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Gronemeyer v. Crossroads Community Hospital

United States District Court, Seventh Circuit

August 26, 2013

PAMELA GRONEMEYER, Plaintiff,
v.
CROSSROADS COMMUNITY HOSPITAL, Defendant.

MEMORANDUM & ORDER

WILLIAM D. STIEHL, DISTRICT JUDGE

Before the Court is defendant Crossroads Community Hospital’s (“Crossroads”) motion to dismiss plaintiff’s third amended complaint (Doc. 51), to which plaintiff has responded (Doc. 54) and defendant has replied (Doc. 55). Plaintiff Pamela Gronemeyer (“Gronemeyer”) alleges that she is entitled to damages as a result of Crossroads terminating her employment after she engaged in what Crossroads allegedly knew to be protected conduct under the False Claims Act of 31 U.S.C. § 3730 (“FCA”). Defendant moves this Court to dismiss plaintiff’s third amended complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons that follow, defendant’s motion to dismiss (Doc. 51) is GRANTED.

Background

Plaintiff is a citizen of Madison County, Illinois. Defendant is an Illinois corporation which provides medical services, and receives significant monies from the United States in the form of reimbursements for Medicare and Medicaid claims.

From 1998 until 2009, defendant employed plaintiff as a pathologist. As part of her employment, plaintiff served on the defendant’s Utilization Management Committee, Infection Control Committee, Medical Executive Committee, and Quality Improvement Committee, wherein her responsibilities included reviewing records and approving transfusions, and conducting after-the-fact quality assurance assessments of the medical necessity for transfusions. In the course of performing these duties, plaintiff allegedly came to believe that defendant was submitting false claims to officials of the United States for the purpose of obtaining Medicare and Medicaid reimbursements. Plaintiff asserts that she brought these findings to her superiors, and as a result, was terminated on August 31, 2009. She alleges that her termination was a violation of the FCA, for which she demands relief.

Legal Standard

A motion pursuant to Fed.R.Civ.P. 12(b)(6) allows for dismissal for “failure to state a claim upon which relief can be granted.” To state a claim, a pleading need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Furthermore, the Court must review a complaint in the light most favorable to the plaintiff, accept as true all well-pleaded facts alleged, and draw all possible inferences in the plaintiff's favor. See Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). Detailed factual allegations are not required, but the pleading must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A plaintiff “can plead himself out of court by pleading facts that show that he has no legal claim.” Atkins v. City of Chicago, 631 F.3d 823, 832 (7th Cir. 2011).

Additionally, Fed.R.Civ.P. 9(b) provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Claims made under the FCA are subject to the heightened pleading requirement of Rule 9(b) and, therefore, must be stated with particularity. See United States ex rel. Garst v. Lockheed-Martin Corp., 328 F.3d 374, 376 (7th Cir. 2003); United States ex rel. Gross v. AIDS Research Alliance-Chicago, 415 F.3d 601, 604 (7th Cir. 2005).

Analysis

The FCA prohibits any person from making false or fraudulent claims for payment to the United States. 31 U.S.C. § 3729(a). In 1986, amendments to the FCA created a private cause of action for an individual retaliated against by his or her employer for assisting with an FCA investigation or proceeding. 31 U.S.C. § 3730(h). This provision is controlling here.

Accordingly, in order for plaintiff to bring an action against defendant under § 3730(h), she must show that (1) her actions were taken “in furtherance of” an FCA enforcement action and were therefore protected by the statute; (2) that defendant had knowledge that she was engaged in this protected conduct; and (3) that the discharge was motivated, at least in part, by the protected conduct. Brandon v. Anesthesia & Pain Mgmt. Associates, Ltd., 277 F.3d 936, 944 (7th Cir. 2002). Defendant seeks to dismiss plaintiff’s third amended complaint on the theory that she has not adequately pleaded all of the FCA’s requisite elements.

I. In Furtherance Of

According to the Seventh Circuit, actions are taken “in furtherance of” an FCA enforcement action and thus “protected” if “‘(1) the employee in good faith believes, and (2) a reasonable employee in the same or similar circumstances might believe, that the employer is committing fraud against the government.’” Fanslow v. Chicago Mfg. Ctr., Inc., 384 F.3d 469, 480 (7th Cir. 2004) (quoting Moore v. Cal. Inst. of Tech. Jet Propulsion Lab., 275 F.3d 838, 845 (9th Cir. 2002)). This test involves an objective component as well as a subjective one. Fanslow, 384 F.3d at 479-80. Thus, the employee must use this test to “show that an FCA action is a ‘distinct possibility’ at the time of the investigation.” Id. (citing Neal v. Honeywell Inc., 33 F.3d 860, 864 (7th Cir. 1994)). For the reasons that follow, this Court FINDS that the plaintiff’s actions were taken “in furtherance of” an FCA action.

Plaintiff, in her reply brief, citing to a Ninth Circuit opinion, argues that an employee’s action is “in furtherance of” if she is “investigating fraud.” The Seventh Circuit, however, requires more than merely “investigating fraud” in order to show actions were taken “in furtherance of.” Specifically, plaintiff must show that an FCA action was a “distinct possibility” at the time she investigated the alleged fraud by demonstrating that she, in good faith believed, and a reasonable employee ...


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