Hennrick v. MIR Sci.

• Decision Date: 21 December 2021
• Docket Number: 21 Civ. 4945 (LGS)
• Court: U.S. District Court — Southern District of New York
• Parties: KENNETH HENNRICK, Plaintiff, v. MIR SCIENTIFIC, LLC, Defendant.

KENNETH HENNRICK, Plaintiff,
v.
MIR SCIENTIFIC, LLC, Defendant.

No. 21 Civ. 4945 (LGS)

United States District Court, S.D. New York

December 21, 2021

OPINION AND ORDER

LORNA G. SCHOFIELD, United States District Judge.

Plaintiff Kenneth Hennrick brings this action alleging violations of the anti-retaliation provisions of the False Claims Act (“FCA”), 31 U.S.C. § 3730(h), and the New York State False Claims Act (“NYFCA”), NY. State Fin. Law 191, and a breach of contract claim alleging wrongful termination. Plaintiff alleges that he was fired by his former employer, Defendant miR Scientific, LLC, for objecting to, and making active efforts to stop, Defendant's allegedly fraudulent submissions to the U.S. Food and Drug Administration (the “FDA”) and the New York State Department of Health (the “NYSDOH”). Defendant moves to dismiss the FCA and NYFCA claims pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, the motion is granted.

I. BACKGROUND

The following facts are taken from the Complaint and are assumed to be true only for purposes of this motion. See R.M. Bacon, LLC v. Saint-Gobain Performance Plastics Corp., 959 F.3d 509, 512 (2d Cir. 2020).

On around July 6, 2020, Plaintiff entered into an employment agreement with Defendant and began working as Defendant's Director of Commercial Laboratory Operations on around July 13, 2020. In this role, Plaintiff was responsible for overseeing Defendant's laboratory

1

operations, complying with applicable FDA regulations, applying for and receiving NYSDOH and New Jersey Clinical Laboratory Improvement Services (“NJCLIS”) approval of Defendant's Sentinel Prostate Test, and helping Defendant's Sentinel Prostate Test gain acceptance into the FDA's “Breakthrough Devices Program.”

Defendant did not provide Plaintiff with the data needed to prepare the relevant applications. In response to Plaintiff's data requests, Defendant told Plaintiff that, “we will show it to you shortly” or “it will be shared within the next few days / weeks.” In or around August 2020, without Plaintiff's assistance, knowledge or review, Defendant submitted its “Breakthrough Devices Program” application for FDA approval. Around the same time, Plaintiff began to suspect that the actual data did not match the data Defendant had included in its FDA application and would include in its subsequent NYSDOH application.

In or around November 2020, Defendant's Sentinel Prostate Test was accepted into the FDA's “Breakthrough Devices Program.” Plaintiff worried that this acceptance would require further submissions to the FDA and worried about the accuracy of those submissions. On around November 16, 2020, although Defendant still had not shown Plaintiff the relevant data, Defendant applied for NYSDOH approval of its Sentinel Prostate Test without Plaintiff's knowledge. On November 17, 2020, when Plaintiff first reviewed the NYSDOH application, Plaintiff observed that the test performance characteristics were different from those submitted to the FDA. The same day, Plaintiff raised concerns with Defendant's CEO, which led to Defendant's retracting its NYSDOH application on November 18, 2020.

Plaintiff continued to investigate the data in Defendant's FDA application. On around December 13, 2020, Plaintiff met with Defendant's Chief Administrative Officer and Defendant's Chief Strategy Officer to raise concerns regarding the FDA application. Plaintiff

2

was concerned that, without intervention, Defendant would submit flawed applications to the FDA, NYSDOH and/or NJCLIS that exaggerated the Sentinel Prostate Test's effectiveness, which could lead to the test's approval. On around December 17, 2020, Plaintiff emailed Defendant's Chief Legal Officer a list of concerns about data in the FDA and NYSDOH applications. Defendant's Chief Legal Officer responded by thanking Plaintiff for raising these issues and reassured him that it would be unlawful for Defendant to retaliate against him for doing so or terminate his employment.

A few days later, on around December 22, 2020, Plaintiff raised the same concerns regarding the FDA and NYSDOH applications to Defendant's Chief Scientific Officer and Defendant's CEO, as well as issues related to quality management, quality assurance and quality control regulatory violations. In response, Plaintiff was told to stop raising these issues. Two weeks later, on January 7, 2021, Defendant terminated Plaintiffs employment.

II. STANDARD

On a motion to dismiss, a court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in favor of the non-moving party but does not consider “conclusory allegations or legal conclusions couched as factual allegations.” Dixon v. von Blanckensee, 994 F.3d 95, 101 (2d Cir. 2021) (internal quotation marks omitted). To withstand a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Kaplan v. Lebanese Canadian Bank, SAL, 999 F.3d 842, 854 (2d Cir. 2021) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678; accord Dane v. UnitedHealthcare Ins. Co., 974 F.3d 183, 189 (2d Cir. 2020). It is not enough for a plaintiff to allege facts that are consistent with liability; the

3

complaint must “nudge[] [plaintiffs] claims across the line from conceivable to plausible.” Bell Atl Corp. v. Twombly, 550 U.S. 544, 570 (2007) (first alteration in original); accord Bensch v. Est. of Umar, 2 F.4th 70, 80 (2d Cir. 2021). To survive dismissal, “plaintiffs must provide the grounds upon which [their] claim rests through factual allegations sufficient to raise a right to relief above the speculative level.” Rich v. Fox News Network, LLC, 939 F.3d 112, 121 (2d Cir. 2019) (alteration in original) (internal quotation marks omitted).

Allegations of a false claim for payment under the FCA sound in fraud and are subject to the particularity requirement of Federal Rule of Civil Procedure 9(b). See Universal Health Servs., Inc. v. United States ex rel Escobar, 579 U.S. 176, 195 n.6 (2016) (“False Claims Act plaintiffs must also plead their claims with plausibility and particularity under Federal Rules of Civil Procedure 8 and 9(b) by, for instance, pleading facts to support allegations of materiality”). The heightened pleading standard of Rule 9(b) requires a party pleading fraud to “state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b). The adequacy of particularized allegations under Rule 9(b) is “case- and context-specific.” United States ex rel. Chorches v. Am. Med. Response, Inc., 865 F.3d 71, 81 (2d Cir. 2017) (internal quotation marks omitted); accord Variblend Dual Dispensing Sys. LLC v Crystal Intl. (Grp.) Inc...