Kruse et al v. Computer Programs and Systems Inc et al

Filing 85

MEMORANDUM OPINION AND ORDER denying 59 Motion to Dismiss. (Ordered by Judge Ada Brown on 3/24/2023) (sxf)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
UNITED STATES OF AMERICA, ex rel.
Stephanie M. Kruse; STATE OF
OKLAHOMA ex rel. Stephanie M. Kruse;
STATE OF TEXAS ex rel. Stephanie M.
Kruse; STATE OF NEW MEXICO ex rel.
Stephanie M. Kruse; DOE STATES 1-45
AND DISTRICT OF COLUMBIA ex rel.
Stephanie M. Kruse;

Plaintiffs;
v.

COMPUTER PROGRAMS AND
AND SYSTEMS, INC.; TRUBRIDGE,
LLC; MUSKOGEE REGIONAL
MEDICAL CENTER; CRESCENT
MEDICAL CENTER LANCASTER; and
ARTESIA GENERAL HOSPITAL;

Defendants.

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Civil Action No. 3:18-CV-00938-E

MEMORANDUM OPINION AND ORDER
Before the Court is Defendants Computer Program and Systems, Inc. and Trubridge, LLC’s
Motion to Dismiss claims asserted in Plaintiffs’ First Amended Complaint. 1 (Doc. 59). Here,
Billing Defendants have sought dismissal based on Federal Rules of Civil Procedure 9(b) and
12(b)(6). (See Doc. 59 at 13-16, et seq.).
At the outset, Federal Rule of Civil Procedure 8(a)(2) requires plaintiffs’ pleadings to
provide “a short and plain statement of the claim showing that the pleader is entitled to relief.”

1

The Court refers to Computer Program and Systems Inc. individually as “CPSI.” The Court refers to
Trubridge LLC as “Trubridge.” The Court refers to CPSI and Trubridge collectively as “Billing
Defendants.”

MEMORANDUM OPINION AND ORDER

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FED. R. CIV. P. 8(a)(2). To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim, a
complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007).
However, when, as here, a complaint alleges claims brought under the False Claims Act
(FCA) or state equivalents of the FCA, Federal Rule of Civil Procedure 9(b) apply to those claims.
U.S. ex rel. Willard v. Humana Health Plan of Texas Inc., 336 F.3d 375, 384 (5th Cir. 2003) (“The
requirements of Rule 9(b) apply to claims under the FCA.”) (collecting cases). “Rule 9(b)
supplements but does not supplant Rule 8(a)’s notice pleading.” U.S. ex rel. Grubbs v. Kanneganti,
565 F.3d 180, 186 (5th Cir. 2009). As the Fifth Circuit has explained:
Under Rule 9(b), “[i]n all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with particularity.” This court has
stated that Rule 9(b) requires that the plaintiff allege “the particulars of time, place,
and contents of the false representations,” Williams v. WMX Techs., 112 F.3d 175,
179 (5th Cir.1997), as well as the identity of the person making the
misrepresentation and what that person obtained thereby, otherwise referred to as
the “who, what, when, where, and how” of the alleged fraud. Thompson, 125 F.3d
at 903.
Malice, intent, knowledge, and other condition of mind of a person may be averred
generally. Fed. R. Civ. P. 9(b). This second sentence of Rule 9(b) “relaxes the
particularity requirement for conditions of the mind, such as scienter.” Tuchman v.
DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir.1994). As this court has
explained, in order to adequately plead scienter, “a plaintiff must set forth specific
facts that support an inference of fraud.” Id. Facts that show a defendant’s motive
to commit the fraud may sometimes provide a factual background adequate for an
inference of fraudulent intent. Id.
U.S. ex rel. Willard, 336 F.3d at 384–85. “In cases of fraud, Rule 9(b) has long played that
screening function, standing as a gatekeeper to discovery, a tool to weed out meritless fraud claims

MEMORANDUM OPINION AND ORDER

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sooner than later.” U.S. ex rel. Grubbs, 565 F.3d at 185. 2 “A dismissal for failure to plead fraud
with particularity under Rule 9(b) is treated as a dismissal for failure to state a claim under Rule
12(b)(6)[.]” U.S. ex rel. Hebert v. Dizney, 295 F. App’x 717, 721 (5th Cir. 2008).
Here, Plaintiffs have asserted claims against the Billing Defendants (i) for presentation of
false claims under the FCA, 31 U.S.C. § 3729(a)(1)(A); (ii) for making or using false record(s) or
statement(s) to cause claim(s) to be paid under the FCA, 31 U.S.C. § 3729(a)(1)(B); (iii) for
making or using false record(s) or statement(s) to conceal, avoid, and/or decrease obligation to
repay money under the FCA, 31 U.S.C. § 3729(a)(1)(G); (iv) for conspiracy under the FCA, 31
U.S.C. § 3729(a)(1)(C); (v) for liability under the Oklahoma Medicaid False Claims Act, 63 Okla.
Sta. Ann. § 5053.l(B); (vi) for liability under the Texas False Claims Act, Tex. Hum. Res. Code
Ann. § 36.002. (Doc. 15 at 56-59, 62-65); (vii) for liability under the New Mexico Medicaid False
Claims Act, N.M. Stat. Ann.§ 27-14-4 and N.M. Stat. Ann. § 44-9-3; and (viii) for retaliation under
the FCA, 31 U.S.C. § 3730(h). (Doc. 15 at 56-69). 3 Upon review of the First Amended Complaint,
motion to dismiss, the response, the reply, and the relevant law, the Court concludes Plaintiffs have
pleaded specific facts which establish a plausibility of entitlement to relief on all its causes of
action against Billing Defendants in accordance with the requirements of Rule 8(a)(2) and Rule
9(b). As such, Billing Defendants’ motion to dismiss is DENIED in its entirety.
(Signature Page Follows)

2

“A plaintiff will not survive a Rule 9(b) motion to dismiss on the pleadings by simply alleging that a
defendant had fraudulent intent.” Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1018 (5th Cir. 1996)
(citing Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir.1994)).

3

The FCA provides an avenue for relief from certain retaliatory actions. 31 U.S.C.A. § 3730(h).

MEMORANDUM OPINION AND ORDER

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SO ORDERED.
24th day of March, 2023.

___________________________________
ADA BROWN
UNITED STATES DISTRICT JUDGE

MEMORANDUM OPINION AND ORDER

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