Bachman et al v. Healthcare Liaison Professionals Inc et al

Motion to Dismiss for Failure to State a Claim

N.D. Tex.August 9, 2016

Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS UNITED STATES OF AMERICA ex. § rel. GORDAN GRANT BACHMAN § Plaintiff. § § v. § CIVIL ACTION NO. 3:13-CV-00023-M HEALTHCARE LIAISON PROFESSIONALS, INC., et. al. Defendants. § § § § § § § § AVEIN GROUP INC. AND NIEVA CUA’S MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT AND BRIEF IN SUPPORT Defendants, Nieva L. Cua and Avein Group, Inc., d/b/a Superior Home Health Care, hereby file this Motion to Dismiss and Memorandum in Support. Respectfully submitted, By: /s/William Chu William Chu Texas State Bar No. 04241000 The Law Offices of William Chu 4455 LBJ Freeway, Suite 909 Dallas, Texas 75244 Telephone: (972) 392-9888 Facsimile: (972) 392-9889 wmchulaw@aol.com Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 1 of 23 PageID 685 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 2 TABLE OF CONTENTS TABLE OF AUTHORITIES ........................................................................................... 3, 4 I. INTRODUCTION ............................................................................................................ 5 II. QUI TAM ACTIONS - MAINTAINING STANDING AND SURVIVING PROCEDURAL RULES WHEN FILING AN AMENDED COMPLAINT WITHOUT A SEAL ................................................................................................................................. 10 III. RELATOR’S CLAIMS AGAINST CUA AND AVEIN GROUP, INC., FAIL TO MEET THE 9(B) PLEADING STANDARDS OF THE FALSE CLAIMS ACT ............ 15 IV. RELATOR’S CLAIMS AGAINST CUA AND AVEIN FAIL TO MEET THE PLEADING REQUIREMENTS OF RULE 8 ................................................................... 17 V. RELATOR’S CLAIMS AGAINST CUA AND AVEIN FAIL TO ESTABLISH THE “KNOWINGLY” ELEMENT OF THE FALSE CLAIMS ACT ...................................... 19 VI. CONCLUSION ........................................................................................................... 22 Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 2 of 23 PageID 686 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 3 TABLE OF AUTHORITIES Cases Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009) ..................................................................... 22 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007). ................................ 18 Hoyt v. Saxon Mortg. Servs., No. 3:15-CV-3693-G, 2016 U.S. Dist. LEXIS 92015 * 19 (N.D. Tex. 2016) ............................................................................................................ 18 In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007). ................... 18 Rockwell Int'l Corp. v. United States, 549 U.S. 457, 463, 127 S. Ct. 1397, 1403, 167 L. Ed. 2d 190 (2007) .......................................................................................................... 14 U.S. ex rel Wilson v. Bristol Myers Squibb, Inc., No. 06-cv-12195, 2011 U.S. Dist. LEXIS 63714, 2011 WL 2462469 (D. Mass. 2011). ............................................... 10, 12 U.S. ex. Rel. Longhi v. Lithiu Power Techs., 575 F.3d 458, 467 (5th Cir. 2009). ............. 20 United States ex rel. Bennett v. Medtronic, Inc., 747, 780 F. Supp. 2d 745 (S.D. Tex. 2010) ................................................................................................................... 15,16, 21 United States ex rel. Keshner v. Immediate Home Care, Inc., No. 06-CV-01067 (FB) (VPP), 2016 U.S. Dist. LEXIS 82436 (E.D.N.Y. 2016) ............................................... 13 United States ex rel. Kolchinsky v. Moody's Corp., No. 12cv1399, 2016 U.S. Dist. LEXIS 13531 (S.D.N.Y. 2016). .................................................................................... 10 United States ex. Rel. Farmer v. City of Houston, 523 F.3d 333, 338 (5th Cir. 2008) ...... 20 Williams v. WMX Techs., Inc., 112 F.3d 175, 179 (5th Cir. 1997) ............................ 15, 21 Statutes 31 U.S.C. § 3730(e)(4)(B) ................................................................................................. 14 31 USCS § 3729 ............................................................................................................. 7,10 31 USCS § 3730 (b)(1-5) ................................................................................................... 10 31 USCS § 3730 (b)(2) ...................................................................................................... 10 Fed. R. Civ. P. 8 .......................................................................................................... 17, 18 Fed. R. Civ. P. 12(b)(6) .......................................................................................... 17,18, 22 USCS Fed Rules Civ. Proc R 9(b) ............................................................. 15, 16, 17, 20, 22 Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 3 of 23 PageID 687 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 4 Other Authorities Amanda Robert, Qui Tam Provisions of False Claims Act Can Lead to Meritless Cases, Attorney Says, Legal Newsline, http://legalnewsline.com/stories/510517120-qui-tam- provision-of-false-claims-act-can-lead-to-meritless-cases-attorney-says (last visited Aug. 8, 2016) ................................................................................................................... 9 Kevin Krause, Seven North Texas Health Care Workers Indicted for Medicare Fraud as Part of the Nation’s Largest Home Health Care Swindle, http://crimeblog.dallasnews.com/2015/06/seven-north-texas-health-care-workers- indicted-for-medicare-fraud-as-part-of-nations-largest-home-health-care-swindle.html/ (last visited Aug. 8, 2016) ............................................................................................... 6 Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 4 of 23 PageID 688 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 5 I. INTRODUCTION On May 4, 2016, Plaintiff Gordan Grant Bachman (hereafter “Plaintiff” or “Relator”) expanded upon a federal qui tam action previously brought against numerous home health care agencies, doctors and individuals accused of violating federal laws in the billing of Medicare pursuant to the Federal False Claims Act. (Doc. 31). The Second Amended Complaint (hereafter “Second Amended Complaint”) for this whistleblower-inspired qui tam action was filed on May 4, 2016-three months after an order was issued on February 22, 2016, to unseal the same civil case. (Order to Unseal - Doc. 29). The Second Amended Complaint impermissibly extended the boundaries of federal qui tam actions and resulted in what has become nothing more than a massive fishing expedition to use the False Claims Act to punish health agencies that unwittingly and unknowingly became the victims of fraudulent doctors and business entities that were previously charged and indicted in a federal criminal indictment issued on or around June of 2015. In the new Second Amended Complaint, which was filed after the government had already unsealed the Relator’s original qui tam action and the First Amended Complaint, Defendants Avein Group, Inc., and Avein’s founder, Nieva L. Cua (hereafter “Defendants”), are subjected to numerous accusations that fail to legally and factually survive given the jurisdictional and pleading requirements of the Federal False Claims Act and the general pleading requirements outlined in the Federal Rules of Civil Procedure. This civil action dates back as far as January 1, 2013, when the original Qui Tam Complaint was filed by the Relator (“whistleblower”). (Doc. 1- Original Complaint). The Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 5 of 23 PageID 689 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 6 original complaint and First Amended Complaint remained under seal until an order lifting the seal was issued on February 22, 2016. (Order Lifting Seal - Doc. 29). The inclusion of more specific allegations against Nieva Cua and Avein Group in the Second Amended Complaint comes after three long years in which most of the facts of the original case had already been disclosed through a federal indictment filed against other co-defendants in this civil action, including Noble U. Ezukanma, Myrna S. Parcon, Lita S. Dejesus, Ransome Etindi, Oliva Padilla and Ben Gaines. The original criminal indictment filed on or around June 10, 2015, was unsealed the same month offering the Relator or (“whistleblower”) and the general public full disclosure about the parties and details related to both the criminal and civil investigations, including home health care agencies, A Good Homehealth (“A Good”) and Essence Home Health. Defendant Cua and her agency, Avein Group, were not part of the indictment filed a year ago, and Defendant Cua remained unaware of her inclusion in the civil suit until the Second Amended Complaint was served this year after the seal had lifted. After the filing of the initial indictment against doctors involved in the home health care business in June 2015, the alleged facts and the names of the main institutions indicted became public knowledge when the Dallas Morning News published an article on the alleged scheme. See Kevin Krause, Seven North Texas Health Care Workers Indicted for Medicare Fraud as Part of the Nation’s Largest Home Health Care Swindle, http://crimeblog.dallasnews.com/2015/06/seven-north-texas-health-care-workers- indicted-for-medicare-fraud-as-part-of-nations-largest-home-health-care-swindle.html/ (last visited Aug. 8, 2016). The article notably discussed the roles of the following defendants-Dr. Noble U. Ezukanma; Myrna S. Parcon, Lita S. Dejesus; Oliva A. Padilla; Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 6 of 23 PageID 690 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 7 and Ben P. Gaines. The Dallas Morning News article also offered enough details to ensure facts serving as the basis for this qui tam action would become public knowledge well before the Second Amended Complaint was filed without the benefit of a resealing of the complaint. Id. In or around November 23, 2015, the Relator’s original qui tam action was amended, and the Court issued an order unsealing the Complaints on February 22, 2016. Shortly thereafter, Plaintiff Gordan Grant Bachman filed a Second Amended Complaint and included numerous federal civil claims against Defendant, Avein Group, and its owner Nieva L. Cua. The Second Amended Complaint attempted to more casually link Cua to the signing of various forged forms. Yet, the lack of factual support cited in the Second Amended Complaint suggests this qui tam action is nothing more than a massive fishing expedition against home health agencies using the power of the Federal False Claims Act, in particular Sections 3730 and 3729. Specifically, the Second Amended Civil complaint alleges the following False Claim Act violations against Cua and Avein: 1) billing Medicare for services rendered knowing that patients for which billings were submitted had been improperly certified as being ‘homebound’ by Defendants Ezukanma and Etindi: 2) billing Medicare for services rendered knowing that patients for which billings were submitted had been improperly certified as being homebound because Conditions of Participation forms had been signed by Defendant Cua and other nurses and employees of Defendants USPHV, AGood, and Essence; 3) the alleged Forging of Form 485 Certification forms by Defendants Parcon and Cua and other nurses and employees of Defendants USPHV, AGood and Essence; 4) billing Medicare for medically unnecessary services; 5) and the alleged Signing of Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 7 of 23 PageID 691 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 8 Condition of Participation Forms by Cua and other nurses and other employees of USPHV, AGood and Essence when the forms should have been signed by physicians instead. Relator alleged all of these claims against Cua and Avein without addressing obvious deficiencies in the Complaint against both Defendants, including the fact that Cua has never been an active employee or agent of USPHV, AGood, or Essence. Further, any allegations of employment by Cua under the umbrella of USPHV are likely to be based on the fraudulent activity of other Defendants who have already been implicated in a federal criminal action involving the same claims at bar in this civil matter. Furthermore, Relator offers the Court and Defendants no evidence of records, documents, or testimony that would support Relator’s claims that Cua and Avein knew or consented to Defendants Ezukanma and Etindi submitting wrongful billings or to knowingly and improperly certifying patients since both of the accused doctors worked outside the parameters of Cua’s business. The Complaint also fails to elaborate or even generically show the Relator’s basis for pinning the forging of forms on Cua and Avein. This is particularly notable since the Relator claims the documented forgeries are obvious and laughable on the face of the various forms, but the Relator’s Second Amended Complaint points to no evidence that would suggest or support the allegation that Cua, Avein, or any employee or agent of Avein, is responsible for the alleged forgeries. In fact, with so many Defendants involved and a lack of clarity on where the signatures came from, the Relator appears to be caught up in making broad-sweeping generalizations and asserting blanket allegations to simply stockpile more Defendants into his Qui Tam action without factual support. Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 8 of 23 PageID 692 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 9 The claims brought by the Relator also name Defendants Cua and Avein in count two of the Complaint, which essentially accuses numerous home health agencies and doctors of participating in a conspiracy with other Defendants to defraud Medicare by submitting False Claims for physician visits for patients improperly certified as homebound. The Relator claims two other Defendants in the conspiracy, Doctors Ezukanma and Etindi, allowed employees of USPHV, including Defendants Parcon, Cua and unnamed others, to forge their signatures on Form 485’s and or condition of participation forms regardless of whether the doctors actually saw the patients. Again, the Relator here asserts strong claims against Cua and Avein while disregarding the simple fact that an action under the False Claim Act cannot simply survive by weaving a web around every health care agency, business or individual working within a particular part of the health care industry. In fact, the abuse of qui tam actions due to the vast amount of monetary rewards associated with these claims makes the wrongful survival of Qui Tam actions a subject of much debate and derision. See generally Amanda Robert, Qui Tam Provisions of False Claims Act Can Lead to Meritless Cases, Attorney Says, Legal Newsline, http://legalnewsline.com/stories/510517120-qui-tam-provision-of-false-claims-act-can- lead-to-meritless-cases-attorney-says (last visited Aug. 6, 2016). Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 9 of 23 PageID 693 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 10 II. QUI TAM ACTIONS - MAINTAINING STANDING AND SURVIVING PROCEDURAL RULES WHEN FILING AN AMENDED COMPLAINT WITHOUT A SEAL A. Qui Tam Actions: Filing Under Seal and the 60-day Rule Through a qui tam action, a private person is permitted to individually instigate a civil action for a violation of 31 USCS § 3729, which prohibits the filing of false claims with the U.S. government. See 31 USCS § 3730 (b)(1-5). Still, for a relator (or whistleblower) to suffice in a qui tam action alleging false claims made to the U.S. government, the Relator is required to bring the action in the name of the government and to serve a copy of the complaint and all written disclosure of material evidence and information that the person possesses to the U.S. government. 31 USCS § 3730 (b)(2). Once received, this information shall remain for 60 days under seal and not served on any Defendant until the Court orders. 31 USCS § 3730 (b)(2). Failure to offer a 60-day investigation period and a resealing of the Complaint when an Amended Complaint has been filed is another issue for the Court and a threat to Relator’s ability to maintain this False Claim Action. This is particularly true when amendments to the Complaint run the risk of prejudicing a Defendant or Defendants “by adding new and substantially different allegations of fraud.” See generally United States ex rel. Kolchinsky v. Moody's Corp., No. 12cv1399, 2016 U.S. Dist. LEXIS 13531 (S.D.N.Y. 2016) (citing U.S. ex rel Wilson v. Bristol Myers Squibb, Inc., No. 06-cv- 12195, 2011 U.S. Dist. LEXIS 63714, 2011 WL 2462469 (D. Mass. 2011)). The purpose of the 60-day waiting period is to allow the government an opportunity to investigate all substantive claims to decide if the government wishes to intervene. Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 10 of 23 PageID 694 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 11 The timeline of Relator’s Second Amended Complaint indicates that substantial claims specific to Nieva Cua’s alleged involvement in the forging of doctor signatures and more specific allegations against Cua in relation to the conspiracy claims were added into the Complaint between the First Amended Complaint and the Second Amended Complaint. Convoluting the issue even further is the fact that the Relator filed the Second Amended Complaint after the seal lifted and no investigation occurred pursuant to the 60- day rule. In the First Amended Complaint, Relator generally claims that Defendant Etindi signed Form 485 certifications “knowing that the patients involved were not homebound.” (Doc. 27, ¶ 62). The same paragraph generally stated that Relator “has also observed that numerous Form 485s were forged with Dr. Ezukanma’s signature by Merna Parcon and others under her direction and control.” Id. In contrast, the First Amended Complaint filed under seal did not specifically discuss Cua’s alleged involvement in the forging of 485s in particular, which is a substantial allegation that surfaced vaguely against Cua in the Second Amended Complaint. Relator accuses Cua in the second amended complaint of forging Form 485 certification forms alongside Parcon. (Doc. 31-Second Amended Complaint, p. 85, ¶ 8). This is the first specific mention of Cua as one of the “485” forgers, and it’s a claim that should have been filed under seal for investigation purposes. The reason for this is evident: The First Amended Complaint filed in November 2015 makes blanket allegations against Parcon and others in relation to 485 forgeries (Doc. 27, p. 53, ¶ 7). It’s not until the Second Amended Complaint that Relator specifically pinpoints Cua as responsible for forgeries. At this point, the case was already unsealed and these were substantial additions to the Complaint that warranted a resealing of the case to ensure the Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 11 of 23 PageID 695 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 12 government would have time to review specific forgery and conspiracy allegations against Cua alone. See U.S. ex rel Wilson v. Bristol Myers Squibb, Inc., No. 06-cv-12195, 2011 U.S. Dist. LEXIS 63714, 2011 WL 2462469 (D. Mass. 2011) (held a resealing of a complaint may be required if an amended complaint includes new and substantially different allegations of fraud). The Second Amended Complaint also specifically names individual Defendants connected to the alleged conspiracy, including USPHV, Parcon, Cua Ezukanma, Etindi, UNEC and/or MedPro. (Doc 31, ¶149). In contrast, the First Amended Complaint filed under seal did not specifically discuss Cua’s involvement in a civil conspiracy and only vaguely touched upon the issue as relating to all Defendants. (Doc. 27, ¶¶ 120-121). Since both of these adjustments and changes are critical to the allegations against Defendants Cua and Avein, the failure to reseal the Complaint before the filing of the Second Amended Complaint is outside the boundaries of a False Claims Act qui tam action and supports either a dismissal of all claims against Defendants Cua and Avein, or at the minimum the resealing of the Complaint for 60 days to allow a government review of any new information that Relator relied upon to file his Second Amended Complaint. B. Relator’s Pleading Fails to Show Relator Possessed the Necessary “knowledge” to Make False Claims Accusations against Cua or Avein. The False Claims Act (“FCA”) is designed specifically to weed out Relator claims brought simply for the purpose of piling on counts or adding Defendants that the Relator may not have specific knowledge about or situations where the Relator is not the original source as to the Defendant’s involvement. For this reason, the False Claims Act forces courts to Dismiss any “action in which the relator relied on publicly disclosed allegations, but was not the original source of those allegations.” See generally United States ex rel. Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 12 of 23 PageID 696 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 13 Keshner v. Immediate Home Care, Inc., No. 06-CV-01067 (FB) (VPP), 2016 U.S. Dist. LEXIS 82436 (E.D.N.Y. 2016). To make a determination on public disclosures, the Court will have to determine whether the same actions or claims were publicly disclosed in the following: (i) “a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party; (ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) 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.” Id. *4. In the case at bar, the Second Amended Complaint came after the unsealing of the original Complaint and the First Amended Complaint. It also arrived a full year after various allegations against other Defendants appeared in the Dallas Morning News. Yet, when filing his Second Amended Complaint, the Relator failed to put it under seal to investigate any substantial amendments to the Complaint itself involving Cua or Avein’s alleged involvement in the 485 form signings or the conspiracy claims. This suggests that the more specific allegations against Cua and Avein came well after the original Relator brought forth his initial claims and well after this case was readily available to the public with the seal lifted a few months prior to the filing of the Second Amended Complaint. (Doc. 29-Order to Unseal). The Court must determine if all of the final allegations regarding 485 forgeries and any new details about Cua and Avein not included in the original sealed Complaint or the First Amended Complaint were “originally sourced” Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 13 of 23 PageID 697 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 14 from the Relator himself, or added in after the Seal was pulled and prior to the filing of the Second Amended Complaint. Since Relator did not include more specific allegations against Cua and Avein until the seal was already lifted and did not reseal the case to allow the government time to investigate these more pointed allegations, Defendants argue that the Relator previously lacked this information in his First Amended Complaint; and is therefore, highly unlikely to be the original source of all claims made against Cua and Avein in the Second Amended Complaint since those claims came after the seal had already been lifted. If Relator is the original source of the claims against Cua and Avein, the Relator fails to offer proof or stipulate how Relator obtained this information. An individual source is one that 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.” Rockwell Int'l Corp. v. United States, 549 U.S. 457, 463, 127 S. Ct. 1397, 1403, 167 L. Ed. 2d 190 (2007) (citing 31 U.S.C. § 3730(e)(4)(B)). Based on the timeline at bar, the Relator’s specific claims of 485 forgery or conspiracy against Cua and Avein were not fully fleshed out until the Second Amended Complaint, which did not have the benefit of a 60-day seal for further investigation. Therefore, it is unlikely this information was provided to the government before the Second Amended filing, and this timeline raises the question as to whether Relator utilized third-party sources or other information uncovered during the process of his Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 14 of 23 PageID 698 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 15 investigation to weave in more specific allegations against Nieva and Cua after the Court’s seal was pulled in February 2016. For the above stated reasons, it is appropriate for the Court to distinguish this case from valid Qui Tam actions based on a Relator’s independent and proven knowledge and summarily dismiss the case for failing to meet the most basic requirements of filing such an action. III. RELATOR’S CLAIMS AGAINST CUA AND AVEIN FAIL TO MEET THE 9(B) PLEADING STANDARD OF THE FALSE CLAIMS ACT Plaintiff-Relator fails to meet the pleading standards of Federal Rule of Civil Procedure 9(b) which requires when pleading fraud or mistake for a party to “state with particularity the circumstances constituting fraud or mistake.” USCS Fed Rules Civ. Proc R 9(b). This “particularity” requirement of Rule 9(b) is baked into the False Claims Act, which makes an action not supported in some fact and evidence a candidate for automatic dismissal. United States ex rel. Bennett v. Medtronic, Inc., 747, 780 F. Supp. 2d 745 (S.D. Tex. 2010). In the context of Qui Tam actions under the False Claims Act, pleading with “particularity” means at bare minimum, a Plaintiff should “set forth the who, what, when, where, and how of the alleged fraud.” Williams v. WMX Techs., Inc., 112 F.3d 175, 179 (5th Cir. 1997)). Further, the pleader must “specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.” Id. at 177. In another healthcare case involving allegations of false claims made in the context of medical billings and reimbursements and allegations of fraud against physician and healthcare employees, a U.S. District Court held that the failure to provide a “representative sample” or an Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 15 of 23 PageID 699 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 16 “instance of submission” to support claims that a party submitted a false claim warrants a dismissal of the False Claims action. United States ex rel. Bennett v. Medtronic, Inc., 747, 769 F. Supp. 2d 745 (S.D. Tex. 2010) (ruled a representative sample of billings should be cited or referenced to support claims in the healthcare context). A. Allegations Against Cua and Avein Fail for Lack of Particularity. Despite the particularity standard, Relator’s Second Amended Complaint and its numerous allegations against Cua and Avein could not be more vague or outside the bounds of Rule 9(b). Relator accuses Cua and Avein of billing Medicare for services knowing that the patients for whom those billings were submitted had been improperly certified as being homebound. Yet, nowhere in the Complaint does the Relator offer a sampling of the bills or records containing forgeries, nor has he alleged what parties signed specific bills or documents. Further, he has failed to specify what false statements were made on specific documents, while also failing to show who had exclusive control of any records at issue and who made the actual claims to Medicare. Further, just as the Relator in United States ex. Rel. Bennett v. Medtronic, Inc., failed to meet the 9(b) pleading requirements by composing at the very minimum a representative sample of the bills or documents in question, the Relator in this case fails to reference what documents, billings or specific signatures they are relying upon when accusing Defendants Avein and Cua of forgery, the submission of false claims, and civil conspiracy. There is no need for these vague assertions, and they do nothing but prove the Relator is depending on trite allegations, innuendo, and cursory statements when more specificity is required in the context of the False Claims Act. Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 16 of 23 PageID 700 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 17 The remaining case against Cua and Avein is weak for the following reasons: There are no specific allegations or samples of bills and medical records referenced to support the allegations that Defendants billed Medicare knowing patients were improperly certified or that Defendants signed Conditions of Certificate forms and 485s with knowledge of the fraud, or that Cua participated in the forging of signatures on forms submitted to Medicare. Relator also fails to answer these basic questions: 1) Where did these allege forgings occur? 2) How did Relator know Cua, and how did he learn of the alleged forgings? 3) When did the above actions occur - on what dates, under what context and what sampling of documents does Relator rely upon to bring forth these False Claims allegations and conspiracy claims against Cua and Neiva. At the very least, Relator has a duty to disclose the basic facts that he is relying upon since no complaint required to satisfy 9(b) pleading requirements can survive on mere conclusory statements and allegations. For the foregoing reasons, Defendant moves to dismiss the entire complaint for failing to comply with the False Claim Act’s 9(b) pleading standards. IV. RELATOR’S CLAIMS AGAINST CUA AND AVEIN FAIL TO MEET THE PLEADING REQUIREMENTS OF RULE 8 Relator fails to meet the basic pleading requirements of Federal Rule of Civil Procedure 8. Failing to meet this standard negates Relator’s ability to survive a 12(b)(6) motion for failure to state a claim for which relief can be granted. Fed. R. Civ. P. 12(b)(6). Under Rule 8, a Plaintiff in a federal qui tam action is required to proffer a short and plain statement of the allegations. Fed. R. Civ. P. 8. Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 17 of 23 PageID 701 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 18 A court is required to “to take all well-pleaded factual allegations” as true under a Rule 12(b)(6) analysis. Hoyt v. Saxon Mortg. Servs., No. 3:15-CV-3693-G, 2016 U.S. Dist. LEXIS 92015 * 19 (N.D. Tex. 2016) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007)). Still, it is not enough to have well-pleaded allegations, the evolution of Rule 12(b)(6) motions has constructed a precept in which a Plaintiff must “plead enough facts to state a claim to relief that is plausible on its face.” In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)), cert. denied, 552 U.S. 1182, 128 S. Ct. 1231, 170 L. Ed. 2d 63 (2008)). Further, factual allegations plead by Plaintiff must rise above the speculative level. See In re Katrina Canal, 495 F.3d at 205 (quoting Twombly, 550 U.S. at 555) (internal quotation marks omitted). The Relator in the case at bar has failed to meet even the most basic pleading requirements of Rule 8 since all claims against Cua and Avein lack simple supporting facts such as who, what, when, where, why and how. Further, the pleaded allegations include mere speculation and conclusory statements with no factual support to make each allegation plausible on its face. The Plaintiff’s pleading also fails to effectively establish the relationships between Cua, Avein and the myriad of other companies and individuals cited as Defendants in this case. Without facts supporting the relationships between Defendants, the conspiracy claims fall flat. Further, all of the False Claim Act claims against Cua and Avein remain vague and lack sufficient detail to rise above the speculative level. It’s Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 18 of 23 PageID 702 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 19 unknown when the alleged forgeries or false claims were made, who made them and what sampling of documents or evidence the Relator relied upon in pleading these various allegations. Further, Relator asserts that all allegations trace back to Relator as the original source, but fails to explain how Relator knew Cua and how he would have obtained information about matters associated with Avein Group. In fact, no clear relationship is established between the Relator, Cua and Avein Group, which shows a lack of personal knowledge on the Relator’s part and a clear absence of relevant supporting facts. V. RELATOR’S CLAIMS AGAINST CUA AND AVEIN FAIL TO ESTABLISH THE “KNOWINGLY” ELEMENT OF THE FALSE CLAIMS ACT Relator claims Defendants Cua, and Avein (Superior Home Health) committed all actions alleged by the Plaintiff knowingly, yet cites no specific facts that establish the required mental state of maintaining a False Claims Act case. Specifically, Relator claims Cua “submitted fraudulent Medicare claims knowing that the Form 485s authorizing home health care were not in compliance with Medicare Guidelines.” (Doc 31, p. 26, ¶56). Relator further alleged that Superior Home Health ( or Avein) “knew that Defendants Etindi and/or Ezukanma had certified their patients as home bound knowing that Defendants Etindi and/or Ezukanma had never seen the patient” and submitted the claims to Medicare. However, Relator establishes no basis for concluding that either Cua, or her agency Avein (Super Home Health), had knowledge of the fraud reportedly perpetuated by Doctors Etindi and/or Ezukanma. Further, these doctors did not work for Avein or Superior Home Health and Relator fails to establish Cua or Avein’s relationship to Etindi Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 19 of 23 PageID 703 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 20 and Ezukanama or plead facts that would push these allegations above the speculative level. Relator also fails to support his basis for finding that Defendant Cua forged Form 485 Certification Forms or Conditions of Participation forms. The FCA requires that a Plaintiff must show more than “mere negligence or gross negligence.” United States ex. Rel. Farmer v. City of Houston, 523 F.3d 333, 338 (5th Cir. 2008). Further when pleading under the False Claims Act, Relators must prove a Defendant did the following: i. knowingly presented, or caused to be presented to the United States Government, a false or fraudulent claim for payment or approval; ii. knowingly made, used or caused to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government; iii. and knowingly made, used or caused 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 U.S. government. Not only are False Claims Act actions subjected to the heightened pleading Standards of Rule 9(b), it is well established that a Relator must show: 1) a false statement or fraudulent course of conduct, 2) made or carried out with the requisite scienter, 3) that was material, and 4) that caused the government to pay out money or to forfeit monies due. U.S. ex. Rel. Longhi v. Lithiu Power Techs., 575 F.3d 458, 467 (5th Cir. 2009). With respect to the requirements of the False Claims Act, Relator failed to state facts or reference simple documents, dates and times that would show Defendants, Avein Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 20 of 23 PageID 704 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 21 and Cua, had knowledge of the alleged forgeries or fraudulent statements submitted to Medicare. This lack of evidence is particularly concerning given the fact that numerous Defendants and a myriad of companies are named as Defendants, and the Complaint fails to pinpoint exactly how Cua and Avein are valid Defendants with respect to the False Claims Act and Conspiracy claims. In the spirit of United States ex. Rel. Bennett v. Medtronic, Inc., a failure to reference specific signatures, documents or a sampling of documents used for the purpose of establishing the element of “knowingness” in a medical claim context is an indication that Relator is unable to prove or support all of the causes of action brought against Plaintiff under the Federal False Claims Act. It’s also an indication that the pleading itself is unsustainable on its face. Relator’s Second Count against Cua and Avein for conspiracy under the False Claims Act fails for the same reason. Relator by his own admission claims the various “Defendants combined, conspired and agreed together to defraud the United States by knowingly submitting False Claims and billing Medicare for the purpose of getting the False Claims paid…”(Doc. 31, p. 88, ¶139). Yet, Relator provides no factual details to establish the element of “knowingness” in relation to the False Claims and fails to provide the government with even the most basic of facts that would show how the alleged conspirators are connected, how they formed their conspiracy and what overt acts each committed and the time and place of these alleged acts to establish all elements of a conspiracy under the False Claims Act. A sufficient False Claim Act claim requires the showing of “who, what, when, where and how” of the claim. Williams v. WMX Techs., Inc., 112 F.3d 175, 179 (5th Cir. Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 21 of 23 PageID 705 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 22 1997)). And even at the most basic level, a Court is not required to “accept as true a legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). Relator has positioned Cua and Avein as Defendants based on mere conclusory statements and on the grounds that Relator has personal knowledge, without providing even an indicia of how the alleged personal knowledge was obtained or without pleading facts that support a connection between the Relator and the various parties. Mere conclusions without facts in a False Claims Act Complaint will not suffice without Relator pleading with particularity as to what knowledge and details he possesses to bring False Claims Act and conspiracy counts against Avein Group and Cua. VI. CONCLUSION Relator has brought a False Claims action against Cua and Avein, but has failed to satisfy all of the necessary pleading requirements and elements of maintaining a successful False Claims Act case. In fact, Relator relies on mere conclusions without facts and illusory evidence, while failing to proffer the details and facts expected under Federal Rules of Civil Procedure 9(b) and 8. For the foregoing reasons, the Relator’s Second Amended Complaint should be dismissed pursuant to Fed. R. Civ. P. 12(b)(6). Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 22 of 23 PageID 706 Avein Group Inc. and Nieva Cua’s Motion to Dismiss Plaintiff’s Second Amended Complaint 23 Respectfully submitted, By: /s/William Chu William Chu Texas State Bar No. 04241000 The Law Offices of William Chu 4455 LBJ Freeway, Suite 909 Dallas, Texas 75244 Telephone: (972) 392-9888 Facsimile: (972) 392-9889 wmchulaw@aol.com CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing was served on all counsel and parties of record who have appeared herein via the Court’s ECF filing system and/or all the Federal Rules of Civil Procedure on all counsel of record on August 9, 2016. By: /s/ William Chu William Chu Case 3:13-cv-00023-M Document 114 Filed 08/09/16 Page 23 of 23 PageID 707