Wilson et al v. Alaska Native Tribal Health Consortium et al
Filing
87
ORDER GRANTING 50 Motion to Dismiss for Lack of Jurisdiction; DENYING 74 Motion for Discovery; and DENYING as moot 32 Motion to Disqualify Counsel. The Clerk of Court is directed to close this case. Signed by Judge Timothy M. Burgess on 7/3/2019. (NMG, CHAMBERS STAFF)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
JOAN WILSON and PAUL FRANKE, M.D.,
Case No. 3:16-cv-00195-TMB
Plaintiffs,
v.
ORDER ON MOTION TO DISMISS FOR
LACK OF SUBJECT MATTER
JURISDICTION AND FAILURE TO
STATE A CLAIM (DKT #50), CROSS
MOTION FOR JURISDICTIONAL
DISCOVERY (DKT #74) AND MOTION
TO DISQUALIFY (DKT #32)
ALASKA NATIVE TRIBAL HEALTH
CONSORTIUM; ANDREW TEUBER; and
ROALD HELGESEN,
Defendants.
I.
INTRODUCTION
The matter comes before this Court on Defendants Alaska Native Tribal Health
Consortium’s (“ANTHC”), Andrew Teuber’s (“Teuber”) and Roald Helgesen’s (“Helgesen”)
(collectively “Individual Defendants”) Motion to Dismiss for Lack of Subject Matter Jurisdiction
and Motion to Dismiss for Failure to State a Claim (“Motion to Dismiss”). 1 Plaintiffs Joan Wilson
(“Wilson”) and Dr. Paul Franke (“Franke”) opposed the Motion to Dismiss and cross-moved for
Jurisdictional Discovery (“Discovery Motion”). 2 This matter was fully briefed by the parties, and
this Court heard oral argument on the Motion to Dismiss and Discovery Motion on June 12, 2019. 3
Also pending before the Court is Defendants’ Motion to Disqualify Counsel and Plaintiffs
(“Motion to Disqualify”), 4 which is fully briefed and ripe for adjudication. The Parties did not seek
oral argument with respect to the Motion to Disqualify, and this Court does not find it necessary
1
Dkt. 50 (Mot. to Dismiss).
2
Dkt. 73 (Opp’n to Mot. to Dismiss); Dkt. 74 (Disc. Mot.).
3
Dkt. 86 (Oral Argument Min. Entry).
4
Dkt. 32 (Mot. to Disqualify).
1
to its analysis. For the reasons explained below, Defendants’ Motion to Dismiss at Docket 50 is
GRANTED, Plaintiffs’ Cross-motion for Jurisdictional Discovery at Docket 74 is DENIED, and
Defendants’ Motion to Disqualify at Docket 32 is DENIED AS MOOT.
II.
BACKGROUND
A. Factual Background
ANTHC is a “Tribal Organization and inter-Tribal consortium of federally recognized
Alaska Tribes and Tribal Organizations” 5 which co-manages Alaska Native Medical Center
(“ANMC”), a tertiary-care hospital that provides medical services in Anchorage, Alaska. 6
From 2014 to 2016, ANTHC employed Wilson as Chief Ethics and Compliance Officer. 7
From 2013 to 2016, ANTHC employed Franke by contract as the Chief Medical Officer of
ANMC. 8 Wilson and Franke assert that they have “intimate knowledge of the day-to-day
operations” of ANTHC, including billing practices of ANMC. 9 They repeatedly allege that Teuber,
President of ANTHC, 10 and Helgesen, Chief Executive Officer of ANTHC and Hospital
Administrator of ANMC, 11 were “well-aware” that ANMC and ANTHC’s various billing practices
were fraudulent. 12 Specifically, Plaintiffs allege that ANTHC engaged in the following fraudulent
5
Dkt. 49 (Second Am. Compl.) at 3, ¶ 5.
6
Dkt. 52 (Helgesen Aff.) at 3, ¶ 5.
7
Dkt. 49 at 2, ¶ 3.
8
Id. at 2, ¶ 4.
9
Id. at 2–3, ¶¶ 3–4.
10
Id. at 3, ¶ 7.
11
Id. at 3, ¶ 6.
12
See Dkt. 49 at 8 –15.
2
practices: double billing for certain medical services; 13 billing for services performed by ineligible
providers; 14 billing for unauthenticated services; 15 and accepting incentive payments from
Medicaid and Medicare without satisfying program requirements. 16 Plaintiffs allege that Wilson
“repeatedly brought these issues to the attention of ANTHC and Helgesen,” “repeatedly attempted
to reverse these [inappropriate] practices” 17 and “urged ANTHC to return, report and repay
overpayments that ANTHC wrongfully obtained” 18 without success. Plaintiffs also allege that
Helgesen and Teuber took “no action to stop [these inappropriate billing practices]” 19 and even
“buried Ms. Wilson’s draft compliance plan designed to remedy billing concerns.” 20
On May 6, 2016, Helgesen terminated Wilson’s employment with approval from Teuber,
his direct supervisor. 21 In June 2016, ANTHC notified Franke that his contract, which was due to
expire on June 7, 2016, would not be renewed. 22
13
Id. at 7, ¶ 22; at 10, ¶¶ 29–31.
14
Id. at 7, ¶ 23.
15
Id. at 8, ¶ 26.
16
Id. at 11–13, ¶¶ 32–35.
17
Id. at 8, ¶ 23.
18
Id. at 13, ¶ 36.
19
Id. at 15, ¶ 38.
20
Id. at 13–14, ¶ 36.
21
Id. at 17, ¶ 41.
22
Dkt. 49 at 2, ¶ 4; 18, ¶ 43. The Second Amended Complaint fails to provide specific dates or
examples of Franke reporting or raising concerns regarding the fraudulent billing practices either
internally or externally.
3
B. Procedural History
On August 29, 2016, Plaintiffs initiated this action against ANTHC as a qui tam lawsuit on
behalf of the government and under seal pursuant to the False Claims Act (“FCA”). 23 On
December 6, 2017, the United States declined to intervene in the action. 24 On June 21, 2018,
Plaintiffs filed an Amended Complaint as a private action on behalf of themselves against
ANTHC. 25 On December 3, 2018, 26 Plaintiffs filed the Second Amended Complaint (“SAC”),
adding the Individual Defendants pursuant to federal question jurisdiction. 27 Plaintiffs allege that
their employment at ANTHC was terminated as a result of Plaintiffs’ opposition to ANTHC’s
fraudulent billing practices in violation of federal and state laws.
III.
LEGAL STANDARD
Defendants move to dismiss the SAC pursuant to Fed. R. Civ. P. 12(b)(1) based on tribal
sovereign immunity and 12(b)(6) based on a failure to state a claim upon which relief can be
granted.
A. Motion to Dismiss Under Fed. R. Civ. P. 12(b)(1)
The issue of tribal sovereign immunity is quasi-jurisdictional. When properly raised in a
12(b)(1) motion, a district court is not bound to accept a plaintiff’s allegations as true in resolving
23
Dkt. 1 (Compl.); 31 U.S.C. § 3729 et seq.
24
Dkt. 12 (Notice of United States Election to Decline to Intervene).
25
Dkt. 15 (Am. Compl.).
26
Dkt. 49.
27
28 U.S.C. § 1331.
4
that issue, 28 nor is it bound by the four corners of the complaint; however, a Court may consider
additional materials in resolving a 12(b)(1) motion. 29 Furthermore, once a party raises this defense,
“‘the party asserting subject matter jurisdiction has the burden of proving its existence,’ i.e. that
immunity does not bar the suit.” 30
B. Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6)
Under Fed. R. Civ. P. 12(b)(6), a defendant may move to dismiss a claim for lacking a
factual basis “upon which relief can be granted.” 31 Under the “facial plausibility” pleading
standard set forth by the Supreme Court in Ashcroft v. Iqbal, “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’” 32 A district
court must accept as true the material factual allegations contained in the complaint, draw all
reasonable inferences in favor of the non-moving party, and only consider the allegations
contained in the complaint without looking beyond its four corners. 33
IV.
ANALYSIS
Plaintiffs assert the following four claims: (Count I) Defendants violated the FCA by
terminating Plaintiffs’ employment in retaliation for raising concerns about ANTHC and ANMC’s
28
See, e.g., Pistor v. Garcia, 791 F.3d 1104, 1112 (9th Cir. 2015); Robinson v. United States, 586
F.3d 683, 685 (9th Cir. 2009).
29
Pistor, 791 F.3d at 1112 (“the declarations presented evidence going to the question of quasijurisdiction, and the district court was not bound to consider only the face of the complaint.”).
30
Id. (quoting Miller v. Wright, 705 F.3d 919, 927–28 (9th Cir. 2013)).
31
Dkt. 51 (Mot. to Dismiss MOL) at 6–12.
32
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
33
Rouse v. U.S. Dep’t of State, 567 F.3d 408, 411 (9th Cir. 2009) (quoting Navarro v. Block, 250
F.3d 729, 732 (9th Cir. 2001)); Fed. R. Civ. P. 12(d).
5
fraudulent billing practices; (Count II) ANTHC wrongfully terminated Plaintiffs’ employment in
violation of Alaska’s public policy to prevent Medicaid fraud in Alaska; (Count III) ANTHC
breached the covenant of good faith and fair dealing under Alaska state law when it terminated
Plaintiffs without cause; and (Count IV) ANTHC is vicariously liable for the acts of its
employees. 34
A. Motion to Dismiss
Defendants move for dismissal of each of Plaintiffs’ four claims. 35 ANTHC contends that
dismissal is appropriate because ANTHC is an “arm of the tribe,” which means it is both entitled
to tribal sovereign immunity, which bars all claims against it, and is not “a person” subject to
liability under the FCA retaliation provision. The Individual Defendants also contend that
dismissal is appropriate because they do not have an employment, contractual or agency
relationship with the Plaintiffs. The Court addresses each of these arguments.
1.
Whether ANTHC is “An Arm of the Tribe”
The quasi-jurisdictional nature of sovereign immunity means that if ANTHC is found to
maintain such immunity, this Court lacks jurisdiction to resolve this action as it pertains to
ANTHC. 36 “Tribal sovereign immunity protects Indian tribes from suit absent express
authorization by Congress or clear waiver by the tribe.” 37 Tribal sovereign immunity extends to
34
Dkt. 49 at 18–22.
35
Dkt. 50.
36
Pistor, 791 F.3d at 1111 (rejecting the district court’s conclusion, and holding “[t]o the contrary,
as the tribal defendants invoked sovereign immunity in an appropriate manner and at an
appropriate stage, i.e. in a Rule 12(b)(1) motion to dismiss, if they were entitled to tribal immunity
from suit, the district court would lack jurisdiction over the claims against them and would be
required to dismiss them from the litigation.”).
37
Id. at 1110 (citing Cook v. AVI Casino Enters., Inc., 548 F.3d 718, 725 (9th Cir. 2008)).
6
tribal governing bodies or entities acting as “an arm of the tribe” 38 as well as organizations
comprised of multiple tribes. 39
In White v. University of California,40 the Ninth Circuit Court of Appeals set forth the
appropriate analysis to determine whether an entity is an “arm of the tribe.” If a Court finds that
an entity is an “arm of the tribe,” that entity is both (1) entitled to maintain tribal sovereign
immunity, and (2) is not liable under the FCA retaliation provision, because it is not “a person”
under the FCA. 41 White, established a five-factor analysis to determine if an entity is an “arm of
the tribe:”
(1) the method of creation of the economic entities; (2) their
purpose; (3) their structure, ownership, and management, including
the amount of control the tribe has over the entities; (4) the tribe’s
intent with respect to the sharing of its sovereign immunity; and (5)
the financial relationship between the tribe and the entities. 42
The Court therefore considers whether ANTHC is an “arm of the tribe” under the five-factor
analysis articulated in White.
a. Method of Creation of ANTHC
Plaintiffs argue that ANTHC is not an “arm of the tribe” because it was created by
Congress, not directly by resolution of the tribes; and tribal status is not required in order to obtain
38
Cook v. AVI Casino Enters., Inc., 548 F.3d 718, 725 (9th Cir. 2008); see Alaska Logistics, LLC
v. Newtok Vill. Council, 357 F. Supp. 3d 916, 924 (D. Alaska 2019).
39
See White v. Univ. of California, 765 F.3d 1010, 1018 (9th Cir. 2014).
40
765 F.3d 1010 (9th Cir. 2014).
41
United States ex rel. Cain v. Salish Kootenai College, Inc., 862 F.3d 939, 941 (9th Cir. 2017)
(“Cain II”) (acknowledging that these two questions are linked and remanding to the district court
to make fact findings as to the White factors).
42
White, 765 F.3d at 1025.
7
federal funding through the Indian Self-Determination and Education Assistance Act
(“ISDEAA”). 43 Defendants assert that the ISDEAA supports tribal sovereign immunity by giving
it the “same ‘rights and responsibilities’ of any tribe.” 44 During oral argument, Defendants further
highlighted that ANTHC was authorized by Congress and formed by the tribes because they
needed an organization above the regional level to manage statewide health services in Alaska.
ANTHC was authorized by federal law and formed by thirteen Alaska Native regional
health entities as a tribal organization and Inter-Tribal Consortia under authority of Alaska Native
tribes. 45 In § 325 of Public Law 105-83, Congress authorized the following tribes and Alaska
Native health entities to join together “without further resolution” to form ANTHC to provide
comprehensive healthcare to the Alaska Native people: the Aleutian/Pribilof Islands Association,
Inc., Bristol Bay Area Health Corporation, Chugachmiut, Copper River Native Association,
Kodiak Area Native Area Association, Maniilaq Association, Metlakatla Indian Community,
Arctic Slope Native Association, Ltd., Norton Sound Health Corporation, Southcentral
Foundation, Southeast Alaska Regional Health Consortium, Tanana Chiefs Conference, Inc., and
Yukon- Kuskokwim Health Corporation. 46 The ISDEAA, in pertinent part, determines that an
“inter-tribal consortium . . . shall have the rights and responsibilities of the authorizing Indian
43
Dkt. 73 at 14–15.
44
Dkt. 51 at 20–22.
45
Section 325(a) P. L. 105-83 (1997) (“without further resolutions from the Regional
Corporations, Village Corporations, Indian Reorganization Act Councils, tribes and/or villages
which they represent are authorized to form a consortium…”); Dkt. 52-2 (Helgesen Aff., Ex. 2,
Alaska Tribal Health Compact) at 7.
46
Section 325(a) P. L. 105-83 (1997). During oral argument, Plaintiffs argued at length that the
tribes must provide a specific resolution in order to authorize and to confer tribal sovereign
immunity upon ANTHC. However, § 325 specifically obviates the need for tribe level resolutions
by stating “without further resolution” from various tribal authorities.
8
tribe and § 325(a) authorizes the fifteen tribes and tribal health organizations to form “a
consortium,” which eventually became ANTHC. 47 Furthermore, ANTHC was incorporated as a
tribal non-profit organization. 48
Based on these facts, the Court finds that ANTHC’s creation, authorized by Congress and
formed by regional health entities and tribes, supports a finding that it is “an arm of the tribe.”
b. ANTHC’s Purpose
Defendants assert that because ANTHC “exists to ‘assure that all Alaska Natives have
access to a comprehensive, integrated, and tribally-controlled health care delivery system;’” and
because ANTHC carries out ISDEAA functions, these facts support its tribal sovereign
immunity. 49 Plaintiffs implicitly agree that this factor weighs in favor of a finding that ANTHC is
“an arm of the tribe” by failing to make an argument to the contrary.
ANTHC serves a government function using federal funds from the Indian Health Service
(“IHS”) under the Department of Health and Human Services (“HHS”) to “provide[] a wide range
of medical, community health and other services for more than 175,000 Alaska Natives across the
State.” 50 Only Alaska Natives and American Indians are eligible to receive direct health services
47
25 U.S.C. § 5381(b); see § 325(a) P. L. 105-83 (1997).
48
ANTHC Overview, https://anthc.org/who-we-are/overview/ (June 7, 2019). See also Cain v.
Salish Kootenai College, Inc., No. CV-12-181-M-BMM, 2018 WL 2272792 at *1–2 (D. Mont.
May 17, 2018) (“Cain III”) (finding that dual incorporation as tribal non-profit and under state
law did not undermine defendant’s status as “arm of the tribe”).
49
Dkt. 51 at 22–23 (asserting that the Alaska State courts agree).
50
Dkt. 52 at 3, ¶ 5; see Dkt. 52 at 2, ¶ 3.
9
from ANMC. 51 ANTHC supplants the government by providing statewide healthcare services that
“were formerly provided by [IHS].” 52 ANTHC was also established “for the purpose of entering
into self-determination and self-governance agreements with the [IHS] to operate and manage
health services as authorized by Section 325 [of Public Law 105-83.]” 53 Like the Repatriation
Committee at issue in White, as a member of the ATHC, ANTHC furthers “tribal selfdetermination and self-governance,” which are central policies underlying the doctrine of tribal
sovereign immunity. 54
Based on the foregoing, the Court finds that ANTHC’s purpose and function support a
finding that it is “an arm of the tribe.”
c. ANTHC’s Structure, Ownership, and Management
Plaintiffs assert ANTHC is nothing “more than a mere business” because ANTHC lacks
tribes as members and the Board of Directors operates independently; thus, ANTHC is not entitled
51
ANMC Policy 703F, http://anmc.org/files/703F-Eligibility-for-Direct-Health-Services-atANMC.pdf. See also Cain III, 2018 WL 22727792, at *2 (finding that the native student
enrollment supported defendant’s status as an “arm of the tribe”).
52
Dkt. 52 at 3, ¶ 5; see § 325(a) P. L. 105-83 (1997) (authorizes the tribes and regional health
entities “to enter into contracts, compacts, or funding agreements under Public Law 93-638 . . . to
provide all statewide health services provided by the Indian Health Service of the Department of
Health and Human Services through the Alaska Native Medical Center and the Alaska Area
Office.”).
53
Dkt. 51-5 (Mot. to Dismiss MOL, Ex. D) at 1. ANTHC is a “Co-Signer” to the Alaska Tribal
Health Compact (“ATHC”) by which ANTHC is authorized “to plan, conduct, and administer
those programs and services to meet the health care needs of the Alaska Native Tribes.” Dkt. 522, Ex. 2 at 10. The ATHC is an “instrument through which all Alaska Native tribes and tribal
organizations could collectively enter into a single-self-governance agreement with the [IHS.]”
Dkt. 51-5, Ex. D at 1.
54
Dkt. 52-2, Ex. 2 at 7–8. See also White, 765 F.3d 1010.
10
to sovereign immunity. 55 Defendants point to the representatives on the Board of Directors as the
mechanism in which the tribes control ANTHC. 56
As a Co-Signer to the ATHC, ANTHC participates in carrying out “the unique tribal
cooperation that has developed in Alaska to assure that all Alaska Natives have access to a
comprehensive, integrated, and tribally-controlled health care delivery system.” 57 ANTHC is
“governed by a 15-member Board of Directors.” 58 Twelve directors are selected by each of the
“regional Alaska Native tribal health consortia; one director is appointed by the Metlakatla India
Community, a federally-recognized tribe;” and two directors are elected by Alaska Native tribes
who are unaffiliated with a regional health consortium. 59 The tribes and tribal organizations that
formed ANTHC exercise control of ANTHC through their representative to the Board of Directors;
each representative has voting power. 60 The tribes are in control of their representative and can
55
Dkt. 73 at 16–19 (quoting Pink v. Modoc Indian Health Project, Inc. 157 F.3d 1185 (9th Cir.
1998)). The Court notes that the parties disagreed as to the significance of Pink v. Modoc Indian
Health Project during oral argument.
56
Dkt. 51 at 22.
57
Dkt. 52-2, Ex. 2 at 4; see also Dkt. 52-2, Ex. 2 at 7 (defining “Co-Signer” as “all Tribes and
tribal organizations or Inter-Tribal Consortia, including the ANTHC, participating in the
Compact”).
58
Dkt. 52 at 4.
59
Id.
60
See ISDEAA, 25 U.S.C. § 5381(b); § 325(a) P. L. 105-83 (1997); Dkt. 52-2, Ex. 2 at 7. See also
McCoy v. Salish Kootenai College, Inc., 334 F. Supp. 3d 1116, 1123 (D. Mont. 2018) (finding that
“the College’s Board of Directors handles the governing day-to-day operations” did not undermine
a conclusion that the College was an arm of the tribe); Cain III, 2018 WL 2272792, at *2 (finding
that a delegated board although separate from the tribes themselves did not undermine a conclusion
that defendant was “an arm of the tribe”).
11
replace that person if the tribe so desires. 61
Based on these facts, the Court finds that ANTHC’s management structure supports a
finding that it is “an arm of the tribe.”
d. The Tribes’ Intent to Share Sovereign Immunity with ANTHC
Plaintiffs argue that ANTHC is not an “arm of the tribe” because it did not sign an explicit
resolution conferring sovereign immunity, 62 is not a “Tribal Co-Signor” to the ATHC, or on a
“government to government basis.” 63 Defendants argue that ANTHC’s tribal authorization through
ATHC and ISDEAA evidences that the tribes intended to share their sovereign immunity with
ANTHC, and is thus “an arm of the tribe.” 64
Pursuant to ISDEAA, when “an Indian tribe has authorized . . . an inter-tribal
consortium . . . to plan for or carry out programs, services, functions or activities . . . on its
behalf . . . [the] inter-tribal consortium . . . shall have the rights and responsibilities of the
authorizing Indian tribe,” 65 which includes sovereign immunity. ANTHC, an “inter-tribal
consortium,” was created without any showing to the contrary; therefore, the tribes and regional
health entities identified in § 325(a) showed their intent to share sovereign immunity. 66 In fact,
when the tribal representatives on the ANTHC board do not wish to share their sovereign
61
Dkt. 52-1 (Helgesen Aff., Ex.1, ANTHC Bylaws) at 4.
62
Plaintiffs raised this argument during oral argument.
63
Dkt. 73 at 14–15.
64
Dkt. 51 at 23.
65
25 U.S.C. § 5381(b), ISDEAA (defining “Indian tribe”).
66
See Cain III, 2018 WL 2272792, at *3 (finding that the tribe’s creation of the College also
supported a showing of its intent to share sovereign immunity).
12
immunity, the tribes explicitly state their intent to waive sovereign immunity. 67 By its own terms,
§ 325(a) authorized the consortium “without further resolution by the . . . tribes” and Congress
obviated any need for an explicit resolution by each tribe to form ANTHC and confer sovereign
immunity by resolution. 68 That ANTHC’s Articles of Incorporation do not explicitly state that it
has sovereign immunity, is not fatal to ANTHC’s sovereignty status either. 69
Based on the foregoing, the Court finds that the tribes and regional health entities identified
in §325(a) P.L. 105-83 intend to share their immunity with ANTHC, which supports a finding that
ANTHC is “an arm of the tribe.”
e. Financial Relationship Between the Tribes and ANTHC
Plaintiffs assert that ANTHC’s financial relationship with the tribes does not support a
finding that ANTHC is “an arm of a tribe” because ANTHC makes no promise to return funding
to the tribes despite its receipt of non-governmental funds. 70 Defendants point to the government’s
transfer of “essentially all of IHS’s Alaska programs, funding, facilities, equipment, and other
resources through the [ATHC] and related funding agreements” and ANTHC’s participation in
67
See, e.g., Southcentral Foundation v. Alaska Native Tribal Health Consortium, Case No. 3:17cv-00018-TMB, Dkt. 125 (ANTHC is “an inter-tribal consortium formed by federally-recognized
tribes, tribally controlled P.L. 93-638 tribal organizations and inter-tribal consortia . . . Whereas,
the Consortium shares in the sovereign immunity of its participating tribes, tribal organizations
and inter-tribal consortia . . . the Board of Directors hereby waives the Consortium’s sovereign
immunity for the sole and limited purpose of seeking a decision from the United States District
Court for the District of Alaska in Southcentral Foundation v. Alaska Native Tribal Health
Consortium, 3:17-cv-00018-TMB.”).
68
Section 325(a) P. L. 105-83 (1997).
69
McCoy, 334 F. Supp. 3d at 1123 (rejecting Plaintiff’s argument that the silence of the articles of
incorporation undermined defendant’s status as “an arm of the tribe”).
70
Dkt. 73 at 16–19.
13
ATHC to support a showing that ANTHC is “an arm of the tribe.” 71
ANTHC is funded by IHS under HHS and authorized to receive those funds “to provide
all statewide health services provided by the Indian Health Service of the Department of Health
and Human Services through the Alaska Native Medical Center and the Alaska Area Office.”72
ANTHC is the coordinated organization by which the tribes supplanted this governmental service,
relying on “tribal shares” authorized under ISDEAA for the benefit of the Alaska Native people. 73
That ANTHC is a non-profit organization, as opposed to a for-profit organization, does not
undermine its status as “an arm of the tribe.” 74
Thus, based on these facts, this Court finds that ANTHC’s financial relationship with the
tribes weighs in favor of a finding that it is “an arm of the tribe.”
For the foregoing reasons, this Court finds that an analysis of the five factors articulated in
White demonstrates that ANTHC is an “arm of the tribe.” Because ANTHC is an “arm of the tribe,”
it maintains tribal sovereign immunity, which deprives this Court of subject matter jurisdiction
over the claims brought against ANTHC and simultaneously establishes that ANTHC is not a
“person” subject to the FCA. Accordingly, Defendants’ Motion to Dismiss is GRANTED with
respect to the FCA claim against ANTHC identified in Count I, which is DISMISSED WITH
PREJUDICE.
71
Dkt. 51 at 21.
72
§ 325(a) P.L. 105-83 (1997).
73
Defendants asserted this during oral argument on June 12, 2019; see 25 U.S.C. §5381(a)(8)
(ISDEAA defining tribal share “the tribal share means an Indian tribe’s portion of all funds and
resources that support secretarial programs, services, functions and activities (or portions thereof)
that are not required by the Secretary for performance of inherent Federal functions.”).
74
See McCoy, 334 F. Supp. at 1123–24.
14
2.
Tribal Sovereign Immunity Bars Tort and Contract Claims Against ANTHC
Having determined that ANTHC is an “arm of the tribe” entitled to tribal sovereign
immunity, 75 this Court now addresses the state law claims brought against ANTHC. 76
In Count II, Plaintiffs contend that they “made good faith reports of improper acts and
compliance issues,” and that by terminating Wilson’s employment and by “fail[ing] to extend or
continue Franke’s contract,” 77 ANTHC committed the tort of wrongful termination in violation a
public policy of the State of Alaska. 78 In additional to tribal sovereign immunity, 79 Defendants
argue that its employees are deemed to be part of HHS when carrying out the ATHC’s
governmental function and Plaintiffs’ tort claims must be treated as claims against the United
States for which the Federal Tort Claims Act (“FTCA”) provides an exclusive remedy.80
Defendants also assert that Plaintiffs’ tort claim fails because Plaintiffs do not identify a particular
public policy recognized under Alaska law. 81 In opposition, Plaintiffs reject both ANTHC’s claim
of tribal sovereign immunity, and its assertion that the FTCA provides an exclusive remedy in this
case. Plaintiffs further assert that ANTHC’s actions violated the “strong public policy of
preventing Medicaid fraud in Alaska.” 82
75
See supra IV(A)(1).
76
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006).
77
Dkt. 49 at 19, ¶¶ 46–47.
78
Dkt. 49 at 18, ¶ 44; at 19–20, ¶ 50.
79
Dkt. 51 at 19–24.
80
Id. at 18–19.
81
Id. at 17–19.
82
Dkt. 73 at 25.
15
Finally, in Count III, Plaintiffs allege that ANTHC breached the covenant of good faith
and fair dealing implied in all employment relationships in Alaska by “terminat[ing] Wilson and
Franke without cause and in retaliation [for] report[ing] violations of state and federal law.” 83
Defendants assert that this Court lacks subject matter jurisdiction over this claim as a result of
ANTHC’s tribal sovereign immunity. 84
As discussed, the Court determined—relying on the White factors—that ANTHC is entitled
to tribal sovereign immunity. 85 As a result, the Court lacks subject matter jurisdiction over the
remaining claims against ANTHC.
Accordingly, Defendants’ Motion to Dismiss under Fed. R. Civ. P. 12(b)(1) is GRANTED
with respect to the claim of wrongful termination identified as Count II, and with respect to the
breach of contract claim identified as Count III, and these claims are DISMISSED WITHOUT
PREJUDICE.
3.
FCA Retaliation Claim Against Individual Defendants
In Count I, Plaintiffs allege that the Individual Defendants retaliated against them in
violation of the FCA, by terminating Wilson’s employment and “fail[ing] to extend or continue
Franke’s contract,” 86 after the Plaintiffs “made good faith reports of improper acts and compliance
issues.” 87 Defendants respond that FCA retaliation claims can only be maintained against
“employers,” not individual persons, and, thus, Teuber and Helgesen cannot be liable for any
83
Dkt. 49 at 20, ¶ 53; see Dkt. 49 at 20, ¶¶ 52–54.
84
Dkt. 51 at 19–24.
85
See supra IV(A)(1).
86
Id. at 19, ¶¶ 46–47.
87
Dkt. 49 at 18, ¶ 44.
16
alleged retaliation. 88
The viability of the FCA claim against the Individual Defendants turns on whether Teuber
and Helgesen are Plaintiffs’ employer under the FCA, or are an entity with whom Plaintiffs have
a contractor or agency relationship. Although the Ninth Circuit Court of Appeals has not addressed
this question, this Court treats as persuasive out of circuit authority, which provides ample support
for the conclusion that the FCA’s retaliation provision does not impose liability on individuals
unless they have an “employment,” “contractor,” or “agency” relationship with a plaintiff. 89 It is
undisputed that ANTHC—not Helgesen or Teuber—employed Wilson and contracted with
Franke.
90
Thus, under this authority, a claim cannot be maintained against the Individual
Defendants.
The legislative history of recent amendments to the FCA provides additional support for
this conclusion. Prior to the 2009 amendments, the FCA prohibited retaliation against an employee
88
Dkt. 51 at 7–11.
89
See e.g., Howell v. Town of Ball, 827 F.3d 515 (5th Cir. 2016) (affirming the district court’s
dismissal of FCA retaliation claim against individual defendants and rejecting Plaintiff’s argument
that by removing the word “employer” in 2009, Congress intended “to broaden the class of viable
defendants”); Quality Assurance Servs., Inc., 242 F. Supp. at 1029 (dismissing retaliation claim
against individual defendants without leave to amend); United States v. Kiewit Pac. Co., 41 F.
Supp. 3d 796, 814 (N.D. Cal. 2014) (dismissing retaliation claim against individual defendants
without leave to amend); Cain IV, 2019 WL 1643634, at *8–9 (dismissing the FCA retaliation
claim against individual defendants because they are not plaintiffs’ “employer”); United States ex
rel. Winter v. Gardens Reg’l Hosp. & Med. Ctr., Inc., No. CV 14-08850-JFW (EX), 2017 WL
8793222, at *8-9 (C.D. Cal. Dec. 29, 2017) (dismissing FCA retaliation claims against nonemployers including individual defendants without leave to amend); United States v. N. Am.
Health Care, Inc., No. 14-CV-02401-WHO, 2015 WL 6871781 at *8 (N.D. Cal. Nov. 9, 2015)
(dismissing retaliation claim against individual defendant with prejudice); Marsteller v. MD
Helicopter Inc., No. CV-14-01788-PHX-DLR, 2014 WL 12821103 at *5–6 (D. Ariz. Oct. 15,
2014) (dismissing FCA retaliation claims against non-employers including an individual
defendant).
90
Dkt. 49 at 2, ¶¶ 3–4.
17
“by his or her employer.” 91 The 2009 amendments removed the term “employer” from that
section. 92 Defendants argue that, despite this revision, Congress did not express the intent to
broaden FCA retaliation liability to all foreseeable defendants. 93 The Court agrees.
Thus, this Court finds that Teuber and Helgesen are not subject to liability under the FCA’s
retaliation provision because Plaintiffs are not the “employee,” “contractor,” or “agent” 94 of the
Individual Defendants.
Accordingly, Defendants’ Motion to Dismiss is GRANTED with respect to the FCA
retaliation claim against the Individual Defendants identified in Count I, which is DISMISSED
WITH PREJUDICE.
B. Cross Motion for Jurisdictional Discovery
In opposing the Motion to Dismiss, Plaintiffs also cross-move for jurisdictional
discovery, 95 seeking to establish that “ANTHC is not controlled by the tribes, and is instead an
‘independent entity’ whose Board members have an ‘undivided loyalty to ANTHC that is not
subordinate to any duty owed to . . . any other entity.’” 96 During oral argument, Plaintiffs
91
Section 4 P.L. 111-21 (May 20, 2009) (“Clarification of the False Claims Act”).
92
Id.
93
Dkt. 51 at 7–11; accord Cain v. Salish Kootenai College, Inc., No. 12-181-N-BMM, 2019 WL
1643634, at *8 (D. Mont. April 16, 2019) (“Cain IV”); United States ex rel. Lupo v. Quality
Assurance Servs., Inc., 242 F. Supp. 3d 1020, 1029 (S.D. Cal. 2017).
94
The appropriate defendant for Plaintiffs’ FCA retaliation claim is Plaintiffs’ former employer,
ANTHC. However, as discussed in Section IV(A)(1) of this Order, ANTHC’s status as “an arm of
the tribe” renders ANTHC immune from this claim.
95
In moving for jurisdictional discovery Plaintiffs failed to identify any authority in which to
ground their motion.
96
Dkt. 74 at 26–27; see Dkt. 81 (Pls.’ Reply in Supp. of Disc. Mot.).
18
identified the following categories of documents that they seek: (1) documents to or from the
designated entities that discuss tribal governance and sovereign immunity; (2) service agreements
between ANTHC and the designated entities; and (3) documents showing revenue generating
dealings with designated entities. Additionally, Plaintiffs seek to take depositions under Fed. R.
Civ. P. 30, in part, to evaluate how ANTHC decides whether to waive sovereign immunity, and to
support Plaintiffs’ arguments that ANTHC is not “an arm of the tribe” but “a mere business.” 97
Defendants contended during oral argument that Plaintiffs’ identified categories of documents and
request for depositions are broad and vague, and that Plaintiffs fail to make a compelling showing
that such discovery is needed; thus, Defendants contend that Plaintiffs do nothing to justify “a
fishing expedition.” 98
Courts are afforded broad discretion in allowing discovery and may appropriately do so
when “pertinent facts bearing on the question of jurisdiction are controverted or where a more
satisfactory showing of the facts is necessary.” 99 “[I]t is clear that a court may allow discovery to
aid in determining whether it has . . . subject matter jurisdiction.” 100 In particular, “a narrowly
tailored request for jurisdictional discovery” may be appropriate. 101 However, a court may fairly
97
Defendants announced their specific request to take depositions during oral argument on June
12, 2019.
98
See Dkt. 78 (Opp’n to Disc. Mot) at 2.
99
Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008) (quoting Data Disc, Inc. v. Sys. Tech.
Assoc., Inc., 557 F.2d 1280, 1285 n.1 (9th Cir. 1977)).
100
Alaska Logistics, LLC v. Newtok Vill. Council, 357 F. Supp. 3d 916, 924 (D. Alaska 2019)
(quoting Wells Fargo & Co. v. Wells Fargo Exp. Co., 556 F.2d 406, 430 n.24 (9th Cir. 1977)).
101
Intercontinental Indus. Corp. v. Wuhan State Owned Indus. Holdings Co., 619 F. App’x 592,
595 (9th Cir. 2015), as amended on clarification (Aug. 19, 2015) (citing Am. W. Airlines, Inc. v.
GPA Grp., Ltd., 877 F.2d 793, 801 (9th Cir. 1989)).
19
deny a discovery request where it determines “‘it is clear that further discovery would not
demonstrate facts sufficient to constitute a basis for jurisdiction.’” 102 Furthermore, “the burden is
greater where, as in the present case, ‘the party seeking discovery is attempting to disprove the
applicability of an immunity-derived bar to suit because immunity is intended to shield the
defendant from the burdens of defending the suit, including the burdens of discovery.’” 103
Plaintiffs have not met their burden. Plaintiffs fail to make a narrowly tailored request;
their broad request for documents and depositions is insufficient to justify jurisdictional discovery
because Plaintiffs fail to identify any relevant facts in dispute, or how more information would
alter the Court’s jurisdictional analysis. 104 Plaintiffs also have not identified any authority on which
to justify their broad request for discovery. 105 The record contains sufficient factual evidence on
which to evaluate Defendants’ Motion to Dismiss, and in particular, the jurisdictional questions
presented therein. 106
Accordingly, Plaintiffs’ Cross-motion for Jurisdictional Discovery at docket 74 is DENIED.
102
Am. W. Airlines, Inc. v. GPA Grp., Ltd., 877 F.2d 793, 801 (9th Cir. 1989).
103
Davila v. United States, 713 F.3d 248, 264 (5th Cir. 2013) (quotation omitted).
104
Plaintiffs’ attempt to incorporate hundreds of pages of filings from Southcentral Foundation
v. Alaska Native Tribal Health Consortium, Case No. 3:17-cv-00018-TMB, is unavailing.
105
Furthermore, Plaintiffs’ failure to direct to this Court to any authority which requires a tribal
resolution to confer tribal sovereign immunity to ANTHC, demonstrates that whether such a
resolution exists is not material to the tribal sovereign immunity analysis.
106
See supra IV(A).
20
C. Motion to Disqualify
Based on the determination above that ANTHC is “an arm of the tribe” and maintains tribal
sovereign immunity, 107 the Court lacks subject matter jurisdiction over claims brought against
ANTHC, and all such claims have been dismissed pursuant to Fed. R. Civ. P. 12(b)(1). The Court
has also dismissed Plaintiffs’ claims against the Individual Defendants for failure to state a claim
pursuant to Fed. R. Civ. P. 12(b)(6).
Accordingly, because all of Plaintiffs’ claims in the SAC have been dismissed, Defendants’
Motion to Disqualify at docket 32 is DENIED AS MOOT.
V.
CONCLUSION
For the foregoing reasons, the Court HEREBY ORDERS as follows:
1. The Motion to Dismiss at docket 50 is GRANTED;
a. Count I of the SAC is DISMISSED WITH PREJUDICE;
b. Counts II, III and IV of the SAC are DISMISSED WITHOUT PREJUDICE;
2. The Discovery Motion at docket 74 is DENIED;
3. The Motion to Disqualify at docket 32 is DENIED AS MOOT; and
4. The Clerk of the Court is directed to close this case.
IT IS SO ORDERED.
Dated at Anchorage, Alaska, this 3rd day of July, 2019.
/s/ Timothy M. Burgess
TIMOTHY M. BURGESS
UNITED STATES DISTRICT JUDGE
107
See supra IV(A)(1).
21
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