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Hoyte v. American National Red Cross

July 14, 2006

MICHELLE HOYTE, PLAINTIFF,
v.
AMERICAN NATIONAL RED CROSS, DEFENDANT.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION

This case is before the Court on defendant's motion to dismiss plaintiff's complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Upon consideration of defendant's motion, plaintiff's opposition, defendant's reply and the entire record in this case, the Court will grant the motion and dismiss Count Two of the complaint. The Court previously dismissed Count One of the complaint after a hearing and an oral ruling on April 27, 2006.

I. BACKGROUND

A. Factual History

On April 15, 2003, Judge John Garrett Penn approved an Amended Consent Decree entered into by the American National Red Cross ("ARC") and the United States of America. Amended Consent Decree of Permanent Injunction ("Amended Consent Decree"), United States of America v. American Nat'l Red Cross, No. 93-0949 (D.D.C. April 15, 2003); Amended Complaint ("Am. Compl.") ¶ 11. That case was brought by the government under the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq., and the Public Health Service Act, 42 U.S.C. § 201 et seq. Amended Consent Decree at 1. The Amended Consent Decree was entered into for the purpose of "further[ing] [the ARC's] commitment to provide safe blood and enabl[ing] it to focus on blood safety rather than litigation." Id. It delineates, among other things, a series of "Standard Operating Procedures" or "SOPs" and reporting requirements for the handling of blood. See Amended Consent Decree at 9 (defining "SOPs" as "ARC standard operating procedures . . .") (emphasis in original), generally; see also Am. Compl.¶ 11. It also provides for a number of sanctions that the government may impose for ARC's failure to abide by the decree, including fining the ARC. Amended Consent Decree at 36-37, 42, 52-66. see also Am. Compl.¶¶ 11, 79-90. Under the terms of the decree, the Food and Drug Administration ("FDA") is to monitor the defendant's compliance with the Amended Consent Decree and is charged with deciding what sanctions should be imposed if the defendant fails to comply. See Amended Consent Decree at 35-37, 42, 52-66. The Court has no role to play in enforcing the consent decree or imposing sanctions except where ARC appeals an imposition of sanctions by the FDA. Id. at 56-58.

Plaintiff Michelle Hoyte was employed by the defendant from 1997 through 2004, most recently as the Director of Quality Audits. Am. Compl. ¶ 7. Her complaint centers on the alleged mishandling of blood by the ARC. Ms. Hoyte alleges that in or around February 10-12, 2004, while she was conducting an audit of the ARC's "Penn-Jersey" facility located in Philadelphia, Pennsylvania, she discovered that 607 units of blood had been mishandled. Id. ¶¶ 16-18. She alleges that members of both the Penn-Jersey facility's staff and the defendant's Washington D.C. headquarters made the same discovery in December 2003, but failed to take the steps required by defendant's SOPs, FDA regulations or the Amended Consent Decree upon making the discovery, including failing to report the mishandling to the FDA. Id. ¶¶ 19-23, 30, 43-46. Ms. Hoyte further alleges that defendant's failure to take the required steps was an attempt to avoid possible fines that could have been imposed by the FDA under the Amended Consent Decree for the mishandling of blood. Id. ¶¶ 92-93.

According to Ms. Hoyte, during and after the February 2004 audit, she and her staff urged their supervisors to take appropriate action to report the 607 units of mishandled blood. Am. Compl. ¶¶ 52-58. She states that the defendant continued to take no action on the 607 units of blood, despite her repeated attempts to bring the problem to the attention of her superiors. Id. Ms. Hoyte's complaint alleges that she eventually scheduled a meeting with the Senior Vice President of Quality and Regulatory Affairs, William Cherry, for June 18, 2004, in an attempt to bring this and other issues to his attention. Id. ¶¶ 56, 58. On the day before her scheduled meeting with Mr. Cherry, Ms. Hoyte was terminated by her supervisor. Id. ¶¶ 52, 58.

B. Procedural History

On June 25, 2004, Ms. Hoyte filed this lawsuit pursuant to the False Claims Act ("FCA"), 31 U.S.C. § 3729, et seq., bringing two claims: (1) a qui tam reverse false claim in violation of 31 U.S.C. § 3729(a)(7), as relator; and (2) a wrongful discharge claim under 31 § U.S.C. § 3730(h), as the plaintiff. Pursuant to 31 U.S.C. § 3730(b)(2) of the FCA, the complaint in this case was maintained under seal for 60 days to give the government time to investigate and decide whether to intervene. The government moved for, and received, several extensions of time, pursuant to 31 U.S.C. § 3730(b)(3), to maintain the case under seal, and eventually filed a notice of election declining to intervene on November 7, 2005. The complaint was then unsealed and served on defendant ARC.

On January 24, 2006, defendant ARC moved to dismiss Count One of the complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, and Count Two pursuant to Rule 12(b)(6). Thereafter, pursuant to 31 U.S.C. § 3730(c)(2)(A), the United States moved to dismiss the qui tam claim brought in the first count of plaintiff/relator's complaint. See 31 U.S.C. § 3730(c)(2)(A) ("The Government may dismiss the [qui tam] 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 an opportunity for a hearing on the motion."); see also Swift v. United States, 318 F.3d 250, 252 (D.C. Cir. 2003) (holding that United States has "unfettered right" under 31 U.S.C. § 3730(c)(2)(A) to dismiss a qui tam claim).*fn1 Plaintiff/relator opposed both the defendant's and the government's motions, requesting a hearing on the government's motion as of right under 31 U.S.C. § 3730(c)(2)(A). After a hearing before the Court on April 27, 2006, the Court in an oral ruling dismissed Count One of plaintiff/relator's complaint pursuant to the United States' motion to dismiss.

II. DISCUSSION

Defendant ARC's motion to dismiss Count One of the complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure is moot, Count One having been dismissed at the request of the United States on April 27, 2006. The Court therefore considers in this Opinion only defendant's motion to dismiss Count Two, the plaintiff's wrongful discharge claim, brought in her personal capacity.

A. Standard of Review

A motion to dismiss for failure to state a claim may not be granted, unless it appears beyond doubt that the plaintiff can demonstrate no set of facts that supports a claim entitling the plaintiff to relief. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1117 (D.C. Cir. 2000). In evaluating the motion to dismiss, the Court must accept the plaintiff's factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Harris v. Ladner, 127 F.3d 1121, 1123 (D.C. Cir. 1997). While the Court must construe the complaint liberally, the Court need not accept the plaintiff's factual inferences if the complaint's factual allegations do not support those inferences, nor must the Court accept ...


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