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United States ex rel. Okeeffe v. The River Oaks Management Co., LLC

United States District Court, S.D. Mississippi, Eastern Division

October 18, 2017

UNITED STATES ex rel. RICHARD M. OKEEFFE, JR., M.D., PLAINTIFF
v.
THE RIVER OAKS MANAGEMENT COMPANY, LLC, et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT UNITED STATES DISTRICT COURT JUDGE.

         For the reasons below, the Court grants in part and denies in part Defendants' Motion to Dismiss [15]. The Court denies the motion as moot with respect to Plaintiff's claim of “corporate practice of medicine, ” but the Court grants the motion in all other respects.

         I. Background

         This is a qui tam action under the False Claims Act (“FCA”).[1] Relator/Plaintiff was a physician employed by Defendants. He contends that Defendants conspired to violate the federal Anti-Kickback Statute, the Stark Law, and the False Claims Act by providing payments to physicians as remuneration for referrals of patients, and knowingly submitting claims for reimbursement to Medicare and Medicaid that falsely represented that the claims complied with applicable federal law. Defendants filed a Motion to Dismiss [15], which the Court now addresses.

         II. Standard of Review

         To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Great Lakes Dredge & Dock Co. LLC v. La. State, 624 F.3d 201, 210 (5th Cir. 2010) (punctuation omitted). “To be plausible, the complaint's factual allegations must be enough to raise a right to relief above the speculative level.” Id. (punctuation omitted). The Court must “accept all well-pleaded facts as true and construe the complaint in the light most favorable to the plaintiff.” Id. But the Court will not accept as true “conclusory allegations, unwarranted factual inferences, or legal conclusions.” Id. Likewise, “a formulaic recitation of the elements of a cause of action will not do.” PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412, 417 (5th Cir. 2010) (punctuation omitted). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).

         Additionally, “complaints under the FCA must comply with Rule 9(b), which provides that ‘[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.'” United States ex rel. Rigsby v. State Farm Fire & Cas. Co., 794 F.3d 457, 466 (5th Cir. 2015).

Rule 9(b) generally requires the plaintiff to plead the time, place, and contents of the false representation and the identity of the person making the representation. However, an FCA claim can meet Rule 9(b)'s standard if it alleges “particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.”

United States v. Bollinger Shipyards, Inc., 775 F.3d 255, 260 (5th Cir. 2014) (quoting United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 190 (5th Cir. 2009)). Moreover, “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b).

         III. Discussion

         A. Counts I & II - Anti-Kickback Statute & Stark Law

         First, Defendants argue that neither the Anti-Kickback Statute nor the Stark Law provide a private right of action. Defendants are correct. Neither the Anti-Kickback Statute[2] nor the Stark Law[3] provide a private right of action. Plaintiff effectively concedes this point, arguing that he may assert a claim under the False Claims Act premised upon violations of the Anti-Kickback Statute or Stark Law. Therefore, the Court grants Defendants' motion with respect to any independent claims under the Anti-Kickback Statute or Stark Law that Plaintiff may have asserted.

         B. Count III - False Claims Act

         Plaintiff referred to numerous sections of the FCA in his Complaint. Defendants argue that he failed to ...


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