United States ex rel. Porter v. HCA Health Servs. of Oklahoma, Inc.
| Decision Date | 30 September 2011 |
| Docket Number | CIVIL ACTION NO. 3:09-CV-0992 |
| Parties | UNITED STATES OF AMERICA and STATE OF TEXAS, ex rel. L. DAVID PORTER, Relator, v. HCA HEALTH SERVICES OF OKLAHOMA, INC., AFZAL NIKAEIN, MEDICAL CITY HOSPITAL, and TEXAS MEDICAL SPECIALITY, INC., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Now before the Court are (1) Defendant HCA Health Services of Oklahoma, Inc.'s motion to transfer venue or, in the alternative, motion to dismiss for lack of personal jurisdiction (Docket #30); (2) Defendant HCA Health Services of Oklahoma, Inc.'s motion to dismiss pursuant to Rules 9(b) and 12(b)(6) (Docket #32); (3) Defendant Medical City Dallas Hospital's Motion to Dismiss (Docket #34); (4) Defendant HCA Health Services of Oklahoma, Inc. and Defendant Medical City Dallas Hospital's unopposed request for judicial notice (Docket #47); and (5) Porter's motion for leave to amend (Docket #44). After reviewing the Parties' briefing, the evidence, and the applicable law, the Court DENIES HCA's Motion to Transfer Venue (Docket # 30), DENIES HCA's motion to dismiss for lack of personal jurisdiction (Docket # 30), GRANTS in PART and DENIES in PART Medical City's and HCA's 12(b)(6) motions (Docket #s 32, 34), GRANTS Defendants' request forjudicial notice (Docket #47) and DENIES as MOOT Porter's request for leave to amend (Docket #44).1
L. David Porter ("Porter") is a former Assistant Director of the tissue typing laboratory at the OU Medical Center Laboratory at Oklahoma University Medical Center ("OUMC" or the "Lab"). The medical center, including the Lab, is operated by Defendant HCA Health Services of Oklahoma, Inc. ("HCA"). Porter worked at the Lab from 2002-2005. Defendant Afzal Nikaein was the Lab's Director. Nikaein was also the Director of another lab – Defendant Texas Medical Speciality Inc. ("TMSI").2 TMSI operates the lab at Defendant Medical City Dallas Hospital ("Medical City").
Clinical laboratories that perform clinical tests on specimens from the human body are regulated by federal law, specifically, by the Clinical Laboratories Improvement Act of 1967 and the Clinical Laboratory Improvement Amendments, which was enacted in 1988 ("CLIA"). 42 U.S.C. § 263a. CLIA was enacted to protect the public from poor laboratory services by strengthening and improving proficiency testing, thereby enhancing patient safety. CLIA requires labs to participate several times a year in a proficiency testing program ("PT"), through which an independent scientific agency sends human tissue samples to the labs for testing. The labs are then graded on their results. 42 U.S.C. § 263a(3).
Defendants performed tissue compatibility testing on transplant organs before transplantation. According to Porter, the TMSI lab was sharing and/or comparing its PT results with the OUMC Lab, in violation of CLIA regulations, which prohibit labs from communicating about their PT results until after the testing results are reported. See 42 C.F.R. § 493.801(3). These communications were allegedly facilitated by the labs' common-Director, Nikaein.
On May 29,2009, Porter filed this qui tarn action against TMSI, HCA, Nikeain, and Medical City alleging violation of the Federal False Claims Act, 31 U.S.C. §§ 3729, et. seq., and violation of the Texas Medicaid Fraud Prevention Act, Tex. Hum. Res. Code Ann. § 36.002 (Vernon). (Docket #s 1, 14.) Defendants move to dismiss Porter's claims on several bases.
HCA moves to dismiss Porter's claims for lack of personal jurisdiction. A motion for lack of personal jurisdiction must be considered by the district court before other challenges since the court must find jurisdiction before determining the validity of a claim. Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994).
The Federal False Claims Act ("FCA") permits nationwide service of process on a defendant. See 31 U.S.C. § 3732(a). When determining whether a federal court may exercise personal jurisdiction over a defendant in a suit based upon a federal statute that provides nationwide service of process, the Fifth Circuit has indicated that so long as the defendant has had minimum contacts with the United States, the Due Process clause of the Fifth Amendment requires no further inquiry. See, e.g., Bellaire Gen. Hosp. v. Blue Cross Blue Shield, 97 F.3d 822, 826 (5th Cir. 1996); Busch v. Buchman, Buchman & O'Brien, Law Firm, 11 F.3d 1255, 1258 (5th Cir. 1994).
Since HCA is an Oklahoma resident, it is by definition a citizen of the United States. Therefore, HCA has the requisite contacts required to exercise personal jurisdiction over Defendants under the FCA's provision for nationwide service of process. Thus, the Court DENIES HCA's motion to dismiss for lack of personal jurisdiction.
HCA also moves to transfer venue in this case. In order to obtain a new federal venue, 28 U.S.C. § 1404 requires that the transfer be "[f]or the convenience of parties and witnesses, in the interest of justice." 28 U.S.C. 1404(a); In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008). Because the movant seeks to disrupt the plaintiff's choice of venue, the burden lies with the movant to demonstrate why the desired division is the most appropriate. See id. at 381. The decision to transfer a case is within the sound discretion of the district court. The Whistler Group, Inc. v. PNI Corp., No. 3:03-CV-1536-G, 2003 WL 22939214, at *2 (N.D. Tex. Dec. 5, 2003) (Fish, J). When the transferee venue is not clearly more convenient than the plaintiff's chosen venue, the plaintiff's choice should be respected. Volkswagen, 545 F.3d at 314-315. But when the movant demonstrates that the transferee venue is clearly more convenient, it has shown good cause and the district court should therefore grant the transfer. Id.
The first issue that must be addressed in ruling on a motion to transfer venue under § 1404(a) is whether the judicial district to which transfer is sought qualifies under the applicable venue statutes as a judicial district where the civil action "might have been brought." In re Horseshoe Entm't, 337 F.3d 429, 433 (5th Cir. 2003). The second issue is whether the transfer would allow the interests of justice to be better served. The Whistler Group, 2003 WL 22939214, at *2.
The Fifth Circuit has adopted the private and public interest factors as proper for the determination of whether a § 1404(a) venue transfer is for the convenience of the parties and witnesses and in the interest of justice. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963). The private interest factors are:"(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive." In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004). The public factors are "(1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws of the application of foreign law." Id.
Although these factors are proper for most transfer cases, they are not necessarily exhaustive or exclusive. Volkswagen, 545 F.3d at 315. Moreover, no single factor is of dispositive weight. Id.
HCA argues the Court should transfer venue to the Western District of Oklahoma because: (1) the case could have originally been filed there and (2) the venue would be more convenient for the parties and witnesses that would be required to appear before the court. In response, Porter claims his choice of venue should be honored and HCA has failed to show that the Western District of Oklahoma would be a more convenient venue for this case.
"The preliminary question under § 1404(a) is whether a civil action 'might have been brought' in the destination venue." In re Volkswagen, 545 F.3d at 312. A civil action may be brought in a "judicial district in which a substantial part of the events or omissions giving rise to the claimoccurred. 28 U.S.C. § 1391 (b)(2). When a case is being filed in a multi-district state, federal statutes provide that, "For the purposes of venue ... a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c).
The FCA states: "Any action under section 3730 [31 U.S.C. § 3730] may be brought in any judicial district in which...any one defendant can be found, resides, transacts business, or in which any act proscribed by section 3729 [31 U.S.C. § 3729] occurred." 31 U.S.C. § 3732(a). HCA, being one of the listed defendants, resides, transacts business, and can be found in the Western District of Oklahoma. Additionally, some of the alleged violations occurred in that district. Thus, this case could have been brought in the Western District of Oklahoma.
The first factor to be addressed is the relative ease of access to sources of proof. HCA contends this factor weighs in favor of transfer because the vast majority of relevant documents are located in Oklahoma. However, "[b]ecause modern technology permits the rapid transfer, sharing, and copying of documents, the location of documents and business records usually receives little weight in the transfer analysis." See e.g., Sarmiento v. Producer's Gin of Waterproof, Inc., 439 F. Supp. 2d 725, 732 (S.D. Tex. 2006); E.E.O.C. v. Mustang Mobile Homes, Inc., 88 F. Supp. 2d 722, 726 (W.D. Tex. 1999).
In this case, the transfer of documents to either location would...
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