John Doe And Jane Doe v. Ahs Hospital Corp. et al

BRIEF in Opposition

D.N.J.September 6, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA ex reI. PAUL TAHLOR, M.D. , et ano., Plaintiffs, -against- AHS HOSPITAL CORPORATION, et al., Defendants. Civil Action No. 2:08-CV-02042-WJM -MF RELATORS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' MOTION PURSUANT TO FED. R. CIV. 1'. 41(b) TO DISMISS TH E THIRD AMENDED COMPLAINT FOR SUPPOSED LACK OF PROSE CUTION Of counsel and on the brief: Paul B. Brickfield, Esq. BRICKFIELD & DONAHUE 70 Grand Avenue River Edge, New Jersey 07661 Local Counsel for Relators Timothy J. McInnis, Esq. LAW OFF ICE OF TIMOTHY J. MciNNIS 521 Fifth Avenue, Suite 1700 New York, New York 10175 Attorne y for Relators Pro Hac Vice Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 1 of 10 PageID: 2234 TABLE OF AUTHO RITIES . OVERVIEW . ARGUMENT. CONCLUSION TABLE OF CONTENTS 2 6 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 2 of 10 PageID: 2235 TABLE OF AUTHORITIES CASES CITED PAGES Adams v. Trs. ofthe N.J. Brewery Emps. ' Pension Tr. Fund, 29 F.3d 863 (3d Cir. 1994) 2,3,4 Donnelly v. Johns-Manville Sales Corp ., 677 F.2d 339 (3d Cir. 1982) 2 Hewlett v. Davis, 844 F.2d 109 (3d Cir. 1988) 6 Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992) 6 Knoll v. City of Allentown, 707 F.3d 406 (3d Cir. 2013) 6 Link v. Wabash R. Co., 370 U.S. 626 (1962) . 5 Mindek v. Rigatti, 964 F.2d 1369, 1372 (3d Cir. 1992) 5 National Hockey League v. Metro Hockey Club, 427 U.S. 639 (1 976) 3 Opta Sys., LLC v. Daewoo Elecs. Am. , 483 F. Supp. 2d 400, 403 (D.N.J. 2007) 5 Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863 (3d Cir. 1984) 2,3,4,5 Roberts v. Ferman, 826 F.3d 117 (3d Cir. 2016) 6 Scarborough v. Eubanks, 747 F.2d 871 (1984) 2 United States v. Richardson, 505 F. App'x 194, 195 (3d Cir. 2012) . 5 Ware v. Rodale Press, Inc., 322 FJd 218 (3d Cir. 2003) 6 RULES CITED Fed. R. Civ. P. 12(b)(6) Fed. R. Civ. P. 41(b) . II I , 5 2 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 3 of 10 PageID: 2236 Plaintiffs-Relators Paul Tahlor, M.D. ("Tahlor), and Margaret Marino, R.N. ("Marino") (together, "Relators") respectfully submit this memorandum of law in opposition to the motion of Defendant Summit Medical Group ("SMG") made pursuant to Fed. R. Civ. P. 41(b) to dismiss the Third Amended Qui Tam Complaint ("TAC") for supposed failure to prosecute this action.' As shown below, and in the accompanying certification of Timothy 1. Mcinnis, Esq., there is no basis in law or fact for Defendants' motion and it should be denied. OVE RVIEW The facts relevant to this opposition are set out in the Mcinnis certification. As can be seen therein, Relators have been active ly prosecuting this action since they commenced it in 2008. Historica lly, Relators successfully helped obtain a nearly $10 million dollar settlement with one of the originally-named defendants. They have successfully withstood multiple motions to dismiss this action under Fed. R. Civ. P. 12(b)(6). Relators have met every motion, party conference and discovery dead line set by the Court and have attended every in person court conference and participated in every judicial telephone conference mandated by the Court. Relators have struggled mightily to obtain vast amounts of third party document discovery. As a result, Relators have incurred substantial legal fees and litigation costs and expenses, including the costs of retaining three different experts (billing/coding, IT and statistical methods). Currently, Relators are on the verge of resolving all allegations against one of the remaining five defendants (namely, EMA). The two parties are merely awai ting the Government's required approval of their proposed settlement. The Relators will also soon I Defendants Emergency Medical Associates of New Jersey ("EMA"), Hospitali sts Assoc iates ("HA") , David Schreck, M.D. (Schreck) and Samir Patel, M.D. (" Patel"), (collectively with SMG, " Defendants") have filed letters asking to join SMG's motion . Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 4 of 10 PageID: 2237 receive long sought after medical records from a non-party (namely, AHS Hospital Corporation). And, Relators and are attempting to negotiate a pretrial schedule with the Defendants that will allow the parties to review these records and proceed to summary judgment and/or trial. In short, Relators have repeatedly evidenced their strong desire to prosecute this action to its conclusion. They have never indicated by their words or conduct any intention to do otherwise. ARGUMENT Defendants have failed to meet Rule 41(b)' s standard for dismissal for want of prosecution. Rule 41(b) provide s, in pertinent part, "If the plainti ff fails to prosecute ... a defendant may move to dismiss the action or any claim against it." Fed. R. Civ. P. 41(b). As the Court of Appeals for the Third Circuit has noted, granting dismissal with prejudice under Rule 41(b) is a rarely to be used sanction and "is only appropriate in limited circumstances." Adams v. Trs. of the N.J Brewery Emps. ' Pens ion Tr. Fund, 29 F.3d 863, 870 (3d Cir. 1994). Even in a "close case," which this is not, "doubts should be resolved in favor of reaching a decision on the merits." Adams v. Trs. ofthe N.J Brewery Emps.' Pension Tr. Fund, 29 FJd 863,878 (3d Cir. 1994) (citing and quoting Scarborough, 747 F.2d at 878.); see also Poulis v. State Farm Fire & Cas. Co. , 747 F.2d 863, 866 (3d Cir. 1984) (Observing that "dismissal is a drastic sanction and should be reserved for those cases where there is a clear record of delay or contumacious conduct by the plaintiff.") (citing and quoting Donnelly v. Joh ns-Manville Sales Corp ., 677 F.2d 339, 342 (3d Cir. 1982)). To determine whether a particular case falls within the rare and limited circumstances warranting dismissal under Rule 41(b), the court must apply the six point balancing test set out 2 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 5 of 10 PageID: 2238 in Poulis v. State Farm Fire and Cas. Co., 747 F.2d 863 (3d Cir. 1984). Those six factors are: (I) the extent of the plainti ffs personal responsibility; (2) the prejudice to the defendant caused by the failure of the plaintiff to meet deadlines; (3) the history of dilatoriness; (4) whether the plaintiff's conduct was willful or in bad faith; (5) the effectivene ss of sanctions other than dismissal; and (6) the merito riousness of the dismissed claims. Id. at 868. The Third Circuit, in Adams v. Trs. ofthe N.J. Brewery Emps. ' Pension Tr. Fund, 29 FJ d 863, 878 (3d Cir. 1994), has further given meaning to each of the six Poulis factors in a way that is intended to limit Rule 41(b) dismissals "to assure that the ' extreme' sanction of dismissal . . . is reserved for the instances in which it is justly merited." Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 870 (3d Cir. 1984). Regarding (I) "plaintiff s personal responsibility," the Third Circuit "ha]s] increasingly emphasized visiting sanctions directly on the delinquent lawyer, rather than on a client who is not actually at fault." Adams v. Trs. ofthe N.J. Brewery Emps.' Pension Tr. Fund, 29 F.3d 863, 873 (3d Cir. 1994). Regarding (2) "prejudice to the defendant ," the Court has made clear that this means more than mere inconvenience and cost but rather refers to "the irretrievable loss of evidence, the inevitable dimming of witnesses' memories, or the excessive and possibly irremediable burdens or costs imposed on the opposing party." Id. at 874. Regarding (3) "history of dilatoriness," the Court explained that "[e]xtensive or repeated delay or delinquency constitutes a history of dilatoriness," and cited as examples "consistent non-response to interrogatories, or consistent tardiness in complying with court orders." Id. at 874. Regarding (4) conduct that is "willful or in bad faith," the Court said it "looks for ' the type of willful or contumacious behavior which [i]s characterized as "flagrant bad faith," id. at 875, (quoting National Hockey League, 427 U.S. at 643), meaning 3 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 6 of 10 PageID: 2239 egregious misconduct, and holding that even the failure to offer any explanation for a four and one-half year hiatus in litigation, making no suggestion that intervening events had prevented prosecuting of the case, and not even hinting that the plaintiffs had done anything except some limited discovery since upon remand following reversal of a previous order of dismissal rose to the level of " flagrant bad faith." In other words, "an absence of a good faith effort to prosecute [alone] does not necessarily amount to willfulness or bad faith." Id. at 876. Regarding (5) "sanctions other than dismissal," the Court cautioned that, [b]efore dismissing a case with prejudice, a district court should consider alternative sanctions." Id. at 876. And finally, regarding (6) the "meritoriousness of the [] claims" subject to dismissal, the Court emphasized that, " [t]he standard of meritoriousness when reviewing a dismissal is moderate:We do not purport to use summary judgment standards. A claim ... will be deemed meritorious when the allegations of the pleadings, if established at trial, would support recovery by plaintiff." Id. at 876 (citing Poulis, 747 F.2d at 869-870). When the Poulis test is applied here through the prism ofAdams v. Trs. ofthe N.J. Brewery Emps.' Pension Tr. Fund, it is clear that neither dismissal, nor any other sanction, is warranted. There is no evidence at all that Relators are personally responsib le for any delays in getting this action ready for summary judgment or trial. Defendants have failed to demonstrate the requisite prejudice, such as the irretrievable loss of evidence. There is no history of dilatoriness, only a history of trying to litigate a complex qui tam False Claims Act matter where the Government had initial control over the action and crucial documentary evidence rested with, and was difficult to obtain from, non-parties (CMS and AHS Hospital Corporation). In the same vain, there is no indicia of flagrant bad faith on the part of Relators or their 4 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 7 of 10 PageID: 2240 attorneys. Defendants have failed to demonstrate the need or justification for any form of sanctions, let alone the "drastic" and "extreme" one of dismissal with prejudice. And lastly, the meritoriouness of Relators' claims is established by twice having defeated Defendants' motions for dismissal under Rule 12(b)(6). Moreover, none of the cases that Defendant SMG cites in its memorandum of law supports dismissal of this action. All of the cases Defendants cited where dismissal was ordered or upheld involved egregious dilatoriness misconduct , while here there is none. For example, in Link v. Wabash R. Co., 370 U.S. 626 (1962), plaintiffs attorney was inexplicitly absent from a pretrial court conference, which followed on the heels of other acts of dilatoriness on the part of the plaintiff, including, three years oflitigation inactivity and the plaintiffs failure to answer interrogatories. Likewise, in Poulis v. State Farm Fire and Cas. Co., 747 F.2d 863 (3d Cir. 1984), the plaintiff engaged in a pattern of dilatory behavior that it compounded by failing to file any answers to interrogatories or a pretrial statement, and where there was a prima facie defense to the claim. Similarly, in Mindek v. Rigatti, 964 F.2d 1369, 1372 (3d Cir. 1992), the plaintiff refused to comply with a pre-trial court directive and responded instead with (yet another) frivolous motion, this time requesting the entry of a default judgment against the defendants. In United States v. Richardson, 505 F. App'x 194, 195 (3d Cir. 2012), a prisoner failed to file a brief in support of his § 2255 habeas corpus petition despite being given four extensions of time to do so. And, in Opta Sys., LLC v. Daewoo Elecs. Am. , 483 F. Supp. 2d 400,403 (D.N.J. 2007), the plaintiff failed to retain new counsel as ordered by the court on numerous occasions, failed to comply with a court order to show cause, failed to appear before the court as directed and failed to respond to defendants' motion for default judgment. 5 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 8 of 10 PageID: 2241 Other cases on which Defendant SMG purports to rely have nothing to do with Rule 41(b) dismissal. See, e.g., Roberts v. Ferman , 826 F.3d 117 (3d CiT. 20 16) (post-trial motion dismissed where movant failed to comply with court's directive to file a reco nstructed record after a substantial portion of the trial record was lost); Knoll v. City ofAllentown , 707 F.3d 406, 408 (3d CiT. 2013) (plaintiffs post-trial motion for judgment as a matter oflaw was denie d where plaintiff failed to comply with local court rule requiring the filing of a transcript or good cause to excuse the requirement); Hewlett v. Davis, 844 F.2d 109, 110 (3d CiT. 1988) (court properly refused to order defa ult judgment for failure to comply with discovery order); Ware v. Rodale Press, lnc., 322 F.3d 218 (3d CiT. 2003) (court ordered exclusion of evidence at trial); Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d CiT. 1992) (court entered defa ult judgment). CONCLUSION For the forego ing reaso ns, the Court should deny Defendants ' mot ion pursuant to Rule 41(b) to dismiss the Th ird Amended Complaint for supposed lack of prosecution. Dated: River Edge, New Jersey September 6, 2016 BRICKFIELD & DONAHUE ATTORNEYS /s/ Paul B. Brickfield By: Paul B. Brickfield, Esq. 70 Grand Avenue River Edge, NJ 0766 1 Ph: 20 1-488-7707 Fax: 201-488-9559 Local Counsel f or Relators 6 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 9 of 10 PageID: 2242 LAW OFFICE OF TIMOTHY 1. Mc INN IS By: Timothy J. McInnis, Esq. 52 1 Fifth Avenue, Suite 1700 New York , New York 10175-0038 Telephone: (2 12) 292-4573 Facsimile: (2 12) 292-4574 Attorneys for Relators Pro Hac Vice 7 Case 2:08-cv-02042-WJM-MF Document 158 Filed 09/06/16 Page 10 of 10 PageID: 2243 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA ex reI. PAUL TAHLO R, M.D., et ano., Plainti ffs, -against- AHS HOSPITAL CORPORATION, et al., Defendants. Civil Action No. 2:08-CV-02042-WJM-MF CERTIFICATION OF TIMOTHY J. MCINNIS, ESQ. IN OPPOSITION TO MOTION TO DISMISS THE THIRD AMENDED QUI TAM COMPLAINT PURSUANT TO FED. R. CIV. P. 41(b) FOR FAILURE TO PROSECUTE I, Timothy J. McInnis, Esq., of full age, hereby cert ifies as follows: I. I am a member in good standing in the bar of the State of New York and admitted pro hac vice to this Court as counsel for Plaintiffs-Relators Paul Tahlor, M.D. and Margaret Marino, R.N. ("Relators") . I submit this Certification in opposition to the motion of defendant Summit Medical Group ("SMG"), that was joined by defendants Emergency Medical Assoc iates of New Jersey ("EMA"), Hospitalists Associates ("HA") , David Schreck, M.D. (Schreck) and Samir Patel, M.D. ("Patel"), (collectively, "Defendants"), to dismiss the third amended qui tam complai nt pursuant to Fed. R. Civ. P. 41(b) for failure to prosecute. 2. As shown in detail below Relators have been active ly prosecut ing this matter since it was commenced in 2008 and continued to do so through the filing of this opposition to Defendants' motion. Case 2:08-cv-02042-WJM-MF Document 158-1 Filed 09/06/16 Page 1 of 5 PageID: 2244 3. The docket in this matter alone demonstrates that Relators have been actively prosecuting this matter. a. Relators have persistently filed their allegations against Defendants, beginning with the initial complaint and then amending their allegations with a first amended complaint, second amended complaint and third amended complaint. See ECF Nos. 1, 36, 69 and 89. b. Relators help persuaded the United States to partially intervene in the action against AHS Corporation, which lead to a settlement of nearly $10 million. Relators subsequently settled all remaining allegations against AHS Hospital Corporation. See ECF Nos. II and 90. c. Relators successfully fended off Defendants' multiple motions to dismiss this action under Rule 12(b)(6). See ECF Nos. 81 and 111 . d. Relators, along with Defendants, filed joint proposed confidentiality and scheduling orders that were subsequently approved by the Court. See ECF Nos. 125, 129 and 131. e. Relators sought and obtained a court-ordered subpoena to the Centers for Medicare and Medicaid Services ("CMS") for claims billing data. See ECF No. 135. f. Relators have attended or participated in numerous settlement and status conferences with the Court. Including conferences that took place on the following dates: 12/04/2012; 04/18/2013 ; 10/24/2016; 02/03/201 5; 03/06/2015; 05/1 5/2015; 10/08/201 5; 10/27/201 5; 1110612015; 12/18/20 15; 01120/2016; and 07/14/2016. g. Relators have met every motion, party conference and discovery deadline set by the Court and have attended every in person court conference and participated in every judicial telephone conference mandated by the Court. 4. Recent events are further evidence that Relators have been actively prosecuting this matter. a. In or about August 20 16, Relators and defendant EMA tentative ly agreed to a resolution of this matter with respect to EMA and have approved a written draft agreement reflecting the terms of their proposed settlement. That agreement has been convened to the United States Attorney 's Office for the District of New Jersey and the United States Department of Justice for the Government's approval, as required by the False Claims Act. 1 have had regular contact with 2 Case 2:08-cv-02042-WJM-MF Document 158-1 Filed 09/06/16 Page 2 of 5 PageID: 2245 AUSA David Dauenheimer who IS attempting to expedite the review of the part ies' proposed settlement. b. In August 2016, Relators made a specific settlement demand upon defendants HA and Patel. I have had follow up contact with counsel for HA and Patel, who advises me that his clients will be responding to our demand. c. On or about August 1, 20 16, I secured a commitment from counse l for non-party AHS Hospital Corporation to produce certain medical records called for by our third party document subpoena by approximately Nove mber 1, 2016. These records need to be obtained and reviewed in order to determine which patient cases, if any, Relators intend to try. d. On September 3, 20 16, I circulated a proposed scheduling order to Defendants that takes into account the time AHS Hospital Corpo ration needs to produce the subpoenaed medical records and the approx imately two months Relators will need to review them. 5. Even the certification on which Defendants rely shows that Relators have been act ively prosecuting this matter. a. Paragraphs 4,5 , 6, 7,8,9, 10, 12,1 7 and 19 (and corresponding exhibits) refer to subpoenas, emails and letters drafted and transmitted by me or local counsel Paul Brickfi eld, Esq., in a sustained, and ultimately successful, effort to obtain claims data from CMS and to use that data to identify a subset of patient cases to be tried in this matter. 6. Relators have incurred or expended considerable attorney time and out of pocket litigation expenses in prosecuting this matter. a. I have spent at least 745 hours handlin g this matter. This includes a significant of amount of time spent communicating with Defendants ' counsel. For example, I have sent or received at least 488 emails to or from Bruce Levy, Esq.;., counsel for the principal movant on this motion, including at least 126 email s since January I, 2016, alone. Given my current billing rate of $750 per hour, this represents more than $550,000 in attorney time. b. Local counsel Paul B. Brickfield, Esq., advises me that he has spent at least 54 hours handling this matte r. c. ln addition to standard filing fees and ancillary litigation expenses , such as travel and copying charges, at considerable cost Relators reta ined the services of: Avalere Health, LLC, to analyze billing patterns; Innovative Applied Sciences to 3 Case 2:08-cv-02042-WJM-MF Document 158-1 Filed 09/06/16 Page 3 of 5 PageID: 2246 translate CMS raw billing data into a usable format; and Jeremy Albright, Ph.D. of Methods Consultants to provide statistical expert services. 7. Have there been substantial delays in prosecuting this matter? Of course there have. One need look no further than the date of the case: 2008. But there are a number of external factors that account for this. It took many years for the Government to make its intervention decision and settle the matter with then defendant, now non-party AHS Corporation. Then there were Defendants' multiple motions to dismiss that had to be briefed and ruled upon, which lead to further amendments of the operative complaint. Thereafter, discovery got mired down with a very late production of claims billing data from CMS. There have also been similar delays in establishing a methodology for a protocol for trying a limited number of patient cases out of the tens of thousands at issue, and likewise in getting corresponding medical records from AHS Hospital Corporation. 8. Could Relators counsel have tried harder and taken different steps to move the litigation of this matter along at a quicker pace? In retrospect the answer is clearly yes. But, although we too have been frustrated by the prolonged delays in getting this action ready for summary judgment and/or trial, we have never abandoned our efforts . Moreover, we have been completely transparent with defense Counsel as to the steps we have been taking and are continuing to take to move the matter along. If anyone knows we have tried mightily to get this case to the finish line, it is the defense attorneys who have made the instant motion to dismiss this action for non-prosecution. 9. For all of the foregoing reasons, Defendants' Rule 41(b) motion to dismiss should be denied. 4 Case 2:08-cv-02042-WJM-MF Document 158-1 Filed 09/06/16 Page 4 of 5 PageID: 2247 I further certify that each of the foregoing statements made by me is true. I am awa re that if any of the foregoing statements made by me is willfully false, I am subject to punishment for contempt. Dated : New York, NY September 6, 20 I6 4~~ ( L~ Timo~f J. Mc Innis , Esq . Me I91)is Law 52 1Jlifth Ave nue, 17th Floo r New York, NY 10175 Ph: 212-292-4573 Fax: 212-292-4574 Email: tmeinnis@meinnis- law.eom Pro Hac Vice Counsel for Relators 5 Case 2:08-cv-02042-WJM-MF Document 158-1 Filed 09/06/16 Page 5 of 5 PageID: 2248 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA ex reI. PAUL TAHLOR, M.D., et ano., Plaintiffs, -against- AHS HOSPITAL CORPORATION, et aI., Defendants. Civil Action No. 2:08-CV-02042-WJM -MF CERTIFICATE OF SERVICE I, Paul B. Brickfield, Esq., local counsel for Relators, hereby certify that, via the Court's electronic filing system, on the date listed below, I caused each of the following documents to be filed with the Clerk of the Court and served on all counsel of record : Relators' Memorandum of Law in Opposition to Defendants' Motion Pursuant to Fed. R. Civ. P. 41(b) to Dismiss the Third Amended Complaint for Supposed Lack of Prosecution and Certification of Timothy J. McInnis, Esq. in Opposition to Motion to Dismiss the Third Amended Qui Tam Complaint Pursuant to Fed. R. Civ. P. 41(b) for Failure to Prosecute. I further certify that I caused a courtesy copy of the foregoing documents to be sent via U.S. mail to: Honorable William J. Martini , U.S.DJ. Martin Luther King Building & U.S. Courthouse 50 Walnut Street Newark, NJ 07101 I further certify that the foregoing statements made by me are true. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment for contempt. Case 2:08-cv-02042-WJM-MF Document 158-2 Filed 09/06/16 Page 1 of 2 PageID: 2249 Dated: River Edge, New Jersey September 6, 20 16 BRICKFIELD & DONAHUE ATTORNEYS lsI Paul B. Brickfield By: Paul B. Brickfield , Esq. 70 Grand Avenue River Edge, NJ 0766 1 Ph: 201-488-7707 Fax: 201-488-9559 Local Counsel for Relators 2 Case 2:08-cv-02042-WJM-MF Document 158-2 Filed 09/06/16 Page 2 of 2 PageID: 2250