United States Of America et al v. Genesis Vascular of Pooler, LLC et al
Filing
213
ORDER denying 139 Motion to Dismiss; denying 158 Motion to Dismiss; denying 159 Motion to Dismiss. Accordingly, Relators' 131 Second Amended Complaint remains the operative pleading. Additionally, the Court's 210 Amended Scheduling Order continues to control the parties' activities in the case. Signed by District Judge R. Stan Baker on 5/25/2023. (gmh)
Case 4:18-cv-00128-RSB-CLR Document 213 Filed 05/25/23 Page 1 of 20
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
UNITED STATES OF AMERICA, et al.,
Plaintiffs,
CIVIL ACTION NO.: 4:18-cv-128
v.
GENESIS GLOBAL HEALTHCARE, et al.,
Defendants.
ORDER
This is a qui tam action brought by Jerry Cohn Jr., M.D., and Sharon Bell as Relators on
behalf of the United States under the False Claims Act (the “FCA”) and on behalf of the state of
Georgia under the Georgia False Medicaid Claims Act (the “GFMCA”). 1 Relators bring suit
against Defendants Genesis Vascular of Pooler, LLC (“GVP”); 2 Genesis Global Healthcare, LLC;
Genesis Healthcare Management, LLC; Genesis Vascular, LLC; Statesboro Cardiology, P.A.;
James O’Dare; Barbara O’Dare; Donald Geer; Dr. Abraham Lin; C3 of Bulloch, Inc.; Dr. Stanley
J. Shin; Alexis M. Shin, as trustee of the Stanley J. Shin Family Trust; Dr. Todd Newsom; Dr.
Howard Gale; Dr. Leonard Talarico; Pooler Property Holdings, LLC; Dr. David Nabert; and Dr.
The FCA allows a private person, known as a relator, to bring an FCA suit on behalf of the United States
in a qui tam action. 31 U.S.C. § 3730(b)(1). A relator serves the United States with a copy of the complaint,
and the United States then has sixty days to intervene and proceed with the action once served. Id. §
3730(b)(2). If the United States does not intervene, the relator may proceed individually with the action.
Id. § 3730(b)(4). Similarly, the GFMCA permits a private person to act as a relator on behalf of the state
of Georgia and continue with the suit even after the state of Georgia declines to intervene. See O.C.G.A. §
49-4-168.2(b), (f).
1
Relators voluntarily dismissed their claims against GVP without prejudice on February 16, 2021. (Doc.
112.)
2
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Todd Becker 3 for alleged violations of the FCA and the GFMCA. (See doc. 131, p. 2.) Various
Defendants previously filed motions to dismiss the First Amended Complaint. (Docs. 72, 73, 74,
75, 80, 81.) The Court entered an Order granting in part and denying in part the motions to dismiss
and directing Relators to file a Second Amended Complaint to cure multiple pleading deficiencies.
(Doc. 130 (the “Order”).)
Presently before the Court are three Motions to Dismiss the Second Amended Complaint:
one filed by Defendants Statesboro Cardiology, P.A., Dr. Abraham Lin, C3 of Bulloch, Inc., Dr.
Stanley J. Shin, Alexis M. Shin as trustee for the Stanley J. Shin Family Trust, Dr. Leonard
Talarico, Pooler Property Holdings, LLC, and Dr. David Nabert (collectively, the “Moving
Defendants”), (doc. 139); one filed by Defendant Barbara O’Dare, (doc. 158); and one filed by
Defendant James O’Dare, (doc. 159). (The Court will refer to Barbara O’Dare and James O’Dare
collectively as the “O’Dare Defendants.”) All of the at-issue Motions argue that the Second
Amended Complaint failed to remedy the pleading deficiencies identified in the Order. (See
generally docs. 139, 158, 159.) Relators filed Responses to the Motions to Dismiss. (Docs. 157,
160.) The O’Dare Defendants collectively filed a Reply, (doc. 166), but the Moving Defendants
did not. For the reasons more fully explained herein, the Court DENIES all three of the Motions
to Dismiss. (Docs. 139, 158, 159.)
Brian Moogerfield was also originally listed as a named Defendant in this case. (See doc. 3.) However,
he is not named in either the First Amended Complaint or the Second Amended Complaint. (See docs. 32,
131.) He also does not appear to be represented in this case and has not joined on any of the Motions.
Plaintiffs shall update the Court on the status of all claims against Brian Moogerfield within fourteen (14)
days of the date of this Order.
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BACKGROUND
I.
Factual Background of the Allegedly Fraudulent Scheme
According to the Second Amended Complaint, in December 2014, the “Genesis Individual
Defendants” (the O’Dare Defendants and non-moving Defendants Geer and Yanes), formed the
“Genesis Entities” (consisting of non-moving Defendants Genesis Vascular, Genesis Global, and
Genesis Management) with the intention of forming a vascular surgical center in Pooler, Georgia:
GVP. (Doc. 131, pp. 29–30.) To form GVP, the Genesis Individual Defendants recruited medical
physicians in the greater Savannah area as investors, and ultimately retained Defendants Drs. Lin,
Shin, Newsom, Gale, Talarico, Nabert, and Becker as investors in GVP (collectively the
“Physician Investors”). (Id. at pp. 10, 30–31.) According to the Second Amended Complaint,
Lin’s investment was made through his company, Defendant C3 of Bulloch, Inc., (“C3 of
Bulloch”), of which he is the sole owner, employee, and beneficiary, and which is operated out of
his home. (Id. at pp. 6–7, 10.) Talarico likewise invested through his company, Defendant Pooler
Property Holdings, LLC (“Pooler Property Holdings”), of which he is allegedly the sole owner
and agent, and which is operated out of his medical office. (Id. at pp. 9–10.) Shin’s investment
was made through his family trust, the Stanley J. Shin Family Trust (the “Trust”). (Id. at p. 8.)
The Second Amended Complaint alleges that, following the creation of GVP, the Physician
Investors would refer patients to GVP for “expensive and invasive vascular procedures” in
exchange for profit distributions and “other payments” from GVP. (Id. at p. 31.) According to
the Second Amended Complaint, the profit distributions for Physician Investors Lin, Talarico, and
Shin were paid out not to the individuals but to C3 of Bulloch, Pooler Property Holdings, and the
Trust, respectively. (Id. at pp. 7–10.) Following the referrals, GVP would then file claims with
Medicare and Medicaid seeking reimbursements for services rendered to the referred patients. (Id.
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at p. 39.) The Second Amended Complaint contends that this scheme violated the Anti-Kickback
Statute (“AKS”), 42 U.S.C. § 1320(a)-7b(b)(2)(A), and, in turn, the FCA. (Id. at pp. 31, 34–35.)
Relators additionally allege that this scheme violated the Stark Act, 42 U.S.C. § 1395nn,
and, in turn, the FCA. 4 (Id. at pp. 47–50, 53.) They allege that Defendant Statesboro Cardiology
and GVP engaged in a “billing scheme that disguised the location of certain billings that [GVP]
could not make without violating the Stark [Act]’s prohibition against self-referral of designated
services.” (Id. at p. 48.) According to the Second Amended Complaint, Talarico referred patients
to GVP for medical procedures that qualify as “designated health services” under the Stark Act,
and Lin, as lead interventionist at GVP, then performed those procedures on the patients or,
alternatively, referred those patients to Statesboro Cardiology (where Dr. Lin had an additional
established practice and Drs. Shin and Nabert also had established practices) to undergo those
procedures. (Id. at p. 49.) However, according to the Second Amended Complaint, regardless of
whether Lin performed those procedures at GVP or referred the patients to Statesboro Cardiology,
Statesboro Cardiology billed Medicare for those services. (See id. at p. 50.) As a result, according
to the Second Amended Complaint, the associated claims either falsely stated the location of
service, rendering the claims in violation of the FCA, or violated the Stark Act’s prohibition against
self-referrals because Lin would have referred patients to Statesboro Cardiology, where Defendant
Lin holds his principal office. (Id. at pp. 7–8, 50.)
Because compliance with the AKS and the Stark Act is a “condition of payment for Medicare and
Medicaid, claims submitted for services rendered in violation of these statutes can form the basis of liability
under the F[CA].” United States v. Marder, 208 F. Supp. 3d 1296, 1316 (S.D. Fla. 2016) (quotation
omitted) (alteration in original).
4
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II.
Procedural Background
Relators initially filed this action on May 29, 2018. (Doc. 3.) After the United States and
the State of Georgia declined to intervene, (docs. 24, 25), the Court unsealed the initial Complaint,
(docs. 30, 31), and Relators filed an amended complaint, (doc. 32 (the “First Amended
Complaint”)). In the First Amended Complaint, Relators asserted eight separate claims: (1) an
FCA presentment clause claim under 31 U.S.C. § 3729(a)(1)(A); (2) an FCA make-or-use clause
claim under 31 U.S.C. § 3729(a)(1)(B); (3) an FCA conspiracy claim under 31 U.S.C. §
3729(a)(1)(C); (4) an FCA claim concerning “reverse false claims” under 31 U.S.C. §
3729(a)(1)(G); (5) a GFMCA claim for presenting false or fraudulent claims under O.C.G.A. § 494-168.1(a)(1); (6) a GFMCA claim for making false material statements under O.C.G.A. § 49-4168.1(a)(2); (7) a GFMCA conspiracy claim under O.C.G.A. § 49-4-168.1(a)(3); and (8) a
GFMCA claim concerning “reverse false claims” under O.C.G.A. § 49-4-168.1(a)(7). (Doc. 32,
pp. 60–64.)
Numerous Defendants (including the Moving Defendants and the O’Dare Defendants) then
filed various motions to dismiss the First Amended Complaint. (Docs. 72, 73, 74, 75, 80, 81.) In
ruling on the motions, the Court dispelled Defendants’ substantive arguments that the claims could
not prevail under the applicable statutes. (Doc. 130, pp. 27–46.) For example, the Court found
that the First Amended Complaint adequately alleged the requisite scienter under the FCA, (id. at
pp. 29–30), adequately alleged AKS violations with particularity, (id. at pp. 32), and sufficiently
plead its FCA and GFMCA claims, (id. at pp. 35–46). Defendants also raised various arguments
regarding general pleading deficiencies. In ruling on those points, the Court found that the First
Amended Complaint amounted to an improper shotgun pleading. (Id. at pp. 11–15.) On the other
hand, the Court found the First Amended Complaint’s collective pleading style throughout the
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complaint was adequate to put the Defendants on notice for their alleged participation in the
fraudulent scheme, but found the collective pleading under each count was not sufficient to show
which Defendants were charged under each count. (Id. at pp. 16–21.) Finally, it found that the
First Amended Complaint had not adequately pled claims against C3 of Bulloch, Pooler Property
Holdings, or the Trust. (Id. at pp. 21–27.) Accordingly, to cure these pleading deficiencies, the
Court directed Relators to file a Second Amended Complaint addressing the problems highlighted
by the Order. (Id. at p. 47.) Specifically, the Court held that,
Relators shall: (1) identify and include within each separate count the specific
factual allegations that Relators contend support each count; (2) allege with
particularity Defendant C3 of Bulloch, Defendant Pooler Property Holdings, and
Defendant SJS Family Trust’s involvement in the purported fraud scheme; and (3)
specifically identify which Defendants Relators contend are liable under each
count.”
(Id.)
The Court additionally clarified that “Relators SHALL NOT make any additions,
modifications, or other amendments to their Amended Complaint other than those explicitly
ordered herein.” (Id.) Relators then timely filed their Second Amended Complaint. (Doc. 131.)
In attempt to comply with the Court’s ruling, the Second Amended Complaint contains seventyfour additional paragraphs under the “Counts” sections, (id. at pp. 61–88), as well as updated
information regarding C3 of Bulloch, Pooler Property Holdings, and the Trust, (id. at pp. 6–10).
In compliance with the Order, Relators made no other changes from the First Amended Complaint.
(See id. at p. 2, n.1.)
The Moving Defendants then filed a Motion to Dismiss the Second Amended Complaint,
arguing, inter alia, that Relators failed to comply the three instructions listed in the Order. (Doc.
139.) The O’Dare Defendants also filed separate Motions to Dismiss arguing, generally, that
Relators have not adequately pled how they are liable under each count. (Docs. 158, 159.)
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Relators filed Responses to all the Motions. (Docs. 157, 160.) The O’Dare Defendants filed a
Reply, (doc. 166), but the Moving Defendants did not.
LEGAL STANDARD
“To survive a motion to dismiss, a complaint must . . . state a claim to relief that is plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations omitted). A claim
is facially 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. When evaluating
a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), a
court must “accept[] the allegations in the complaint as true and constru[e] them in the light most
favorable to the plaintiff.” Belanger v. Salvation Army, 556 F.3d 1153, 1155 (11th Cir. 2009).
However, this tenet “is inapplicable to legal conclusions. Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft, 556 U.S. at
678. Rather, “[a] complaint must state a facially plausible claim for relief, and ‘[a] claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.’” Reese v. Ellis, Painter, Ratterree
& Adams, LLP, 678 F.3d 1211, 1215 (11th Cir. 2012) (quoting Ashcroft, 556 U.S. at 678).
The plausibility standard is “not akin to a probability requirement, but it asks for more than
a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are
merely consistent with a defendant’s liability, it stops short of the line between possibility and
plausibility of entitlement to relief.” Ashcroft, 556 U.S. at 678 (internal quotation marks and
citation omitted). Dismissal under Rule 12(b)(6) is also permitted “when, on the basis of a
dispositive issue of law, no construction of the factual allegations will support the cause of action.”
Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993);
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see also Neitzke v. Williams, 490 U.S. 319, 326–27 (1989) (explaining that Rule 12 allows a court
“to dismiss a claim on the basis of a dispositive issue of law”).
Additionally, Rule 9(b) of the Federal Rules of Civil Procedure imposes more stringent
pleading requirements on claims alleging fraud. 5 Clausen, 290 F.3d at 1308. The complaint must
allege “facts as to time, place, and substance of the defendant’s alleged fraud, specifically the
details of the defendant[’s] allegedly fraudulent acts, when they occurred, and who engaged in
them.” Hopper v. Solvay Pharms., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009).
DISCUSSION
I.
Relators Have Adequately Identified and Included Specific Factual Allegations to
Support Each of their Counts Per the Order’s Instruction
A.
Relators’ Mistaken Reference to Statesboro Cardiology as an Investor is not
Fatal to their Claims.
The Moving Defendants first argue that the Second Amended Complaint fails to comply
with the instruction in the Order to “identify and include within each separate count the specific
factual allegations that Relators contend support each count.” (Doc. 139, p. 7 (quoting doc. 130,
p. 47).) Defendants are incorrect.
It is true that in the Order the Court found the First Amended Complaint to be an improper
shotgun pleading. (Doc. 130, pp. 11–15.) The First Amended Complaint contained allegations
that rolled into every successive count, which the Eleventh Circuit Court of Appeals has found to
be a “quintessential shotgun pleading[].” Strategic Income Fund, LLC v. Spear, Leeds & Kellogg
Corp., 305 F.3d 1293, 1295 (11th Cir. 2002). Indeed, the Eleventh Circuit has held “the most
common type” of shotgun pleading to be “a complaint containing multiple counts where each
The Eleventh Circuit Court of Appeals has made clear that “Rule 9(b) does apply to actions under the
False Claims Act.” United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1308–09 (11th Cir.
2002).
5
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count adopts the allegations of all preceding counts, causing each successive count to carry all that
came before and the last count to be a combination of the entire complaint.” Weiland v. Palm
Beach Cnty. Sheriff’s Off., 792 F.3d 1313, 1321 (11th Cir. 2015). This is because when a
complaint is pled in this manner, defendants are not put on notice as to what conduct the counts
are referring to because “the answer is always ‘everything that the plaintiff has previously
mentioned anywhere in the complaint.’” Estate of Bass v. Regions Bank, Inc., 947 F.3d 1352,
1356, n.5 (11th Cir. 2020). This was precisely the problem with the First Amended Complaint,
where Relators incorporated all of the previous paragraphs into each count without specifying
which allegations applied. Accordingly, the Court found it to be an improper shotgun pleading.
(Doc. 130, p. 14.) In line with Eleventh Circuit precedent, the Court allowed Relators one
opportunity to cure these deficiencies by amending their complaint. (Doc. 130, p. 15 (citing Vibe
Micro, Inc. v. Shabanets, 878 F.3d 1291, 1296 (11th Cir. 2018) (mandating that district courts
allow a plaintiff “once chance to replead before dismissing [the] case with prejudice on non-merits
shotgun pleading grounds”)).) Relators then timely filed their Second Amended Complaint, which
contained seventy-four additional paragraphs containing factual support for each of the eight
counts. (See doc. 131, pp. 61–88.)
Despite these additions and the elimination of all “incorporated by reference” language,
Defendants nevertheless argue that “Relators have failed to sufficiently plead specific factual
allegations in support of each count.” (Doc. 139, p. 7.) The Moving Defendants point, as a specific
example, to Count One, where Relators note that “Physician Investor Defendants (including
Statesboro Cardiology . . .) invested in [GVP].” (Doc. 139, p. 7 (quoting doc. 131, p. 62).) The
Moving Defendants attack this allegation as “facially deficient” because there are no prior factual
allegations in the Second Amended Complaint that support this assertion that Statesboro
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Cardiology was an investor in GVP. (Id.) Relators, in their Response, candidly admit that “the
reference to Statesboro Cardiology as an ‘investor’ . . . is just a mistake,” (doc. 157, p. 3), but, as
Relators point out, this minor pleading issue does nothing to undermine Relator’s claims or to
advance the Moving Defendants’ defenses or their theory of the case, as the Court already found
the First Amended Complaint alleged “Statesboro Cardiology [to be] a proper defendant . . .
because of its ‘direct involvement in the fraudulent scheme,’” (doc. 157, p. 3 (quoting doc. 130, p.
27)).
Indeed, within Count One, Relators specifically incorporate allegations implicating
Statesboro Cardiology through false claims made under its fraudulent billing scheme. (Doc. 131,
p. 65 (detailing Statesboro Cardiology’s billing scheme that worked together with GVP to violate
the Stark Act by facilitating improper referral or by improperly disguising the location of services
rendered).) The Moving Defendants’ attempt to transform one mistaken reference to Statesboro
Cardiology as an “investor” into a ground for dismissal is unfounded. 6 A simple misstatement of
fact is not grounds for dismissing the entirety of a complaint. See, e.g., United States ex rel. Silva
v. VICI Mktg., LLC, 361 F. Supp. 3d 1245, 1252 (M.D. Fla. 2019) (refusing to dismiss a complaint
because of an immaterial mistake incorporating unrelated paragraphs where defendants could not
show prejudice from the pleading error, and the mistake was not confusing to the pleading overall).
Moreover, this mistake is wholly irrelevant to the Court’s finding that the First Amended
Complaint was an insufficient shotgun pleading. Indeed, the problem identified by the Court in
the Order was that “each of the eight counts raised in the Amended Complaint expressly
After citing just one example, the Moving Defendants additionally contend in passing that “[t]he Second
Amended Complaint is replete with similar examples of citations to paragraphs purported to support the
allegations, but which are entirely lacking in said support.” (Doc. 139, p. 7.) The only examples provided,
however, are citations to other paragraphs of the Second Amended Complaint concerning the “Physician
Investor Defendants.” (Id.) Thus, as far as the Court can make out, the Moving Defendants’ only tangible
objection is to Statesboro Cardiology being referred to as an investor, which, as stated previously, is not
material.
6
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‘incorporate[s] by reference’ the allegations ‘of all the preceding paragraphs’ of the Amended
Complaint . . . ‘leaving the reader to wonder which prior paragraphs support the elements’ of each
count.” (Id. at p. 13 (quoting Wagner, 464 F.3d at 1279).) Relators’ Second Amended Complaint
undoubtedly remedies this problem.
The Second Amended Complaint’s counts no longer
incorporate “all the preceding paragraphs” by reference, and Relators added seventy-four
additional paragraphs which detail the actions underlying each of the individual counts. (Compare
doc. 32, pp. 60–64, with doc. 131, pp. 61–88.) In their briefing, Moving Defendants provide no
supporting caselaw or logic to show how this simple misstatement that Statesboro Cardiology was
an investor in GVP has failed to “give the defendants adequate notice of the claims against them
and the grounds upon which each claim rests.” Vibe Micro, Inc., 878 F.3d at 1295. It appears
Moving Defendants’ only issue with Relators’ compliance with the Order’s first instruction is
simply an immaterial misstatement of fact, which does not defeat the fact that Relators have
complied with the Court’s instruction to cure the First Amended Complaint’s shotgun pleading
defects. Accordingly, the Court rejects the Moving Defendants’ argument on this point as
meritless and denies their Motion on this ground. (Doc. 139.)
B.
The O’Dare Defendants’ General Argument to Dismiss for Lack of Specific
Factual Allegations Lacks Merit.
The O’Dare Defendants likewise move to dismiss the Second Amended Complaint on this
ground. Ironically, the O’Dare Defendants claim that Relators failed to identify and include factual
allegations to support their claims, yet they themselves fail to provide any specific examples to
support this alleged ground for dismissal. (See doc. 158, p. 4 (restating the Court’s instruction in
the Order to identify and include specific factual allegations to support each count and simply
stating that “[t]he factual allegations cited by Relators . . . do not do so”); doc. 159, p. 4 (same).)
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Beyond this general claim, the O’Dare Defendants’ Motions do little more than reraise
arguments that the Court previously rejected in the Order. For example, they argue that Relators
failed to allege facts to show the O’Dare Defendants’ fraudulent intentions for GVP. (Doc. 158,
p. 4; doc. 159, p. 4.) However, the Court already addressed this argument and found that Relators’
general pleading of scienter under the FCA satisfied Rule 9(b). (See doc. 130, pp. 29–30.) They
additionally argue that Relators failed to satisfy the FCA’s presentment requirement. (Doc. 158,
p. 4; doc. 159, p. 4.) But this, too, was already addressed at length in the Order, and the Court
found “that Relators sufficiently pled that Defendants presented or caused to be presented false
claims to federal and state healthcare programs.” (Doc. 130, pp. 38–39; see id. at pp. 35–39.) The
Court declines to readdress these arguments which were already ruled on in the Order.
Accordingly, as the O’Dare Defendants fail to provide the Court with any basis to dismiss the
Second Amended Complaint for failure to identify specific supporting factual grounds in the
counts, the Court denies the O’Dare Defendants’ Motions regarding Relators’ alleged noncompliance on this ground. (Docs. 158, 159.)
II.
Relators Have Sufficiently Identified Which Defendants Are Liable Under Each
Count
A.
The Second Amended Complaint Makes Clear that Relators Allege that the
Moving Defendants are Liable Under Each Count.
The Moving Defendants also challenge Relators’ compliance with the Order’s instruction
to “specifically identify which Defendants Relators contend are liable under each count.” (Doc.
130, p. 47.) They claim Relators have failed to correctly remedy this pleading deficiency because
the Second Amended Complaint “commingles claims against all . . . Defendants,” and it only
includes a parenthetical in the heading of Count One specifying that it was directed towards all
Defendants, yet it “did not include any indication in the headings of the remaining seven counts.”
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(Doc. 139, p. 10.) Importantly, the Moving Defendants do not challenge the sufficiency of the
facts alleged against them to support each count. (See generally id.) They simply argue that
because the heading of each count does not explicitly state that the count is being asserted against
all Defendants and because the counts are pled against all Defendants collectively, Relators fail to
“satisfy Rule 9(b) with respect to each defendant.” (Id.) The Moving Defendants are incorrect.
In a case involving multiple defendants under Rule 9(b), “the complaint should inform each
defendant of the nature of his alleged participation in the fraud.” DiVittorio v. Equidyne Extractive
Indus., 822 F.2d 1242, 1247 (1987). As the Court noted in the Order, the First Amended Complaint
failed under Rule 9(b) because it “lump[ed] all Defendants together under each count” and made
generalized allegations such as “Defendants violated the [FCA]” without specifying which
Defendants’ conduct violated the statute or distinguishing their conduct. (Doc. 130, p. 21.) The
Second Amended Complaint adds an allegation in each count clarifying that it is plead against
“[e]ach and every one of the Defendants,” “each of the Defendants,” or “all of the Defendants.”
(Doc. 131, pp. 61, 70, 74, 76, 80, 82, 86.) While the Moving Defendants are correct that only
Count I’s caption includes a parenthetical specifying that the count is plead against all Defendants,
neither the Local Rules, the Federal Rules, nor the Court’s Order require a heading precisely
identifying the defendants against whom a claim is brought. Nor have the Moving Defendants
cited to any authority indicating that doing so is necessary to cure a shotgun pleading defect. What
is fundamental is to give a defendant “adequate notice of the claims against them and the grounds
upon which each claim rests.” Weiland, 792 F.3d at 1323.
The Moving Defendants appear to understand that each count is pled against all
Defendants, but they nevertheless contend that this amounts to inappropriate “commingl[ing]” of
the claims. (Doc. 139, p. 10.) This is incorrect. It is permissible to plead against all defendants
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collectively, so long as it is clearly alleged how each of them is liable under that count. See United
States ex rel. Sedona Partners LLC v. Able Moving & Storage, Inc., No. 20-cv-23242, 2022 WL
178225, at *5 (S.D. Fla. Jan. 20, 2022) (finding it permissible to “allege claims against Defendants
collectively without being considered a shotgun pleading” so long as there are allegations of
specific conduct to establish liability). Again, the issue is notice, and while each count is pled
against all Defendants, the Second Amended Complaint has, as discussed in Discussion Section
I.A, supra, adequately alleged specific factual allegations concerning each Defendant’s role in the
alleged fraudulent scheme to support each count. It thus follows that because Relators have
sufficiently put Defendants on notice of their alleged individual conduct in the fraudulent scheme,
they are likewise on notice that each count has been asserted against them.
B.
The Second Amended Complaint Makes Clear that Relators Allege that the
O’Dare Defendants are Liable Under Each Count.
The O’Dare Defendants likewise argue that the Second Amended Complaint “comingles
the claims against all the defendants.” (Doc. 158, p. 4; doc. 159, p. 4.) For the reasons stated in
Section II.A, supra, this is incorrect. Furthermore, in their Reply, the O’Dare Defendants seem to
fundamentally misunderstand the claims raised against them and the instructions given to Relators
in drafting their Second Amended Complaint. They claim that the counts are not clearly pled
against them because their names are only specifically mentioned once. (Doc. 166, p. 3.) The
Court directs the O’Dare Defendants to the Order, which contains the very instructions their
Motions are based on. In the Order, the Court discusses at length how Relators’ collective pleading
style against the “Genesis Individual Defendants”—which includes the O’Dare Defendants—
provided adequate notice under Rule 9(b) to each Defendant within that group. (Doc. 130, pp. 16–
21.) Accordingly, the Court denies the O’Dare Defendants’ Motions on these grounds.
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III.
Relators Have Sufficiently Pled Liability Against the Entities Identified in the Court’s
Order
Moving Defendants next argue that “Relators’ new agency theory of liability is
insufficiently pled and the claims against the Entities [(i.e., Defendants C3 of Bulloch, Pooler
Property Holdings, and the Trust)] fail.” (Doc. 139, p. 8.) They claim that Relators failed to
comply with the Court’s Order because they “failed to plead any additional factual allegations
sufficiently particular under Rule 9(b) to substantiate the entities’ involvement in the allegedly
fraudulent scheme,” and failed to add “any more factual underpinnings for this alleged agency
relationship.” (Id. at pp. 8–9.) The Court disagrees.
The Court’s Order dictated that Relators “allege with particularity Defendant C3 of
Bulloch, Defendant Pooler Property Holdings, and Defendant SJS Family Trust’s involvement in
the purported fraud scheme.” (Doc. 130, p. 47.) The problems with the First Amended Complaint
identified by the Order were that it contained neither substantive allegations targeted at these
entities nor allegations that any of the entities’ own conduct violated the FCA. (Id. at pp. 21–27;
see generally doc. 32, pp. 6–8.) Indeed, the only allegations tying the entities to the allegedly
fraudulent scheme were summarily stated as,
For purposes of this lawsuit, Defendant Lin’s knowledge, intent, and actions are imputable
to Defendant C3 of Bulloch, through which Lin invested in [GVP] and received profit
distributions from [GVP]. . . . For purposes of this lawsuit, Defendant Shin’s knowledge,
intent, and actions are imputable to [the Trust]. . . . For purposes of this lawsuit, Defendant
Talarico’s knowledge, intent, and actions are imputable to Defendant Pooler Property
Holdings . . . through which Talarico invested in [GVP] and received profit distributions
from [GVP].
(Doc. 23, pp. 6–8.) “A[n] [FCA] complaint satisfies Rule 9(b) if it sets forth 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, 588 F.3d at 1324
(internal quotations omitted). Given the flimsy and unclear allegations concerning the entities in
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the First Amended Complaint, the Court read Relators’ position to be that the entities were liable
under an alter-ego theory and held that the First Amended Complaint failed to include sufficient
factual allegations to support such a theory. (See doc. 130, pp. 21–27.) Relators have now pled
additional facts to clarify that they seek to hold each of these entities liable not under an alter ego
theory, but on the grounds that the entities are liable for “[their] own actions, and those of [their]
agent[s] . . . , in investing in and receiving profits from [GVP].” (Doc. 131, p. 7, n.2.) According
to the Second Amended Complaint, the entities are “direct participant[s] involved in the scheme,
armed with the knowledge” of Lin, Shin, and Talarico, their respective agents. (Id.)
A.
C3 of Bulloch and Pooler Property Holdings
In the Order, the Court found that Relators failed to plead facts sufficient to show that C3
of Bulloch and Pooler Property Holdings were the alter egos of Lin and Talarico, respectively, and
instructed them to correct this pleading deficiency in the Second Amended Complaint. (See doc.
130, pp. 21–27.) Instead, in the Second Amended Complaint, Relators clarify that they contend
that C3 of Bulloch and Pooler Property Holdings are liable not as alter egos, but as actors directly
involved in the scheme and also involved through the actions of their agents, Lin and Talarico.
(Doc. 157, p. 7, n.2.) In their Motion, Moving Defendants claim that the new pleading of agency
does not adequately allege the existence of an agency relationship. (Doc. 139, pp. 8–10.) The
Court disagrees.
“[I]n cases brought under the [FCA][,] . . . the knowledge of an employee is imputed to the
corporation when the employee acts for the benefit of the corporation and within the scope of his
employment.” Grand Union Co. v. United States, 696 F.2d 888, 891 (11th Cir. 1983). The Second
Amended Complaint alleges that Lin is the “CEO, CFO, and Secretary” for C3 of Bulloch and that
C3 of Bulloch maintains its principal office at Lin’s personal address. (Doc. 131, p. 7.) It further
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alleges that “there are no other owners or shareholders of C3 of Bulloch . . . beyond . . . Lin and
his immediate family members” and that he and his family “personally enjoyed the benefit of the
[GVP] investment.” (Id.) Additionally, it alleges that “Lin elected to invest in [GVP] through . .
. C3 of Bulloch . . . rather than through himself individually,” “C3 of Bulloch . . . made all of Lin’s
investment in [GVP] and received Lin’s profit distributions from [GVP],” and that Lin “was acting
as agent of . . . C3 of Bulloch . . . and within the scope of that agency with respect to its investment
in [GVP].” (Id.) The Court finds that, because the Second Amended Complaint specifically
alleges that C3 of Bulloch made the investment in GVP, and because actions Lin took regarding
the investment were within his role as C3 of Bulloch’s agent, Relators have alleged C3 of Bulloch’s
direct involvement in the scheme with sufficient particularity to withstand Moving Defendants’
Motion to Dismiss. Cf. Silva, 361 F. Supp. 3d at 1255 (finding the complaint inadequate because
it failed to allege “that [the individual] was acting on behalf of and within the scope of his
employment with [the defendant] . . . when he entered into the kickback schemes”).
The Second Amended Complaint contains similar allegations with respect to Talarico’s
self-controlled company Pooler Property Holdings. It alleges that Talarico is the organizer and
registered agent for the LLC, as well as its sole owner, and that its principal office is located at the
address housing only Talarico’s medical practice (where he is the only doctor). (Doc. 131, p. 9.)
It further alleges that Pooler Property Holdings, “as directed by its agent . . . Talarico, made all of
Talarico’s investment in [GVP] and received all of Talarico’s profit distributions from [GVP].”
(Id.) Furthermore, the Second Amended Complaint alleges that Talarico “personally enjoyed” the
benefit of the GVP investment and profit distributions, and that Talarico was “acting as agent of .
. . Pooler Property Holdings . . . and within the scope of that agency with respect to its investment
in [GVP].” (Id.) These allegations likewise are enough to meet Rule 9(b)’s particularity
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requirement and to find that Relators have adequately alleged Pooler Property Holdings’ direct
involvement in the scheme.
B.
The Trust
In the prior Order, the Court found that “Relators’ minimal allegations regarding the Trust
and Alexis Shin are not ‘enough to raise a right to relief above the speculative level.’” (Doc. 130,
p. 27 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).) The Court reasoned
that,
“[t]he Amended Complaint lack[ed] any factual allegations regarding the type of
trust, who is the settlor of the trust, who are the beneficiaries of the trust, Alexis
Shin’s relation to Stanley Shin, how any injustice would occur if the Trust were not
considered an alter ego of Stanley Shin, or how the Trust benefitted from any GVP
profit distributions.”
(Id. at p. 26.) Accordingly, the Court instructed Relators to allege the Trust’s “involvement in the
purported fraud scheme” with particularity. (Id. at p. 47.) To cure these deficiencies, Relators
alleged in the Second Amended Complaint that the Trust is a “family trust,” and that Stanley Shin’s
wife, Alexis Shin, is one of the trustees. (Doc. 131, p. 8.) The Second Amended Complaint further
alleges that Alexis and Stanley Shin, as well as their children, all have direct or indirect interests
in the Trust, and are the only individuals with interests in the Trust. (Id.) While it never asserts
that Stanley Shin (in addition to Alexis Shin) is a trustee of the trust or that he has some other role
that gives him authority to direct actions taken by the Trust, the Second Amended Complaint states
that the Trust, “as directed by its agents . . . Stanley Shin and his wife Alexis M. Shin, made all of
Shin’s investment in [GVP] and received Shin’s profit distributions from [GVP].” (Id.) The Court
cannot say that the facts as alleged, without more, could support a finding that Stanley Shin was
in fact an agent for the Trust. However, the Second Amended Complaint alleges that it was the
Trust, not Shin, that made the investments in GVP and received its profit distributions. While the
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facts determined through discovery may require a different result, at this time the Court finds that
this allegation of the Trust’s direct involvement in the scheme is sufficient to withstand the Motion
to Dismiss.
C.
Statesboro Cardiology
Additionally, in their Motion, the Moving Defendants seem to argue that Relators also
failed to plead sufficient facts with respect to Statesboro Cardiology, stating that Relators “are
simply lumping Statesboro Cardiology in with the Entities under an agency theory.” (Doc. 131,
pp. 9–10.) This is incorrect. The Court did not instruct Relators to make any corrections with
respect to Statesboro Cardiology. (See doc. 130, p. 47 (instructing Relators to plead particular
facts against C3 of Bulloch, Pooler Property Holdings, and the Trust only).) Indeed, the Order
made clear that Relators were not to make any changes to the First Amended Complaint that were
not specifically directed by the Court. (Id.) And, as the Court previously held in the Order,
Relators do not need to prove Statesboro Cardiology is liable under an alter ego theory because
the allegations in the First Amended Complaint (which have been repeated without alteration in
the Second Amended Complaint) sufficed to show their “direct involvement in the fraudulent
scheme.” (Id. at p. 27.) The same logic necessarily applies to Defendants’ attempt to say that
Statesboro Cardiology cannot be found liable under an agency theory. Relators were not required
to include any new allegations specifying Statesboro Cardiology’s liability because the Court’s
Order already found that Relators’ existing allegations pertaining to Statesboro Cardiology
sufficed to implicate it in the scheme. Accordingly, Defendants’ arguments as they relate to
Statesboro Cardiology are also without merit.
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CONCLUSION
For the foregoing reasons, the Court DENIES the Moving Defendants’ Motion to Dismiss,
(doc. 139), and the O’Dare Defendants’ Motions to Dismiss, (docs. 158, 159). Accordingly,
Relators’ Second Amended Complaint, (doc 131), remains the operative pleading. Additionally,
the Court’s Amended Scheduling Order, (doc. 210), continues to control the parties’ activities in
the case.
SO ORDERED, this 25th day of May, 2023.
R. STAN BAKER
UNITED STATES DISTRICT JUDGE
SOUTHERN DISTRICT OF GEORGIA
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