United States of America v. Catholic Health System of Long Island Inc. et al

Filing 110

ORDER re 109 Mandate of USCA. The Court grants 61 Defendants' motion to dismiss and for partial summary judgment and dismisses Relator's misappropriation claims based on section 1320a-7b(a)(4) with prejudice. The parties are directed to provide a status report regarding the retaliation claims on or before January 19, 2024. Ordered by Chief Judge Margo K. Brodie on 12/20/2023. (JYJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------UNITED STATES OF AMERICA and NEW YORK
STATE ex rel. MICHAEL QUARTARARO,
Plaintiff,

ORDER
12-CV-4425 (MKB) (RML)

v.
CATHOLIC HEALTH SYSTEM OF LONG
ISLAND INC. d/b/a/ CATHOLIC HEALTH
SERVICES OF LONG ISLAND, ST. CATHERINE
OF SIENA MEDICAL CENTER, and ST.
CATHERINE OF SIENA NURSING HOME,
Defendants.
--------------------------------------------------------------MARGO K. BRODIE, United States District Judge:
Plaintiff-Relator Michael Quartararo (“Relator”), a former nursing home administrator,
commenced the above-captioned qui tam action on September 5, 2012, against Defendants
Catholic Health System of Long Island, Inc., doing business as Catholic Health Services of Long
Island (“CHS”), St. Catherine of Siena Medical Center (the “Medical Center”), and St. Catherine
of Siena Nursing Home (the “Nursing Home”) under the federal False Claims Act, 31 U.S.C.
§ 3729 et seq. (the “FCA”), and the New York False Claims Act, N.Y. Finance Law § 187 et seq.
(the “NYFCA”). (Compl., Docket Entry No. 1; Fourth Am. Compl. (“FAC”), Docket Entry No.
47.)
On August 10, 2018, the Court denied Defendants’ motion to dismiss the FAC and
motion for partial summary judgment as to Relator’s misappropriation claims 1 alleging
1

In the March 31, 2017 Memorandum and Order, the Court defined misappropriation
claims as those claims alleging violations of the FCA based on allegations that Defendants (1)
unlawfully used a mitigation payment for purposes unrelated to Medicare and Medicaid; and (2)

violations of the FCA based on alleged violations of the Benefits Conversion Statute, 42 U.S.C.
§ 1320a-7b(a)(4), but granted Defendants’ motion as to Relator’s claims alleging FCA violations
based on other alleged conduct. 2 (See Mem. & Order dated Aug. 10, 2018, Docket Entry No.
75.) 3 On February 22, 2021, the Court granted Defendants’ motion for a certification of
interlocutory appeal and issued a certificate of appealability on the grounds that the case
presented an issue of first impression in the Second Circuit. (See Mem. & Order dated Feb. 22,
2021, Docket Entry No. 96.) Defendants’ motion to dismiss and motion for partial summary
judgment raised a novel question of law as to whether section 1320a-7b(a)(4) of the Benefits
Conversion Statute could serve as the basis for Relator’s misappropriation claims. (Id. at 13–
22.)
On appeal, the Second Circuit found that the Benefits Conversion Statute is not violated
where the recipient of a reimbursement payment is under no obligation to utilize the funds in any
particular way. (Order of U.S. Court of Appeals for the Second Circuit dated Oct. 16, 2023 at
14–15, Docket Entry No. 108.) Accordingly, the Second Circuit held that “Relator’s claims

unlawfully used St. Catherine of Siena Nursing Home’s Medicaid funding for improper
purposes. (See Mem & Order dated Mar. 31, 2017 at 25–26, Docket Entry No. 40.)
2

Defendant did not move to dismiss or for summary judgement as to Relator’s
retaliation claims and the Court never addressed this claim. (See Mem. & Order dated Aug. 10,
2018; Defs.’ Mem. in Supp. of Mot. to Dismiss and for Partial Summ. J. as to Third Am. Compl.
at 1 n.1, Docket Entry No. 29-9 (“[B]ecause retaliation claims generally are not susceptible to
dismissal on a pre-Answer motion, [D]efendants will pursue dispositive relief as appropriate in
the future.”); see also Defs.’ Mot. in Supp. of Mot. to Dismiss and for Partial Summ. J. as to
FAC, Docket Entry No. 61-6 (moving to dismiss and for summary judgment only as to the
misappropriation claims).)
3

The Court reconsidered Defendants’ motion to dismiss and motion for summary
judgment, and on July 13, 2020 denied both motions. (Mem. & Order dated July 13, 2020,
Docket Entry No. 90.)

2

based on section 1320a-7b(a)(4) therefore fail as a matter of law.” (Id. at 15.) The Second
Circuit remanded with instructions to dismiss Relator’s section 1320a-7b(a)(4)-based claims
against Defendants. (Mandate of U.S. Court of Appeals for the Second Circuit dated Dec. 8,
2023, Docket Entry No. 109.)
The Court grants Defendants’ November 13, 2017 motion to dismiss and for partial
summary judgment and dismisses Relator’s misappropriation claims based on section 1320a7b(a)(4) with prejudice. The parties are directed to provide a status report regarding the
retaliation claims on or before thirty days from the filing of this Order.
Dated: December 20, 2023
Brooklyn, New York
SO ORDERED:

S/MKB
MARGO K. BRODIE
United States District Judge

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