United States of America v. Janke et al

Filing 75

ORDER DENYING 54 Motion to Dismiss for Failure to Join a Required Party. Signed by Judge K. Michael Moore on 8/17/2009. (rg1)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
Case No. 09- 14044-CIV-MOORE/LYNCH UNITED STATES OF AMERICA, Plaintiff, VS. WALTER JANKE, M.D., LALITA JANKE, and MEDICAL RESOURCES, L.L.C., Defendants.
1

ORDER DENYING DEFENDANTS' MOTION TO DISMISS FOR FAILURE TO JOIN A REOUIRED PARTY
THIS CAUSE came before the Court upon the Motion of Defendants Walter Janke, M.D., Lalita Janke, and Medical Resources, L.L.C. to Dismiss fo Failure to Join a Required Party [54]. Plaintiff, the United States of America, filed a Response [7 11 and Defendants filed a Reply [74]. UPON CONSIDERATION of the Motions, the Responses, the pertinent portions of the record, and being otherwise fully advised in the premises, the Court enters the following Order.

I.

BACKGROUND
This case involves an alleged fraud on the federal Medicare program, in violation of the

federal False Claims Act ("FCA"). Plaintiff, the United States of America ("the United States") alleges that Walter Janke, M.D. and Lalita Janke, (collectively the "Jankes") and Medical Resources, LLC ("MR) (collectively, the "Defendants"), violated the FCA by making, or causing to be made, false statements and claims that resulted in millions of dollars of Medicare

overpayments. The United States alleges that the Defendants falsely represented or caused Defendant MR and America's Health Choice Medical Plan, ("AHC") to falsely represent that AHC beneficiaries had serious illnesses that were not supported by the patients' own medical records. AHC, now defunct, was a Medicare Advantage Health Plan, of which the Jankes were sole shareholders. MR, a network of clinics that provided primary health care to AHC beneficiaries, was its corporate affiliate. On August 6, 2008, the Circuit Court in and for the Second Judicial Circuit of the State of Florida entered an order appointing the Florida Department of Financial Services as receiver of AHC, and entered a stay precluding the commencement or continuation of lawsuits against AHC or its assets. The United States contends that Defendants and AHC are jointly and severally liable for the alleged violations, but has not joined AHC as a defendant in this action.
11.

ANALYSIS
Defendants claim that AHC is a required party that must be joined under Federal Rule of

Civil Procedure 19. However, because AHC is in receivership and cannot currently be joined due to the Florida receivership court's stay prohibiting suit against it, Defendants assert that this case must be dismissed pursuant to Federal Rule of Civil Procedure Rule 12(b)(7). The United States responds that AHC is not a required party under Rule 19. Rule 19(a)(l) of the Federal Rules of Civil Procedure sets forth two categories of persons who are required to be joined if feasible. A non-party is a person who must be joined if (A) in that person's absence, the court cannot accord complete relief among the existing parties; or (B) that person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may: as a practical matter impair or impede the person's ability to protect that (i) interest; or

(ii)

leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the claimed interest.

Fed. R. Civ. P. 19(a)(l). A Rule 12(b)(7) motion to dismiss for failure to join a required party under Rule 19 triggers a two-step inquiry. See Focus on the Farnilv v. Pinellas Suncoast Transit
,

Auth 344 F.3d 1263, 1279 (1 1th Cir. 2003). First, the court applies the standards of Rule 19(a) . to determine whether the person in question is one who should be joined if feasible. See id. at 1280. This first step is governed by "pragmatic concerns, especially the effect on the parties and the litigation." Id.' Second, if the person should be joined but cannot be, the court weighs a series of factors listed in Rule 19(b) to determine whether dismissal is appropriate. See id. As with a motion to dismiss for failure to state a claim, all