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Hernandez v. Hernandez

United States District Court, M.D. Florida, Orlando Division

June 12, 2017



          JOHN ANTOON II United States District Judge.

         Erick Hernandez (Plaintiff) alleges that his former employers, Dr. Vinicio Hernandez (Dr. Hernandez) and Sand Lake Cancer Center, P.A. (Sand Lake) (collectively, Defendants), retaliated against him in violation of the False Claims Act (FCA), 31 U.S.C. § 3730(h), for reporting Defendants' fraudulent Medicare billing practices to federal authorities. Defendants filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1), (Doc. 19), and Plaintiff filed a response in opposition, (Doc. 21). The motion is due to be granted in part and denied without prejudice in part.

         I. Background[1]

         Dr. Hernandez is a hematologist and oncologist who founded Sand Lake in 2009. (Am. Compl., Doc. 15, ¶¶ 3, 19). Sand Lake is a full-service cancer treatment center providing radiation services to treat all types of cancer in Orlando, Florida. (Id. ¶ 3). Before opening Sand Lake, Plaintiff, who is a "MS Medical Physicist" with over 22 years of medical physics experience, (id. ¶ 7), performed consulting services for Dr. Hernandez as he started the process of opening Sand Lake, (id ¶¶ 12-16). In October 2010, Plaintiff became Defendants' full-time employee as a medical physicist and supervisor of the radiation center. (Id. ¶¶ 13-21). Plaintiffs agreed upon annual salary was $225, 000 along with an annual one-percent "radiation collection" bonus. (Id.). Plaintiff worked as a Sand Lake employee until he was terminated on June 10, 2016. (Id. ¶74).

         In January 2016, Plaintiff discovered that Defendants were engaging in fraudulent Medicare billing practices.[2] (Id. ¶¶ 39-42). Specifically, Defendants were altering patients' medical records and submitting inflated Medicare bills to the federal government. (Id.). This fraudulent practice, which dated back to February 2015, resulted in overcharges of 15% on office visits where only a physician assistant-as opposed to a physician-saw the patient, (Id. ¶¶ 42, 45, 69). Plaintiff continued his investigations throughout the next several months, (Id. ¶ 69).

         Also in January 2016-about the time Plaintiff discovered Defendants' fraudulent conduct-Defendants began conducting audio and video surveillance of several "common areas" within the facility. (Id. ¶¶ 36-38). Defendants never sought or obtained employees' consent to conduct the surveillance. (Id. ¶ 38). The recording equipment, although not placed in Plaintiff's office, was "strong enough" to capture any conversations occurring in Plaintiff's office, (Id. ¶ 38). Around the same time, Dr. Hernandez and the office administrator, Asha Jiawan, began "reviewing employee emails and desktops, in real time, spying on what [employees] were doing." (Id. ¶ 43).

         "[A]t least one Sand Lake employee confirmed seeing Jiawan looking at [Plaintiff's] desktop in real time, reviewing what he was doing-specifically around the time he discovered the Medicare billing fraud." (Id.). "Sand Lake and Dr. Hernandez knew about [Plaintiffs] . . . efforts to stop violations of the [FCA] because: (1) employees reported seeing that [Plaintiffs] computer was being monitored[] when he was reviewing the records related to the Medicare fraud; (2) Sand Lake and Dr. Hernandez were recording his audio conversations; (3) Sand Lake and Dr. Hernandez were viewing and intercepting [Plaintiff's] activities on his work computer[] when he was reviewing the records that related to the Medicare fraud; (4) representatives of Sand Lake, including Dr. Sollacio, were asked directly by Dr. Hernandez if [Plaintiff] was the False Claims Act whistleblower." (Id. ¶ 44).

         After Plaintiff discovered Defendants' fraudulent billing practices, Defendants began to retaliate against Plaintiff. The following conduct occurred between February and June 2016: (1) Jiawan stated that Dr. Hernandez would not be paying Plaintiff's annual bonuses, (Id. ¶ 46); (2) Dr. Hernandez declined to pay Plaintiff the full amount he was owed in unpaid bonuses, (Id. ¶¶ 53, 62); (3) Defendants decreased Plaintiff's annual salary by $50, 000, (Id. ¶¶ 55-56); (4) Dr. Hernandez falsely claimed that Plaintiff agreed that he would not receive a bonus for 2014, (Id. ¶ 63); (5) Dr. Hernandez began requiring Plaintiff to clock in and clock out, "treating him like a minimum wage-earning employee, " and began harassing Plaintiff for failing to comply, (Id. ¶¶ 63-64); (6) Sand Lake did not allow Plaintiff to use a "paid time off" day to take a vacation even though Plaintiff still had unused "paid time off days available to him, (Id.. ¶¶ 66, 68); (7) Dr. Hernandez changed Plaintiffs employment from full time to working only two days per week, reducing Plaintiff's annual salary from $175, 000 to $70, 000, (Id. ¶ 70); (8) Defendants repeatedly asked Plaintiff "if he had resigned or was going to resign, " (Id. ¶ 73); and (9) Defendants terminated Plaintiff, providing no reason, (Id. ¶74). Defendants failed to pay Plaintiff's annual bonuses for 2013, 2014, 2015, and 2016. Id. ¶ 84).

         In March 2016, Plaintiff contacted a federal investigator regarding Defendants' fraudulent practices, and he met with the investigator several times. (Id. ¶ 45). The Amended Complaint does not state whether the government ever took enforcement action based on Plaintiff's tips.

         Plaintiff filed the instant lawsuit against Defendants on October 18, 2016, alleging four causes of action: retaliation under the FCA; breach of contract; failure to pay wages; and invasion of privacy. (Id. ¶¶ 75-93). On January 13, 2017, Defendants filed the instant motion to dismiss and Plaintiff filed a timely response in opposition.

         II. Standard[3]

         Generally, "[a] pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "[D]etailed factual allegations" are not required, but "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Ashcroft v. Igbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570). At the motion-to-dismiss stage, a court must construe all plausible inferences derived from the facts of the complaint in favor of the plaintiff. Whitwam v. JetCard Plus, Inc., 34 F.Supp.3d 1257, 1259 (S.D. Fla. 2014).

         III. Analysis

         Defendants argue in their motion to dismiss that (1) Plaintiff cannot hold Dr. Hernandez personally liable because he fails to pierce Sand Lake's corporate veil, (2) Plaintiff fails to sufficiently allege that Defendants were aware of Plaintiff's protected conduct before Defendants' retaliation, and (3) the Court should not exercise supplemental jurisdiction over the state law claims or alternatively, Plaintiff's state law claims fail under Rule 12(b)(6). Because the Court agrees that Plaintiff fails to state a claim of retaliation under the FCA and that the Court should not exercise supplemental jurisdiction over Plaintiff's remaining state law claims, the Court does ...

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