United States District Court, E.D. Michigan, Southern Division
UNITED STATES OF AMERICA and the STATE OF MICHIGAN, ex rel., ASHWANI SHEORAN, RPh, Plaintiff-Relator,
WAL-MART STORES EAST, LP, d/b/a WALMART, a foreign corporation, TOI WALKER, DOUG HENGER, ALFRED RODRIGUEZ, RICHARD LOCKARD, M.D., NAVEED MAHFOOZ, M.D., and TAREK EZZEDDINE, M.D., Defendants.
OPINION AND ORDER (1) GRANTING DEFENDANT
LOCKARD'S MOTION TO DISMISS SECOND AMENDED COMPLAINT (ECF
NO. 58) AND (2) GRANTING WALMART DEFENDANTS' MOTION TO
DISMISS SECOND AMENDED COMPLAINT (ECF NO. 61)
V. PARKER U.S. DISTRICT JUDGE.
(“Relator”), Ashwani Sheoran, RPh, on behalf of
himself, the United States and the State of Michigan,
initiated this lawsuit on February 11, 2013, filing a qui
tam complaint under seal against Defendants (1) Walmart,
(2) Toi Walker, (3) Doug Henger, (4) Alfred Rodriguez, (5)
Richard Lockard, M.D., (6) Naveed Mahfooz, M.D., and (7)
Tarek Ezzeddine, M.D. (Compl., ECF No. 1.) As a matter of
course, on April 16, 2013, Relator filed his First Amended
Complaint (“FAC”) against the same Defendants and
alleging the same claims. (Am. Compl., ECF No. 3.)
December 7, 2018, Relator filed his Second Amended Complaint
(“SAC”) alleging violations of (1) the False
Claims Act (“FCA”), 31 U.S.C. § 3729 et
seq., (2) the Fraud Enforcement Recovery Act of 2009
(“FERA”), 31 U.S.C. §§ 3729-3733, (3)
the Michigan Medicaid False Claims Act (“MMFCA”),
Mich. Comp. Laws § 400.601 et seq., and (4) the
retaliation provisions of 31 U.S.C. § 3730(h). (Sec. Am.
Compl., ECF No. 57.) The federal and state FCA claims are
against all Defendants, Sec. Am. Compl. at 25-28, Pg. ID
589-592, while the FCA retaliation claim is only against
Walmart, id. at 28, Pg. ID 592. On March 8, 2018,
this Court unsealed the complaints after the United States
and the State of Michigan declined to intervene. (ECF Nos.
before the Court are Defendant Lockard's and Defendants
Wal-Mart Stores East, LP, Toi Walker, Doug Henger, and Alfred
Rodriguez's (the “Walmart Defendants”)
respective Motions to Dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). (Lockard Dismiss Mot., ECF No. 58;
Walmart Dismiss Mot., ECF No. 61.) The Motions have been
fully briefed. (ECF Nos. 58, 61, 62, 63, 64, 65.) Finding the
facts and legal arguments sufficiently presented in the
parties' briefs, the Court is dispensing with oral
argument pursuant to Local Rule 7.1(f). For the reasons that
follow, the Court grants both motions and dismisses all
claims against Defendant Lockard and the Walmart
motion to dismiss pursuant to Rule 12(b)(6) tests the legal
sufficiency of the complaint. RMI Titanium Co. v.
Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir.
1996). Under Federal Rule of Civil Procedure 8(a)(2), a
pleading must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” To survive a motion to dismiss, a complaint
need not contain “detailed factual allegations, ”
but it must contain more than “labels and
conclusions” or “a formulaic recitation of the
elements of a cause of action . . ..” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint
does not “suffice if it tenders ‘naked
assertions' devoid of ‘further factual
enhancement.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 557).
As the Supreme Court provided in Iqbal and
Twombly, “[t]o survive a 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). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). The plausibility standard
“does not impose a probability requirement at the
pleading stage; it simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence of
illegal [conduct].” Twombly, 550 U.S. at 556.
In deciding whether the plaintiff has set forth a
“plausible” claim, the court must accept the
factual allegations in the complaint as true. Erickson v.
Pardus, 551 U.S. 89, 94 (2007). This presumption is not
applicable to legal conclusions, however. Iqbal, 556
U.S. at 668. Therefore, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. (citing
Twombly, 550 U.S. at 555).
claims brought under the FCA have a heightened standard and
must also comply with Federal Rule of Civil Procedure 9(b).
When alleging fraud, “a party must state with
particularity the circumstances constituting fraud.”
Factual and Procedural Background
about May 2012 to January 2013, Relator worked for Walmart as
a “full-time floater pharmacist.” (SAC
¶¶ 7, 36-37, 166.) This lawsuit concerns
observations that Relator made at various Walmart pharmacies
between July 14 and August 30, 2012. (Id.
Related to Defendant Lockard
about July 31, 2012, Relator was assigned to work at a
Walmart store in Bad Axe, Michigan. (Id. ¶ 73.)
Upon arriving that day before 8 a.m., he observed a line of
roughly ten customers waiting for the pharmacy to open-each
one a patient of Defendant Lockard's. (Id.
¶¶ 74, 75.) Relator alleges that each of these
patients was prescribed “high doses” of
controlled substances-methadone, morphine sulfate, and/or
oxycodone-and that Medicare or Medicaid was used in paying
for them. (Id. ¶¶ 76-78.)
about August 6, 2012, while working at the same Walmart in
Bad Axe, Relator observed “large numbers of controlled
substances” prescribed from Defendant Lockard's
office being presented to the pharmacy, and he declined to
fulfill them. (Id. ¶¶ 97, 100.) Relator
contends that Defendant Lockard's prescriptions were
either false, fraudulent or submitted to the Walmart pharmacy
in violation of state and federal healthcare law.
(Id. ¶¶ 168, 172, 176.)
Related to Walmart Defendants
also alleged that, while working at various Walmart
pharmacies, he observed a customer attempting to refill
prescriptions prematurely, customers presenting allegedly
“high dose[ ]” prescriptions, a customer
attempting to use a stolen prescription pad, and customers
presenting out-of-area prescriptions. (See Id.
¶¶ 68, 73-81, 87, 97, 114.)
further alleged that he shared his observations and
suspicions with his direct supervisor, Defendant Toi Walker,
and with other members of Walmart management, including
Defendant Doug Henger. (Id. ¶¶ 119-21.)
Walmart investigated, and on September 12, 2012, Relator
received an email stating that the investigation had been
closed. (Id. ¶¶ 130-131, 146.) Defendant
Alfred Rodriguez, a Walmart Human Resources Director, sent
Relator an email stating that the investigation found