United States Of America et al v. Spanish Oaks Hospice, Inc et al
ORDER granting re 32 Motion to Stay Discovery; granting re 36 Motion to Stay Discovery. Signed by Magistrate Judge G. R. Smith on 7/19/17. (loh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
UNITED STATES OF AMERICA,
ex rel. JOLIE JOHNSON and
SPANISH OAKS HOSPICE, INC.,
In this False Claims Act case, defendants Spanish Oaks Hospice,
Inc., Spanish Oaks Retreat, Inc., Spanish Oaks Foundation, Inc., Spanish
Oaks Properties, LLC, Spanish Oaks of Bellville, LLC, Spanish Oaks of
Bellville Properties, LLC, Keith Munger, and Ali R. Rahimi, M.D., move
to dismiss the Complaint (docs. 29 & 35) and stay discovery in the
meantime (docs. 32 & 36). They contend, among other things, that the
Complaint fails to comply with Fed. R. Civ. P. 8 & 9(b)’s pleading
standards, is “impermissibly shotgun in nature,” and fails to sufficiently
allege facts to support either retaliation or false claims submitted to the
Government. Docs. 32 at 2 & 36 at 1. They’re right.
The general “fraud” allegations of the Complaint aren’t specific
enough to survive the motions to dismiss.
See United States v.
Southerncare, Inc., 2015 WL 5278413 at *2 (S.D. Ga. Sept. 9, 2015)
(citing Rule 9(b), False Claims Act complaints must “state with
particularity the circumstances constituting fraud or mistake.”). They’re
not specifically drawn to individual defendants, or individual causes of
action. See, e.g., doc. 1 (Complaint) at ¶ 78 (“Defendants submitted . . .
Defendants engaged . . . Defendants also knowingly created, submitted,
or caused to be submitted . . . Defendants billed inappropriately . . . They
also failed . . . Defendants falsified . . . Defendants used . . . Defendants
shortchanged . . . Defendants discharged . . . Defendants retaliated . . .
“Defendants” apparently committed fraud, but it is not clear from
even repeated readings of the Complaint which defendants did what and
when -- only that many of defendants’ practices were suspect.
Corsello v. Lincare, Inc., 428 F.3d 1008, 1014 (11th Cir. 2005) (the
complaint must plead not only the “who, what, where, when, and how of
improper practices,” but also the “who, what, where, when, and how of
fraudulent submissions to the government.”); United States v. Choudry,
2016 WL 7228760 at *3 (M.D. Fla. Oct. 11, 2016) (complaints that refer
to defendants collectively “fail[ ] to distinguish between the defendants
and therefore fail[ ] to meet the particularity requirements of pleading a
False Acts Claim.”). This is insufficient to survive a Fed. R. Civ. P.
12(b)(6) motion, see United States ex rel. Creighton v. Beauty Basics Inc.,
2016 WL 2642740 at *2 (N.D. Ala. May 10, 2016) (Relators “make[ ] no
effort to explain how [their] ‘facts applicable to all counts’ satisfy the
elements of [their] alternative theories; instead, [they] offer[ ] a series of
legal conclusions -- which do nothing to fortify a complaint against
dismissal.”), and discovery should not go forward to give them a free
ticket to fish around for more, see United States ex rel. Atkins v.
McInteer, 345 F. Supp. 2d 1302, 1305 (N.D. Ala. 2004) (where complaint
failed to meet the requirements of Rule 9(b), relators should not be given
“a ticket to the discovery process without identifying a single claim.”).
When a party seeks a stay pending resolution of a dismissal motion,
the court takes a “preliminary peek” at the dismissal motion to assess
the likelihood that it will be granted. McCabe v. Foley, 233 F.R.D. 683,
685 (M.D. Fla. 2006). A stay makes sense when the dismissal motion
likely will dispose of the case, thus obviating discovery. Sams v. GA West
Gate, LLC, 2016 WL 3339764 at * 6 (S.D. Ga. June 10, 2016). Because
the instant dismissal motions pack enough heft, and because significant
resources would be expended responding to the pending discovery 1 that
may be obviated (or significantly narrowed by the Court’s decision on the
motion to dismiss), the Court GRANTS the stay motions. Docs. 32 & 36.
SO ORDERED, this 19th day of July, 2017.
Relators served more than 250 discovery requests on defendants (doc. 32 at 2), all
of which may be mooted by the pending motion to dismiss. Defendants ask that they
be spared the “unnecessary cost” of responding until the scope of the claims against
them are clarified and narrowed. Id. at 2-3. They also convincingly note that,
regardless, a stay will not prejudice the Relaters because it is not necessary to their
response to the motion to dismiss. Id.; see also Chudasama v. Mazda Motor Corp.,
123 F.3d 1353, 1367 (11th Cir. 1997) (since “the allegations in the [complaint] are
presumed to be true,” the resolution of a motion to dismiss for failure to state a claim
“always presents a purely legal question” that does not involve issues of fact, and
therefore, “neither the parties nor the court have any need for discovery before the
court rules on [it].”).
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