United States of America et al v. Jackson HMA LLC et al

Filing 77

ORDER deferring ruling on 51 Motion to Dismiss; denying 27 Motion for Preliminary Injunction; denying 27 Motion for TRO for the reasons set out in the Order. The Government is given 45 days to make its election going forward, and this case is stayed until further Order of the Court. Signed by Chief District Judge Daniel P. Jordan III on September 14, 2018. (SP)

UNITED STATES DISTRIC COURT
SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
THE UNITED STATES OF AMERICA, ex rel.
W. BLAKE VANDERLAN, M.D.
V.

PLAINTIFFS
CIVIL ACTION NO. 3:15-CV-767-DPJ-FKB

JACKSON HMA, LLC d/b/a
CENTRAL MISSISSISSIPPI MEDICAL CENTER
a/k/a MERIT HEALTH CENTER-JACKSON

DEFENDANT

ORDER
This suit under the False Claims Act is before the Court on Relator W. Blake Vanderlan,
M.D.’s motion for a preliminary injunction/temporary restraining order [27] and Defendant
Jackson HMA, LLC’s motion to dismiss [51]. For the reasons explained, the Court finds the
motion for a preliminary injunction/temporary restraining order [27] should be denied. The
Court will defer ruling on the motion to dismiss, opting instead to stay the case.
I.

Facts and Procedural History
The parties meticulously set forth the procedural history behind this action, as well as the

background and workings of the False Claims Act (“FCA”) and the Emergency Medical
Treatment and Labor Act (“EMTALA”) in their filings. In the interest of brevity, the Court will
not attempt to recap their overviews.
In very general terms, Dr. W. Blake Vanderlan (“Vanderlan” or “Relator”) formerly
worked as a physician at Jackson HMA, LLC d/b/a Central Mississippi Medical Center, a/k/a
Merit Health Center-Jackson (“Jackson HMA”). Vanderlan believes that the hospital wrongfully
transferred African-American trauma patients without insurance to the University of Mississippi
Medical Center in violation of EMTALA. He provided that information to federal investigators,

and on May 13, 2015, the Center for Medicare and Medicaid Services (“CMS”)1 issued a letter
advising Jackson HMA that its Medicare provider agreement would terminate on June 5, 2015,
unless it produced evidence that its deficiencies had been corrected. Letter [50-1] at 1–2.
The following day, CMS sent Vanderlan a copy of its letter to Jackson HMA, thanked
him for bringing the matter to its attention, and advised him he “may wish to consider the civil
enforcement provisions of § 187 [of the Social Security Act] on an independent basis.” Letter
[50-2] at 1. On October 23, 2015, Vanderlan filed the instant civil action against Jackson HMA,
alleging that it submitted false claims for reimbursement to Medicare and Medicaid, by virtue of
its violation of EMTALA. The case remained inactive for almost two years while the
Government considered intervention. The Government ultimately declined to intervene, so
Vanderlan now pursues this qui tam action as a private individual (also referred to as a relator),
in the name of the Government, to enforce provisions of the FCA. 31 U.S.C. § 3730.
II.

Motion for Preliminary Injunction/Temporary Restraining Order
Vanderlan is afraid the Government may settle the EMTALA claims against Jackson

HMA and in so doing rebrand the EMTALA claims as “non-FCA” claims. According to him,
this might extinguish his EMTALA-based FCA claims. Vanderlan therefore seeks an injunction
of settlement talks until the Court decides whether he has stated an FCA claim based on the
alleged EMTALA violations. Both the Government and Jackson HMA oppose the motion.
A.

Standard

“A preliminary injunction is an extraordinary remedy.” Lakedreams v. Taylor, 932 F.2d
1103, 1107 (5th Cir. 1991) (citing Miss. Power & Light Co. v. United Gas Pipe Line Co., 760
F.2d 618, 621 (5th Cir. 1985)). To obtain a preliminary injunction, Vanderlan must establish

1

CMS is a federal agency within the Department of Health and Human Services (“HHS”).
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four factors: (1) a substantial likelihood of success on the merits, (2) a substantial threat that
failure to grant the injunction will result in irreparable injury, (3) the threatened injury outweighs
any damage that the injunction may cause the opposing party, and (4) the injunction will not
disserve the public interest. Neal v. Fed. Bureau of Prisons, 76 F. App’x 543, 545 (5th Cir.
2003); Lakedreams, 932 F.2d at 1107; Allied Mktg. Grp., Inc. v. CDL Mktg., Inc., 878 F.2d 806,
809 (5th Cir. 1989). Vanderlan “must prove all four elements and failure to prove any one of
them will result in denial of the motion.” Neal, 76 F. App’x at 545 (citing Enter. Int’l, Inc. v.
Corporacion Estatal Petrolera Ecuatoriana, 762 F.2d 464, 472 (5th Cir. 1985)); see also PCI
Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535, 545 (5th Cir. 2005) (noting that
granting preliminary injunction is “extraordinary remedy” to be granted only if party seeking it
has “clearly carried the burden of persuasion” on all four elements).
B.

Analysis

Having considered the applicable factors, the Court finds that an order enjoining Jackson
HMA and the Government from pursuing settlement is not appropriate. Specifically, factors
two, three, and four weigh against injunctive relief.2
1.

Irreparable Injury

“To show irreparable injury if threatened action is not enjoined, it is not necessary to
demonstrate that harm is inevitable and irreparable. The plaintiff need show only a significant
threat of injury from the impending action, that the injury is imminent, and that money damages
would not fully repair the harm.” Humana, Inc. v. Avram A. Jacobson, M.D., P.A., 804 F.2d
1390, 1394 (5th Cir. 1986). Vanderlan fails to meet this part of the test.

Because these three factors do not support injunctive relief, the Court need not delve into the
likelihood of success on the merits—particularly because the briefing on the merits overlaps with
the motion to dismiss, on which the Court defers ruling.
2

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Although Vanderlan seeks to enjoin the settlement discussions, he is not necessarily
opposed to settlement of the FCA claims; indeed he would be entitled to a percentage of the
proceeds. 31 U.S.C. § 3730(d)(1) (stating the relator shall receive 15–25% “of the proceeds of
the action or settlement of the claim” if the Government proceeds with an action); id. (d)(2)
(stating the relator shall receive 25–30% “of the proceeds of the action or settlement” if the
Government does not proceed).
But he does oppose a settlement that releases all EMTALA claims and brands them as
non-FCA, because he thinks it “may” extinguish his FCA claims “giving him no recourse in this
Court.” Relator Mem. [28] at 26 (emphasis added).
To begin, Vanderlan has not shown a significant threat that the Government’s actions
would deprive him of recovery, that the alleged harm is imminent, or that it could not be
remedied financially. The only remedy Vanderlan is attempting to preserve in this motion is his
right to recover a monetary award as the relator. Vanderlan has not shown that he would be
without financial remedy if the Government acts beyond its statutory authority in settling its
dispute with Jackson HMA.
In addition, an injunction until this Court rules on whether Vanderlan properly stated an
EMTALA-based FCA claim does not necessarily entitle him to recovery because the
Government retains broad authority over the dispute. As noted, the Government passed the
opportunity to pursue this case. But under 31 U.S.C. § 3730(c)(3), the Court may “permit the
Government to intervene at a later date upon a showing of good cause.” And once it does, the
Government has substantial authority to control the outcome. “The Government may dismiss the
action notwithstanding the objections of the person initiating the action if the person has been
notified by the Government of the filing of the motion and the court has provided the person with

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an opportunity for a hearing on the motion.” 31 U.S.C. § 3730(c)(2)(A) (emphasis added). Or,
“[t]he Government may settle the action with the defendant notwithstanding the objections of the
person initiating the action if the court determines, after a hearing, that the proposed settlement
is fair, adequate, and reasonable under all the circumstances.” Id. § 3730(c)(2)(B) (emphasis
added). So even if Vanderlan has stated a claim, the Government still has authority to settle or
dismiss it over his objections. Vanderlan has not yet shown that the potential settlement would
exceed that authority.
Vanderlan is also concerned about the conclusive effect of any settlement. Under 31
U.S.C. § 3730(c)(5), “the Government may elect to pursue its claim through any alternate
remedy available to the Government, including any administrative proceeding to determine a
civil money penalty.” Alternative remedies have been defined to include settlements. United
States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 342 F.3d 634, 649 (6th Cir. 2003) (“We
therefore hold that a settlement pursued by the government in lieu of intervening in a qui tam
action asserting the same FCA claims constitutes an ‘alternate remedy’ for purposes of 31 U.S.C.
§ 3730(c)(5).”). Vanderlan’s concern is that “any finding of fact or conclusion of law made in
such other proceeding that has become final shall be conclusive on all parties to an action under
this section.” 31 U.S.C. § 3730(c)(5). Thus, Vanderlan fears an order affirming a potential
settlement that would become conclusive on his FCA claims. But Vanderlan has not
demonstrated that the results § 3730(c)(5) dictates constitute irreparable harm.
2.

Balancing the Harms

Vanderlan has not established that the threatened injury outweighs any damage that the
injunction may cause the opposing party. Indeed, Vanderlan has not shown that he faces any
more harm than the FCA allows. See Tucker v. Hosemann, No. 2:10-CV-178, 2010 WL

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4384223, at *4 (N.D. Miss. Oct. 28, 2010) (“Since the plaintiffs have not shown a substantial
likelihood of an actual injury . . . , there is no threatened injury to outweigh the threatened harm
to the [defendant].”).
Even if he has a potential harm, Vanderlan is not your typical litigant who has suffered,
or will suffer, personal detriment. The financial injury Vanderlan would potentially experience
is the loss of qui tam damages. And that loss does not outweigh the damage that Jackson HMA
and the Government would suffer if precluded from continuing settlement discussions. Under
the FCA, the Government’s determination of the greater good trumps that of the relator when it
comes to settlement or even dismissal. See 31 U.S.C. § 3730(c).
3.

Public Interest

It is worth noting that the Court found no cases enjoining the Government from settling a
dispute related to an FCA proceeding or an alleged EMTALA claim. The absence of any such
cases may flow from the Government’s broad authority in FCA disputes, or it may be the result
of the strong public interest in favor of settlements in various contexts. See Cotton v. Hinton,
559 F.2d 1326, 1331 (5th Cir. 1976) (noting “there is an overriding public interest in favor of
settlement” particularly in class-action suits) (citing United States v. Allegheny-Ludlum Indus.,
Inc., 517 F.2d 826 (5th Cir. 1975) (stating settlement and conciliation “are the preferred means
for resolving employment discrimination disputes”); Van Bronkhorst v. Safeco Corp., 529 F.2d
943, 950 (9th Cir. 1976) (“It hardly seems necessary to point out that there is an overriding
public interest in settling and quieting litigation.”)); see also Bradley v. Sebelius, 621 F.3d 1330,
1339 (11th Cir. 2010) (“Historically, there is a strong public interest in the expeditious resolution
of lawsuits through settlement.”).

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A settlement of this case would clear the dispute between a hospital and the Government.
The Court understands Vanderlan’s arguments regarding relators in general, but preventing
further settlement discussions would not serve the public interest.
In sum, the Court finds that Vanderlan has not satisfied “a cumulative burden of proving
each of the four elements” required for issuance of a temporary restraining order or preliminary
injunction. Miss. Power & Light Co., 760 F.2d at 621. His motion is denied.
II.

Motion to Dismiss
Jackson HMA seeks dismissal of all of Vanderlan’s claims. Vanderlan responded; the

Government did not. On August 31, 2018, after reviewing the pending motions, the Court
requested an update from the parties. Order [72] at 1.3 In response, the Government advised that
it is “currently in the process of evaluating whether to file a statement of interest or to seek
dismissal of this case pursuant to 31 U.S.C. § 3730(c)(2)(A).” Gov’t’s Resp. [73] at 1. The
Government “anticipates submitting a filing to the court stating its position within the next fortyfive (45) days.” Id.
As noted above, the Government would be within its rights to ultimately dismiss the case
over Vanderlan’s objections after he receives notice and an opportunity to be heard. 31 U.S.C.
§ 3730(c)(2)(A); see also Riley v. St. Luke’s Episcopal Hosp., 252 F.3d 749, 753 (5th Cir. 2001)
(noting that “government retains the unilateral power to dismiss an action ‘notwithstanding the
objections of the person’”) (citing 31 U.S.C. § 3730(c)(2)(A)). Such a step would substantively
change the legal issues before the Court. Most notably, the present motion to dismiss includes an
issue of first impression—whether an EMTALA violation can form the basis of an FCA claim.

With apologies to the parties, this matter did not initially appear on the Court’s electronic
tracking system. Given the passage of time, it was necessary to obtain an update.
3

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As Vanderlan himself notes, “there is no prior FCA case premised on alleged EMTALA
violations.” Relator’s Resp. [54] at 34. Given the possibility that the Government may invoke
§ 3730(c)(2)(A), it would be imprudent to render an opinion on this open question.
In light of this information, the Court finds this action should be stayed. Once the
Government’s filing is received, the Court will reassess and determine the next step. The
Government is given 45 days from the date of this order to make its decision.
IV.

Conclusion
The Court has considered all arguments raised by the parties; those not addressed would

not have changed the result. Relator Vanderlan’s motion for a preliminary injunction/temporary
restraining order [27] is denied. The Government is given 45 days to make its election going
forward, and this case is stayed until further Order of the Court.
SO ORDERED AND ADJUDGED this the 14th day of September, 2018.
s/ Daniel P. Jordan III
CHIEF UNITED STATES DISTRICT JUDGE

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