United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT WILLIAM BEAUMONT
HOSPITALS' MOTION TO PARTIALLY DISMISS RELATOR
FELTEN'S FIRST AMENDMENT TO COMPLAINT [114]
STEPHEN J. MURPHY, III UNITED STATES DISTRICT JUDGE
On
August 27, 2018, after the parties settled and stipulated to
dismissing the majority of the case, Relator David Felten,
M.D., Ph.D., filed an amended complaint and added more recent
allegations to his retaliation claim. ECF 97.[1] On October 26,
2018, Defendant William Beaumont Hospitals
("Beaumont") filed a motion to partially dismiss
Felten's amended complaint. ECF 114. Beaumont argues that
the majority of the allegations in Felten's amended
complaint are either (1) untimely, or (2) beyond the scope of
conduct that 31 U.S.C. § 3730(h) covers. Id. at
1770-71. Beaumont does not seek to dismiss Felten's claim
for retaliation based on Beaumont allegedly halving
Felten's budget while still expecting him to accomplish
the same goals prior to Felten filing the complaint. See
Id. at 1771. The Court reviewed the briefs and finds
that a hearing is unnecessary. See E.D. Mich. LR 7.1(f). For
the reasons below, the Court will grant the motion.
BACKGROUND
On
August 30, 2010, Felten filed a qui tam complaint and alleged
that Beaumont was violating the federal False Claims Act
("FCA") and the Michigan Medicaid False Claims Act
("MMFCA") and was retaliating against him in
violation of both federal and Michigan law. See generally ECF
1. Felten alleged that Beaumont paid improper remuneration to
various physicians and physicians' groups in exchange for
referrals of Medicare, Medicaid, and TRICARE patients to
Beaumont in violation of the Anti-Kickback Statute
("AKS")[2] and Stark Laws. Id. He also
alleged that Beaumont retaliated against him in violation of
31 U.S.C. § 3730(h) and Mich. Comp. Laws § 400.610c
by "continuously and increasingly marginaliz[ing him]
due to his insistence that the laws and regulations of the
United States be complied with." Id. at 91,
95-96.
The
Government intervened, and the parties settled most of the
case. The Court, on stipulation of the parties, dismissed all
claims except the Relators' claims for attorneys'
fees and costs and for retaliation. ECF 87, 88. Felten then
amended his complaint to add allegations to his retaliation
claim regarding conduct that occurred after he filed his
initial complaint. ECF 97. Beaumont filed a motion to
partially dismiss the amended complaint. ECF 114. Beaumont
now seeks to dismiss all of Felten's claims except his
claim for retaliation based on his marginalization before he
filed the qui tam complaint, which is similar to the
retaliation claim in his initial complaint. See Id.
at 1771.
STANDARD
OF REVIEW
When
analyzing a motion to dismiss under Civil Rule 12(b)(6), the
Court views the complaint in the light most favorable to the
plaintiff, presumes the truth of all well-pleaded factual
assertions, and draws every reasonable inference in favor of
the non-moving party. Bassett v. Nat'l Collegiate
Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). To
survive a motion to dismiss, "the complaint must contain
either direct or inferential allegations respecting all the
material elements to sustain a recovery under some viable
legal theory." Nat'l Hockey League Players Ass'n
v. Plymouth Whalers Hockey Club, 419 F.3d 462, 468 (6th Cir.
2005) (citation omitted). It must allege facts
"sufficient 'to raise a right to relief above the
speculative level,' and to 'state a claim to relief
that is plausible on its face.'" Hensley Mfg. v.
ProPride, Inc., 579 F.3d 603, 609 (6th Cir. 2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)).
The
Court must analyze a Rule 12(c) motion for judgment on the
pleadings with the same standard it would employ for a
12(b)(6) motion to dismiss. Tucker v. Middleburg-Legacy
Place, LLC, 539 F.3d 545, 549 (6th Cir. 2008) (citation
omitted). The Court accepts as true all well-pleaded material
allegations and draws reasonable factual inferences in favor
of the non-moving party, but "need not accept as true
legal conclusions or unwarranted factual inferences."
JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581-82
(6th Cir. 2007) (quoting Mixon v. Ohio, 193 F.3d 389, 400
(6th Cir. 1999)). The complaint must not only "give the
defendant fair notice of what the claim is and the grounds
upon which it rests," Nader v. Blackwell, 545 F.3d 459,
470 (6th Cir. 2008) (quoting Erickson v. Pardus, 551 U.S. 89,
93 (2007)), but also "'raise a right to relief above
the speculative level,' and . . . 'state a claim to
relief that is plausible on its face.'" Hensley, 579
F.3d at 609 (quoting Twombly, 550 U.S. at 555, 570). It is
not enough to merely offer "'labels and
conclusions' or 'a formulaic recitation of the
elements of a cause of action[.]'" Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at
555).
DISCUSSION
Beaumont
seeks judgment on the pleadings as to several of Felten's
retaliation allegations because the allegations are
time-barred. ECF 114, PgID 1770-71. Beaumont also seeks to
dismiss several of Felten's additional retaliation
allegations for failure to state a claim under Rule 12(b)(6)
because the allegations include conduct after the end of
Felten's employment at Beaumont and the relevant
retaliation statute covers only current employees.
Id. at 1771. The Court will address each argument in
turn.
I.
Relation Back
First,
Beaumont seeks judgment on the pleadings as to certain
retaliation allegations in Felten's amended complaint
because they are time-barred. The statute of limitations for
a retaliation claim under 31 U.S.C. § 3730(h) and under
Mich. Comp. Laws § 400.610c is three years. See 31
U.S.C. 3730(h)(3); United States ex rel. Yanity v. J&B
Med. Supply Co., No. 08-11825, 2012 WL 4811288, at *5 (E.D.
Mich. Oct. 10, 2012) (finding that when the state false
claims act lacks a limitations period it is governed by the
state's general tort statute of limitations, and
concluding that in Michigan the applicable limitations period
is three years).[3] Felten filed his amended complaint on
August 27, 2018. ECF 97. Any allegations that predate August
27, 2015 are therefore time-barred unless they relate back to
Felten's initial 2010 complaint.
"An
amendment to a pleading relates back to the date of the
original pleading when . . . the amendment asserts a claim or
defense that arose out of the conduct, transaction, or
occurrence set out-or attempted to be set out-in the original
pleading." Fed.R.Civ.P. 15(c)(1)(B). The Sixth Circuit
analyzes questions of relation back "not by generic or
ideal notions of what constitutes a 'conduct,
transaction, or occurrence,' but instead by asking
whether the party asserting the statute of limitations
defense had been placed on notice that he could be called to
answer for the allegations in the amended pleading."
United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501
F.3d 493, 516 (6th Cir. 2007). And here, there are several
reasons why Felten's original complaint did not
adequately put Beaumont on notice about the new retaliation
allegations he added in his amended complaint.
First,
the original complaint was sealed, so it is unclear whether
that provided Beaumont sufficient notice of any of
Felten's claims for purposes of relation back. See, e.g.,
Hayes v. Dept. of Educ. of New York City, 20 F.Supp.3d 438,
449-51 (S.D.N.Y. 2014). Second, the new retaliation
allegations in Felten's amended complaint are based on
actions taken after the original complaint was filed. See
Kellett v. Memphis Light, Gas & Water, No.
2:11-cv-3045-JTF-tmp, 2013 WL 6418997, at *4 (W.D. Tenn. Dec.
9, 2013) (adopting report and recommendation of the
magistrate judge holding that relation back does not apply to
a new retaliation claim when the ...