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United States ex rel. Sibley v. Delta Regional Medical Center

United States District Court, N.D. Mississippi, Greenville Division

March 21, 2019

THE UNITED STATES OF AMERICA ex rel. CANDI SIBLEY PLAINTIFFS
v.
DELTA REGIONAL MEDICAL CENTER DEFENDANT

          MEMORANDUM OPINION

         The Emergency Medical Treatment Act, 42 U.S.C. § 1395dd, requires that hospitals that receive Medicare funds provide medical treatment to patients who present with emergency medical conditions and stabilize them before transferring them to another facility. Candi Sibley claims that on numerous occasions Delta Regional Medical Center failed to treat patients with emergency medical conditions before transferring them to other facilities as EMTALA requires.

         The False Claims Act, 31 U.S.C. §§ 3729 et. seq, imposes liability on anyone seeking payment from the United States government, such as a hospital seeking Medicare or Medicaid reimbursements, for knowingly submitting a false or fraudulent claim for that payment. Sibley asserts that Delta Regional's EMTALA violations, and its failure to report them to the government, make the subsequent Medicare and Medicaid reimbursements Delta Regional sought false.

         The False Claims Act permits private individuals, such as Sibley, who know of fraudulent claims to bring an action on the government's behalf. But the Act provides that even when a private individual brings that action, the government may step in and move to dismiss any claims against the defendant. The question this case presents is what standard the Court should use to determine whether the government's motion to dismiss ought to be granted.

         As the Court sets out below, both the text of the False Claims Act and case law establish that the government's decision to dismiss a False Claims Act case is one committed to the its discretion. And even if the government must show that dismissal is rational related to a valid government purpose, as Sibley claims it must, the government meets that burden here. Thus, the United States' motion to dismiss, Doc. 60, should be granted.

         Background

         I. The Emergency Medical Treatment and Labor Act

         The Emergency Medical Treatment and Labor Act ("EMTALA") requires that when a patient comes into a hospital emergency room, the hospital perform a medical screening to determine if the patient has an emergency condition. 42 U.S.C.A. § 1395dd(a). If the screening reveals that the patient has an emergency medical condition, the hospital must treat the patient until the emergency condition is stabilized. § 1395dd(b)(1)(A).

         Unless the patient is first stabilized and no longer has an emergency medical condition, the hospital can transfer the patient to another facility under only two conditions. First, if the patient, after being informed of the hospital's EMTALA obligations, requests in writing to be transferred; and second, when a physician or other qualified medical person certifies that the medical benefits of transfer outweigh the risks. § 1395dd(c)(1).

         II. The False Claims Act

         The False Claims Act, in relevant part, imposes liability on anyone who:

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;
(D) has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property
(G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.

31 U.S.C. § 3729(A)(1). To establish a violation of the False Claims Act, the plaintiff must show that "(1) there was a false statement or fraudulent course of conduct; (2) made or carried out with the requisite scienter; (3) that was material; and (4) that caused the Government to pay out money or to forfeit moneys due (i.e. that involved a claim)." U.S., ex rel. Jamison v. McKesson Corp., 784 F.Supp.2d 664, 675 (N.D. Miss. 2011) (citing U.S. ex rel. Longhi v. Lithium Power Tech, Inc., 575 F.3d 458, 467 (5th Gir. 2009)).

         The False Claims Act permits a private individual, known as a relator, to "bring a civil action for a violation of § 3729 ... in the name of the Government." Id. § 3730(b). The Government may intervene and conduct the action itself, or it may decline intervention and permit the citizen to conduct the action. Id. § 3730(b)(4). Even where the Government does not intervene, however, it "may dismiss the action notwithstanding; the objections of the person initiating the action." § 3730(c)(2)(A).

         III. Factual and Procedural Background

         Sibley previously worked at Delta Regional in its emergency department. Compl., Doc. 16 at 15 ¶ 57; Declaration of Candi Sibley, Doc. 45-1, at 1, ¶ 2. During her employment, she came to believe that Delta Regional was intentionally failing to provide appropriate emergency care to individuals who came into Delta Regionil's emergency room. Declaration, Doc. 45-1 at 4, ¶¶ 8-9. She employed an outside physician to review Delta Regional's medical records. The physician identified several potential EMTALA violations. M at 4-5, ¶ 10 Sibley filed the present qui tarn action. In her amended complaint she identifies 52 instances where a Delta Regional failed to render emergency care as required by EMTALA. Compl., Doc. 16 at 15-35, ¶¶ 58-243 In 44 of those instaices, she alleges only that the "unstable patient was inappropriately transferred." Four of the five counts in the complaint relate to those EMTALA violations.[1]

         The government elected not to intervene. Notice of Election to Decline Intervention, Doc. 13. Delta Regional filed a motion to dismiss. Doc. 34. The Court took notice of a similar False Claims Act case in the Southern District of Mississippi, also asserting False Claims Act claims based on EMTALA violations.[2] The government also declined to intervene there but was nonetheless considering moving for dismissal. This Court ordered the government to state whether they intended to move to dismiss this case. The government responded by filing the instant motion seeking to dismiss the first four counts of the complaint.[3] In addition to her response in opposition to the government's motion, Sibley has also filed a motion to convert the motion to one for summary judgment and allow discovery under Rule 56(d). Doc. 74.

         Analysis

         I. Dismissal as of right vs. dismissal for good cause shown

         In a False Claims Act case, it is the government, not the relator, who is the injured party. Even when the government declines to intervene and conduct the case itself, the False Claims Act gives the government certain powers over the litigation. These powers include the right to dismiss the case "notwithstanding the objections of the [relator]." 31 U.S.C. § 3730(c)(2)(A).

         The government argues that this provision gives it unilateral power to dismiss any False Claims Act action-if the government wants to dismiss the case, the government can. Sibley, however, argues that the government must put forward some reason that bears a rational relation to a valid government purpose.

         The government responds by saying that even if that were true, there are valid reasons for dismissal here. Namely, the government asserts that maintaining [his case will interfere with the Department of Health and Humans Services efforts to enforce EMTALA; that the case will require the use of scarce government resources; and finally, that the complaint does not allege any viable false claims.

         The section of the False Claims Act at issue here provides that:

The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.

31 U.S.C. § 3730(c)(2)(A). Courts agree that it is unnecessary for the government to formally intervene before moving to dismiss. United States v. Everglades Coll, Inc., 855 F.3d 1279, 1286 (11th Cir. 2017) (citing Ridenour v. Kaiser-Hill Co., 397 F.3d 925, 933 (10th Cir. 2005)). Courts are split, however, on whether this statute permits the government to unilaterally dismiss qui tarn actions brought under the False Claims Act without reason, or whether the United States must show that dismissal serves a valid government purpose. Compare Swift v. United States, 318 F.3d 250, 252 (D.C. Cir. 2003) with U.S. ex rel, Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139, 1145 (9th Cir. 1998).

         The United States argues that the Fifth Circuit would adopt the D.C. Circuit's reasoning in Swift and hold that the United States may dismiss this case without first showing good cause supports dismissal. Sibley argues that the Court should use the Ninth Circuit's Sequoia Orange standard. Beyond that, she asserts that the Swift standard is inapplicable once the defendant has been served. Thus, the Court sets out to determine when the government may dismiss a qui tarn False Claims Act case.

         The Ninth Circuit first considered this question in U.S. ex rel, Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139 (9th Cir. 1998). The dispute there arose out of alleged violations of prorate restrictions and reporting requirements on marketing orders for navel and Valencia oranges. Id. at 1141. After protracted litigation, the USDA amended its citrus industry policies and decided to no longer enforce the statutes and regulations the defendants had violated. To that end, the government moved to dismiss all of the pending False Claims Act cases premised on violations of those regulations. Id. at 1142. The district court granted the motion, and in doing so, held that the government must identify a valid government purpose and show a rational relationship between that purpose and dismissal. Id. at 1145 (citing U.S. ex rel. Sequoia Orange Co. v. Sunland Packing House Co., 912 F.Supp. 1325, 1341 (E.D. Cal. 1995)).

         On appeal, the Ninth Circuit first determined that § 3730(c)(2)(A) did not identify a standard to apply. Id. They reasoned that the district court's standard was reasonable because it conformed with the notion that the government must not act i arbitrarily. Id. at 1145. Further, the Ninth Circuit gave weight to a Senate report on the statute which "explained that relators may object if the government moves to dismiss without reason." Id. (citing S. Rep. No. 99-345, at 26 (1986)). Finally, they dismissed any separation of powers concerns by holding that standard applied was no greater than "mandated by the Constitution itself." Id. at 1146. Thus, the standard did not impermissible require judicial approval over executive authority. Id. at 1145-1146.

         Next, in Swift v. United States, 318 F.3d 250 (D.C. Cir. 2003), the D.C. Circuit considered whether a lower court was correct in applying the Sequoia Orange rational relationship standard. The Court held the rational relationship test was incorrect, and that the government possesses "an unfettered right to dismiss a [qui tarn] act on." 318 F.3d at 252.

         The D.C. Circuit first started with statute's text, noting that the statute appears to give the executive the power to dismiss unilaterally: "The section states that 'The Government'-meaning the Executive Branch, not the Judicial-'may dismiss the action, '. . . suggests the absence of judicial constraint." Id. (quoting § 3730(c)(2)(A)). The court also equated a motion to dismiss in this context with a decision not to prosecute, which was "a decision generally committed to [the government's] absolute discretion." Id. at 253 (quoting Heckler v. Chaney, 470 U.S. 821, 831-33, 105 S.Ct. 1649, 1655-57, 84 L.Ed.2d 714 (1985) (alteration in original)). The court discounted the Senate Report cited by the Ninth Circuit, noting that that report concerned an unenacted version of the Act. Id. Finally, the D.C. Circuit concluded that the requirement that the Court provide the relator with an "opportunity for hearing" did not impose judicial oversight. Instead, it was intended to "give the relator a formal opportunity to convince the government not to end the case. Id.

         II. The motion will not be converted to one for summary judgment.

         In addition to outright opposing the government's motion to dismiss, Sibley also seeks to convert it to a motion for summary judgment. She contends this is appropriate because all parties have ...


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