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UNITED STATES EX REL. EL AMIN v. GEORGE WASHINGTON

November 10, 1998

UNITED STATES OF AMERICA EX REL. EL AMIN, ET AL, Plaintiffs/Relators,
v.
GEORGE WASHINGTON UNIVERSITY, Defendant.



The opinion of the court was delivered by: FLANNERY

Memorandum Opinion

 There are four motions pending before the Court. This opinion shall address three of those motions. The fourth motion, A Motion to Reconsider the Court's Bench Ruling of March 26, 1998 Regarding Rule 9(b), shall remain under advisement pending further consideration by the Court. The three motions the Court will now address are (1) A Motion to Dismiss the Third Claim of the Third Amended Complaint; (2) A Motion to Dismiss for Lack of Subject Matter Jurisdiction; and (3) a Motion to Dismiss Claims Pre-Dating Oct. 24, 1989 as Prohibited by the Statute of Limitations.

 For the reasons set forth below, the Court grants the defendant's motion to dismiss with prejudice the third claim of the third amended complaint; denies the defendant's motion to dismiss the entire case for lack of subject matter jurisdiction; and grants the defendant's motion to dismiss all claims pre-dating October 24, 1989 as prohibited by the statute of limitations.

 I. Background

 This civil action was brought under the qui tam provisions of the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733, by four nurse anesthetists formerly employed at the George Washington University Hospital. The qui tam plaintiffs (or "relators") seek to recover damages and civil penalties as a result of the defendant's allegedly fraudulent claims under the Federal Medicare Program. The relators' complaint alleges that, from 1989 to 1995, the defendant and its anesthesiologists routinely defrauded the government by submitting false claims for Medicare reimbursement. The relators filed their action on October 24, 1995. The Court unsealed the relators' complaint on April 15, 1997, after the United States declined to intervene in the lawsuit. Discovery is currently proceeding in this case and defendant has filed a number of motions, seeking to eliminate or reduce defendant's burden in responding to relators' discovery requests.

 II. Discussion

 (1) A Motion to Dismiss the Third Claim of the Third Amended Complaint

 On May 28, 1998, the Court ordered relators, inter alia, to amend their complaint by specifically identifying the anesthesiologist associations, other than Medical Faculty Associates, with which the defendant allegedly conspired. On June 5, 1998 the relators filed their third amended complaint. The relators' third amended complaint adds further detail, but defendant contends that the complaint still fails to allege a viable claim under the conspiracy provisions of the FCA, 31 U.S.C. § 3729(a)(3), and that the third claim of the amended complaint should be dismissed in its entirety. After reading the parties memorandum and hearing oral argument, the Court grants the defendant's motion to dismiss with prejudice the third claim of the third amended complaint for failure to state a claim.

 The third claim alleges that the defendant, George Washington University ("GWU"), conspired with three national anesthesiologist associations - Medical Faculty Associates, the American Society of Anesthesiology, and the Association of University Anesthetists, ("Associations") - to defraud the government. According to relators, paragraphs 4, 54, 55, and 67 of the third amended complaint contain the relevant allegations in support of relators' third claim. The text of these paragraphs is as follows:

 
4. Defendant George Washington University (hereinafter "GWU") operates a hospital in the District of Columbia. At all times in question, GWU's hospital has administered anesthesia to Medicare patients. For those procedures, GWU bills for the services of anesthesiologists whom it directs and controls, some of which are associated with its Medical Faculty Associates, with the American Society of Anesthesiology, and with the Association of University Anesthetists. The anesthesiologists are employed by GWU. All of the anesthesia billing is done by GWU.
 
54. As GWU enriched itself by misrepresenting that its anesthesiologists had performed the work required for Medicare reimbursement, GWU's anesthesiologists utilized their Associations to promote that same lie to the public, and in particular to the segment of the population eligible for Medicare. Specifically, the Associations conducted studies, issued mailings, and published commentaries arguing that only their member anesthesiologists were competent to perform anesthesia work; that nurse-anesthetists in particular should be prohibited from performing it alone; and accordingly, only anesthesiologists should be permitted to obtain reimbursement, at their higher rates, for the work. The anesthesiologists vigorously promoted that message through their Associations, and vigorously opposed any change in governing law that would openly permit nurse-anesthetists to perform the work. At the same time, the anesthesiologists cynically forced nurse-anesthetists like the Relators to perform all the anesthesiologists' work.
 
55. Many of GWU's anesthesiologists participated in these efforts as constituents of Medical Faculty Associates and the American Society of Anesthesiology. Certain GWU anesthesiologists, such as Dr. Weintraub, also participated in the Associations' efforts as constituents of the Associations of University Anesthetists.
 
67. Defendant, GWU, the aforementioned anesthesiologists, other GWU anesthesiologists not mentioned, and the aforementioned anesthesiologists' organizations, agreed between and among themselves, and have conspired, to defraud the Government by obtaining or seeking to obtain or getting allowance and payment of GWU's false or fraudulent claims allowed or paid in violation of 31 U.S.C. § 3729(a)(3), thereby damaging the United States.

 Third Amended Complaint (June 5, 1998). GWU argues that (1) the relators' complaint never alleges that GWU and the professional associations ever had any manner of agreement to defraud the United States through the submission of fraudulent claims for anesthesiology services and (2) the relators' allegations regarding the purported conspiratorial activities between GWU and the professional associations involve nothing more than engaging in public relations campaigns to influence legislation, which cannot be a violation of 31 U.S.C. § 3729(a). Relators strenuously disagree, arguing that they have clearly set forth a viable claim because they have alleged that GWU conspired with the Associations to defraud the government.

 After considering the parties' arguments, the Court agrees with the defendant that the third claim of the third amended complaint should be dismissed. The third claim consists of nothing more than conclusory allegations that GWU conspired with these Associations to defraud the government. Even if the relators were able to prove that the Associations and GWU agreed to commit the activities alleged in the third claim, these activities would not constitute a conspiracy to defraud. Rather, the activities alleged consist of entirely lawful pursuits such as convincing legislatures and the public that it is beneficial to have doctor anesthesiologists, rather than nurse anesthetists, treat patients. The Court further agrees with defendant that the relators' invocation of United States v. Bouchey, 860 F. Supp. 890, 893 (D.D.C. 1994), aff'd, 1997 U.S. App. LEXIS 19034 (D.C. Cir. 1997) and United States v. Metzinger, Civil Action No. 94-7520, 1996 U.S. Dist. LEXIS 13666 (E.D. Pa. Sept. 16, 1998), is "misplaced since the present complaint does not allege that [the] defendant conspired with one or more persons to have a fraudulent claim paid by the United States." Def. Reply Memorandum at 2-3 (internal quotations omitted). The relators' factual allegations concerning the Associations' activities have no connection to the allegedly fraudulent billing scheme engaged in by GWU or the doctor anesthesiologists alleged absence from hospital procedures. Thus, the third complaint does not state, in any way, that the Associations submitted, or caused to be submitted, false bills to the government. Contrary to plaintiffs' contention, Bouchey actually supports defendant's position that the third claim should be dismissed because the complaint does not meet the three part test discussed in Bouchey.

 The Court is mindful that an overt act need not be pleaded against each defendant in a conspiracy, because a single overt act by one of the conspirators can support a conspiracy claim, even on the merits. However, here the complaint fails to identify any agreement between the parties to defraud the government or to engage in any act that could constitute an attempt to defraud the government. Thus, the third claim of the third amended complaint should be dismissed.

 (2) A Motion to Dismiss for Lack of Subject Matter Jurisdiction

 This motion asks the Court to dismiss this action for lack of subject matter jurisdiction. The defendant argues that the relators do not have standing, under Article III of the United States Constitution, to bring this action because they have suffered no injury cognizable under Article III. GWU also argues that the FCA violates the principle of separation of powers and the Appointments Clause, Article II, Section 2, Clause 2 of the Constitution.

 These arguments have been rejected by almost every federal district court and every federal circuit court to address them, but they have not been directly addressed by any judge in this Circuit. See e.g., United States ex. rel. Hall v. Tribal Development Corp., 49 F.3d 1208 (7th Cir. 1995); United States ex. rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032 (6th Cir. 1994); United States ex. rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir. 1993); United States ex. rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148 (2nd Cir. 1993); United States ex. rel. Givler v. Smith, 775 F. Supp. 172 (E.D. Pa. 1991); United States ex. rel. Truong v. Northrop Corp., 728 F. Supp. 615, 619 (C.D. Cal. 1989); cf. Juliano v. Federal Asset Disposition Ass'n, 736 F. Supp. 348 (D.D.C. 1990) (OG) ...


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