Juan v. Regents of the University of California et al

Filing 92

ORDER OF DISMISSAL by Judge Claudia Wilken granting 78 Motion to Dismiss. (kcS, COURT STAFF) (Filed on 11/26/2018)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,
ex rel. DIANA JUAN,
Plaintiff,

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United States District Court
Northern District of California

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Case No. 16-cv-04934-CW
ORDER OF DISMISSAL

v.
(Dkt. No. 78)
REGENTS OF THE UNIVERSITY OF
CALIFORNIA et al.,
Defendants.

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Defendants Stephen Hauser, Sam Hawgood and Eileen Kahaner

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have moved to dismiss the Second Amended Complaint (2AC).

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Plaintiff-Relator Diana Juan opposed the motion and Defendants

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filed a reply.

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Defendants’ motion and DISMISSES WITH PREJUDICE all claims

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against Defendants.

For the reasons set forth below, the Court GRANTS

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BACKGROUND
Plaintiff-Relator alleges that Defendants violated the False

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Claims Act (FCA) in submitting Medicare and Medicaid claims for

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services at the University of California, San Francisco.

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Court construed the 2AC as a motion for leave to amend and

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granted it insofar as Plaintiff-Relator asserts claims against

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Hauser, Hawgood and Kahaner.

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as a request to dismiss voluntarily the claims against those

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Defendants named in the First Amended Complaint but not the 2AC

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and granted the request.

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only remaining Defendants.

The

The Court further construed the 2AC

Hauser, Hawgood and Kahaner are the

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LEGAL STANDARD
A complaint must contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.”

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Civ. P. 8(a).

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a claim to relief that is plausible on its face.”

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Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

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Twombly, 550 U.S. 544, 570 (2007)).

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12(b)(6) for failure to state a claim, dismissal is appropriate

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United States District Court
Northern District of California

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only when the complaint does not give the defendant fair notice

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of a legally cognizable claim and the grounds on which it rests.

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Twombly, 550 U.S. at 555.

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the plaintiff pleads factual content that allows the court to

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draw the reasonable inference that the defendant is liable for

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the misconduct alleged.” Iqbal, 556 U.S. at 678.

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Fed. R.

The plaintiff must proffer “enough facts to state
Ashcroft v.

On a motion under Rule

A claim is facially plausible “when

In considering whether the complaint is sufficient to state

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a claim, the Court will take all material allegations as true and

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construe them in the light most favorable to the plaintiff.

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Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049,

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1061 (9th Cir. 2008).

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of the complaint, materials incorporated into the complaint by

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reference, and facts of which the court may take judicial notice.

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Id. at 1061.

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conclusions, including threadbare “recitals of the elements of a

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cause of action, supported by mere conclusory statements.”

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Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555).

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The Court’s review is limited to the face

However, the Court need not accept legal

Rule 9(b) provides that in “alleging fraud or mistake, a

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party must state with particularity the circumstances

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constituting fraud or mistake.”

Fed. R. Civ. P. 9(b).
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The

allegations must be “specific enough to give defendants notice of

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the particular misconduct which is alleged to constitute the

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fraud charged so that they can defend against the charge and not

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just deny that they have done anything wrong.”

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Weidner, 780 F.2d 727, 731 (9th Cir. 1985).

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“state the time, place, and specific content of the false

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representations as well as the identities of the parties to the

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misrepresentation.”

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United States District Court
Northern District of California

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Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

Semegen v.

The allegations must

Schreiber Distrib. Co. v. Serv-Well
“While the

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factual circumstances of the fraud itself must be alleged with

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particularity, the state of mind—or scienter—of the defendants

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may be alleged generally.”

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541, 554 (9th Cir. 2007).

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Odom v. Microsoft Corp., 486 F.3d

When granting a motion to dismiss, the Court is generally

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required to grant the plaintiff leave to amend, even if no

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request to amend the pleading was made, unless amendment would be

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futile.

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Inc., 911 F.2d 242, 246-47 (9th Cir. 1990).

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whether amendment would be futile, the Court examines whether the

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complaint could be amended to cure the defect requiring dismissal

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“without contradicting any of the allegations of [the] original

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complaint.”

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th

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Cir. 1990).

The Court’s discretion to deny leave to amend is

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“particularly broad” where the Court has previously granted

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leave.

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2002).

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Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv.
In determining

Chodos v. West Publ’g Co., 292 F.3d 992, 1003 (9th Cir.

DISCUSSION
Defendants move to dismiss all claims against them because
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Plaintiff-Relator has not alleged particular acts taken by these

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Defendants that could support a claim.1

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to the FCA’s qui tam provisions requires allegations that “(1)

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defendants made a claim against the United States (2) that was

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false or fraudulent (3) with knowledge of the falsity or fraud.”

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United States ex rel. Alfatooni v. Kitsap Physicians Serv., 314

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F.3d 995, 1000 (9th Cir. 2002).

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A claim brought pursuant

In the 2AC, Plaintiff-Relator identifies each Defendant by

United States District Court
Northern District of California

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name and job title, and alleges that each “is responsible for the

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acts and omissions set forth below constituting the submission of

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False Claims.”

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once more, where the complaint alleges that each Defendant:

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2AC ¶¶ 10-12.

Defendants’ names are mentioned

knowingly permitted the continued presentation or caused to
be presented false claims for payment from the United States
government; knowingly made, or caused to be made, false
records or statements in order to receive payment from the
Government and act together to conspire with the other named
Defendants to have the government pay a false or fraudulent
claim . . . [and] had direct knowledge of the failure to
audit the outside coding, the failure to repay overbillings
caused by the systematic failures identified by [PlaintiffRelator] in the Neurology Department, which were present
throughout all parts of the School of Medicine and Medical
Center because of systemic failure, and failed to cause USCF
to repay the overbilled items.

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Id. ¶¶ 143-148.

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to satisfy even Rule 8’s liberal pleading requirements,” much

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less the more rigorous standard of Rule 9(b).

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rel. McMasters v. Northrop Grumman Ship Sys., Inc., No. 06-cv-

These allegations are “too vague or conclusory

United States ex

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Defendants’ further arguments, such as that the 2AC
establishes bad faith that warrants a sanction of dismissal, need
not be reached to dismiss the claims against Defendants.
Accordingly, the Court addresses Defendants’ particularity
argument only.
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03881-RMW, 2006 WL 2884415, at *3 (N.D. Cal. Oct. 10, 2006)

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(dismissing FCA claim in which plaintiff alleged that defendant

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“made false claims for payment” and “bills for goods that it

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builds for Navy submarines” (citation and internal quotation

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marks omitted)).

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The Court must dismiss FCA claims under Rule 9(b) where a
relator “fails to allege with any specificity” a particular

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defendant’s involvement in the alleged scheme.

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United States District Court
Northern District of California

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rel. Serrano v. Oaks Diagnostics, Inc., 568 F. Supp. 2d 1136,

United States ex

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1143 (C.D. Cal. 2008) (dismissing despite allegation that

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individual defendant had ownership interest).

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not allow a complaint to merely lump multiple defendants together

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but requires plaintiffs to differentiate their allegations when

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suing more than one defendant and inform each defendant

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separately of the allegations surrounding his alleged

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participation in the fraud.”

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Corinthian Colls., 655 F.3d 984, 997-98 (9th Cir. 2011) (quoting

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Swartz v. KPMG LLP, 476 F.3d 756, 764–65 (9th Cir. 2007)

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(internal quotation marks omitted)).

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suit involving multiple defendants, a plaintiff must, at a

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minimum, identify the role of each defendant in the alleged

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fraudulent scheme.”

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quotation marks & alterations omitted); see also Corinthian

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Colls., 655 F.3d at 998 (“The Complaint provides no additional

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detail as to the nature of the Individual Defendants’ involvement

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in the fraudulent acts, but simply attributes wholesale all of

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the allegations against Corinthian to the Individual Defendants.

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Rule 9(b) undoubtedly requires more.”); United States v. Safran

That rule “does

United States ex rel. Lee v.

“In the context of a fraud

Swartz, 476 F.3d at 764 (citation, internal

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Grp., No. 15-CV-00746-LHK, 2017 WL 235197, at *7 (N.D. Cal. Jan.

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19, 2017) (“Even if an FCA claim is adequately alleged, a

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complaint must provide an adequate factual basis connecting that

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FCA claim to the particular defendant.”); United States ex rel.

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Silingo v. Mobile Med. Examination Servs., Inc., No. 13-cv-01348-

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FMO, 2015 WL 12752552, at *9 (C.D. Cal. Sept. 29, 2015)

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(rejecting “group-pleading” of FCA claim).
Notably, the Court granted Plaintiff-Relator leave to amend

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United States District Court
Northern District of California

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once before and addressed the present deficiencies at a November

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7, 2017, case management conference that preceded Plaintiff’s

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filing of the 2AC.

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being sued individually in their personal capacities . . . so

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they need to have done something wrong individually and not just

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as part of a group . . . .”).

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failed to comply with the necessary pleading requirements.

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Court concludes that further leave to amend would be futile.2

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Docket No. 48 at 11 (“These are individuals

Nonetheless, Plaintiff-Relator
The

CONCLUSION

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For the aforementioned reasons, the Court GRANTS Defendants’

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motion to dismiss and DISMISSES WITH PREJUDICE all claims against

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Defendants.

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//

This Order terminates Plaintiff-Relator’s action.

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The Court’s July 25, 2018, Order denied leave to amend and
struck the 2AC insofar as it added claims against new Defendants.
This denial was “without prejudice to Juan further amending her
complaint under Rule 15(a).” Docket No. 77. Approximately four
months have passed since the Court’s ruling and Plaintiff-Relator
has not filed a motion for leave to file another amended
complaint or otherwise indicated any intention to do so.
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The Court DIRECTS the Clerk of the Court to enter judgment and

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close this case.

Each party shall bear its own costs.

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IT IS SO ORDERED.

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Dated: November 26, 2018
CLAUDIA WILKEN
United States District Judge

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United States District Court
Northern District of California

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