UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
ex rel. Lokesh Vuyyuru, M.D., ]
Plaintiffs, ]
vs. ] Civil Action No. 3:06cv180
]
Gopinath Jadhav, M.D., ]
and ]
Southside Gastroenterology
Associates, Ltd. ]
and ]
Petersburg Hospital
Company, LLC ]
and ]
The Cameron Foundation, ]
a
and ]
Columbia/HCA John
Randolph, Inc. ]
Defendants. ]
PLAINTIFFS’ BRIEF IN OPPOSITION TO DEFENDANTS’
CONSOLIDATED MOTION TO DISMISS PURSUANT TO RULES 12(b)(1) and 12(b)(6)
Comes now
the plaintiffs, by counsel, and pursuant to the Federal Rules of Civil
Procedure files this brief in opposition to the consolidated motion to dismiss
pursuant to Rules 12(b)(1) and 12(b)(6).
INTRODUCTION
The pleading
sets forth sufficiently with short and plain statements the circumstances
constituting fraud upon the
Defendants’
first defense is an attack upon the Relator, Dr. Vuyyuru, claiming that this
suit is simply an attempt to intimidate those who question his medical
practice, citing and mischaracterizing several suits in which Dr. Vuyyuru is or
was a party. In Vuyyuru v. Hardy,
Civil Action No. 3:06cv179 (E.D. Va. filed
The
defendants contend that the suit is simply “another attack in his public
harassment campaign against Defendants…[and is] abusive.” Notwithstanding the conclusory statements of
defendants, the facts and witnesses support the allegations that Dr. Jadhav
frequently biopsies the IC Valve which is unnecessary and that he documented
procedures like the History and Physical that he simply did not due. U.S. Tax payers should not have to pay for
such procedures, simply because defendants attack Dr. Vuyyuru.
STANDARD OF REVIEW FOR RULE 12(b)(1) and 12(b)(6)
To survive a motion to dismiss, a plaintiff does not need to
establish a prima facie case, but
rather need only to effectively state its claim under the minimum pleading
requirements set forth in Fed. R. Civ. Pro. 8(a)[1]. See,
Swierkiewicz v. Sorema N. A., 534
"It is inappropriate to focus exclusively on the fact that Rule 9(b)
requires particularity in pleading fraud. This is too narrow an approach and
fails to take account of the general simplicity and flexibility contemplated by
the rules." 5 Wright and Miller, § 1298 (footnotes omitted.)
1.
Rule 9(b) pleading requirements are not
applicable to FCA claims for false claims submitted to the government under 31 USCS § 3730
Civil actions for violation of the False Claims Act
(“FCA”), 31 U.S.C.S. § 3729[2]
et seq. are not identical to actions for fraud subject to more stringent
pleading requirements under Fed. R. Civ. Pro. 9(b).[3] Instead the FCA clearly distinguishes them
from fraud actions which require clear and convincing evidence, stating that
the preponderance of the evidence standard applies.
(c)
In any action brought under section 3730 [31 USCS § 3730], the United States
shall be required to prove all essential elements of the cause of action,
including damages, by a preponderance of the evidence.
31 USCS § 3731
(emphases added)
A number of circuits have held otherwise.[4]
Notwithstanding,
the Rule 9(b) pleading requirement certainly is satisfied if the plaintiff
alleges the "date, place or time" of the allegedly fraudulent
conduct. The plaintiff need not plead the "date, place or time" of
the fraud, however, if the plaintiff is able to use alternative means of
injecting precision and some measure of substantiation into their allegations
of fraud.
2.
Rule 8 and 9(b)’s short and plain statement showing
the pleader is entitled to relief and circumstances constituting fraud are
sufficient to withstand the motions under Rule 12(b)(1) and 12(b)(6)
A stereotyped complaint against plaintiff’s pleadings is that the
plaintiff has alleged mere conclusory statements. The line between what is a statement of fact
and what is a conclusion is not so broadly and easily drawn as that he who runs
may read. Indeed, as the cases and text
books amply show, it is sometimes quite finely drawn. Most words are syntheses,
that is, the result of conclusions which have been drawn. We analyze to
synthesize. We synthesize to analyze again.
Even cases before Leatherman v. Tarrant County Narcotics Intelligence
& Coordination Unit, 507 U.S. 163, 113 S. Ct. 1160, 122 L.Ed. 2d 517 (1993),
and later criticized in light of Leatherman appreciated the blurring of
lines between facts and conclusions. See
We are cognizant that the line
between "facts" and "conclusions" is often blurred. But,
there are some general parameters. Most often, facts are susceptible to
objective verification. Conclusions, on the other hand, are empirically
unverifiable in the usual case. They represent the pleader's reactions to,
sometimes called "inferences from," the underlying facts. It is only
when such conclusions are logically compelled, or at least supported, by the
stated facts, that is, when the suggested inference rises to what experience indicates
is an acceptable level of probability, that "conclusions" become
"facts" for pleading purposes.
The defendants and courts should not play what many a fair minded person
considers a game with cases towards which courts are ill disposed. Such a game should be banned. One asks, how
is the allegation of Form 9 of the Federal Rules of Civil Procedure any less a
conclusory allegation? Or conversely, how is the allegation any less an
allegation of a statement of fact? “Defendant negligently drove a motor vehicle
against plaintiff who was then crossing said highway” is no different than any
of the short and plain statements set forth in the pleading of this case. Few facts in life are primary, broken down
to the most basic assertion. Instead
most “facts” are built upon a plethora of other facts.
3.
Under Rule 12(b)(1) and 12(b)(6) the issue is
not whether a plaintiff will ultimately prevail, but whether he is entitled to
offer evidence to support eh claims, no matter how remote and unlikely recovery
might seem.
The issue is not whether a plaintiff will ultimately prevail but whether
he is entitled to offer evidence to support the claims, no matter how remote
and unlikely recovery might seem. “[I]n
passing on a motion to dismiss, whether on the ground of lack of jurisdiction
over the subject matter or for failure to state a cause of action, the
allegations for the complaint should be construed favorably to the pleader.” Scheuer
v. Rhodes, 416
This general standard is specifically applied in cases where the
dismissal is sought on subject-matter jurisdiction grounds:
“Where subject matter jurisdiction is
challenged pursuant to Fed. R. Civ. P. 12(b)(1), the plaintiff has the burden
of proving jurisdiction in order to survive the motion. Specifically, the plaintiff must show that the
complaint alleges a claim under federal law, and that the claim is
substantial. The plaintiff will survive
the motion to dismiss by showing any arguable basis in law for the claims set
forth in the complaint.”
Michigan S. R.R. v. Branch
& St. Joseph Counties Rail Users Ass’n, 287 F.3d 568, 573 (6th Cir. 2002) (internal
citations omitted).
4.
Under Rule 12(b)(1) and 12(b)(6), the court
should accept as true all material allegations of the complaint and view the
complaint in a light most favorable to the plaintiff.
Likewise, in deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(6),
the court should accept as true all material allegations of the complaint and
view the complaint in a light most favorable to the plaintiff, Warth v. Seldin, 422 U.S. 490, 501, 95
S.Ct. 2197, 45 L.Ed.2d 343 (1975); Boring v.
ARGUMENT
I. Vuyyuru is an original source of the
information pursuant to 31 U.S.C. § 3730(e)(4) of the False Claims Act.
Vuyyuru is
an original source for purposes of 31 U.S.C. § 3730(e)(4). That code section provides in pertinent part
as follows:
(e)
Certain actions barred.
(4) (A) No court shall have jurisdiction over an action under this section
based upon the public disclosure of allegations or transactions in a criminal,
civil, or administrative hearing, in a congressional, administrative, or
Government [General] Accounting Office report, hearing, audit, or
investigation, or from the news media, unless the action is brought by the
Attorney General or the person bringing
the action is an original source of the information.
(B) For purposes of this paragraph, "original source" means an
individual who has direct and independent knowledge of the information on which
the allegations are based and has voluntarily provided the information to the
Government before filing an action under this section which is based on the
information.
31 USCS § 3730
31 USCS §
3730(e)(4)(B) contain two jurisdictional requirements; first, qui tam relator
must have direct and independent knowledge of information on which allegations
are based, and second, relator must have voluntarily provided information to
government prior to filing suit. United
States ex rel. Fine v MK-Ferguson Co. (1996, CA10 NM) 99 F3d 1538, 41 CCF P
77024.
For purposes
of original source exception, putative relator's knowledge is
"direct" if he acquired it through his own efforts, without
intervening agency, and it is "independent" if knowledge is not
dependent on public disclosure. United
States ex rel. Grayson v Advanced Mgmt. Tech., Inc, 221 F3d 580, 583 (4th
Cir. 2000) (Putative relators were attorneys who at best verified information
they obtained from another company’s administrative protest and therefore were
not an “original source”)[6]
Notwithstanding
the public disclosure, the Fourth Circuit and statute provide that suit may
still be brought if the putitive relator is “an ‘original source’”. Id at 583.[7]
Additionally,
an original source need not be natural person, despite fact that 31 USCS §
3730(e)(4)(B) refers to original source as individual. Minn. Ass'n of Nurse Anesthetists v Allina Health System Corp.
(2002, CA8 Minn) 276 F3d 1032, reh, en
banc, den (2002, CA8) 2002 US App LEXIS 4870 and cert den, motion gr (2002) 537
A.
Relator Vuyyuru complained and provided to the
Government information
Defendants
assert that Vuyyuru may not be an original source for two reasons. First, because of the March 30, 2005
front-page article titled “Alleged insurance, quality-of-care fraud at SRMC”,
describing an allegedly fraudulent scenario involving IC-Valve procedures and
colonoscopies allegedly performed in less than five minutes by Dr. Jadhav in
which Rowley, the author cites “[n]ursing sources who worked with Jadhav” as
providing factual details contained in the article. And second, because of an excerpt providing a
mere conclusion taken out of context from a deposition of Dr. Vuyyuru, where he
was represented by counsel defending a malpractice action in which Vuyyuru was
a defendant together with Columbia/HCA
John Randolph, Inc.,[8]
one of the defendants in this present action.
1.
Dr. Vuyyuru complained of his concerns that Dr. Jadhav
and the hospitals were engaged in improper medical procedures and Medicaid and
Medicare Fraud before the March 30, 2005 Newspaper articles.
The
defendants essentially ask the court to look outside the pleadings and then to
view the evidence in the light most favorable to the moving party and to make
some horrific jumps in logic—neither can the court do without offending
established rules of law and justice.
In and
around 2002, 2003 and 2004, Dr. Vuyyuru spoke with FBI Agents Vanosten and
Irons regarding the improper medical procedures and Medicaid and Medicare Fraud
by Dr. Jadhav, SRMC and JRMC. Affidavit
Vuyyuru –
At the
Center for Quality Health Care, Dr. Vuyyuru also provided information regarding
who, what, when, where and how of the alleged fraud by Dr. Jadhav.
As director
of endoscopy at JRMC, Dr. Vuyyuru investigated Dr. Jadhav and presented the
data in multiple meetings from 2001 to 2005, including “who, what, when, where,
and how” to administration at JRMC, yet no action was taken by JRMC.
2.
Dr. Vuyyuru Satisfies The Notice Requirement – He
voluntarily disclosed information related to fraud by defendants to the
government on multiple occasions prior to filing suit.
Defendants
complain that Dr. Vuyyuru did not voluntarily disclose to the government the
evidence of fraud by defendants prior to filing suit. As described above, this is simply false. The complaint at ¶¶ 38, 40, and 41 alleges
such prior disclosure.[9] Notice is not required to be plead with
specificity as is the case of fraud.
Fed. R. Civ. Pro. 8.
Further, the
interpretation of 31 U.S.C. § 3730(e)(4)(B) provided by the defendants is
contrary to the purpose of the statute.
The False Claims Act (predecessor to 31 USCS § 3730) was designed to
encourage apprehension of profiteers by providing financial incentives to
private parties to expose and prosecute fraud against government. United States v Burmah Oil Co. (1977,
CA2 NY) 558 F2d 43, cert den (1977)
434
Notwithstanding,
in the present case, the court need not decide the interpretation issue, since
Dr. Vuyyuru repeatedly attempted to have the government intervene to end the
practice of performing unnecessary procedures and billing Medicaid and Medicare
for those procedures.
3.
The deposition excerpt is out of context and does not
constitute an admission that Dr. Vuyyuru is not an “original source” for
purposes of the False Claims Act.
The
deposition excerpt is taken out of context and does not constitute a legal
opinion regarding what constitutes an original source for purposes of the False
Claims Act, nor does it support the proposition that Dr. Vuyyuru did not have
the requisite individual knowledge acquired from his independent investigations
regarding the false claims set forth in the qui tam complaint.
II.
THE STATUTE OF LIMITATIONS DOES NOT BAR THE FCA COUNTS
a.
There is no affirmative defense on the face of the
complaint making it inappropriate to raise an affirmative defense on a 12(b)(1)
or 12(b)(6) motion.
Although a
motion pursuant to Rule 12(b)(6) invites an inquiry into the legal sufficiency
of the complaint, not an analysis of potential defenses to the claims set forth
therein, dismissal nevertheless is appropriate when the face of the complaint clearly reveals the existence of a
meritorious affirmative defense.
In the
present case there is no such showing on the face of the pleading that the
statute of limitation has run.
b.
The Six-Year Limitation is tolled by the defendants’
fraud.
Federal
statutes of limitation in fraud cases are universally tolled until the
plaintiff knew or should have known of the facts giving rise to its cause of
action. Bailey v. Glover, 88
c.
The conspiracy claim is not time-barred in its
entirety—the statute of limitations does not run upon the formation of the
conspiracy but upon the wrongful actions.
The elements
of such a claim are: (1) that the defendant conspired with one or more persons
to get a false or fraudulent claim allowed or paid by the United States; (2)
that one or more conspirators performed any act to effect the object of the
conspiracy; and (3) that the United States suffered damages as a result of the
false or fraudulent claim. See Hageny v.
Defendants’
argue an absurd “Grandfather Clause” for conspiracies, that if they can
conspire without being caught for six years, that any conspiracy and all acts
in furtherance of that conspiracy are time-barred, notwithstanding the
continuation of the conspiracy and injuries.
See pages 22-23 of Defendants Memorandum. Defendants contend that Count
III, for conspiracy under 31 U.S.C. § 3729(a)(3) is time-barred in its
entirety, because the statute of limitations begins to run upon the formation
of the conspiracy, citing Blusal Meats,
inc. v. United States, 638 F. Supp. 824, 829 (S.D.N.Y. 1985)., aff’d by 817
F.2d 1007 (2d Cir. 1987). However, that
case states very clearly that the conspiracy claim was dismissed not due to the
statute of limitations, but due to the fact that the government failed to
allege the existence of any agreement to get a false claim paid, stating
“An
agreement among two or more persons to commit a crime is the essence of
conspiracy.
Blusal Meats v.
More
importantly, cited by the Blusal Meats
case, is Singleton v.
The
existence of a conspiracy does not postpone the accrual of causes of action
arising out of the conspirators' separate wrongs. It is the wrongful act, not the conspiracy, which is actionable,
whether that act is labelled a tort or a violation of § 1983. Korry v. International Telephone &
Telegraph Corp., 444 F. Supp. 193 (S.D.N.Y.1978). Where no single act is
sufficiently decisive to enable a person to realize that he has suffered a
compensable injury, the cause of action may not accrue until the wrong
becomes apparent. This may occur, for instance, where a person contracts
silicosis as the result of ingesting infinitesimally small amounts of coal dust
over a period of years, Sadowski v. Long
Island Railroad, 292 N.Y. 448, 55 N.E.2d 497 (1944), or gradually becomes
disabled as the result of operating a defective hammer, Fowkes v. Pennsylvania Railroad, 264 F.2d 397 (3d Cir. 1959). See also Triangle Underwriters, Inc. v.
Honeywell, Inc., 457 F. Supp. 765, 770 (E.D.N.Y.1978), affd. as to this holding, 604 F.2d 737, 744-46 (2d Cir. 1979); Holdridge v. Heyer-Schulte Corp., 440 F.
Supp. 1088, 1096 (N.D.N.Y.1977).
Singleton v.
III.
THE COMPLAINT PLEADS THE FCA CLAIMS WITH SUFFICIENT
SPECIFICITY.
Fed. R. Civ. Pro. 9(b) reads as follows:
Fraud,
Mistake, Condition of the Mind. (b) In all averments of fraud or mistake, the circumstances constituting fraud
or mistake shall be stated with particularity. Malice, intent, knowledge, and
other condition of mind of a person may be averred generally.
Fed Rules Civ Proc 9(b)(emphasis added)
The purpose
of Rule 9(b) is to prevent the indiscriminate or unjustified charging of fraud
by requiring the allegation of particular facts showing fraud and by requiring
that when a plaintiff alleges fraud only on "information and belief,"
he provides a factual statement of the basis for his "information and
belief." See 5 C. Wright and A. Miller, Federal Practice and Procedure §
1296 (1969).
First, the rule ensures that the defendant has
sufficient information to formulate a defense by putting it on notice of the
conduct complained of. ... Second, Rule 9(b) exists to protect defendants from
frivolous suits. A third reason for the rule is to eliminate fraud actions in
which all the facts are learned after discovery. Finally, Rule 9(b) protects
defendants from harm to their goodwill and reputation.
The inquiry
is whether the averments of fraud or the circumstances
constituting fraud are stated with particularity.
There is
nothing unclear about the particularity with which plaintiff has stated the
circumstances constituting the fraud in the present case.
In the
present case, plaintiff sets out “who, what, when, where and how.”
Who:
Complaint ¶
5, 6 and 7: Defendants Gopinath Jadhav, M.D, Southside Gastroenterology
Associates, Ltd., The Cameron Foundation, a Virginia non-profit corporation is
the successor in interest to The Hospital Authority of the City of Petersburg,
a political subdivision of the Commonwealth of Virginia which operated
Southside Regional Medical Center until its sale on or about 2003 to defendant
Petersburg Hospital Company, LLC (“PHC”) a Virginia limited liability company,
which has owned and operated Southside Regional Medical Center from that time
until the present, and Columbia/HCA John Randolph, Inc.
What:
Complaint ¶
17: Dr. Jadhav while performing colonoscopies routinely took a biopsy of the Valvula Bauhini also known as
Ileocecal Valve (“IC Valve”) with a stated impression of “lipoma,” when he was
unable to find a polyp.
Complaint ¶
21: Dr. Jadhav, for the sole purpose of enhancing his income and that of SRMC
and JRMC, engaged in the systematic
practice of performing unnecessary medical procedures with the purpose
of charging Medicaid and Medicare for the unnecessary medical procedures.
Complaint ¶
27: Dr. Jadhav frequently billed
for the procedure of a colonoscopy and upper-endoscopy when Dr. Jadhav failed to complete the procedure. JRMC and SRMC knew or should have known of
the fact that the procedures were not being performed but were being billed and
also billed for the procedures as completed procedures when the procedures were
incomplete.
Complaint ¶
32: Defendants were participating Medicaid and Medicare providers, and submitted claims to Medicaid and
Medicare for the biopsies of the Ileocecal Valve (“IC Valve”), and
other fraudulent billings.
Complaint ¶
33: Dr. Jadhav for a period of nearly 10 years failed to dictate the required
consult note before billing, making minor notations only in the chart, while
billing for a level 3 to 5 consult. At
SRMC (different than his practice at JRMC), Dr. Jadhav routinely and in most
cases did not provide a dictation for consults and failed to perform general
multi-system examinations failing to follow CMS guidelines since 1997 for which
he billed or caused to be billed to
the United States Government as though the CMS guidelines were being met.
When:
Complaint ¶
17: This practice continued through
March 2005, and was reflected in medical records.
Complaint ¶
22:
Complaint ¶
24:
Complaint ¶
33: for a period of nearly 10 years
Complaint ¶
¶ 36 and 37: from 2001 defendants continued their practice
Complaint ¶
39: December 2001
How:
Complaint ¶
32: At all times relevant to the complaint, defendants were participating
Medicaid and Medicare providers, and submitted claims to Medicaid and Medicare
for the biopsies of the Ileocecal Valve (“IC Valve”), and other fraudulent
billings. Further, upon information and
belief, defendants further defrauded the United States of America by similar
charges and billings to CHAMPUS, and insurance, MCO’s and HMO’s funded by
Medicaid, including but not limited to Health Keepers Plus, Virginia Premier,
CareNet of Southern Health, Sentara Medicaid Program and Optimum Choice.
Complaint ¶¶
1- 53.
A.
Plaintiff has plead the Fed. R. Civ. Pro. 9(b) “circumstances
constituting fraud”.
a.
Circumstances constituting the false claims.
Defendants
first argue that Vuyyuru cannot be the relator because they claim, he does not
qualify as an original source due to “the overwhelming number of public
disclosures” of the fraud. Now,
defendants ask the court to find that the fraud is still a secret, that the
complaint fails to set forth the itemized bills associated with the false
claims made upon the government, and therefore fails the pleading requirements
of Fed. R. Civ. Pro. 9(b). Such a
ruling would be not only inconsistent with Fed. R. Civ. Pro. 9(b) but would
invite installation with tax dollars of golden toilet seats in every
unscrupulous medical facility.
Additionally,
allegations of fraud may be based on information and belief when the facts in
question are peculiarly within the opposing party's knowledge, provided that
the complaint sets forth the factual basis for the plaintiff's belief, which
has been done in this case. Koch v. Koch
Indus., Inc., 203 F.3d 1202, 1237 (10th Cir. 2000).
b.
Circumstances constituting the conspiracy to file false
claims.
In
These provisions, considered together, indicate a purpose to reach any person
who knowingly assisted in causing the government to pay claims which were
grounded in fraud, without regard to whether that person had direct contractual
relations with the government.
317
Plaintiff
plead the circumstances constituting the conspiracy. Specifically, Relator addressed and
confronted the defendants regarding the false claims in an attempt to cause the
practice to cease—he was rebuffed.
Complaint
¶ 36: On or about 2001, the Relator,
with knowledge that it was a violation of federal law to knowingly or willfully
make or cause to be made any false statement or representation of material fact
in any application for payment under the Medicare program, informed Dr. Jadhav,
SRMC and JRMC that the routine biopsy of the IC Valve was fraudulent, illegal
and improper activities.
Not
only was he rebuffed, but when he refused to accept money to cover up their
scheme, he was attacked. Complaint ¶
37-39.[11]
IV.
THE COMPLAINT PLEADS THE STATE COMMON LAW AND
STATUTORY CONSPIRACY CLAIMS WITH SUFFICIENT SPECIFICITY.
A. Plaintiff’s claims set out unlawful act or
purpose for statutory and common law and statutory conspiracy
A civil
conspiracy is a combination of two or more persons, by some concerted action,
to accomplish some criminal or unlawful purpose, or to accomplish some purpose,
not in itself criminal or unlawful, by criminal or unlawful means. Hechler Chevrolet, Inc. v. General Motors
Corp., 230 Va. 396, 337 S.E.2d 744, 748 In Duggin v. Adams, 234 Va. 221, 227-228 (Va. 1987)[12]
the court noted that "improper methods" may include violations of
established standards of a trade or profession, sharp dealing, overreaching,
or unfair competition, means that are illegal or
independently tortious, such as violations of statutes, regulations, or
recognized common-law rules, violence, threats or intimidation, bribery,
unfounded litigation, fraud, misrepresentation or deceit, defamation, duress,
undue influence, misuse of inside or confidential information, or breach of a
fiduciary relationship, competitor's acquisition and use of confidential
contractual information in violation of oral covenant not to compete
constituted improper method of interfering with plaintiff's at-will contract,
violation of an established standard of a trade or profession, unethical
conduct, sharp dealing, overreaching, or unfair competition, other competitive
conduct "below the behavior of fair men similarly situated", Duggin
v. Adams, 234 Va. 221,
227-228 (Va. 1987)
Defendants assert that
plaintiff has not plead any underlying unlawful act or unlawful purpose. The Complaint ¶ 41, alleged that following
Lokesh Vuyyuru, M.D.’s objections and disclosures to government authorities, he
has been subjected to intolerable, insulting, damaging and discriminatory
treatment. 81. 18 USC §1513 provides in pertinent part as follows:
"Whoever knowingly, with the
intent to retaliate, takes any action harmful to any person, including
interference with the lawful employment or livelihood of any person, for
providing to a law enforcement officer any truthful information relating to the
commission or possible commission of any Federal offense, shall be fined under
this title or imprisoned not more than 10 years, or both. Whoever conspires to
commit any offense under this section shall be subject to the same penalties as
those prescribed for the offense the commission of which was the object of the
conspiracy."
Compliant ¶
39 alleged that in and about December 2001, the Chief of Staff from SRMC
offered to Relator that if he kept silent with regard to the ongoing
Medicare/Medicaid fraud that “They will make you rich” which Relator
rejected. Later, another member of the
Medical Staff for SRMC threatened Relator that if he did not back off, SRMC
would hurt some of Relator’s friends.
Eventually, SRMC conspired and did do injury to Relator by bring
spurious charges to remove Relator’s hospital privileges and by filing charges
against Relator with the Virginia Board of Medicine.
Defendants
assert an improper conclusory statement outside of the pleading, that the
charges made by defendants were “validated by the Board of Medicine’s
independent findings.” Page 36. The findings of the Virginia Board of
Medicine did not validate the charges made by defendants. The vast part of the spurious charges made by
defendants were not “validated” by the Virginia Board of Medicine.
B. Plaintiff plead the statutory and common
law conspiracy with requisite particularity.
There is no
reason to distinguish civil from criminal conspiracies, which “by their nature
secret and thus can rarely be proven by direct evidence.”
The
plaintiff has pled sufficiently circumstances evidencing such a concerted
effort by the defendants to injure him, including but not limited to the
threats to do so.
V.
THE STATUTE OF LIMITATIONS HAS NOT RUN FOR EITHER
THE STATE COMMON LAW AND STATUTORY
CONSPIRACY CLAIMS.
a.
There is no affirmative defense on the face of the
complaint making it inappropriate to raise an affirmative defense on a 12(b)(1)
or 12(b)(6) motion.
Although a
motion pursuant to Rule 12(b)(6) invites an inquiry into the legal sufficiency
of the complaint, not an analysis of potential defenses to the claims set forth
therein, dismissal nevertheless is appropriate when the face of the complaint clearly reveals the existence of a
meritorious affirmative defense.
In the
present case there is no such showing on the face of the pleading that the
statute of limitation has run.
b.
The statute of limitations has not run.
A cause of
action under the conspiracy statute accrues at the time the Vuyyuru suffered any
damages resulting from the acts committed in furtherance of the conspiracy. Eshbaugh v. Amoco Oil Co., 234
Va. 74, 360 S.E.2d 350 (Va. 1987). As the Virginia Supreme Court stated in Stone v. Ethan Allen,
Inc., 232
where an injury, though slight, is sustained
in consequence of the wrongful or negligent act of another and the law affords
a remedy therefor, the statute of limitations attaches at once. It is not
material that all the damages resulting from the act should have been sustained
at the time and the running of the statute is not postponed by the fact that
the actual or substantial damages do not occur until a later date.
Id. at 632; see
also International Surplus Lines Ins. Co. v. Marsh & McLennan, Inc.,
838 F.2d 124, 129 (4th Cir. 1988) ("In Virginia, only the slightest injury
is required to start the running of the limitations period . . . It is of no
consequence that the amount of damages [is] not ascertainable until a later
date.") Detrick v. Panalpina, Inc.,
108 F.3d 529, 543 (4th Cir. 1997)
Defendants
again assert that the “Grandfather Clause” for misconduct, arguing that once
conspirators pass the five year mark[13]
from the first injury resulting from their conspiracy, they may continue their
conspiracy and injurious acts against the plaintiff without fear of Vuyyuru
ever obtaining relief due to their “Grandfather Clause” interpretation of the
statute of limitations. It is the
wrongful act, not the conspiracy, which is actionable. Singleton v.
VI.
DEFENDANTS ARE NOT ENTITLED TO STATUTORY IMMUNITY FROM
DAMAGES FOR THE STATE-LAW CONSPIRACY COUNTS
a.
The is no affirmative defense on the face of the
complaint making it inappropriate to raise an affirmative defense on a 12(b)(1)
or 12(b)(6) motion.
See
above.
b.
There is nothing in the face of the pleading by which
the court can determine whether defendants would be entitled to immunity for
the state-law claims pursuant to 42 U.S.C. §§ 11101 to 11152, Health Care
Quality Improvement Act or Va. Code § 54.1-2400.6 and 54.1-2909with respect to
defendants’ participation in “peer review” or their spurious complaints to the
Virginia Board of Medicine.
As
defendants assert, Health Care Quality Improvement Act, (“HCQIA”) 42
Virginia
Code does not provide protection for persons acting in bad faith or with
malicious intent.
Plaintiffs
are not required to anticipate affirmative defenses in its pleadings.
VII.
PLAINTIFF MAKES NO CLAIM AGAINST THE CAMERON
FOUNDATION FOR CONSPIRACY.
Respectfully
submitted,
ex rel. Lokesh Vuyyuru, M.D.,
By
Counsel
Certificate of Service
I
hereby certify that on this 24TH day of October, 2006 I caused a true and
accurate copy of the foregoing to be served on the following opposing counsel/party
and the United States Attorney General as indicated below:
[] via facsimile [x] via U.S. Mail
[] via hand
Martin A. Donlan, Jr.,
Esquire
W. Benjamin Pace, Esq.
Williams Mullen
Two
James Center
804-783-6932
804-783-6507
f
(Counsel for Gopinath Jadhav, M.D. and Southside
Gastroenterology Associates, Ltd.)
[] via facsimile [] via U.S. Mail [x]
via hand
Michael R. Shebelskie, Esq.
Rita Davis, Esq.
Hunton & Williams, LLP
(804) 788-8200
(804) 788-8218 f
(Counsel for Petersburg Hospital Company, LLC &
The Cameron Foundation)
[] via facsimile [x] via U.S. Mail
[] via hand
J. William Boland, Esq.
Charles Wm. McIntrye, Jr.,Esq.
Nathan A. Kottkamp, Esq.
McGuire Woods, LLP
(804) 775-1000
(804) 775-1061 f
Counsel for Columbia/HCA John Randolph, Inc.
[] via facsimile [x] via U.S. Mail
[] via hand
Tara Casey, Assistant
Paul McNulty, USAG
Eastern District of Virginia
(804) 819-5400
(804) 771-2316 f
___________________________
[1] Fed. R. Civ. Pro. 8(a) -- Claims for Relief. (a) A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks. Relief in the alternative or of several different types may be demanded.
[2] §
3729. False claims
(a) Liability for certain acts [Caution: For inflation-adjusted civil monetary
penalties, see 28 CFR 85.3.]. Any person who--
(1) knowingly presents, or causes to be presented, to an officer
or employee of the United States Government or a member of the Armed Forces of
the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false
record or statement to get a false or fraudulent claim paid or approved by the
Government;
(3) conspires to defraud the Government by getting a false or
fraudulent claim allowed or paid;
(4) has possession, custody, or control of property or money used,
or to be used, by the Government and, intending to defraud the Government or
willfully to conceal the property, delivers, or causes to be delivered, less
property than the amount for which the person receives a certificate or
receipt;
(5) authorized to make or deliver a document certifying receipt of
property used, or to be used, by the Government and, intending to defraud the
Government, makes or delivers the receipt without completely knowing that the
information on the receipt is true;
(6) knowingly buys, or receives as a pledge of an obligation or
debt, public property from an officer or employee of the Government, or a
member of the Armed Forces, who lawfully may not sell or pledge the property;
or
(7) knowingly makes, uses, or causes to be made or used, a false
record or statement to conceal, avoid, or decrease an obligation to pay or
transmit money or property to the Government,
is liable to the United States Government for a civil penalty of not less than
$ 5,000 and not more than $ 10,000, plus 3 times the amount of damages which
the Government sustains because of the act of that person, except that if the
court finds that--
(A) the person committing the violation of this subsection
furnished officials of the United States responsible for investigating false
claims violations with all information known to such person about the violation
within 30 days after the date on which the defendant first obtained the
information;
(B) such person fully cooperated with any Government investigation
of such violation; and
(C) at the time such person furnished the United States with the
information about the violation, no criminal prosecution, civil action, or
administrative action had commenced under this title with respect to such
violation, and the person did not have actual knowledge of the existence of an
investigation into such violation;
the court may assess not less than 2 times the amount of damages which the
Government sustains because of the act of the person. A person violating this
subsection shall also be liable to the United States Government for the costs
of a civil action brought to recover any such penalty or damages.
(b) Knowing and knowingly defined. For purposes of this section, the terms
"knowing" and "knowingly" mean that a person, with respect
to information--
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the
information; or
(3) acts in reckless disregard of the truth or falsity of the
information,
and no proof of specific intent to defraud is required.
(c) Claim defined. For purposes of this section, "claim" includes any
request or demand, whether under a contract or otherwise, for money or property
which is made to a contractor, grantee, or other recipient if the United States
Government provides any portion of the money or property which is requested or
demanded, or if the Government will reimburse such contractor, grantee, or
other recipient for any portion of the money or property which is requested or
demanded.
(d) Exemption from disclosure. Any information furnished pursuant to
subparagraphs (A) through (C) of subsection (a) shall be exempt from disclosure
under section 552 of title 5.
(e) Exclusion. This section does not apply to claims, records, or statements
made under the Internal Revenue Code of 1986.
[3] Fed. R. Civ. Pro. 9(b) reads as follows:
Fraud, Mistake, Condition of the Mind. (b) In all
averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated with
particularity. Malice, intent, knowledge, and other condition of mind of a
person may be averred generally.
Fed Rules Civ Proc 9(b)(emphasis added)
[4]E.g., Sanderson v. HCA-The Healthcare Co., 447
F.3d 873, 876-877 (6th Cir.
2006)(“Because the basis for a qui tam action is fraud in the filing of claims
against the government, we have held, as have other circuit courts in False
Claims Act cases, that allegations in the complaint must comply with the
particularity requirements of Federal Rule of Civil Procedure 9(b).”) Gold
v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir.1995), cert. denied, 116
[5]Prior to the Leatherman
decision, [the First] circuit applied a heightened standard for specificity in
pleading on Rule 12(b)(6) motions. See Dartmouth Review v. Dartmouth College,
889 F.2d 13, 16 (1st Cir. 1989) (on a motion to dismiss, "the need [for
specific factual allegations] is perhaps greater where allegations of civil
rights violations lie at the suit's core"); Cuddy v. City of Boston,
765 F. Supp. 775, 777 (D.Mass. 1991) (on a motion to dismiss, the First Circuit
Court of Appeals "has consistently required plaintiffs, at a minimum, to
outline the specific facts on which they rely in civil rights cases"); see
also Glaros v. Perse, 628 F.2d 679, 684 (1st Cir. 1980) (while discovery
may help clarify issues, plaintiff in his complaint must plead specific facts
in support of civil rights violation); Cohen v. Illinois Inst. of Technology,
524 F.2d 818, 827 (7th Cir. 1975), cert. denied, 425 U.S. 943, 48 L. Ed.
2d 187, 96 S. Ct. 1683 (1976) (on a motion to dismiss, plaintiff "is not
entitled to a trial, or even to discovery, merely to find out whether or not
there may be a factual basis for a claim which [he] has not made"). In Leatherman, however, the Court
specifically held that "a federal court may [not] apply a 'heightened
pleading standard'--more stringent than the usual pleading requirements of Rule
8(a) of the Federal Rules of Civil Procedure--in civil rights cases alleging
municipal liability under [section 1983]." Leatherman, 113
[6] To be
publicly disclosed, the information must be conveyed "in a criminal,
civil, or administrative hearing, in a congressional, administrative, or
Government Accounting Office report, hearing, audit, or investigation, or from
the news media." 31 U.S.C. § 3730(e)(4)(A). We have previously held that a
"civil hearing" encompasses the filing of a civil complaint and that
allegations contained in such a complaint are "publicly disclosed"
for purposes of section 3730(e)(4)(A). See Siller, 21 F.3d at 1350. We also
construe "administrative hearing" to include the filing of an
administrative complaint. Where, as in this case, the filing was not under seal
and the document was available upon request to the FAA, the allegations
contained in ISN's agency protest were publicly disclosed.
[7] Putative relator in qui tam action
did not have direct and independent knowledge of fraud to qualify him as
"original source" under 31 USCS § 3730, where relator did not know
"who, what, when, where, and how" of alleged fraud, and his
precomplaint inquiry yielded nothing beyond suspicion or hunch that fraud was
occurring. United States ex rel. Detrick
v Daniel F. Young, Inc., 909 F Supp 1010. (ED Va. 1995)
More must be done to
qualify as original source than to file action; government must be voluntarily
notified beforehand. United States v Bank
of Farmington (1999, CA7 Ill) 166 F3d 853 (criticized in United States ex rel. O'Keeffe v Sverdup Corp. (2001,
DC Mass) 131 F Supp 2d 87, 52 Envt Rep Cas 1966) and (criticized in Minn. Ass'n of Nurse Anesthetists v Allina Health System
Corp. (2002, CA8 Minn) 276 F3d 1032) and (criticized in United States ex rel. Brennan v Devereux Found.
(2003, ED Pa) 2003
To bring qui tam action
based on allegations already in public domain, plaintiff must have played part
in disclosing those allegations. Chen-Cheng
Wang ex rel. United States v FMC Corp. (1992, CA9 Cal) 975 F2d 1412, 92
CDOS 7885, 92 Daily Journal DAR 12858, 7 BNA IER Cas 1256, 38 CCF P 76413 (criticized in United States ex rel. Findley
v FPC-Boron Employees' Club (1997, App DC) 105 F3d 675, 41 CCF P 77042) and
(criticized in United States ex rel.
McKenzie v Bellsouth Telcoms. (1997, CA6
Qui
tam claim brought by former medical director of emergency room must be
dismissed, where substance of claims was previously advanced in Texas
malpractice action, because former director is neither true whistle-blower nor
"original source" since he voluntarily engaged in assisting in public
disclosure of allegations of fraud against medical administration firm long
before attempting to notify government.
Whether or not individual
is original source (31 USCS § 3730(e)(4)) depends on facts and circumstances of
individual case, evaluated in light of central purpose of Act to encourage
persons with knowledge of fraud against government to come forward with their
knowledge. United States ex rel. Barajas
v Northrop Corp. (1993, CA9 Cal) 5 F3d 407, 93 CDOS 6992, 93 Daily Journal
DAR 11911, 39 CCF P 76571, cert den
(1994) 511 US 1033, 128 L Ed 2d 195, 114 S Ct 1543 and request den, on remand (1995, CD Cal) 897 F Supp 1274 and (criticized in United States ex rel. Laird v
Lockheed Martin Eng'g & Sci. Serv. Co. (2003, CA5 Tex) 336 F3d 346, 20
BNA IER Cas 99).
[8] In that
action, Columbia/HCA John Randolph, Inc. negligently failed to properly equip a
crash cart with the most basic medical devices required for such an emergency
cart, including a laryne scope, a face mask for the ambu-bag and a
defibulator. Matheny v. Columbia/HCA
John Randolph, Inc., Case No. CL05000345-00 (Petersburg Cir. Ct. Va., filed
[9] ¶
38 – “Lokesh Vuyyuru, M.D. leaned that certain fraudulent practices were
occurring at
¶ 40 – “Lokesh Vuyyuru, M.D. is [and] as[sic] was an “original source” of the information describing the fraudulent practices under the statute for reporting false claims against the United States within the meaning of 31 U.S.C.A. § 3729 et seq.”
¶ 41 – “Following Lokesh Vuyyuru, M.D.’s objections and disclosures to government authorities, he has been subjected to intolerable, insulting, damaging and discriminatory treatment.”
[10] “Precisely
what it would mean to have voluntarily provided the information to the
government before filing the lawsuit under 31 U.S.C. § 3730(e)(4)(B) is not
something settled in the caselaw or clearly specified in the statute. A qui tam
plaintiff might satisfy this requirement, for example, by notifying the United
States Attorney, the FBI, or other suitable law enforcement office of the
information which is the basis for the action, or by informing the agency or
official responsible for the particular claim in question--in Mathews' case,
the FmHA or Victor Rhea. These are not exclusive methods, but it is clear that
the requirement is not satisfied by informing the government at the time of
filing the action, even in compliance with the requirement that a private
plaintiff must provide the government, at the time of filing, with "a copy
of the complaint and written disclosure of substantially all material evidence
and information the person possesses . . . . "
[11] 37. Nevertheless, defendants continued their practice and conspired to injure the reputation of Relator by injurious and fraudulent manipulation of the peer review process, by suspending medical privileges and by filing complaints with the Virginia Board of Medicine.
38. Lokesh
Vuyyuru, M.D. leaned that certain fraudulent practices were occurring at
39. In and about December 2001, the Chief of Staff from SRMC offered to Relator that if he kept silent with regard to the ongoing Medicare/Medicaid fraud that “They will make you rich” which Relator rejected. Later, another member of the Medical Staff for SRMC threatened Relator that if he did not back off, SRMC would hurt some of Relator’s friends. Eventually, SRMC conspired and did do injury to Relator by bring spurious charges to remove Relator’s hospital privileges and by filing charges against Relator with the Virginia Board of Medicine.
[12] Cited
by the Fourth Circuit in the unpublished opinion of Thad Gray Abrasives, Inc. v. Carborundum Abrasives Co., 1992
[13] 5-year limitation period for Conspiracy under Va. Code § 18.2-500. Detrick v. Panalpina, Inc., 108 F.3d 529, 543 (4th Cir. 1997).