McIntosh v. Arrow-Med Ambulance, Inc.
Filing
36
MEMORANDUM OPINION & ORDER: Defendants Arrow-Med Ambulance, Inc., and Hershel Jay Arrowood's 30 Motion for Leave to File a Counterclaim is DENIED. Signed by Judge Joseph M. Hood on 10/27/2016. (STC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
UNITED STATES OF AMERICA, ex
rel. DARRELL STEPHEN
MCINTOSH,
Plaintiff,
v.
ARROW-MED AMBULANCE, INC., et
al.,
Defendants.
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Civil Case No.
15-CV-105-JMH
MEMORANDUM OPINION & ORDER
***
The case at bar was initiated by Relator Darrell Stephen
McIntosh under the qui tam provisions of the False Claims Act,
31 U.S.C. § 3730 [DE 1]. After investigation, the United States
elected to intervene in part [DE 15] and filed a Complaint in
Intervention on June 3, 2016 [DE 20]. The parties aver that
defendants submitted or caused to be submitted false claims for
reimbursement to federal medical programs, including Medicare
and
Medicaid,
related
to
medically
unnecessary
ambulance
transports [Id. at ¶¶30-64]. Defendants answered the Complaint
in Intervention [DE 25] on August 9, 2016. The matter is now
before
the
Court
on
Defendants
Arrow-Med
Ambulance,
Inc.
(“Arrow-Med”), and Hershel Jay Arrowood’s Motion for Leave to
1
File a Counterclaim, filed on September 15, 2016 [DE 30]. The
United States of America and Relator Darrel Stephen McIntosh
have filed a Response [DE 34], stating their objections to the
motion. The time for reply has expired, and this motion is ripe
for resolution.
The
proposed
counterclaim
seeks
relief
against
Relator
McIntosh for abuse of civil proceedings, abuse of process, and
tortious interference with prospective business advantage [DE
30-3]. The United States and the Relator have articulated a host
of problems with the counterclaim, but the Court will begin and
end
its
absence
consideration
of
of
the
proposed
subject-matter
counterclaim
jurisdiction.
The
with
the
proposed
counterclaim presents no claims other than state-law tort claims
involving
a
corporation
that
is
a
citizen
of
Kentucky
and
individuals who the parties represent to be citizens of the
United States and residents of the Commonwealth of Kentucky –
but
who
are
not
purported
to
be
from
“diverse”
[DE
30-3,
Proposed Counterclaim at ¶8; see also DE 20 and 25]; see Safeco
Ins. Co. of Amer. v. City of White House, Tenn., 36 F.3d 540,
544 (6th Cir. 1994) (“The court equates the citizenship of a
natural person with his domicile, Von Dunser v. Aronoff, 915
F.2d 1071, 1072 (6th Cir. 1990), but deems a corporation to have
2
the citizenship of its state of incorporation and its principal
place of business, 28 U.S.C. § 1332(c)(1).”).1
In the absence of a federal question, diversity of the
parties,
premise
or
any
other
original
grounds
jurisdiction
upon
of
the
which
this
Court
counterclaims,
might
see
28
U.S.C. §§ 1330-1358, the Court has considered the relationship
of the proposed counterclaims to those raised in the pending
action. This Court may exercise supplemental jurisdiction over
the counterclaim as long as the counterclaim is part of the same
“case or controversy” as the underlying claim, § 1367(a), not
specifically excluded by § 1367(b), and not coupled with any
persuasive reason to nevertheless decline jurisdiction under §
1367(c).
See
also
Fed.
R.
Civ.
P.
13
(defining
compulsory
counterclaims – “aris[ing] out of the transaction or occurrence
that is the subject matter of the opposing party’s claim” - and
permissive counterclaims – “any claim that is not compulsory”).
1
The Intervenor Complaint [DE 20] avers and Defendants’ Answer [DE 25] admits
that Relator McIntosh and Defendant Hershel Jay Arrowood are “resident[s] of
. . . Kentucky and . . . citizen[s] of the United States” and that Defendant
Arrow-Med is “a Kentucky corporation with its principal place of business in
. . . Kentucky.” The tendered Counterclaim offers no further information.
“‘Citizenship’ for purposes of the diversity statute is synonymous not with
‘residence’ but with ‘domicile.’” Kaiser v. Loomis, 391 F.2d 1007, 1009 (6th
Cir. 1968) (quoting Napletana v. Hillsdale College, 385 F.2d 871 (6th Cir.
1967); Williamson v. Osenton, 232 U.S. 619 (1914)). In this case, there is no
foundation up on which to presume that the parties to the tendered
Counterclaim are diverse or not diverse, but the “burden of persuasion for
establishing diversity jurisdiction . . . remains on the party asserting it.”
Hertz Corp. v. Friend, 559 U.S. 77, 97 (2010) (citing Kokkonen v. Guardian
Life Ins. Co. of America, 511 U.S. 375, 377 (1994); McNutt v. General Motors
Acceptance Corp., 298 U.S. 178, 189 (1936); 13E Wright & Miller § 3602.1, at
119). Neither Defendant Arrowood nor Defendant Arrow-Med have borne that
burden in this instance.
3
According to Defendants Arrow-Med and Arrowood, “[t]hese
claims do not arise out of the same transaction or occurrence
that is the subject matter of McIntosh’s complaint. These claims
are distinct because they relate to occurrences or transactions
not related to the claims asserted in the original complaint.”
[DE 30-1 at 2.] In fact, while the United States and Relator
aver
that
practices,
Defendants
Arrow-Med
were
and
engaged
Arrowood
in
fraudulent
aver
that
billing
McIntosh
was
consistently using his role within the governments of the City
of
Jackson
and
Breathitt
County
to
intercept
or
interrupt
services that Arrow-Med and Arrowood were providing to patients
and engaged in activities which would divert emergency response
opportunities
to
other
providers.
Even
if
the
Court
broadly
construes the definition of “case or controversy” in § 1367,
Arrow-Med
and
insufficiently
Arrowood’s
related
to
counterclaim
Plaintiff’s
averments
averment
that
are
they
submitted false claims for reimbursement to warrant the exercise
of supplemental jurisdiction.
Because they do not “form part of
the same case or controversy” as the pending action, 28 U.S.C. §
1367, the counterclaims averred do not fall under the Court’s
supplemental
basis
for
jurisdiction.
subject
counterclaim,
it
matter
must
be
In
the
absence
jurisdiction
dismissed.
12(b)(1).
4
of
with
See
an
independent
respect
Fed.
R.
to
Civ.
the
P.
Accordingly,
Defendants
Arrow-Med
Ambulance,
Inc.,
and
Hershel Jay Arrowood’s Motion for Leave to File a Counterclaim
[DE 30] is DENIED.
This the 27th day of October, 2016.
5
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