Karen Kidd Jan. 29, 2016, 11:35am


JACKSONVILLE, Fla. (Legal Newsline) – Dismissals in whistleblower lawsuits, like the one recently granted by a Florida federal judge in a multimillion-dollar False Claims Act case, are extremely rare, an attorney says.

"Dismissals of qui tam (whistleblower) cases in which the government does not intervene are quite common, primarily due to the fact that whistleblowers often do not have access to detailed billing information necessary to meet their pleading burden," said Jerad Rissler, an attorney with Arnall Golden Gregory.

"Dismissals in cases where the government has intervened are quite rare."

That's just what happened this month in a Jacksonville, Fla., federal court. The case began in 2011 when EMT Shawn Pelletier filed his qui tam lawsuit against two ambulance companies, both his former employers, and four hospitals in the Jacksonville area.

The U.S. government elected to intervene, as is its prerogative in FCA cases, claimed the ambulance companies, Century Ambulance and Liberty Ambulance, and the hospitals had defrauded the United States. The ambulance companies allegedly transported patients who did not medically require ambulance transportation.

Pelletier, an EMT since 1998, claimed he witnessed documents being falsified in advance of billing Medicare or Medicaid. Liberty Ambulance allegedly submitted false claims of more than $10 million.

U.S. District Judge Timothy Corrigan, however, dismissed the claims on Jan. 7. The government still has a chance to amend its complaint.

Such a dismissal, Rissler explained, "will only occur where the government either fails to plead a fact that is necessary to its claim or where the complaint pushes the bounds of a legal claim beyond its breaking point.

"There have been a handful of decisions over the years where a court has dismissed an intervened case at

the pleading stage, but that is by far the exception rather than the rule," he added.

In March of last year, the U.S. government settled the case with all defendants except Liberty Ambulance. After the settlement, a federal judge unsealed some documents, and the government filed a new complaint the following June against Liberty Ambulance for allegedly filing false claims.

In response, Liberty filed a motion to dismiss with arguments that include claims the government’s complaint did not “demonstrate more than a mere possibility of misconduct” and that the government’s “False Claims Act counts [were] not pled with sufficient particularity.”

There are two reasons for such rare dismissals in cases in which the government intervenes, Rissler said.

"The government is permitted significant opportunity to investigate the alleged fraud before deciding whether to intervene, and it, therefore, has more information to meet its pleading requirements than the average litigant," he said.

"The standard for dismissing a complaint at the pleading stage — whether brought by the government or a private party — is quite high. At this stage, all of the allegations in the complaint are presumed to be true, and the only question to be answered is whether those allegations are sufficient to state a claim that is

recognized under the law.

"The court does not consider any response that the defendant might make to these allegations."

The case may not be over yet. The government will be given the opportunity to re-plead its complaint, adding in allegations of actual false claims resulting from implementation of the scheme that was alleged in the complaint, Rissler said.

"Therefore, the implications of this case depend on the government’s reason for failing to plead the missing facts showing implementation of the alleged scheme. Is this a mere pleading defect?" he said.

Any re-pleading will depend on whether the government had the required information but failed to adequately allege it in the complaint, or this information was lacking all along, Rissler explained.

"If the former, the defendant’s victory likely will be short-lived," Rissler said. "The government will file an amended complaint containing the missing allegations."

"If the latter, the government may be unable to fix the defect in its complaint without conducting further investigation.

Defendants in such cases can learn from this decision that is "is not enough for a plaintiff in a False Claims Act suit - whether it is a qui tam whistleblower or the government - to allege a scheme to defraud the government without alleging factual details showing the implementation of that scheme," Rissler said.

"This case demonstrates that courts will hold parties to that pleading requirement, and defendants should request that courts do so."

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