United States of America et al v. Health Management Associates, Inc. et al

Filing 22

TRANSFER ORDER re: pldg. ( 1 in MDL No. 2524) Transferring 9 action(s) to Judge Reggie B. Walton in the District of District of Columbia.Signed by Judge John G. Heyburn II, Chai rman, PANEL ON MULTIDISTRICT LITIGATION, on 4/3/2014. Associated Cases: MDL No. 2524, FLM/2:11-cv-00014, FLM/8:08-cv-01795, FLS/0:11-cv-62445, GAM/3:09-cv-00135, GAM/3:12-cv-00151, ILN/1:13-cv-01212, NCW/3:10-cv-00472, PAE/5:10-cv-03007, SC/0:11-cv-01713 (dld)

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

IN RE: HEALTH MANAGEMENT ASSOCIATES, INC.
QUI TAM LITIGATION (NO. II)

MDL No. 2524

TRANSFER ORDER

Before the Panel:* Pursuant to 28 U.S.C. § 1407, the United States of America (the
Government) moves for centralization of this litigation in the Middle District of Florida. The
litigation encompasses the nine qui tam False Claims Act actions listed on Schedule A.
Plaintiff/relators in four of the nine actions – Middle District of Georgia Brummer, Eastern
District of Pennsylvania Miller, Western District of North Carolina Mason, and Southern District of
Florida Meyer – submitted responses in support of centralization in the Middle District of Florida.
Principal defendant Health Management Associates, Inc. (HMA) and 59 related defendants1 support
centralization, but in the District of District of Columbia. Defendant Physicians Alliance, Ltd. (PAL)
– which is named in only Miller and as to which the Government has not made an intervention

*

Judge Marjorie O. Rendell and Judge Lewis A. Kaplan took no part in the decision of this

matter.
1

Hospital Management Associates, Inc.; Anniston HMA, LLC; Amory HMA, LLC;
Bartow HMA, Inc.; Bartow HMA, LLC; Biloxi HMA, LLC; Brandon HMA, LLC; Carlisle
HMA, Inc.; Chester HMA, LLC; Citrus HMA, LLC; Clarksdale HMA, LLC; Durant HMA, LLC;
Gaffney HMA, LLC; Haines City HMA, LLC; Hamlet H.M.A., LLC; Hartsville HMA, LLC;
Hernando HMA, LLC; HMA Fentress County General Hospital, Inc.; HMA Santa Rosa Medical
Center, Inc.; Jackson HMA LLC; Kennett HMA, Inc.; Key West HMA, LLC; Lancaster HMA,
Inc.; Lancaster HMA, LLC; Lebanon HMA, Inc.; Lehigh HMA, LLC; Lone Star HMA, LP;
Louisburg HMA Physician Management LLC; Madison HMA, LLC; Marathon HMA, LLC;
Meridian HMA, LLC; Midwest Regional Medical Center, LLC; Monroe HMA, LLC; Mooresville
Hospital Management Associates, LLC; Naples HMA, LLC; Natchez Community Hospital, LLC;
Osceola SC, LLC; Paintsville Hospital Company LLC; Pasco Regional Medical Center, LLC;
Poplar Bluff Regional Medical Center, Inc.; Poplar Bluff Regional Medical Center, LLC; Port
Charlotte HMA, LLC; Punta Gorda HMA, LLC; River Oaks Hospital, LLC; Riverview Regional
Medical Center, LLC; Rose City HMA, Inc.; Rose City HMA, LLC; Santa Rosa HMA
Physicians Management LLC; Sebastian Hospital, LLC; Sebring Hospital Management
Associates, LLC; Statesboro HMA Inc.; Statesville HMA, LLC; Tullahoma HMA, Inc.; Van
Buren Central Business Office, LLC; Van Buren H.M.A., Inc.; Venice HMA, LLC; Williamson
Memorial Hospital, LLC; Winder HMA, LLC; and Yakima HMA, LLC.

-2decision – requests that the claims against it not be included in the MDL, if one is created. If the
Panel denies that request, then PAL supports centralization in the District of District of Columbia.2
At our May 2013 hearing session, we denied the Government’s motion to centralize, in the
Middle District of Florida, the same nine actions now before us. In doing so, we acknowledged that
the actions did “appear to share certain factual issues arising from allegations that HMA and related
defendants provided improper remuneration to physicians and/or employed various improper policies
and practices that encouraged or coerced the administration of medically unnecessary tests on
Emergency Room patients, as well as the admission to the hospital of patients who should have
received outpatient care.” See MDL No. 2442, Order Denying Transfer, at 2-3 (J.P.M.L. June 6,
2013) (ECF No. 76). We also noted that most of the actions involved allegations that the misconduct
was “corporate-wide in nature.” Id. at 3. We denied centralization as “premature,”however, because
(a) all of the actions were then under seal, as the Government had not yet decided to intervene in any
of them;3 and (b) it was unclear when the Government’s intervention decisions would come, and thus
correspondingly unclear when pretrial proceedings would begin in earnest. See id. In December
2013, several months after our decision, the Government notified the involved courts of its intent to
intervene, or partially intervene, in eight of the nine actions (all but Middle District of Florida
Napoliello). The Government then filed this second motion for centralization.
On the basis of the papers filed,4 we are now persuaded that centralization under Section 1407
in the District of District of Columbia will serve the convenience of the parties and witnesses and
promote the just and efficient conduct of this litigation. These actions share the various factual issues
referenced above, and, with the Government now having made its intervention decisions, we conclude

2

Numerous parties did not submit briefs, but did file notices waiving oral argument in
which they indicated that they supported centralization in either the Middle District of Florida or
the District of District of Columbia. Specifically, plaintiff/relators in the other five actions
(Middle District of Florida Napoliello and Nurkin, District of South Carolina Meyer, Middle
District of Georgia Williams, and Northern District of Illinois Plantz) support centralization in the
Middle District of Florida. Gary Newsome, HMA’s former CEO and a defendant in District of
South Carolina Meyer, supports centralization in the District of District of Columbia. PRO-MED
Clinical Systems, LLC, which is a defendant in Plantz, supports centralization in either of the two
districts.
3

The Section 1407 proceedings in MDL No. 2442 also were conducted under seal. On the
Government’s motion, the seal was lifted (with the exception of a limited number of items) in
January 2014. See MDL No. 2442, Minute Order (J.P.M.L. Jan 10, 2014) (ECF No. 79).
4

The parties waived oral argument.

-3that centralization will eliminate the possibilities of duplicative discovery and conflicting pretrial
rulings, and facilitate the resolution of any first-to-file issues that may arise.5
We reject PAL’s request that we exclude the claims against it in the Miller action from the
MDL. See 28 U.S.C. § 1407(a) (authorizing the Panel to “separate any claim, cross-claim, counterclaim, or third party claim and remand any of such claims before the remainder of the action is
remanded”). The Miller plaintiffs plainly allege a conspiracy involving the HMA defendants and
PAL, making separation and remand of such claims inefficient and, indeed, virtually impracticable.
See, e.g., Miller Compl. ¶ 384 (“Defendant PAL conspired with Defendants HMA and Lancaster by
assisting in the illegal kickback arrangement, by recruiting PAL physicians to participate in HMA’s
joint venture of Lancaster Regional, and by demanding an additional $500,000 annual payment.”).
To the extent that Miller involves some unique issues, the transferee judge has the discretion to
handle those issues through the use of appropriate pretrial devices, such as separate tracks for
discovery and motion practice. See, e.g., In re: Countrywide Fin. Corp. Mortgage-Backed Sec.
Litig., 812 F. Supp. 2d 1380, 1383 (J.P.M.L. 2011). In addition, the transferee judge, whenever he
deems appropriate, may recommend Section 1407 remand of Miller or any claims in Miller in
advance of other actions or claims. See In re: ClassicStar Mare Lease Litig., 528 F. Supp. 2d 1345,
1347 (J.P.M.L. 2007).
After weighing all factors, we have selected the District of District of Columbia as transferee
district for this litigation.6 Counsel for both the Government and the HMA defendants are located
there, and HMA’s attorneys represent that numerous potentially discoverable documents have been
transferred to their offices. Centralization in the District of District of Columbia also addresses PAL’s
concern that litigating in the Middle District of Florida would impose an exceptional burden on PAL,
which is a group of affiliated physicians located in the Lancaster, Pennsylvania, area. Last but not
least, the Honorable Reggie B. Walton, to whom we assign this MDL, is an experienced jurist, and
we have every confidence that he will steer the litigation on a prudent course.
IT IS THEREFORE ORDERED that pursuant to 28 U.S.C. § 1407, the actions listed on
Schedule A are transferred to the District of District of Columbia and, with the consent of that court,
assigned to the Honorable Reggie B. Walton for coordinated or consolidated pretrial proceedings.

5

See 31 U.S.C. § 3730(b)(5) (“When a person brings an action under this subsection, no
person other than the Government may intervene or bring a related action based on the facts
underlying the pending action.”).
6

Although no constituent action currently is pending in the District of District of Columbia,
that is no impediment to its selection as transferee district. See, e.g., In re: Nutramax Cosamin
Mktg. & Sales Practices Litig., — F. Supp. 2d —, 2013 WL 6825613, at *1 n.2 (J.P.M.L. Dec.
17, 2013).

-4PANEL ON MULTIDISTRICT LITIGATION

John G. Heyburn II
Chairman
Charles R. Breyer
Ellen Segal Huvelle

Sarah S. Vance

IN RE: HEALTH MANAGEMENT ASSOCIATES, INC.
QUI TAM LITIGATION (NO. II)

MDL No. 2524

SCHEDULE A

Middle District of Florida
UNITED STATES OF AMERICA, ET AL. V. HEALTH MANAGEMENT
ASSOCIATES, INC., ET AL., C.A. No. 2:11-00014
NAPOLIELLO V. HEALTH MANAGEMENT ASSOCIATES, INC.,
C.A. No. 8:08-01795
Southern District of Florida
UNITED STATES OF AMERICA, EX REL. V. HEALTH MANAGEMENT
ASSOCIATES, INC., C.A. No. 0:11-62445
Middle District of Georgia
UNITED STATES, EX REL ET AL. V. HOSPITAL MANAGEMENT
ASSOCIATES, INC., ET AL., C.A. No. 3:09-00135
WILLIAMS, EX REL V. HEALTH MANAGEMENT ASSOCIATES INC., ET AL.,
C.A. No. 3:12-00151
Northern District of Illinois
PLANTZ, ET AL. V. HEALTH MANAGEMENT ASSOCIATES INC., ET AL.,
C.A. No. 1:13-01212
Western District of North Carolina
MASON, ET AL. V. HEALTH MANAGEMENT ASSOCIATES, INC., ET AL.,
C.A. No. 3:10-00472
Eastern District of Pennsylvania
UNITED STATES OF AMERICA, EX REL MILLER, ET AL. V. HEALTH
MANAGEMENT ASSOCIATES, INC., C.A. No. 5:10-03007
District of South Carolina
USA, ET AL. V. HEALTH MANAGEMENT ASSOCIATES INC., ET AL.,
C.A. No. 0:11-01713