any false claims actually submitted. However, the court's analysis does not end there. Rather, the court has looked carefully at Plaintiff's averments and finds that her allegations have a sufficient “indicia of reliability” which supports the allegation of an actual false claim (or claims) even absent detailed information about a representative claim. See Clausen, 290 F.3d at 1311; Mastej, 591 Fed.App'x at 707. Plaintiff has pled a detailed factual basis which supports her knowledge of the submission of false claims. Plaintiff's Second Amended Complaint alleges that Plaintiff (1) had personal knowledge of Defendants' (allegedly fraudulent) billing practices, (2) derived that knowledge based on the nature of her employment and communications with other employees, (3) and sought to investigate Defendants' allegedly unlawful billing practices. (Doc. # 37 at ¶¶ 41, 52, 59, 77). Not only is Plaintiff a former officer of Comfort Care Home Health, but she alleges that she personally observed Defendants engage in unlawful conduct. (See Doc. # 37 at ¶ 59). Moreover, Plaintiff has identified specific categories of patients for whom Defendants allegedly submitted fraudulent documents and reimbursement claims.[3] (Doc. # 37 at ΒΆΒΆ 57-68, 74, 76). ...


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