Hammond v. Northland Counsleing Center, Inc., 99-1672

Decision Date13 December 1999
Docket NumberNo. 99-1672,99-1672
Parties(8th Cir. 2000) MARILYNN K. HAMMOND, M.D., APPELLANT, v. NORTHLAND COUNSELING CENTER, INC.; GREG WALKER, APPELLEES. Submitted:
CourtU.S. Court of Appeals — Eighth Circuit

Appeal from the United States District Court for the District of Minnesota

[Copyrighted Material Omitted] Before Wollman, Chief Judge, McMILLIAN, Circuit Judge, and Battey, 1 District Judge.

McMILLIAN, Circuit Judge.

Dr. Marilynn K. Hammond appeals from a final order entered in the United States District Court for the District of Minnesota granting summary judgment in favor of Northland Counseling Center, Inc. ("Northland"), on her claim pursuant to the whistleblower provision of the False Claims Act, 31 U.S.C. 3730(h), and dismissing her remaining pendent state claims without prejudice. See Hammond v. Northland Counseling Ctr., Inc., No. 5-96-353 (D. Minn. Jan. 15, 1999) (summary judgment order) (hereinafter "slip op."). 2 For reversal, Hammond argues that summary judgment was improper because there was a genuine issue of material fact as to whether she was entitled to damages or other relief under the False Claims Act. For the reasons discussed below, we reverse the district court's order and remand for further proceedings consistent with this opinion.

Jurisdiction

Jurisdiction in the district court was proper based upon 28 U.S.C. 1331 and 1367. Jurisdiction in the court of appeals is proper based upon 28 U.S.C. 1291. The notice of appeal was timely filed pursuant to Fed. R. App. P. 4(a).

Background

The following statement of facts is drawn from the district court order and the record on appeal. Hammond, a Minnesota board-certified psychiatrist, was employed as Medical Director of Northland from October 1994 to September 1996. In January 1996, Hammond became concerned that Northland was improperly billing day treatment programming to Medicare 3 as a partial hospitalization program, thereby yielding a higher level of reimbursement for Northland. 4 Hammond contends that she repeatedly expressed concern about the propriety of these billings to Northland officials, including Greg Walker, Chief Executive Officer of Northland. Hammond asserts that, despite her efforts, Northland's billing practices were not corrected.

On April 1, 1996, after purportedly conducting her own inquiries into the billing practices of other local mental health facilities to determine if Northland's billings were in compliance with Medicare requirements, Hammond rescinded her authorization for Northland to bill partial hospitalization expenses under her license. See Appellant's Appendix at 17-18 (Hammond affidavit); id. at 26-29 (letter from Hammond to Walker). Hammond then scheduled a meeting for April 12, 1996, with officials from the United States Department of Health and Human Services ("HHS"), so that Hammond could report her concerns about Northland's allegedly irregular billing practices. On April 11, 1996, Walker met with Hammond and allegedly told her that she had no right or authority to present her concerns to HHS officials. See id. at 44-45 (Amended Complaint, 20). Nevertheless, Hammond met with the HHS officials as scheduled. She notified Walker and other Northland employees that the meeting had taken place and claimed that the federal officials had said they would investigate the matter and contact her in the future. See id. at 45.

On May 29, 1996, Walker notified Hammond, in compliance with the notice provision of Hammond's employment contract, that Northland did not intend to renew her year-to-year contract when it expired on September 30, 1996. See Appellee's Appendix at 22 (letter from Walker to Hammond). Walker allegedly told her that he did not know whether Northland would be able to support the services of a psychiatrist, now that HHS had been notified of the alleged billing irregularities. See Appellant's Appendix at 20 (Hammond affidavit).

During the summer of 1996, Hammond continued to meet with representatives of HHS, as well as the Federal Bureau of Investigation and the United States Attorney for the District of Minnesota, regarding her allegations of Medicare fraud. Hammond purportedly kept Walker and other Northland employees informed of her activities in this regard. During this same period of time, Hammond claims that she was virtually excluded from Northland's administration, that she no longer received internal memoranda, and that she was no longer authorized to attend continuing medical education seminars. See id. at 49 (Amended Complaint, 34).

At 5:10 p.m. on September 18, 1996, Walker notified Hammond by memorandum that her position at Northland was terminated as of 5:30 p.m. that day. Walker's memorandum allegedly stated in part: "After 5:30 p.m. today your presence on the Northland premises is not allowed and we will take whatever action is necessary in order to remove you from the property should you trespass." Id. at 49-50 (Amended Complaint, 38). Although she had scheduled 25 patients for mental health care services the following day (in addition to a full schedule for the remainder of the month), Hammond was forced to vacate her work area immediately and to meet with her patients the next day in the hallways and auditorium of the nearby Itasca Medical Center ("IMC"). See id. at 49-50 (Amended Complaint, 39-40).

Hammond became the new Medical Director of IMC's Department of Behavioral Health effective October 1, 1996. See id. at 50 (Amended Complaint, 40). However, IMC paid Hammond retroactively to September 19, 1996, see Hammond deposition, vol. III, at 95, and provided her with salary and benefits equal to or greater than those which she received from Northland. Hammond worked at IMC for more than a year until her department closed in mid-November 1997. See id., vol. III, at 49. Hammond and her family subsequently moved out of state. See id., vol. III, at 117.

Hammond further claims that, both before and after her termination from Northland, Walker and other Northland officials engaged in a campaign of character assassination against her. Among other things, Hammond alleges that Walker and other Northland officials encouraged patients and mental health advocacy groups to file unfounded complaints against Hammond. See id. at 50 (Amended Complaint, 42).

On December 5, 1996, Hammond commenced this action against Walker and Northland. As amended on April 30, 1997, Hammond's complaint included a federal claim for violation of the whistleblower provision of the False Claims Act (FCA), 31 U.S.C. 3730(h),5 as well as state law claims of defamation, tortious interference with a business relationship, breach of contract, and violation of the Minnesota Whistleblower Act, Minn. Stat. 181.932. On August 4, 1997, the district court granted a motion to dismiss the FCA claim with regard to Walker. Northland subsequently moved for summary judgment on the claims remaining against it.

On January 15, 1999, the district court granted summary judgment in favor of Northland on the FCA claim and dismissed the remaining pendent state claims against Northland and Walker without prejudice. Initially concluding that damages were an essential element of an FCA whistleblower claim, see slip op. at 3-4, the district court determined that Hammond had failed to generate a genuine issue of material fact as to whether she was entitled to any relief under the FCA. See id. at 9-10. As stated above, the district court had previously determined that Hammond could not seek punitive damages under the FCA. See supra note 2 (citing district court order affirming magistrate judge's order denying Hammond leave to amend her complaint to include claim for punitive damages). The district court reasoned that, based on the undisputed facts, no compensatory remedies were available to Hammond under the FCA because: (1) reinstatement was not an appropriate remedy in the instant case; (2) "2 times the amount of back pay" would result in a net pecuniary loss of zero for Hammond, given that her mitigating pay from IMC wholly canceled out lost wages from Northland; (3) interest on back pay was accordingly not applicable; and (4) damages for emotional distress were not warranted. See slip op. at 5-10. This appeal followed.

Discussion

We review decisions to grant summary judgment de novo, applying the same standards as did the district court, see Wooten v. Farmland Foods, 58 F.3d 382, 385 (8th Cir. 1995), and affirming only when no genuine issue of material fact remains and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986) (Celotex); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). We view all evidence in the light most favorable to the non-moving party, drawing all inferences most favorable to that party. See Burnham v. Ianni, 119 F.3d 668, 673 (8th Cir. 1997) (en banc). However, summary judgment is proper if "the nonmoving party has failed to make a sufficient showing on an essential element of her [or his] case with respect to which she [or he] has the burden of proof." Celotex, 477 U.S. at 323.

Double back pay

Hammond contends that there is a genuine issue of material fact as to whether she proved damages as an essential element of her federal whistleblower claim against Northland and that summary judgment in favor of Northland was therefore improper.6Hammond initially argues that the FCA requires doubling of back pay prior to any consideration of mitigation. See Brief for Appellant at 24-27 (citing Neal v. Honeywell, Inc., 995 F. Supp. 889, 896 (N.D. Ill. 1998) ("Under [31 U.S.C. 3730(h)] we double that $50,000 [back pay] and subtract $10,000 [mitigating pay] for a beginning figure of $90,000."), aff'd, 191 F.3d 827 (7th Cir. 1999) (Neal); United States v. Bornstein, 423 U.S. 303, 316 (1976) ("[I]n computing the double damages authorized by the [predecessor FCA], the...

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