Taul v. Nagel Enterprises, Inc. et al
MEMORANDUM OPINION AND ORDER GRANTING IN PART and DENYING IN PART 85 MOTION to Dismiss for Lack of Jurisdiction, DENYING 86 MOTION to Quash, DENYING 87 MOTION to Strike Defendants' Objections to Plaintiff's 2nd Set of Interrogatories & Requests for Production, DENYING 88 MOTION to Amend/Correct, DENYING 96 MOTION for Leave to File Response to Plaintiff's Surreply, DENYING 97 MOTION for Leave to File Corrected Motion to file a Response to Pl aintiff's Surreply to Defendants' 2nd Motion to Dismiss. Both parties are hereby ORDERED to file a Joint Status Report regarding the status of Nagel's Alabama criminal case, including any appeals by February 10, 2017. Signed by Judge Virginia Emerson Hopkins on 2/1/2017. (JLC)
2017 Feb-01 AM 10:16
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
BARRY TAUL, ex rel., UNITED
STATES OF AMERICA,
NAGEL ENTERPRISES, INC., et
) Case No.: 2:14-CV-0061-VEH
MEMORANDUM OPINION AND ORDER
The primary issue for the court to decide is which claims arising under the
False Claims Act (“FCA”) in Counts I-V of the First Qui Tam Amended
Complaint (the “Amended Complaint”)(doc. 47)1 brought by Plaintiff Relator
Barry Taul (“Taul”) are actionable against Defendants Nagel Enterprises, Inc. and
Jed Nagel (“Defendants”). As explained below, some of Taul’s claims are barred
by their respective statutes of limitations, while others are not. Additionally,
Taul’s reverse FCA claims are due to be dismissed as inadequately alleged. This
court retains jurisdiction to decide Taul’s timely claims, and Defendants’ Motion
All references to (Doc. __) correspond with the court’s CM/ECF numbering system.
To Dismiss (doc. 85) is due to be GRANTED IN PART and DENIED IN PART.
Taul commenced this action against Defendants on January 13, 2014.2,3 On
May 19, 2015, Taul filed an Amended Complaint, asserting five grounds for relief:
violations of (1) 31 U.S.C. § 3729(a)(1)(A); (2) 31 U.S.C. § 3729(a)(1)(C); (3) 31
U.S.C. § 3729(a)(1)(B); (4) retaliation under 31 U.S.C. § 3730(h); and (5) FCA
violations based on violations of 42 U.S.C. § 1320a-7b(b)(2). (Doc. 47). On July
13, 2015, Defendants filed their Answer, which raised the statute of limitations as
an affirmative defense. (Doc. 58). On July 30, 2015, Defendants moved for
summary judgment (Doc. 61), and on January 25, 2016, this court granted in part
and denied in part Defendants’ Motion for Summary Judgment. (Doc. 80).
Currently pending before the court are the following Motions:
Defendants’ Motion To Dismiss, filed on October 7, 2016 (doc.
A complaint is first filed under seal to allow the government time to investigate and
potentially intervene. 31 U.S.C. § 3730(b)(2). If the government declines to intervene, the relator
may proceed with the action, id.§ 3730(c)(3), and if successful, may recover between 25 and 30
percent of the judgment or settlement, plus reasonable expenses, attorney fees, and costs, id.§
3730(d)(2). An FCA violator is also subject to statutory penalties of between $5,000 and $10,000
per claim and treble damages. 31 U.S.C. §3729(a). The United States declined to intervene in this
qui tam action. (Doc. 6).
On August 31, 2011, a criminal case arising from the same facts and circumstances as
this whistleblower action was filed. In the criminal case, Demosthenes Lalisan and Richard Alan
Hicks were charged with a conspiracy to defraud the United States and two counts of healthcare
fraud. They pleaded guilty in the spring of 2012. See Memorandum Opinion, (Doc. 80 at 2).
Defendants’ Motion To Quash Plaintiff’s Second Deposition
Notice and Accompanying Request To Produce Documents at
Deposition, filed on October 21, 2016 (doc. 86);
Defendants’ Motion To Strike/Defendants’ Objections to
Plaintiff’s Second Set of Interrogatories and Requests for
Production, filed on October 21, 2016 (doc. 87);
Defendants’ Motion To Amend/Correct his (doc. 86) Motion
To Quash, filed on October 21, 2016 (doc. 88);
Defendants’ Motion for Leave To File a Response to Plaintiff’s
Surreply, filed on November 23, 2016 (docs. 96 and 97).4
On November 4, 2016, Taul filed a Response to Defendants’ Motion
To Dismiss for Lack of Jurisdiction. (Doc. 90). On November 9, 2016,
Defendants filed their Reply. (Doc. 92). On November 21, 2016, Taul filed
his Surreply. (Doc. 95). All of the above Motions are now ripe for the
MOTION TO DISMISS STANDARD
A Rule 12(b)(6) motion attacks the legal sufficiency of a complaint. FED. R.
CIV. P. 12(b)(6) (“[A] party may assert the following defenses by motion: (6)
failure to state a claim upon which relief can be granted[.]”). The complaint must
CM/ECF documents 96 and 97 are identical, though they were filed in two different
ways. Doc. 96 is styled as a “Motion for Leave To File Response to Plaintiff’s Surreply,” and
Doc. 97 is styled as “Motion for Permission to File Response to Plaintiff’s Surreply to
Defendants 2nd Motion To Dismiss.”
provide a short and plain statement of the claim that will “give the defendant fair
notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley
v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 103, 2 L. Ed. 2d 80 (1957) (quoting FED.
R. CIV. P. 8(a)(2)), abrogated by Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
556, 127 S. Ct. 1955, 1965, 167 L. Ed. 2d 929 (2007); see also FED. R. CIV. P. 8(a)
(requiring that general pleading in a complaint include “a short and plain
statement of the claim showing that the pleader is entitled to relief”).
A plaintiff must set forth grounds for entitlement to relief to survive a
motion to dismiss. Twombly, 550 U.S. at 555, 127 S. Ct. at 1964 (citing Conley,
355 U.S. at 47, 78 S. Ct. at 103). Once a claim has been set forth adequately, it
may be “supported by showing any set of facts consistent with the allegations in
the complaint.” Twombly, 550 U.S. at 563, 127 S. Ct. at 1969. If well-pleaded
factual allegations support the complaint, a court “should assume their veracity
and then determine whether they plausibly give rise to an entitlement to relief.”
Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868
(2009). A claim is considered plausible 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. at 678. The complaint must establish “more than a
sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly,
550 U.S. at 556, 127 S. Ct. at 1965).
STANDARD OF REVIEW FOR A STATUTE OF LIMITATIONS
Defendants’ Motion To Dismiss (doc. 85) does not specify under which
Federal Rule of Civil Procedure they seek to dismiss Taul’s claims as untimely. In
this Circuit, “[a] Rule 12(b)(6) motion to dismiss for failure to state a claim is an
appropriate method for raising a statute of limitations defense. Mann v. Adams
Realty Co., 556 F.2d 288, 293 (5th Cir. 1977);5 see also Edwards v. Apple
Computer, Inc., 645 F. App’x 849, 851 (11th Cir. 2016) (internal citations
omitted)(“A complaint is subject to dismissal when its allegations, on their face,
show that an affirmative defense bars recovery on the claim . . . [t]hus, a motion to
dismiss for failure to state a claim is an appropriate method for raising a statute of
limitations defense.”).6 Accordingly, the court construes Defendants’ Motion To
Dismiss as a challenge under Rule 12(b)(6) of the Federal Rules of Civil
Procedure.7 The court construes the Amended Complaint in the light most
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981)(en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed
down prior to 1981.
In the Eleventh Circuit, unpublished decisions are not binding precedent, but they may
be cited as persuasive authority. 11th Cir. R. 36-2.
Taul’s Response (doc. 90) construes Defendants’ Motion as a 12(b)(1) facial challenge,
but he cites no authority for his proposition that 12(b)(1) is the proper Rule under which this
statute of limitations-based Motion should be brought. Plaintiff also admits that the standard of
favorable to Taul and takes the factual allegations contained therein as true.
Taul alleges the following facts in his Amended Complaint (doc. 47):
10. Relator Barry Taul started working for Nagel-Abanks from June
2006 until September 2009.
11. The owner and principal of Nagel-Abanks is Defendant Jed Nagel.
12. The Alabama Organ Center is the only federally designated Organ
Procurement Organization for the State of Alabama.
13. The Alabama Organ Center coordinates the equitable use of organs
and tissues for life-saving transplants and medical research.
14. In and around June 2003, Nagel-Abanks and the Alabama Organ
Center, by and through their respective agents Jed Nagel, Demosthenes
“Dem” Lalisan (Director of the Alabama Organ Center), and Richard
Alan Hicks (Associate Director of the Alabama Organ Center), entered
into an agreement to harvest tissue at Nagel’s facility. This agreement
involved the harvesting of tissue, bone, muscle, and tendons but not
15. Under the agreement between Nagel and the Alabama Organ Center,
when a bone or tissue donor died, the organ center called Abanks with
the death information. Abanks, by and/or at the direction of Nagel,
would remove the donor from the place of death and bring them to
Abanks for harvesting. After the tissue had been harvested the donor
would then be transported by Abanks to the funeral home of the
deceased’s choosing. One particular division of the Alabama Organ
Center that was involved in the agreement was the[n] called the gift of
body program (hereinafter “GOB”).
review under a 12(b)(1) facial argument is the same as a standard of review under Rule 12(b)(6).
Id. at 6. Therefore, the court will apply the 12(b)(6) standard, as encouraged by this Circuit.
16. After the harvesting, the GOB donor’s remains were cremated and
returned to the donor family. Because Nagel-Abanks also operated a
crematory, this Defendant was paid pursuant to the agreement to do the
17. In or around June 2003, Lalisan and Hicks convinced the Alabama
Organ Center to enter into the aforementioned agreement with
Nagel-Abanks by arguing that it would be more cost efficient for the
Center to perform all tissue recoveries in Birmingham. Lalisan and
Hicks reasoned that they could have a tissue recovery team on the ready
24 hours a day in Birmingham. Further, the Alabama Organ Center
could pay Nagel-Abanks to remove the donors from anywhere in the
state of Alabama and bring them to its Birmingham facility; pay for the
use of Nagel-Abanks’ embalming room, pay for tissue harvesting
performed by Nagel-Abanks, and pay Nagel-Abanks for cremations
performed on the GOB donors.
18. In reality Lalisan and Hicks promoted the services of Nagel-Abanks
in exchange for kickback payments from Nagel-Abanks. Consequently,
from approximately June 2003 until approximately June 2011
Defendants Nagel-Abanks and Jed Nagel made illegal kickback
payments to Lalisan and Hicks in exchange for the contractual referral
business from the Alabama Organ Center.
19. For each month from June 2003 until approximately June 2011, in
Birmingham, Alabama, Lalisan and Hicks would meet at Nagel-Abanks
with Nagel to discuss the Alabama Organ Center’s bill for the previous
month’s services. At these monthly meetings Lalisan, Hicks and Nagel
would cook the books by fabricating charges to the Alabama Organ
20. For example, for each month from June 2003 until approximately
June 2011, in Birmingham, Alabama, Lalisan, Hicks and Nagel would
add miles onto transportation services. Further, if a GOB donor was
disqualified for tissue harvesting, the books might indicate that the GOB
donor did have tissue harvested so the embalming room charge could be
used as well as the cremation charge.
21. It is standard in the death care industry to have a removal fee for
picking up a body from the place of death. Usually this is a flat rate that
includes a certain geographical area. If the removal requires going
outside that area there is a per mile charge that takes place.
22. The Nagel-Abanks transportation, embalming, cremation and
harvesting charges to the Alabama Organ Center were well over national
averages and often were inflated. At the monthly meetings of Nagel,
Lalisan, and Hicks, they determined how much the bills would be for the
previous month. Consequently, the bills were submitted to UAB (the
University of Alabama Birmingham) for payment. Once the bills were
paid, twenty percent of the bill would be given back to Hicks and
Lalisan by Nagel; Hicks and Lalisan received ten percent each of the
23. Under the kickback scheme, which violated both the False Claims
Act and the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b),
Lalisan and Hicks guaranteed that Nagel-Abanks would be able to bill
$50,000.00 to $60,000.00 each month to the Alabama Organ Center.
This bill was paid for with government grants, Medicare, and other
federal and taxpayer dollars as these donor services were free to the
24. In approximately the first week of June 2009, in Birmingham,
Alabama, Relator Barry Taul became of aware of the aforementioned
fraud and illegal kickbacks.
25. In approximately the first week of June 2009 Taul, an employee of
Nagel-Abanks and Nagel at that time, was sent from Nagel-Abanks’
Birmingham Alabama location to deliver cremains to a funeral home in
26. While Taul was on this delivery run the only person at
Nagel-Abanks was Jed Nagel.
27. When he arrived back at Nagel-Abanks’ mortuary he entered the
back of the building. When Taul entered the building he was not heard
because the crematory, a very loud machine, was in full operation.
28. As Taul walked to the front of the building, he heard voices coming
from the front office. Taul did not recognize the voices at first so he
paused before going into the office area because he wanted to know if
this was a family in the office making cremation arrangements. If this
was this case, Taul didn’t want to be disrespectful of a grieving family
and barge in on their arrangement conference.
29. In approximately the first week of June 2009, as he approached
however, Taul recognized the voices in the front office as those of
Lalisan, Hicks, and Nagel. Because Taul was on a first name basis with
all three individuals, he approached the office to announce his return. At
this point, Taul overheard Nagel telling Lalisan and Hicks that if they
wanted to continue to get ten percent they were going to have to pad
“this bill a little more.” Taul knew these comments were improper but
didn’t fully understand the full scope of the conversation at that
30. When Taul entered the office Nagel, Lalisan and Hicks were
shocked to see him. The three men stopped talking immediately and then
changed the subject. All three seemed very nervous. Lalisan and Hicks
left very shortly after. Nagel then called Taul into the office and told him
that he didn’t hear anything. Nagel told Taul that it takes a little grease
on some palms sometimes to make money. At this point, Nagel informed
Taul of the kickback scheme and fraudulent billing referenced above in
31. In approximately the first week of June 2009, Nagel told Taul that
if he (Taul) ever told anybody about the fraud and the kickback scheme
Taul had overheard, he (Nagel) would cremate Taul alive and no one
would ever find Taul’s remains.
32. Nagel is a huge man and Taul took Nagel’s threat very seriously.
Nagel also said that he knew where Taul lived, where Taul’s parents
lived and that he (Nagel) would also torture or kill them as well. After
these threats, Nagel became very verbally abusive towards Taul during
Taul’s everyday work environment.
33. Nagel also became physically abusive. For example, between June
2009 and October 2009, in Birmingham, Alabama, Nagel would kick
doors into Taul. Also, Nagel often would slap Taul open handed. Once,
between June 2009 and October 2009, Nagel even threw an open
embalming fluid bottle at Taul resulting in embalming fluid, a very
dangerous chemical, spilling all over Taul.
34. During the same time frame, between June 2009 and October 2009,
Nagel once threw feces from deceased individuals at Taul. Also, during
this same time frame Nagel once took a full catheter bag from a
deceased and emptied it on Taul’s back. This abusive behavior was
designed to scare and intimidate Taul so that he would be too fearful of
the consequences of disclosing the fraudulent scheme involving
Nagel-Abanks, Nagel, Lalisan and Hicks.
35. The foregoing behavior resulted in Taul fearing retribution to
himself and his family from Nagel if Taul were to disclose what he
knew about the aforementioned fraud/kickback scheme.
36. After Relator Taul became aware of this fraud and kickback scheme
in approximately June 2009 and began suffering abusive behavior from
Nagel, Taul began to actively look for employment at another funeral
home. Subsequently, in approximately October 2009, Taul found
employment at Valhalla funeral home in Midfield, Alabama.
37. In approximately, August 2010, Barry Taul informed the FBI of the
fraud and illegal kickback scheme described above involving Lalisan,
Hicks, [and] Nagel/Abanks.
38. Relator Taul disclosed the fraud and illegal kickback scheme
described above to the government before any public disclosure was
made and therefore Relator Taul is the original source regarding said
39. Relator Taul has knowledge independent of the public disclosure
relating to this matter that “materially adds” to the disclosure and said
knowledge and/or information was provided to the government before
Relator Taul filed his lawsuit.
40. Shortly after informing the FBI of the fraud and illegal kickbacks
described above, in or around August 2010, Taul received a plain card
hand addressed to him at Valhalla funeral home in Midfield, Alabama.
On one side the card stated, “He knows it was you.” Taul gave this card
to the FBI and the FBI retained the card.
41. After this incident, in approximately October 2010, Taul’s regional
manager at Valhalla funeral home talked to him about an anonymous
letter that had been received stating that Taul was a thief. Shortly after
this incident, in or around February 2011, Taul was fired from Valhalla
funeral home. No good reason was given by Valhalla funeral home for
42. After he was terminated from Valhalla funeral home, it became
virtually impossible for Taul to get a job in the funeral business in
Birmingham, Alabama despite having worked in the funeral business in
that area since 1985.
43. However, Taul finally found a job at a funeral home in Jasper, AL
in approximately September 2012.
44. The Jasper funeral home used Nagel to perform their cremations. In
late Fall 2012, one of Nagel-Abanks’ employees came to the Jasper, Al
funeral home to pick up a body to cremate. The employee of
Nagel-Abanks saw Taul and asked if he was working at the funeral
home. Shortly thereafter, on or about December 26, 2012, Taul was fired
from the funeral home in Jasper, Al.
45. Since the time that Taul informed the FBI of the fraud and illegal
kickbacks in August 2010, Taul has received several threats from Nagel
against himself and his family.
46. Relator Taul has clearly been retaliated against by Nagel-Abanks
and Nagel and continues to suffer the economic and emotional effects
of this retaliation.
47. As a result of their actions Nagel-Abanks, Jed Nagel, Demosthenes
“Dem” Lalisan and Richard Alan Hicks have violated the False Claims
Act and defrauded the Government.
(Doc. 47 at 3-9).
In his Amended Complaint, Taul alleges that the relevant statute of
limitations for his FCA claims has been tolled since October 11, 2002, pursuant to
the Wartime Suspension of Limitations Act (“WSLA”) because the United States
has been at war, as defined by the WSLA, since 2002. (Doc. 47 at 2). As of the
time the Amended Complaint was filed on May 19, 2015, Taul’s position was still
good law. However, seven days later, on May 26, 2015, the Supreme Court held in
Kellogg Brown & Root Services, Inc., v. United States ex rel. Carter, 135 S.Ct.
1970, 191 L. Ed. 2d 899 (2015), that the tolling provisions of the WSLA apply
only to criminal cases. Because the WSLA does not apply in this civil case, the
applicable statute of limitations for FCA claims is found under 31 U.S.C. §
3731(b), and the applicable statute of limitations for retaliatory claims is found
under 31 U.S.C. § 3730(h)(3).
The Applicable Statutes of Limitations
The FCA’s statute of limitations states as follows:
(b) A civil action under section 3730 may not be brought (1) more than 6 years after the date on which the violation of
Section 3729 is committed, or
(2) more than 3 years after the date when facts material to the
right of action are known or reasonably should have been known
by the official of the United States charged with responsibility to
act in the circumstances, but in no event more than 10 years after
the date on which the violation is committed,
whichever occurs last.
31 U.S.C. § 3731(b)(1-2). The statute of limitations for retaliatory claims states as
(h) Relief from retaliatory actions.–
Limitation on bringing civil action.– A civil action under
this subsection may not be brought more than 3 years after
the date when the retaliation occurred.
31 U.S.C. § 3730(h)(3).
Statute of Limitations for Taul’s Retaliation Claims (Count IV)
The court previously held that some, but not all, of Taul’s retaliation claims
in Count IV were barred. See Memorandum Opinion, (doc. 80 at 25) (“[Taul] is
correct [in stating that not all alleged retaliatory actions were more than three
years old at the time of the filing of his initial Complaint on January 13, 2014],
since one of [the] alleged instances of harassment occurred in the fall of 2012 . . .
[t]he retaliation alleged in paragraph 44 of the complaint survives, but summary
judgment is granted as to any other claims of retaliation.”).
Despite the court’s earlier ruling, Defendants erroneously continue to claim
that the statute of limitations on all of Taul’s retaliation claims has run because
Taul has not alleged any retaliatory events occurring in the fall of 2012 or
thereafter. (Doc. 92 at 1, 9). This is simply incorrect, see (Doc. 47 at 9, ¶¶ 43-46),
and Defendants’ argument is not well taken by this court.
Therefore, as previously ordered, Taul’s retaliation claims from fall 2012
survive, but Plaintiff’s other retaliation claims are barred by the 3-year statute of
limitations pursuant to Section 3730(h)(3).
Statute of Limitations for FCA Claims (Counts I, II, and III)
Count I of the Amended Complaint asserts a claim under Section
3729(a)(1)(A) of the False Claims Act, which holds any person liable who
“knowingly presents, or causes to be presented, a fraudulent claim for payment or
approval.” 31 U.S.C. § 3729(a)(1)(A). Count II asserts a claim under Section
3729(a)(1)(C), which creates liability for those who “conspire to commit a
violation of subparagraph (A), (B), (D), (E), (F), or (G)” of Section 3729. 31
U.S.C. § 3729(a)(1)(C). Count III asserts a claim under Section 3729(a)(1)(B),
which holds any person liable who “knowingly makes, uses, or causes to be made
or used, a false record or statement material to a false or fraudulent claim.” 31
U.S.C. § 3729(a)(1)(B).
Defendants posit their argument as though the statute of limitations, once
triggered by any violation of the FCA, also cuts off from judicial review any
timely claims of the same kind or character. However, they cite no authority for
this argument. Defendants also clearly misconstrue the FCA statute of limitations
in Section 3731. They claim that all of Taul’s claims are barred by the three-year
period found in 3731(b)(2) because Taul related facts to the FBI in 2010 but did
not file his initial Complaint until January 2014.
Yet, Section 3731(b)(2) is a tolling provision, not a statute of limitations
provision. See, e.g., United States ex rel. Lewis v. Walker, No. 3:06-CV-16, 2007
WL 2713018, at *5 (M.D. Ga. Sept. 14, 2007) (Land, J.) (referring to Section
3731(b)(2) as a tolling provision). Defendants “muddy the waters” by treating the
statutorily-created tolling provision in Subsection (b)(2) as shortening the general
statute of limitations otherwise applicable under Subsection (b)(1). They also
ignore the fact that Section 3731 states that a plaintiff’s claims are subject to either
3731(b)(1) or 3731(b)(2), whichever occurs last.
Under the facts of this case, in which Taul became aware of the alleged
FCA violations more than six years before the date on which he filed his initial
Complaint, any FCA violations committed within six years are timely under
Subsection (b)(1). In fact, Taul concedes that the tolling provision in Section
3731(b)(2) does not apply to this litigation. See (Doc. 90 at 4) (“In the instant
matter . . . the tolling provisions of 3731(b)(2) . . . are [not] applicable”).
Accordingly, the court need not reach a decision as to whether, and how, Section
3731(b)(2) applies to relators, a question that has divided federal courts.8 The sixyear statute of limitations period in Section 3731(b)(1) applies to Taul’s FCA
The alleged FCA violations began in June 2003 and ended in June 2011.
Taul claims that he first became aware of the violations in June 2009. He informed
the FBI of the violations in August 2010, and he filed his initial Complaint on
January 13, 2014. Under Section 3731(b)(1), Taul’s allegations of violations that
occurred after January 13, 2008, fall within the six-year limitations period and are
timely. Counts I, II, and III all allege some timely and some untimely violations.9
See, e.g., United States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211, 1218 (9th Cir.
1996); United States ex rel. Malloy v. Telephonics Corp., 68 F. App’x 270, 273 (3d Cir. 2003).
See, e.g. (Doc. 47 at 4-5, ¶¶ 18, 19, 20) (alleging violations that occurred both before
and after January 13, 2008).
All FCA claims in Counts I, II, and III based on allegations taking place before
January 13, 2008, are barred by the statute of limitations. All claims in Counts I,
II, and III based on allegations taking place after January 13, 2008, are timely.
Statute of Limitations for Count V Claims
Count V of Taul’s Amended Complaint asserts an FCA violation, pursuant
to Sections 3729(a)(1)(A-B), “vis-à-vis violation of the Anti-Kickback Statute.”
(Doc. 47 at 15-18). Defendants’ Motion To Dismiss summarily states that all of
Taul’s claims are time barred, but their Motion does not specifically address what
Defendants believe is the applicable statute of limitations for Count V. In fact,
neither Defendants’ Motion To Dismiss (doc. 85) nor their reply brief (doc. 92)
even reference the violations of the Anti-Kickback (“AKS”) statute that Taul
alleges have occurred.
Taul’s Response (doc. 90) to Defendants’ Motion To Dismiss similarly fails
to clarify for the court what the applicable statute of limitations should be for the
claims in Count V. In his Response, Taul states that Defendants failed “to consider
the fact that Relator’s FCA claims arising from the Anti-Kickback (“AKS”) statute
were clearly filed within the applicable limitations period,” (doc. 90 at 4), but Taul
fails to cite to any authority to support this proposition, much less explain why his
claim should be “clear” to the court.
The Anti-Kickback Statute, in relevant part, prohibits individuals from the
following acts involving federal health care programs:
Whoever knowingly or wilfully offers or pays any remuneration
(including any kickback, bribe, or rebate) directly or indirectly,
overtly or covertly, in cash or in kind to any person to induce such
to refer an individual to a person for the furnishing or
arranging for the furnishing of any time or service for
which payment may be made in whole or in part under a
Federal health care program, or
to purchase, lease, order, or arrange for or recommend
purchasing, leasing, or ordering any good, facility, service,
or item for which payment may be made in whole or in part
under a Federal health care program,
shall be guilty of a felony and upon conviction thereof, shall be fined not
more than $25,000 or imprisoned for not more than five years, or both.
42 U.S.C. § 1320a-7b(b)(2). As the Eleventh Circuit has explained, a violation of
the AKS occurs when the defendant “(1) knowingly and wilfully, (2) pays money,
directly or indirectly, to doctors, (3) to induce the doctors to refer individuals to
the defendants for the furnishing of medical services, (4) paid for by Medicare.”
United States ex rel. Mastej v. Health Mgmt. Assocs., Inc., 591 F. App’x 693, 698
(11th Cir. 2014) (citing United States v. Vernon, 723 F.3d 1234, 1252 (11th Cir.
2013) (setting forth the elements of an Anti-Kickback Statute violation under §
In addition to the criminal penalties provided for in the statute above,
violations of the AKS can lead to civil monetary penalties under the Civil
Monetary Penalties Law (“CMPL”) for submitting false claims for Medicare
reimbursement. See 42 U.S.C. § 1320a-7a.10
In addition to these criminal and civil monetary penalties, violations of the
AKS may serve as the basis for a false or fraudulent claim for purposes of the
FCA. See 42 U.S.C. §1320a-7(b)(g) (“In addition to the penalties provided for in
this section [1320a-7b] or section 1320a-7a of this title [the civil monetary
penalties section], a claim that includes items or services resulting from a violation
of this section constitutes a false or fraudulent claim for the purposes of
As the Tenth Circuit has explained,
On August 13, 1981, Congress enacted the CMPL, a statute providing for civil
monetary penalties and assessments for individuals who file false Medicare or
Medicaid claims. 42 U.S.C. § 1320a–7a(a)(1)(A). Such were “in addition to any other
penalties that may be prescribed by law . . . .” 42 U.S.C. § 1320a–7a(a). The CMPL
also provided that upon conviction a false claimant would be excluded from
continued participation in the Medicare and Medicaid programs. 42 U.S.C. §
The CMPL, as enacted in 1981, was intended to promote an administrative adjunct
to criminal proceedings as an additional means of sanctioning persons who submit
false claims for payment under the Medicare and Medicaid programs.
Bernstein v. Sullivan, 914 F.2d 1395, 1397 (10th Cir. 1990). An action under the CMPL may not
be initiated “with respect to any claim, request for payment, or other occurrence” later than “six
years after the date the claim was presented, the request for payment was made, or the occurrence
took place.” 41 U.S.C. § 1320a-7a(c)(1); see also Bernstein, 914 F.2d at 1398.
subchapter III of chapter 37 of Title 31 [the FCA].”);11 see also Miller v. Abbot
Laboratories, 648 F. App’x 555, 561 (6th Cir. 2016) (internal citations omitted)
(“AKS violations can constitute FCA violations where a claim submitted to the
government for reimbursement includes items or services resulting from a
violation of the AKS, or where cost reports submitted to the government for
reimbursement include an express certification that the underlying claims comply
with the AKS.”).
Count V of the Amended Complaint, which alleges that an AKS violation
occurred, clearly asserts an FCA claim. (Doc. 47 at 17, ¶ 63) (“By reason of the
violation of 31 U.S.C. §§ 3729(a)(1)(A) and 3729(a)(1)(B), Defendants have
knowingly or recklessly damaged the United States Government in an amount to
be determined at trial).12 Further, Taul’s prayer for relief in Count V requests
treble damages and a civil penalty of $5,500-$11,000, which derives from Section
3729(a)(1) of the FCA as adjusted for inflation. 31 U.S.C. § 3729(a); see also
See United States ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295, 311 n. 19
(3d Cir. 2011) (“As part of the comprehensive health care legislation Congress enacted in 2010,
it amended the AKS to clarify that “a claim that includes items or services resulting from a
violation of this section constitutes a false or fraudulent claim for purposes of [the FCA].”
Patient Protection and Affordable Care Act of 2010 (“PPACA”), Pub. L. No. 111–148 § 6402(f),
124 Stat. 119, 759 (to be codified at 42 U.S.C. § 1320a–7b(g)).”).
Taul’s heading under Count V also clarifies that he is asserting AKS violations as the
basis of an FCA claim. See (Doc. 47 at 15) (alleging a “[v]iolation of the False Claims Act, 31
U.S.C. §§ 3729(a)(1)(A) vis-à-vis a violation of the Anti-Kickback Statute.”).
Kane ex rel. United States v. Healthfirst, Inc., 120 F. Supp. 3d 370, 379 n. 12
(S.D.N.Y. 2015) (“The 1986 amendments [to the FCA] included a penalty range of
$5,000 to $10,000 for each false claim . . . to be adjusted by the Federal Civil
Penalties Inflation Adjustment Act of 1990, S. Rep. 111-10, 22, 2009
U.S.C.C.A.N 430, 444. Today, due to inflation, the available penalty is a range of
$5,500 to $11,000.”). Based on the language of Count V and the damages
requested, the alleged kickback scheme serves as the basis for a false claim under
Section 3729(a)(1) of the FCA.
The court has not found any authority, and Defendants point to no source,
stating that any statute of limitations other than the FCA statute of limitations
found in Section 3731(b)(1) should apply to Count V merely because the Count is
based on a violation of another statute. Therefore, like Counts I, II, and III, the
statute of limitations for Taul’s claims in Count V is 6 years, per Section
3731(b)(1). All claims in Count V based on allegations taking place on or before
January 13, 2008 are time barred. All claims in Count V based on allegations
taking place after January 13, 2008 are timely.
“Retention of Overpayments” and the “Reverse False Claims”
Taul’s Response brief alleges - for the first time in this litigation - that he
has pled facts to support a “retention of overpayments” claim. He asserts that the
“Statute of Limitations is Effectively Extended for Retention of Overpayments that
violate Section 3729(a)(1)(A), (B), (C), or (G).” (Doc. 90 at 10). Defendants’
Reply fails to directly address Taul’s “retention of overpayment” argument headon, asserting instead that Taul has failed to plead any “reverse false claim”
violations under Section 3729(a)(1)(G). (Doc. 92 at 2). Because both parties argue
past each other and fail to cite to any authority to support their claims, the court
will first begin with a discussion of both the “retention of overpayments” statute
and the “reverse false claims” FCA provision.
Statutory Overview and Recent Changes
In 2009, Congress passed the Fraud Enforcement and Recovery Act
(“FERA”), which amended the “reverse false claims” provision of the FCA. See
Fraud Enforcement and Recovery Act, Pub. L. No. 111-21, § 4, 123 Stat. 1617,
1621-25 (2009). Under the pre-amendment version, a reverse false claim violation
occurred when a person “knowingly makes, uses, or causes to be made or used, a
false record or statement to conceal, avoid, or decrease an obligation to pay or
transmit money or property to the Government.” 31 U.S.C. § 3729(a)(7) (1986).
After the 2009 FERA amendment, a reverse false claims violation occurs
when a person “knowingly makes, uses, or causes to be made or used, a false
record or statement material to an obligation to pay or transmit money or property
to the Government, or knowingly conceals or knowingly and improperly avoids or
decreases an obligation to pay or transmit money or property to the Government.”
31 U.S.C. § 3729(a)(1)(G). An obligation under the FCA is now defined as “an
established duty, whether or not fixed, arising from an express or implied
contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or
similar relationship, from statute or regulation, or from the retention of any
overpayment.” 31 U.S.C. § 3729(b)(3) (emphasis added).
The Patient Protection and Affordable Care Act (“PPACA”) then defined an
“overpayment” as “any funds that a person receives or retains under subchapter
XVIII [Medicare] or XIX [Medicaid] of this chapter to which the person, after
applicable reconciliation, is not entitled under such subchapter.” Patient Protection
and Affordable Care Act of 2010, Pub. L. No. 111–148 § 6402, codified as 42
U.S.C. § 1320a-7k(d)(4)(B). All overpayments must now be reported and refunded
to the government within “60 days after the date on which the overpayment was
identified” or “the date any corresponding cost report is due.” 42 U.S.C. § 1320a7k(d)(2)(A-B). Significantly, the PPACA also provided that a “repayment retained
by a person after the deadline for reporting and returning the overpayment” is an
“obligation” for purposes of Section 3729 of the FCA. 42 U.S.C. § 1320a23
7k(d)(3). Therefore, the retention of a Medicare or Medicaid overpayment from
the government past the 60-day deadline creates an obligation for purposes of
Section 3729 of the FCA.
Whether a Retention of Overpayment “Obligation” May Be
Brought Pursuant to any FCA Provision Other Than Section
Taul’s Response and Surreply briefs assert that Defendants’ alleged
retention of overpayments violates not only Section 3279(a)(1)(G) of the FCA but
also Sections 3729(a)(1)(A-C). See (Doc. 90 at 10); (Doc. 95 at 2). Defendants’
Reply brief altogether fails to address whether retention of overpayment
allegations may be brought pursuant to any subsection other than Section
3729(a)(1)(G); instead, Defendants hang their hat on their contention that Taul has
not properly pled a claim under subsection (a)(1)(G).13
It appears to be an open question in this Circuit whether retention of
overpayment claims may be brought pursuant to subsections (a)(1)(A-C) of
Section 3729. The PPACA amendments state only that an overpayment retention
is an “obligation” for the purposes of “section 3729.” 42 U.S.C. § 1320a-7k(d)(3).
However, the court finds it unlikely, based on the language added by the PPACA
While Defendants do not say so expressly, the court assumes that Defendants intend
to argue that Plaintiff’s newly-raised retention of overpayments claim has not been pled with any
particularity pursuant to Section 3729(a)(1)(G) or any other subsection.
describing an overpayment retention as an “obligation,” that a retention of an
overpayment claim may be brought pursuant to any subsection of Section 3279
that does not use the word “obligation.” While Section 3729(a)(1)(G) incorporates
the word “obligation,” Sections 3729(a)(1)(A-C) do not.14
Additionally, the court notes that when the Eleventh Circuit has previously
faced retention of overpayment claims, these violations have been presented as
obligations pursuant to the reverse false claim provision of the FCA rather than
any other FCA statutory provision. See, e.g., United States ex rel. Matheny v.
Medco Health Solutions, Inc., 671 F.3d 1217, 1223 (11th Cir. 2012) (stating that a
contractual obligation to remit excess government property is an obligation for
See 31. U.S.C. §§ 3729(a)(1)(A),(B),(C), and (G)(emphasis added), imposing liability
for any person who:
(A) knowingly presents, or causes to be presented, a false or fraudulent claim for
payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false record or statement
material to a false or fraudulent claim;
(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G);
(G) knowingly makes, uses, or causes to be made or used, a false record or statement
material to an obligation to pay or transmit money or property to the government, or
knowingly conceals or knowingly and improperly avoids or decreases an obligation
to pay or transmit money or property to the Government . . . .
purposes of Section 3729(a)(7))15; United States v. Pemco Aeroplex, Inc., 195 F.3d
1234, 1237 (11th Cir. 1999) (finding allegations of contractual obligations to
identify and return excess government property were sufficient to state a reverse
false claim violation); see also United States v. Crumb, No. 15-655, slip op. at *8
(S.D. Ala. Aug. 24, 2016) (Steele, J.) (analyzing a retention of overpayment claim
brought pursuant to Section 3729(a)(1) as a claim under Subsection (a)(1)(G)). Yet
again, Taul has cited to no authority16 for his proposition that retention of
overpayment claims may be brought pursuant to Sections 3729(a)(1)(A),(B), or
(C) rather than pursuant to the reverse false claims provision found in Section
For these reasons, this court declines to consider Taul’s newly-raised
“retention of overpayment” claims under any FCA statutory provision that does
not include the word “obligation.” As Sections 3729(a)(1)(A-C) do not include the
term “obligation” as an element of the claim, Taul’s retention of overpayment
31 U.S.C. § 3729(a)(7) is the pre-FERA amendment version of the reverse false claims
provision. Section 3729(a)(7) was re-designated as 31 U.S.C. § 3729(a)(1)(G), effective May 20,
On this basis alone, the court is not required to address this underdeveloped argument.
See Flanigan’s Enters., Inc. v. Fulton County, Ga., 242 F.3d 976, 987 n.16 (11th Cir. 2001) (a
party waives an argument if the party “fail[s] to elaborate or provide any citation of authority in
support” of the argument); Ordower v. Feldman, 826 F.2d 1569, 1576 (7th Cir. 1987) (stating
that an argument made without citation to authority is insufficient to raise an issue before the
allegations may not be brought pursuant to those statutory sections. For the
purposes of this litigation, and in accordance with previous Eleventh Circuit cases,
the court will consider Taul’s retention of overpayment allegations in the context
of a reverse false claim pursuant to Section 3729(a)(1)(G). The remaining question
for the court is whether Taul has properly pled a claim pursuant to that statutory
Taul Did Not Properly Plead a Retention of Overpayments
Violation or Otherwise Establish a Reverse False Claim
Defendants argue that Taul’s Amended Complaint (doc. 47) fails to plead a
violation of Section 3729(a)(1)(G) with particularity, as required under Federal
Rule of Civil Procedure 9(b). (Doc. 92 at 5-7). Though Defendants do not say so
expressly, their argument implies that there is no way for this court to address the
timeliness of any alleged overpayment retention for the purposes of the FCA
statute of limitations because there are no factual allegations that plausibly support
such a claim.
In the Eleventh Circuit, any FCA claim, including a reverse false claim,
must meet the heightened pleading requirements under Rule 9(b). United States ex
rel. Clausen v. Laboratory Corp. of Am., 290 F.3d 1301, 1308-09 (11th Cir. 2002).
Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake” but “[m]alice, intent,
knowledge, and other conditions of a person’s mind may be alleged generally.
FED. R. CIV. P. 9(b). As the Eleventh Circuit has explained,
At the pleading stage, a complaint alleging violations of the FCA must
satisfy two pleading requirements. First, the complaint must provide “a
short and plain statement of the claim showing that the pleader is
entitled to relief.” FED. R. CIV. P. 8(a)(2). A complaint cannot merely
recite the elements of a cause of action but must contain factual
allegations sufficient to raise the right to relief above the speculative
level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955,
167 L. Ed. 2d 929 (2007). Second, a complaint must comply with Rule
9(b)'s heightened pleading standard, which requires a party to “state
with particularity the circumstances constituting fraud or mistake.” FED.
R. CIV. P. 9(b); Clausen, 290 F.3d at 1308–09 (holding Rule 9(b) applies
to FCA claims). The purpose of Rule 9(b) is to “alert[ ] defendants to the
precise misconduct with which they are charged and protect[ ]
defendants against spurious charges . . . .” Ziemba v. Cascade Int'l, Inc.,
256 F.3d 1194, 1202 (11th Cir. 2001) (citation and internal quotation
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 defendants' allegedly fraudulent
acts, when they occurred, and who engaged in them.” Hopper v. Solvay
Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009) (internal quotation
marks omitted) (citing Clausen, 290 F.3d at 1310); see also Ziemba, 256
F.3d at 1202 (noting the pleading standards are satisfied if alleging
precisely what statements were made in what documents, when, where
and by whom, the content, the manner in which they misled the plaintiff,
and what the defendants obtained as a consequence of the fraud).
Matheny, 671 F.3d at 1222.
The applicable pleading standard for reverse false claims depends on
whether the claims are brought under the version of the FCA that pre-dates or
post-dates the 2009 FERA amendment, which became effective May 20, 2009. See
Matheny, 671 F.3d at 1223 n. 9.
As another district court within this Circuit has stated,
For the reverse false claim pleaded as Count III of the Amended
Complaint, the applicable legal standard depends on whether the claims
are brought under the version of the False Claims Act that predated the
Fraud Enforcement & Recovery Act of 2009, § 4(a), Pub. L. No. 111-21,
123 Stat. 1617, 1621-22 (2009) ( “FERA”), or whether they proceed
under the version of the Act that prevails post-FERA. Under the
pre-FERA iteration of the FCA, a plaintiff generally must allege “(1) a
false record or statement; (2) the defendant's knowledge of the falsity;
(3) that the defendant made, used, or caused to be made or used a false
statement or record; (4) for the purpose to conceal, avoid, or decrease an
obligation to pay money to the government, and (5) the materiality of the
misrepresentation.” Matheny, 671 F.3d at 1224. After FERA, however,
reverse false claims liability attaches either (i) when a person
“knowingly makes, uses, or causes to be made or used, a false record or
statement material to an obligation to pay or transmit money or property
to the Government;” or (ii) when a person “knowingly conceals or
knowingly and improperly avoids or decreases an obligation to pay or
transmit money or property to the Government.” 31 U.S.C. §
3729(a)(1)(G); see also United States ex rel. Petratos v. Genentech, Inc.,
141 F. Supp. 3d 311, 322 (D.N.J. 2015) (observing that § 3729(a)(1)(G)
“creates liability for two categories”). “Both of these prongs only apply
where there is an obligation to pay the Government.” Petratos, 141 F.
Supp.3d at 322.
Crumb, No. 15-655, slip op. at *8 (citing to the post-FERA version of the reverse
false claims statutory subsection).
Although this case was commenced after the 2009 FERA amendment, the
claims alleged “bridge that timeframe and implicate both versions of the law”
because the 2009 FERA amendments to the reverse false claim provision do not
apply retroactively. United States ex rel. Keeler v. Eisai, Inc., 568 F. App’x 783,
784 n. 1 (11th Cir. 2014); Matheny, 617 F.3d at 1223 n. 9. Therefore, the court
must look to both versions to determine whether Taul has properly pled a reverse
Fortunately, this court’s analysis is simplified by the fact that under both
versions of the statute, the plaintiff relator is required to identify an obligation to
re-pay the government and allege other details of the claim with particularity. See
Matheny, 671 F.3d at 1223 (“To sustain a reverse false claim action, relators must
show that the defendants owed an obligation to pay money to the United States . . .
“) (pre-FERA amendment); Petratos, 141 F. Supp.3d at 322 (noting that reverse
false claims liability necessitates a showing of “a ‘clear’ obligation or liability to
the government”) (citations omitted) (pre-FERA amendment); Crumb, 15-655, slip
op. at *8 (“To be sure, a reverse false claim cause of action requires an ‘obligation
to pay or transmit money or property to the government.’”) (post-FERA
amendment). A reverse false claim action, however, does not require that the
presentment of a false claim be pled. Matheny, 671 F.3d at 1224 n.12.
In Matheny, applying the reverse false claim language predating the FERA
amendment, the Eleventh Circuit concluded that the relators adequately alleged
with particularity the existence of an obligation to pay money to the government
because their complaint contained detailed allegations of the defendants’ express
contractual obligation to remit any overpayments; outlined the procedures the
defendants should have used to remit any identified overpayments; and identified
the particular document or statement alleged to be false, who made it, when the
statement was made, how the statement was false, and what the defendants
obtained as a result. Id. at 1223-1125. The complaint in Matheny also contained
“detailed allegations that the Overpayments were received from Medicare,
Medicaid, or other federally funded healthcare programs” and specified specific
amounts, invoice numbers, and carrier codes. Id. at 1227.
In Crumb, applying the reverse false claim language postdating the FERA
amendment, the court found that the complaint identified sufficient facts to show
that the defendants had a “concrete obligation to pay the Government at the time
of the alleged avoidance.” 15-655, slip op. at *16. The complaint specifically pled
facts to support a reverse false claim, including that the defendants “did not take
any steps to identify and return” overpayments received but instead “knowingly
continued with the same course of conduct”; that they “did not conduct a selfaudit, investigate, or inquire into whether” any of the relevant claims might
necessitate repayment, even after the Government began an FCA investigation into
the claims; and that defendants “failed to take any corrective or repayment action.”
Id. at *4, *16.
In the Amended Complaint, Taul only cursorily references the receipt of
government funds in paragraphs 22 and 23, which also describe the alleged
kickback scheme between the Alabama Organ Center and Defendants. Paragraph
22 alleges that the transportation, embalming, cremation, and harvesting charges
to the Alabama Organ Center were above national averages and were inflated
when they were submitted to the University of Alabama Birmingham. (Doc. 47 at
5, ¶ 22). Then, once the bills were paid, employees of the Alabama Organ Center
received twenty percent as a kickback. Id. Paragraph 23 alleges that under the
kickback scheme, Defendants billed “$50,000.00 to $60,000.00 each month to the
Alabama Organ Center. This bill was paid for with government grants, Medicare,
and other federal and taxpayer dollars as these donor services were free to the
donor families.” (Doc. 47 at 5, ¶ 23).
Simply put, Taul has not pled facts as to the time, place, or substance of any
retained overpayments sufficient to sustain a reverse false claim under Rule 9(b).
Despite specifically citing to other FCA statutory provisions, Taul’s Amended
Complaint makes no mention of reverse false claims, Section 3729(a)(7), or
Section 3729(a)(1)(G). Unlike in Matheny or in Crumb, the Amended Complaint
does not specify which reverse false claims resulted in overpayments; has not
alleged the receipt of federal funds with particularity; and, unlike in Matheny,
makes no detailed allegations that any overpayments received actually originated
from a federally funded healthcare program. In fact, he does not identify the
federal government as the source of any overpayment or use the term
“overpayment” at all.
Taul’s briefing also fails to clarify which particular set of facts in the
Amended Complaint supports allegations that Defendants retained certain
overpayments from the government. The Amended Complaint, as it currently
stands, does not provide either Defendants or the court with enough information
regarding the substance of his reverse false claim or the retention of an
overpayment that serves as the obligation underlying that claim.
For these reasons, Taul has failed to allege with specificity if or when
Defendants retained any overpayments to the government that would constitute an
obligation under Section 3729(a)(1)(G). Accordingly, the court does not need to
reach the question of how the 60-day clock for retention of overpayments would
impact the FCA statute of limitations. Taul’s reverse false claim cause of action
based on alleged retentions of overpayments is HEREBY DISMISSED as
inadequately pled pursuant to Federal Rules of Civil Procedure 8(a)(2) and 9(b).
Taul’s Request To Amend his Complaint
In his Surreply, Taul also requested permission to amend his complaint in
order to plead a claim under the reverse false claims provision, Section
3729(a)(1)(G).17 (Doc. 95 at 9-10). To the extent that Taul’s request may be
construed as a motion for leave to amend, it was filed far outside the court’s
deadline to amend pleadings18 and therefore must meet the requirements of Rule
16(b)(4). Under the Federal Rules of Civil Procedure, “a schedule may be
modified only for good cause and with the judge’s consent.” FED. R. CIV. P.
It has been noted that,
[w]here . . . a motion to amend “comes long after the deadlines for filing
motions to amend established in the scheduling orders entered in [a]
case,” a plaintiff must “show good cause under Federal Rule of Civil
Procedure 16(b).” Mann v. Taser Int'l, Inc., 588 F.3d 1291, 1312 (11th
Cir. 2009). Simply put, [the motion to amend] is governed in the first
The court notes that Counts I, II, and III already assert claims under §§ 3729(a)(1)(AC). If Taul truly believed that a retention of overpayments was an actionable obligation pursuant
to Sections 3729(a)(1)(A-C) as well as 3729(a)(1)(G), it would be unnecessary for him to amend
his Complaint in order to include his retention of overpayments claim.
The court’s June 9, 2014, Scheduling Order set the deadline to amend pleadings as
March 31, 2015 and the discovery deadline as June 30, 2015. (Doc. 25). While the court’s June
30, 2015, Order extended the discovery deadline to 30 days after the completion of Nagel’s
criminal case, the Order also stated explicitly that no other deadlines were extended. (Doc. 57).
Therefore, more than twenty-one months have passed since Taul’s deadline to amend his
pleadings expired on March 31, 2015.
instance by Rule 16(b)(4)'s “good cause” requirement, not by Rule
15(a)(2)'s “freely give leave” standard. See Smith v. School Bd. of
Orange County, 487 F.3d 1361, 1367 (11th Cir.2007) (“despite Smith's
argument on appeal that the district court should have granted his
motion to amend his complaint in accordance with the liberal
amendment instructions of Rule 15(a), Smith still had to comply with
Rule 16(b)'s good cause requirement because he filed his motion to
amend . . . after the court's deadline for such motions”); Sosa v. Airprint
Systems, Inc., 133 F.3d 1417, 1419 (11th Cir.1998) (“[B]ecause Sosa's
motion to amend was filed after the scheduling order's deadline, she
must first demonstrate good cause under Rule 16(b) before we will
consider whether amendment is proper under Rule 15(a).”).
Under well-settled law, the “good cause” standard prescribed by Rule
16(b) “precludes modification unless the schedule cannot be met despite
the diligence of the party seeking the extension.” [Sosa v. Airprint Sys.,
Inc., 133 F.3d 1417, 1418 (11th Cir. 1998)] (citation and internal
quotation marks omitted).
“Diligence, not lack of prejudice, is the touchstone of the Rule 16(b)(4)
inquiry.” Roberson, 2013 WL 4870839, at *2 (citations omitted); see
also De Varona v. Discount Auto Parts, LLC, 285 F.R.D. 671, 672–73
(S. D. Fla. 2012) (“diligence is the key to satisfying the good cause
requirement”); Southern Track & Pump, Inc. v. Terex Corp., 722 F.
Supp. 2d 509, 521 (D. Del. 2010) (“the good cause standard under Rule
16(b) hinges on diligence of the movant, and not on prejudice to the
non-moving party”) (citation omitted).
Jasper Wood Products, LLC v. Jordan Scrap Metal, Inc., No. CIV. A. 13-0407-WSC, 2014 WL 3720530, at *3-4 (S.D. Ala. July 25, 2014) (Steele, J.).
Taul fails to cite to Rule 16 at all in his Surreply and makes no attempt to argue
“good cause” for the court to modify its scheduling order and allow him to re-amend
his complaint this late in the course of this litigation. Accordingly, the court construes
Taul’s request to amend his pleadings and add a Count pursuant to 31 U.S.C. §
3729(a)(1)(G) as a Motion for Leave To Amend, which is hereby DENIED for his
failure to mention, much less show, good cause under Rule 16(b).
Defendants’ Two Motions for Leave To File a Response To Plaintiff’s
Defendants’ (doc. 97) Motion for Permission To File a Response To Plaintiff’s
Surreply is a duplicate filing of its (doc. 96) Motion for Leave To File a Response To
Plaintiff’s Surreply. Both Motions state Defendants’ intent to discuss the heightened
Rule 9(b) pleading requirements for FCA claims and their belief that the FCA statute
of limitations bars all available claims under the FCA. Defendants’ Motion (doc. 85)
and Reply (doc. 92) already brought both issues to the court’s attention, and the court
has already addressed both matters in this Opinion. The court will not permit
Defendants to rehash arguments they have already made. Therefore, both Motions are
due to be DENIED.
Defendants’ Pending Discovery Motions
On June 30, 2015, this court extended the deadline to complete discovery in
this case until thirty days after the completion of Jed Nagel’s Alabama criminal trial,
including any appeals. (Doc. 57). The last joint status report filed by the parties on
February 1, 2016, informed the court that the related criminal trial had been continued
until July 11, 2016. (Doc. 83 at 1). The court has received no further update since
February 2016 on the status of this criminal trial.
On October 21, 2016, Defendants filed a Motion To Quash Plaintiff’s Second
Deposition Notice and Accompanying Request To Produce Documents at Deposition
(doc. 86, the “Motion To Quash”); a Motion To Strike/Defendants’ Objections To
Plaintiff’s Second Set of Interrogatories and Requests for Production (doc. 87, the
“Motion To Strike”); and a Motion To Amend/Correct the prior (doc. 86) Motion To
Quash (doc. 88, the “Motion To Amend”). In each Motion, Defendants object to
discovery requests made by Taul because they incorrectly claim, as they did in their
Motion To Dismiss, that the statute of limitations has run on every claim asserted in
the Amended Complaint. See (Doc. 86 at 1, ¶ 2); (Doc. 87 at 2, ¶2); (Doc. 88 at 2, ¶2).
Taul has not responded to any of these Motions.
The Motion To Quash and Motion To Amend both ask the court to enter an
order quashing the Plaintiff’s second notice of deposition, which was set to take place
on November 2, 2016. The court has no idea whether the deposition has already taken
place or did not go forward due to the pending Motions. Defendants’ Motion To
Strike objects to Taul’s second set of interrogatories and request for production of
documents, particularly documents relating to allegations of retaliation. (Doc. 87 at
2). Because Taul has not responded to this Motion, the court cannot tell if he is
contesting it. Due to the ambiguous status of the overriding discovery deadline in this
case, all three discovery Motions (docs. 86, 87, and 88) are due to be DENIED
WITHOUT PREJUDICE to refiling them, but only to the extent that they are not
now MOOT and only to the extent that they do not rehash arguments already rejected
by this court. Further, both parties are hereby ORDERED to file a joint status report
regarding the status of Nagel’s Alabama criminal case, including any appeals, by
February 10, 2017.
Taul’s reverse FCA claims, to the extent that they have been pled at all, are not
pled adequately. Accordingly, they are hereby DISMISSED.
Although some of Taul’s other FCA claims are barred by their respective
statutes of limitations, not all are so barred. As a result, this court retains jurisdiction
to decide Taul’s timely FCA claims. All untimely FCA claims are hereby
DISMISSED. Specifically, Defendants’ Motion To Dismiss (doc. 85) is hereby
DENIED as to the following timely claims:
Counts I, II, and III: FCA claims brought pursuant to 31 U.S.C. §§
3729(a)(1)(A-C), occurring after January 13, 2008;
Count IV: FCA retaliation-based claims from fall 2012;
Count V: FCA claims based on violations of the Anti-Kickback Statute,
occurring after January 13, 2008.
In all other respects, such Motion is GRANTED. Further, Defendants’ Motion for
Leave To File a Response to Plaintiff’s Surreply (doc. 96) and Motion for Permission
To File Response to Plaintiff’s Surreply (doc. 97) are hereby DENIED. Additionally,
the discovery motions (docs. 86, 87, and 88) are hereby DENIED.
Both parties are hereby ORDERED to file a joint status report regarding the
status of Nagel’s Alabama criminal case, including any appeals, by February 10,
2017. The joint status report must also address whether the issues raised in the three
discovery-related Motions (docs. 86, 87, and 88) have been resolved.
DONE and ORDERED this the 1st day of February, 2017.
VIRGINIA EMERSON HOPKINS
United States District Judge
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