United States ex rel. Karvelas v. Tufts Shared Servs., Inc.

• Decision Date: 17 December 2019
• Docket Number: Civil No. 18-11260-LTS
• Citation: 433 F.Supp.3d 174
• Parties: UNITED STATES of America EX REL. John KARVELAS, Plaintiff, v. TUFTS SHARED SERVICES, INC. d/b/a Tufts Medical Center, Inc. et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

433 F.Supp.3d 174

UNITED STATES of America EX REL. John KARVELAS, Plaintiff,

v.TUFTS SHARED SERVICES, INC. d/b/a Tufts Medical Center, Inc. et al., Defendants.

Civil No. 18-11260-LTS

United States District Court, D. Massachusetts.

Filed December 17, 2019

Steven T. Sharobem, United States Attorney's Office, Ilyas J. Rona, Milligan Rona Duran & King, LLC, Royston H. DeLaney, DeLaney Kester LLP, Boston, MA, for Plaintiff.

John Karvelas, Danvers, MA, pro se.

Bruce A. Singal, Donoghue, Barrett & Singal, PC, Boston, MA, for Defendants.

ORDER ON MOTION TO DISMISS

SOROKIN, United States District Judge

Pending before the Court is a motion to dismiss brought jointly by Defendant Tufts Medical Center ("TMC") and individual Defendants Leslie Lussier, Theresa Hudson-Jinks, and Albert Fantasia. Relator¹ John Karvelas' Complaint alleges five counts: (1) retaliation in violation of the False Claims Act ("FCA"), 31 U.S.C. § 3730(h) (Count I); (2) retaliation in violation of the Massachusetts False Claims Act ("MFCA"), Mass. Gen. Laws ch. 12 § 5J (Count II); (3) wrongful termination in violation of public policy (Count III); (4) retaliation against a licensed health care provider in violation of Mass. Gen. Laws ch. 149 § 187(b) (Count IV); and (5) breach of the implied covenant of good faith and fair dealing (Count V). Doc. No. 20 at 27-33.

I. BACKGROUND ²

John Karvelas was employed as a respiratory therapist at Tufts Medical Center ("TMC") in Boston, Massachusetts, from December 2005 until November 2016. Doc. No. 20 ¶ 5. Karvelas' claims arise out of allegations that TMC engaged in several forms of fraudulent billing practices, which Karvelas says violate the FCA, as well as allegedly unlawful kickbacks. The alleged billing irregularities include duplicative billing, id. ¶¶ 39–42, billing for services not provided, id. ¶ 43, unbundling of services, id. ¶¶ 44–45, billing for services that were not reimbursable for failing to comply with Medicare standards, id. ¶¶ 46–50, and upcoding of services, id. ¶¶ 51–53. Meanwhile, the alleged kickbacks relate to Tufts' replenishment and restocking of drugs and supplies for EasCare, an ambulatory service provider that contracted with Tufts to bring patients to its medical center. Id. ¶¶ 55–58.

More importantly to Karvelas' five claims in this suit, he alleges that he "raised concerns" about TMC's allegedly fraudulent billing practices to his superiors. Id. ¶¶ 64–67. Specifically, he alleges that on or about October 14, 2016, he raised concerns about "the billing of subsequent-day ventilator charges on the same day as [an] initial charge," a practice he alleges constituted "over-billing" of Medicare, "as well as other billing concerns, to the individual responsible for the Hospital's electronic billing system." Id. ¶ 65. He also alleges that on or about October 28, 2016, he raised concerns regarding patient safety to Defendant Theresa Hudson-Jinks, TMC's Vice President of Patient Care Services, as well as Assistant Director of Respiratory Care Donna Kelly, only to be "yelled at" and for no further action to be taken. Id. ¶¶ 66–67. He further alleges that at some point during September and October 2016, he "was interviewed by the [Drug Enforcement Agency]" and went to the Office of the Inspector General for the Department of Health and Human Services to discuss his concerns about TMC's allegedly fraudulent billing practices. Id. ¶¶ 77. Additionally, Karvelas alleges that the Defendants labeled him a "troublemaker" and ultimately terminated his employment on November 16, 2016, in retaliation for "his efforts to expose and reform Tuft's [sic] fraudulent practices." Id. ¶¶ 67–68, 80. Additionally, he alleges that he was "subjected to repeated acts of harassment, discrimination, and intimidation" both "[b]efore and after his termination." Id. ¶ 70.

Before turning to the merits of the pending motion, the Court notes what is not at issue: Karvelas' suit does not present any allegations of fraudulent billing practices or unlawful kickbacks. Rather, his claims are limited in scope to allegations about the circumstances of his termination from TMC.

II. LEGAL STANDARDS

To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint "must provide fair notice to the defendants and state a facially plausible legal claim." Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011). The pleader must " ‘show’ an entitlement to relief" by including in the complaint "enough factual material ‘to raise a right to relief above the speculative level’ " if the facts alleged are accepted as true. Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); accord Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Fed. R. Civ. P. 8(a). In assessing whether a complaint withstands a Rule 12(b)(6) challenge, courts "employ a two-pronged approach." Ocasio-Hernandez, 640 F.3d at 12.

First, statements in the complaint that amount to "threadbare recitals of the elements of a cause of action" are identified and disregarded. Id. (quotation marks and brackets omitted). So, too, are "bald assertions, subjective characterizations and legal conclusions." DM Research, Inc. v. Coll. of Am. Pathologists, 170 F.3d 53, 55 (1st Cir. 1999) (quotation marks omitted). As the First Circuit has warned, such statements "are a danger sign that the plaintiff is engaged in a fishing expedition." Id. "[T]he price of entry, even to discovery, is for the plaintiff to allege a factual predicate concrete enough to warrant further proceedings, which may be costly and burdensome." Id. (emphasis in original).

Second, "[n]on-conclusory factual allegations" are "treated as true, even if seemingly incredible." Id. If such allegations "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged," and thereby "state a plausible, not a merely conceivable, case for relief," then the motion to dismiss must be denied. Id. (quotation marks omitted); accord Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. "The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citation omitted). "Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937 (citation omitted).

III. DISCUSSION

First, the Court considers Karvelas' claims against individual Defendants Fantasia, Lussier, and Hudson-Jinks.

A. Claims Against the Individual Defendants

At the outset, the Court notes that the Complaint is devoid of any allegations, factual or otherwise, regarding Defendant Albert Fantasia. The Complaint simply does not plausibly state a claim against him. Thus, the motion to dismiss is ALLOWED as to Defendant Fantasia. The claims against Fantasia are also DISMISSED for the reasons resulting in dismissal of all claims against the other individual defendants.

The Complaint also fails to state a claim against individual Defendants Lussier and Hudson-Jinks. The Court now explicates why this is so for each of the Complaint's five counts.

1. Count I: FCA Retaliation

Defendants Lussier and Hudson-Jinks move to dismiss Karvelas' FCA retaliation claim, arguing that "[c]ourts have held that [ section 3730(h) ] claims do not apply against defendants in their individual capacity." Doc. No 32 at 4 (citing Orell v. UMass Mem'l Med. Ctr., Inc., 203 F. Supp. 2d 52, 66 (D. Mass. 2002) ). Defendants accurately portray the settled state of federal law before 2009, when "federal courts ... uniformly held that the FCA did not impose individual liability for retaliation claims." U.S. ex rel. Strubbe v. Crawford Cty. Mem'l Hosp., 915 F.3d 1158, 1167 (8th Cir. 2019), cert. denied sub nom. U.S. ex rel. Strubbe v. Crawford Cty. Mem. Hosp., No. 19-225, ––– U.S. ––––, 140 S.Ct. 553, 205 L.Ed.2d 356, 2019 WL 6257418 (U.S. Nov. 25, 2019) ; U.S. ex rel. Siewick v. Jamieson Sci. & Eng'g, Inc., 322 F.3d 738, 740 (D.C. Cir. 2003) (holding that an individual corporate director was not an "employer" for purposes of section 3730(h) liability). However, after the enactment of a 2009 amendment, "it is less clear that the statute still applies only to employers now that Congress has removed the statute's reference to retaliation ‘by [an] employer.’ " Aryai v. Forfeiture Support Assocs., 25 F. Supp. 3d 376, 385 (S.D.N.Y. 2012) (quoting Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111–21, § 4(d), 123 Stat. 1617, 1624–25). As amended, the statute now reads:

Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, or agent or associated others in furtherance of other efforts to stop 1 or more violations of this subchapter.

31 U.S.C. § 3730(h)(1).

Given the amended statutory text, some courts have been hesitant to reflexively dismiss FCA retaliation claims brought against defendants in their individual capacities. See, e.g., Laborde v. Rivera-Dueno, 719 F. Supp. 2d 198, 205 (D.P.R. 2010) (declining to dismiss an FCA retaliation claim "[i]n the absence of specific First Circuit guidance holding that individual liability does not exist in FCA retaliation claims, and in light of the fact that the persuasive authority on the issue relies upon an outdated version of the statute"); U.S. ex rel. Moore v. Community Health Servs., Inc., 2012 WL 1069474, at * 9 (D. Conn. Mar. 29, 2012) ; Weihua Huang v. Rector & Visitors of Univ. of Virginia, 896 F.Supp.2d 524, 548 n.16 (W.D. Va. 2012). A slew of federal courts,...