United States District Court, M.D. Florida, Tampa Division
UNITED STATES OF AMERICA, STATE OF FLORIDA, and ex rel. DONNA ISABELL, and KATHERINE SCHWALBE, Plaintiffs/Relators,
KINDRED HEALTHCARE, et al., Defendants.
D. Whittemore United States District Judge
THE COURT are Defendants Kindred Healthcare, Inc.,
d/b/a Kindred at Home, Gentiva Health Services, Inc., Kindred
Systems, Inc., Gentiva Health Services (Certified), Inc., and
Senior Home Care, Inc.'s Motion to Dismiss Second Amended
Complaint (Dkt. 102); Defendant Chris Gelvin's Motion to
Dismiss Plaintiff's Second Amended Complaint (Dkt. 115);
and Relators' oppositions to both motions (Dkts. 108,
118). Upon consideration, the motions to dismiss are
action is brought by Relators Donna Isabell and Katherine
Schwalbe. Donna Isabell worked as the Area Vice President for
Defendant Kindred Healthcare for two years and five months.
(Dkt. 97 ¶ 1). Katherine Schwalbe worked as an Account
Manager for Defendant Senior Home Care for ten years and ten
months. (Id. ¶ 2). Their Second Amended
Complaint alleges that six defendants (the “Kindred
Defendants”) violated the False Claims Act, 31 U.S.C.
§ 3729 et seq., by engaging in retaliation and
various billing, fraudulent document, understaffing, and
kickback schemes. Specifically, Relators contend these False
Claims Act violations/schemes were carried out by the
defendants through the “Presentation of False
Claims” (Count I); “Making and Using False
Records and Statements to get False Claims Paid” (Count
II); “Retaliation” against Relator Isabell (Count
III); and “Retaliation” against Relator Schwalbe
(Count IV). See (Dkt. 97, Second Am. Compl., pp.
filed this action on March 11, 2016. (Dkt. 1). In May 2016,
they filed an amended complaint. (Dkt. 7). In March 2018, the
United States declined to intervene, and the complaint was
unsealed. (Dkts. 36, 37). One month later, the State of
Florida declined to intervene. (Dkt. 43). Relators later
filed a Second Amended Complaint, which is now the subject of
defendants' motions. (Dkts. 97, 102, 115).
state a claim under the False Claims Act, a relator must
satisfy two pleading standards. First, the complaint 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). This Rule does not require detailed
factual allegations, but it demands more than an unadorned,
conclusory accusation of harm. Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). The complaint must “plead all
facts establishing an entitlement to relief with more than
‘labels and conclusions' or a ‘formulaic
recitation of the elements of a cause of action.'”
Resnick v. AvMed, Inc., 693 F.3d 1317, 1324 (11th
Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)). And while “[l]egal conclusions
can provide the framework of a complaint, they must be
supported by factual allegations.” Iqbal, 556
U.S. at 679.
a False Claims Act complaint must “state with
particularity the circumstances constituting fraud.”
Fed.R.Civ.P. 9(b); see United States ex rel. Clausen v.
Lab. Corp. of Am., 290 F.3d 1301, 1310 (11th Cir. 2002).
The particularity requirement of Rule 9(b) is satisfied if
the complaint alleges “facts as to time, place, and
substance of the defendant's alleged fraud, specifically
the details of the defendant['s] allegedly fraudulent
acts, when they occurred, and who engaged in them.”
Hopper v. Solvay Pharm., Inc., 588 F.3d 1318, 1324
(11th Cir. 2009) (citing Clausen, 290 F.3d at 1310).
in order to plead the submission of a false claim with
particularity, “a relator must identify the particular
document and statement alleged to be false, who made or used
it, when the statement was made, how the statement was false,
and what the defendants obtained as a result.”
United States ex rel. Matheny v. Medco Health Solutions,
Inc., 671 F.3d 1217, 1225 (11th Cir. 2012). And in the
context of a kickback scheme that violates the False Claim
Act, “[t]o plead a violation of the Anti-Kickback
Statute, the Relator must allege that (1) [defendant]
knowingly and wilfully (2) offered or paid any remuneration
(3) to induce a physician to refer a patient for services
that may be paid by a federal health care [program].”
See 42 U.S.C. § 1320a-7b(b)(2); United
States ex rel. Mastej v. Health Mgmt. Assocs, Inc., 591
Fed.Appx. 693, 698 (11th Cir. 2014).
“central question” in any False Claims Act case
is “whether the defendant ever presented a ‘false
or fraudulent claim' to the government.”
Hopper, 588 F.3d at 1326 (quoting Clausen,
290 F.3d at 1311). A defendant violates the False Claims Act
only by “knowingly ask[ing] the Government to pay
amounts it does not owe, ” and not by “merely
disregard[ing] Government regulations or [following] improper
internal policies.” Clausen, 290 F.3d at 1311.
The requirement of alleging the “presentment” of
a false claim cannot be overcome by detailing other improper
activity. Id. Rule 9(b) does not permit a relator
“merely to describe a private scheme in detail but then
to allege simply and without any stated reason for his belief
that claims requesting illegal payments must have been
submitted, were likely submitted or should have been
submitted to the Government.” Id. Rule 9(b)
requires “some indicia of reliability . . . in the
complaint to support the allegation of an actual false
claim for payment being made to the Government.”
Id. (emphasis in original).
Second Amended Complaint is due to be dismissed because it
lacks specific allegations that satisfy Rule 9(b). The first
deficiency in the Second Amended Complaint is that it alleges
no fewer than eleven different ways the six defendants
violated the False Claims Act, yet only brings four causes of
action under the Act, leaving it to the defendants and this
Court to determine which scheme falls within which count.
See (Dkt. 97 ¶¶ 59-200); (id. ¶¶
270-273). Accordingly, it is not clear which alleged
scheme or what specific allegations relate to which False
Claims Act count. See Weiland v. Palm Beach Cty.
Sheriff's Office, 792 F.3d 1313, 1322-23 (11th Cir.
the Second Amended Complaint impermissibly lumps together all
defendants, failing to allege the conduct of each defendant.
In a footnote, Relators assert that “Kindred
Healthcare, Inc. is now responsible for the conduct of the
Kindred Defendants through acquisition or merger. As a
result, throughout this complaint, conduct of the defendant
entities will be attributed to ‘Kindred' as the
entity now responsible for conduct of its divisions and
subsidiaries.” (Dkt. 97, p. 3 n.1). This explanation,
however, is nothing more than a conclusory allegation without
supporting facts. See Ambrosia Coal & Const. Co. v.
Pages Morales, 482 F.3d 1309, 1317 (11th Cir. 2007)
(dismissal proper when complaint “devoid of specific
allegations with respect to each defendant”).
referring to defendants collectively as “Kindred,
” each of the eleven False Claims
Act/Anti-Kickback/Stark Law schemes, as well as the four
pleaded counts, fails to distinguish between the defendants,
and therefore fails to meet the particularity requirements of
pleading a False Claims Act claim. See Brooks v. Blue
Cross & Blue Shield of Fla., Inc., 116 F.3d 1364,
1381 (11th Cir. 1997) (“The Amended Complaint is devoid
of specific allegations with respect to the separate
Defendants. Thus, the Amended Complaint is also subject to
dismissal without prejudice for failure to plead fraud with
the requisite specificity as to each of the Defendants under
Rule 9(b).”). It follows that the schemes themselves
are therefore not described with the particularity ...