U.S. ex rel. Phipps v. Comprehensive Community, 99 Civ. 5172(JGK).

• Decision Date: 16 July 2001
• Docket Number: No. 99 Civ. 5172(JGK).,99 Civ. 5172(JGK).
• Citation: 152 F.Supp.2d 443
• Parties: UNITED STATES of America ex rel. Claudette PHIPPS, Plaintiff, v. COMPREHENSIVE COMMUNITY DEVELOPMENT CORPORATION, d/b/a Soundview Health Center, Nonprofit Community Resources, Inc., Pedro Espada, Sandra Love, Kenneth Brennan, Esther Hill, and Maria Cruz, each in their official and individual capacities, Defendants.
• Court: U.S. District Court — Southern District of New York

152 F.Supp.2d 443

UNITED STATES of America ex rel. Claudette PHIPPS, Plaintiff, v. COMPREHENSIVE COMMUNITY DEVELOPMENT CORPORATION, d/b/a Soundview Health Center, Nonprofit Community Resources, Inc., Pedro Espada, Sandra Love, Kenneth Brennan, Esther Hill, and Maria Cruz, each in their official and individual capacities, Defendants.

No. 99 Civ. 5172(JGK).

United States District Court, S.D. New York.

July 16, 2001.

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Dan Cherner, Law Office Dan Cherner, New York City, for Plaintiff.

Martin Szold, Arthur R. Block, New York City, for Defendants.

OPINION AND ORDER

KOELTL, District Judge.

Plaintiff Claudette Phipps ("Phipps") brings this qui tam action on behalf of the United States against Comprehensive Community Development Corporation, d/b/a Soundview Health Center ("CCDC"), Nonprofit Community Resources, Inc. ("NCR"), Pedro Espada ("Espada"), Sandra Love ("Love"), Kenneth Brennan ("Brennan"), Esther Hill ("Hill"), and Maria Cruz ("Cruz"), each in their official and individual capacities pursuant to the False Claims Act, 21 U.S.C. § 3729 et seq. ("FCA"). Phipps has also brought common law claims for unjust enrichment, fraud, and mistake of fact. Phipps alleges that the defendants falsely represented that certain individuals were enrolled in CCDC's Women, Infants, and Children ("WIC") program and submitted false claims, statements, records, and information to the federal government ("Government") and to New York State to obtain funds from various federal and state programs. The defendants CCDC, Espada, Love, Brennan, Hill and Cruz (collectively the "Moving Defendants") now move pursuant to Fed.R.Civ.P. 12(c) for judgment on the pleadings, or in the alternative, for partial summary judgment on the grounds that this Court lacks subject matter jurisdiction over the plaintiff's qui tam action and that the plaintiff's complaint does not meet the requirements of Fed.R.Civ.P. 9(b).¹

I.

The same standards apply to a Rule 12(c) motion for judgment on the pleadings and to a Rule 12(b)(6) motion to dismiss for failure to state a claim. See Burnette v. Carothers, 192 F.3d 52, 56 (2d Cir.1999); Narvarte v. Chase Manhattan Bank, N.A., 969 F.Supp. 10, 11 (S.D.N.Y. 1997). The Court "must view the pleadings in the light most favorable to, and draw all reasonable inferences in favor of, the nonmoving party." Davidson v. Flynn, 32 F.3d 27, 29 (2d Cir.1994); see also Madonna v. United States, 878 F.2d 62, 65 (2d Cir.1989); National Ass'n of Pharmaceutical Mfrs., Inc. v. Ayerst Labs., 850 F.2d 904, 909 n. 2 (2d Cir.1988) (indicating that the Court treats a motion for judgment on the pleadings as if it were a motion to dismiss); Slavsky v. New York City Police Dep't, 967 F.Supp. 117, 118 (S.D.N.Y.1997), aff'd, 159 F.3d 1348 (2d Cir.1998). A court should not dismiss a complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief. See Valmonte v. Bane, 18 F.3d 992, 998 (2d Cir.1994) (citing Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In deciding the motion, the Court can consider documents referenced in the complaint and documents that are in the plaintiff's possession or that the plaintiff knew of and relied on in bringing suit. See Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir.1993); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir. 1991); I. Meyer Pincus & Assoc., P.C. v. Oppenheimer & Co., Inc., 936 F.2d 759, 762 (2d Cir.1991); Skeete v. IVF America, Inc., 972 F.Supp. 206, 208 (S.D.N.Y.1997). The Court can also consider "matters of which judicial notice may be taken." See Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 107 (2d Cir.1999) (quotation omitted); see also Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir.1991).

Although subject matter jurisdiction is usually challenged by way of a Rule 12(b)(1) motion to dismiss, it may also be raised on a Rule 12(c) motion for judgment on the pleadings. See Ryan v. Volpone Stamp Co., Inc., 107 F.Supp.2d 369, 375 (S.D.N.Y.2000); Brooks v. New York City Housing Authority, No. 98 Civ. 5016, 1999 WL 395387, at *2 (S.D.N.Y. Jun. 15 1999); Peters v. Timespan Comm., Inc., No. 97 Civ. 8750, 1999 WL 135231, at *2 (S.D.N.Y. Mar. 12, 1999). A Rule 12(c) motion for judgment on the pleadings based upon a lack of subject matter jurisdiction is treated as a Rule 12(b)(1) motion to dismiss the complaint. See Peters, 1999 WL 135231, at *2. A party invoking federal jurisdiction "must allege in [its] pleading the facts essential to show jurisdiction," and "must support [those facts] by competent proof." See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 179, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); see also Board of Educ. of the Mount Sinai Union Free Sch. Dist. v. New York State Teachers Retirement Sys., 60 F.3d 106, 109 (2d Cir.1995) (citation omitted); United States ex rel. Pentagen Tech. Int'l Ltd. v. Caci Int'l Inc., No. 96 Civ. 7827, 1997 WL 473549, at *6 (S.D.N.Y. Aug. 18, 1997), aff'd, 172 F.3d 39 (2d Cir.1999). In considering a motion to dismiss for lack of subject matter jurisdiction, a court must accept as true all material factual allegations in the complaint and refrain from drawing inferences in favor of the party contesting jurisdiction. See Atlantic Mut. Ins. Co. v. Balfour Maclaine Intern. Ltd., 968 F.2d 196, 198 (2d Cir.1992). Where subject matter jurisdiction is challenged, however, a court may consider materials outside the pleadings, such as affidavits, documents and testimony. See Antares Aircraft v. Fed. Rep. of Nigeria, 948 F.2d 90, 96 (2d Cir.1991); Kamen v. American Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir.1986). Thus, the standard used to evaluate a Rule 12(b)(1) claim is similar to that for summary judgment under Fed.R.Civ.P. 56. See Kamen, 791 F.2d at 1011. The plaintiff has the ultimate burden of proving the Court's jurisdiction by a preponderance of the evidence. See Malik v. Meissner, 82 F.3d 560, 562 (2d Cir.1996); see also Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir.1991) (when subject matter jurisdiction is challenged under Rule 12, plaintiff must bear burden of persuasion); Martin v. Reno, No. 96 Civ. 7646, 1999 WL 527932 at *1 (S.D.N.Y. July 22, 1999).²

II.

The following facts are undisputed for purposes of this motion except where specifically noted. Phipps was the Director of defendant CCDC's Women, Infants, and Children program ("WIC program") from on or about August 1990 until on or about May 6, 1999. (Compl. ¶¶ 4, 20; Declaration of Maria Cruz dated January 25, 2001 ("Cruz Decl."), n. 2; Pl.'s 56.1 Counter-St. ¶ 1.) CCDC is a New York Corporation incorporated on or about April 21, 1987, doing business as Soundview Health Center. (Compl.¶ 5.) Defendant NCR is a New York Corporation incorporated on or about April 14, 1993. (Compl.¶ 6.) Defendant Espada is the chairman and/or Director of CCDC. (Compl.¶ 7.) Defendant Love is a Senior Vice-President for CCDC. (Compl.¶ 8.) Defendant Brennan is the Chief Financial Officer for CCDC. (Compl.¶ 9.) Defendant Cruz is the Executive Director of NCR. (Compl.¶ 10.) Defendant Hill is a Coordinator of Human Resources for CCDC. (Compl.¶ 11.)

The Child Nutrition Act, 42 U.S.C. § 1786 et. seq. ("CNA"), was enacted to provide supplemental foods and nutrition education to women, infants, and young children from families with inadequate income. See 42 U.S.C. § 1786(a). The CNA provides for grants to assist State agencies to provide, through local agencies, supplemental foods and nutrition education to eligible women and children. See 42 U.S.C. § 1786(c). The State agency receiving assistance must submit a plan of operation and administration to the Secretary of Agriculture containing various information designed to implement the purposes of the CNA. See 42 U.S.C. § 1786(f). CCDC runs a WIC program by authority and contract granted by New York State by authority granted to New York State through the CNA. (Compl. & 5.)

The Ryan White Comprehensive AIDS Resources Emergency Act of 1990, 42 U.S.C. § 300ff et seq. ("White Act"), was enacted "to provide emergency assistance to localities that are disproportionately affected by the Human Immunodeficiency Virus epidemic and to make financial assistance available to States and other public or private nonprofit entities to provide for the development, organization, coordination, and operation of more effective and cost efficient systems for delivery of essential services to individuals and families with HIV disease." 42 U.S.C. § 300ff. CCDC allegedly receives grants pursuant to the White Act and/or other federal programs which provide monies for AIDS research, treatment, and/or education. (Compl.¶ 19.)

In or around 1998, the New York State Department of Health ("DOH") initiated an investigation into CCDC's WIC program based upon allegations made to the DOH by current and/or former employees of CCDC. (Compl. ¶ 23; Defs.' 56.1 St. ¶ 2.) The DOH investigation, which Phipps alleges is still ongoing, is headed by Fred Fogel, a Regional Chief Investigator with DOH's Investigative Services Unit. (Compl. ¶24; Defs.' 56.1 St. ¶ 3.) Phipps alleges that according to Mr. Fogel, false information was provided as to certain women and/or children to the WIC program, so as to enroll these women and/or children into CCDC's WIC program when, in fact, these individuals were not eligible for the WIC program. (Compl.¶ 25.) Phipps alleges, in particular, that certain relatives of defendants Espada and Love received benefits from the WIC program that they were not eligible to receive. (Compl.¶¶ 26-28.) In or about December 1998, Mr. Fogel allegedly appeared at CCDC and requested certain files from Phipps. (Defs.' 56.1 St. ¶ 4; Pl.'s 56.1 Counter-St. ¶ 4.) Phipps informed some of the individual defendants about the visit and s...