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
"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."