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United States v. Allegiance Health Management

United States District Court, W.D. Louisiana, Shreveport Division

April 24, 2019





         Relator Tiffany Kagebein ("Relator") brings this qui tam action on behalf of the United States, the State of Arkansas, the State of Louisiana, and the State of Texas against Allegiance Health Management, Inc., Allegiance Healthcare, LLC, and Allegiance Hospital of North Little Rock, LLC d/b/a North Metro Medical Center ("North Metro") for alleged violations of the Federal False Claims Act, 31 U.S.C. §§ 3729-3733 ("FCA"). Now pending before the Court is Defendants' Motion to Dismiss for Failure to State a Claim upon Which Relief can be Granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). [Record Document 15]. Kagebein has filed an Opposition. [Record Document 17]. Defendants have filed a Reply. [Record Document 18]. For the reasons discussed below, the motion is DENIED.


         From January of 2016 until January of 2017, Relator worked for North Metro as the Program Director for the Transitions Unit, the hospital's Geriatric Behavioral Unit. Record Document 1, ¶ 6. Relator asserts that her employment at North Metro was terminated after she raised concerns to her superiors that Defendants were submitting fraudulent claims to Government-funded healthcare programs for geriatric psychiatry services, in violation of the FCA and similar state laws in Arkansas, Louisiana, and Texas. Id. at ¶s 1 & 6. According to Relator, Defendants improperly admitted and retained patients in order to maintain an elevated level of patient occupancy (id. at ¶s 44-47) and billed for services that were not rendered and/or unreasonable or unnecessary (id. at ¶s 48-59). Relator alleges that this conduct exposed patients to harm. Id. at ¶ 60. Relator claims that her employment at North Metro was terminated by the hospital's CEO Bill Bledsoe ("Bledsoe") because she "repeatedly raised her concerns to him and others regarding the improper conduct." Id. at ¶ 64. The United States and the States of Arkansas, Louisiana, and Texas declined to intervene in this action. Record Document 4. Relator voluntarily dismissed all of her claims against Defendants, with the exception of her retaliation claim under § 3730(h)(1) of the FCA. Record Documents 8 & 14. The United States and the States of Louisiana, Arkansas, and Texas consented to the partial dismissal. Record Document 13. Defendants now move for the dismissal of Relator's remaining claim pursuant to Rule 12(b)(6). Record Document 15.


         I. Legal Standard

         In order to survive a motion to dismiss brought under Rule 12(b)(6), a plaintiff must "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. The court must accept as true all of the factual allegations in the complaint in determining whether plaintiff has stated a plausible claim. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). However, a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986). If a complaint cannot meet this standard, it may be dismissed for failure to state a claim upon which relief can be granted. Iqbal, 556 U.S. at 678-79. A court does not evaluate a plaintiffs likelihood for success, but instead determines whether plaintiff has pleaded a legally cognizable claim. U.S. ex rel. Riley v. St. luke 's Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004). A dismissal under 12(b)(6) ends the case "at the point of minimum expenditure of time and money by the parties and the court." Twombly, 550 U.S. at 558.

         II. Applicable Law

         "The purpose of the [FCA] ... is to discourage fraud against the government, and the whistleblower[1] provision is intended to encourage those with knowledge of fraud to come forward." Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994). The "whistleblower" provision of the FCA provides:

Any employee . . . shall be entitled to all relief necessary to make that employee .. . whole, if that employee ... is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee ... in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.

31 U.S.C. § 3730(h)(1). For an FCA retaliation claim to survive a motion to dismiss, a plaintiff must show that (1) he engaged in protected activity, (2) his employer knew about the protected activity, and (3) he was retaliated against because of his protected activity. U.S. ex rel. Bias v. Tangipahoa Parish School Bd., 816 F.3d 315, 323 (5th Cir. 2016) (citing Robertson, 32 F.3d at 951). For an employee's internal complaint to a superior to qualify as protected activity, the complaint must concern "false or fraudulent claims for payment submitted to the government." US. ex rel. Patton v. Shaw Servs., L.L.C., 418 Fed.Appx. 366, 372 (5th Cir. 2011) (citing Robertson, 32 F.3d at 952). Without knowledge that an employee was investigating fraud, an employer cannot possess the "retaliatory intent" that would establish a violation of § 3730(h)(1). Id. Although some circuits have adopted a broader interpretation of § 3730(h)(1)'s "protected activity" requirement, the Fifth Circuit continues to require a showing that an employee was attempting to expose fraud against the government. McKenzie v. BellSouth Telecomms., Inc., 219 F.3d 508, 515 (6th Cir. 2000); see Patton, 418 Fed.Appx. at 372; U.S., ex rel Johnson v. Kaner Med. Grp., P.A., 641 Fed.Appx. 391, 395 (5th Cir. 2016); US. ex rel. Ligai v. ESCO Tech., Inc., 611 Fed.Appx. 219, 220-21 (5th Cir. 2015) (citing Robertson, 32 F.3d at 951).

         Whether an employer had knowledge that a plaintiff was engaged in protected activity depends in part on the employee's job description. In Robertson v. Bell Helicopter, the Fifth Circuit found that the defendants could not have known that the plaintiff was engaged in protected activity because the plaintiffs actions were consistent with the performance of his job duties. 32 F.3d at 952. Plaintiff did not identify any change in his conduct that might have given the defendants notice of his intentions to report fraud upon the government. Id. To prove that an employee's engagement in protected activity caused a retaliatory action, a plaintiff cannot rely solely on temporal proximity of the retaliatory action to the protected activity. U.S. ex rel. King v. Solvay Pharm., Inc., 871 F.3d 318, 334 (5th Cir. 2017). However, allegations of temporal proximity may be sufficient to overcome a motion to dismiss. See Id. (quoting Shackleford v. Deloitte & Touche, LLP, 190 F.3d 398, 409 (5th Cir. 1999) ("Indeed, the combination of suspicious timing with other significant evidence of pretext, can be sufficient to survive summary judgment.")).

         III. Arguments ...

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