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United States ex rel Brown v. Aramark Corp.

December 29, 2008


The opinion of the court was delivered by: John D. Bates United States District Judge


Plaintiff-relator Sheila Brown ("plaintiff" or "Ms. Brown") brings this action pursuant to the qui tam provisions of the False Claims Act ("FCA"). Plaintiff alleges that defendants Aramark Corporation ("Aramark Corp.") and Aramark Healthcare Support Services ("Aramark Healthcare") (collectively "Aramark") presented false claims and made false statements to the United States in billing for food and related services provided to Medicare and Medicaid patients at Johns Hopkins Bayview Medical Center. Ms. Brown also asserts two common law claims related to the alleged fraud, and a retaliation claim under the FCA. Currently before the Court is Aramark's motion to dismiss the five-count Complaint in its entirety pursuant to Rule 12(b)(6) (FCA claims) and Rule 12(b)(1) (common law claims) or, alternatively, Rule 41(b). In response, plaintiff opposes Aramark's motion to dismiss, but concedes that she lacks standing to bring the common law claims and also asks the Court to stay its decision on the retaliation claim pending discovery. Upon careful consideration of the motion, the parties' several memoranda, the applicable law, and the entire record, the Court will grant Aramark's motion and will dismiss all five counts of the Complaint.


The United States administers the federally-funded Medicare and Medicaid programs through the Department of Health and Human Services ("DHHS") and the Centers for Medicare and Medicaid Services ("CMS"). See Compl. ¶ 9. CMS is authorized to enter into and administer contracts on behalf of DHHS and the United States. See id. This authority includes the power to contract with providers and suppliers. See id. When CMS enters into such contracts, it pays for services provided to Medicare and Medicaid program beneficiaries. See id. ¶ 10. These payments are typically made through a fiscal intermediary -- i.e., an insurance company that processes provider claims for payment under Medicare Part A. See id. Consequently, healthcare providers, such as hospitals, submit cost reports to a fiscal intermediary for certain expenses such as the cost of providing meals to Medicare and Medicaid program beneficiaries. See id. CMS, in turn, pays the provider, through the intermediary, for the provider's Medicare- and Medicaid-related costs. See id. ¶¶ 10-11.

Johns Hopkins Bayview Medical Center ("Bayview") is an acute care hospital and healthcare center in Baltimore, Maryland. See id. ¶ 6. Bayview provides inpatient hospital care and other healthcare services to beneficiaries under the Medicare and Medicaid programs. See id. During the time period relevant to the Complaint, Bayview contracted with Aramark Healthcare to manage its food service department. See Defs.' Ex. 1 at 1. Under the contract, Aramark Healthcare was responsible for all on-site preparation and service of food at Bayview --including food service for patients, staff, employees, and visitors. See id. The original plaintiff-relator in this case, Earle Brown ("Mr. Brown"), was employed by Aramark Healthcare as a food service production manager. See Compl. ¶ 5. In that position, he was responsible for "ordering and delivering food to multiple Bayview food service consumers." Id. ¶ 14. Mr. Brown was employed at Bayview by Aramark Healthcare from approximately March 1999 until January 2000. See id. ¶ 16.

Mr. Brown initiated this action by filing the Complaint on September 28, 2001, at which time it was assigned to another judge of this Court. The Complaint alleges that Aramark committed fraud by billing the Government for: (1) patient meals made from recycled food; and (2) food and other resources used at private functions that were unrelated to Medicare or Medicaid. See id. at 2. By virtue of these practices, the Complaint asserts that the cost reports and claims for payment submitted by Aramark to Bayview for Medicare- and Medicaid-related expenses -- which were subsequently submitted to CMS for payment, through a fiscal intermediary -- were inflated and fraudulent. Id. ¶ 11. Hence, plaintiff alleges that Aramark violated the False Claims Act, 31 U.S.C. § 3729(a)(1)-(2), by knowingly presenting false or fraudulent claims to the United States for payment, and by making false records or statements to get false or fraudulent claims paid by the Government. See id. ¶¶ 21-26. The Complaint also alleges that Mr. Brown was wrongfully terminated from his employment with Aramark Healthcare in retaliation for his refusal to participate in the alleged illegal activities at Bayview. See id. ¶¶ 37-38.

The United States investigated Mr. Brown's allegations, but on March 24, 2003 the Government filed notice of its election to decline to intervene. The case then sat dormant for more than four years. During that time, Mr. Brown died in an auto accident. See Pl.'s Mem. in Opp'n to Defs.' Mot. Dismiss ("Pl.'s Opp'n") at 9. On November 8, 2007, the case was reassigned to the undersigned judge. Subsequently, on December 11, 2007, with no government intervention and no notice of Mr. Brown's death, the Court unsealed the Complaint and ordered it to be served on defendants. The Court also denied a prior motion for leave to file an amended complaint, but gave plaintiff an opportunity to file a renewed motion by not later than January 2, 2008. See Order, Dec. 11, 2007. When a timely response to the December 11 Order was not received, the Court ordered plaintiff to file proof of service of the existing complaint or a renewed motion for leave to file an amended complaint by January 17, 2008. See Order, Jan. 8, 2008. Finally, on January 17, 2008, Mr. Brown's wife, Sheila Brown, filed a motion notifying the Court of her husband's death, seeking to substitute as plaintiff and relator in her husband's stead, and seeking leave to file the original complaint upon defendants within 120 days of the Court's December 11, 2007 Order. The Court subsequently granted Ms. Brown's motion. See Order, Feb. 19, 2008. Aramark was served with a summons and the Complaint on April 10, 2008. Aramark's answer was filed on May 30, 2008, and its motion to dismiss followed soon thereafter.


"[I]n passing on a motion to dismiss, whether on the ground of lack of jurisdiction over the subject matter or for failure to state a cause of action, the allegations of the complaint should be construed favorably to the pleader." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); see Leatherman v. Tarrant Cty. Narcotics and Coordination Unit, 507 U.S. 163, 164 (1993); Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C. Cir. 1979). Therefore, the factual allegations must be presumed true, and plaintiffs must be given every favorable inference that may be drawn from the allegations of fact. Scheuer, 416 U.S. at 236; Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). However, the Court need not accept as true "a legal conclusion couched as a factual allegation," nor inferences that are unsupported by the facts set out in the complaint. Trudeau v. Federal Trade Comm'n, 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

In considering a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Court is mindful that all that the Federal Rules of Civil Procedure require of a complaint is that it contain "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); accord Erickson v. Pardus, 551 U.S. ___, 127 S.Ct. 2197, 2200 (2007) (per curiam). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the "grounds" of "entitle[ment] to relief," a plaintiff must furnish "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Bell Atl. Corp., 127 S.Ct. at 1964-65; see also Papasan, 478 U.S. at 286. Instead, the complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp., 127 S.Ct. at 1965 (citations omitted).

For claims involving fraud, however, the Federal Rules of Civil Procedure provide for a heightened pleading standard. Rule 9(b) requires that in "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Although the particularity requirement distinguishes fraud claims from ordinary civil pleadings, Rule 9(b) is still subject to the general "short and plain statement" command set out in Rule 8. United States ex rel. Williams v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251, 1256 (D.C. Cir. 2004) (explaining that Rule 9(b) is not the "antithesis" of Rule 8). Consequently, to satisfy Rule 9(b), the "pleader must state the time, place and content of the false misrepresentations, the fact[s] misrepresented and what was obtained or given up as a consequence of the fraud." United States ex rel. Joseph v. Cannon, 642 F.2d 1373, 1385 (D.C. Cir. 1981).


I. All Counts of the Complaint Should Be Dismissed.

Plaintiff's Complaint contains five counts: (I) presentation of false claims under the FCA, 31 U.S.C. § 3729(a)(1); (II) presentation of false statements under the FCA, 31 U.S.C. § 3729(a)(2); (III) unjust enrichment; (IV) payment by mistake of fact; and (V) wrongful termination and retaliatory discharge under the FCA, 31 U.S.C. § 3730(h). See Compl. ¶¶ 21-38. Ms. Brown has already conceded that two counts, Counts III and IV, must be dismissed for lack of subject-matter jurisdiction.*fn1 Aramark asserts that ...

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