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United States ex rel. Lott v. Not-For-Profit Hospital Corp.

United States District Court, District of Columbia

November 8, 2017

UNITED STATES ex rel. LOTT, Plaintiff,




         Plaintiff John Lott worked for about four months as the Chief Compliance Officer of Defendant Not-For-Profit Hospital Corporation, an entity created under District of Columbia law that operates United Medical Center. Plaintiff alleges that Defendant fired him for identifying and reporting a host of problems at the hospital in violation of federal and state laws. Defendant's Motion to Dismiss is now before the court. For the reasons set forth below, the court dismisses Plaintiffs federal claims and declines to exercise supplemental jurisdiction over his remaining state law claims. Defendant's Motion to Dismiss is therefore granted. The court, however, will grant Plaintiff one more opportunity to amend his pleading and therefore does not dismiss this action.


         A. Factual Background

         The District of Columbia created Defendant Not-for-Profit Hospital Corporation in 2010 for the purpose of acquiring the assets of the struggling, then-privately owned hospital, United Medical Center, and ensuring its continued operation. See D.C. Code § 44-951.01 et seq. The legislation that created Defendant established it as "an instrumentality of the District government, " "which shall have a separate legal existence within the District government." Id. § 44-951.02(a).

         On April 6, 2015, Plaintiff John Lott began work as the Chief Compliance Officer at United Medical Center, the hospital operated by Defendant Not-For-Profit Hospital Corporation. Am. Compl., ECF No. 18 [hereinafter Am. Compl.], ¶¶ 15-16. When Plaintiff was hired, Defendant advised him that his term of employment would be at least six months long. Id. ¶¶ 16, 18. Plaintiff, however, was fired less than four months later on June 30, 2015. Id. ¶ 1.

         As Chief Compliance Officer, Plaintiffs primary responsibility was to ensure that the hospital complied with federal and state laws. M¶¶l, 18. Almost immediately, Lott began noticing problems at the hospital, ranging from unlocked doors to unsecured patient files. Id. ¶¶ 17, 19-20; see also Id. ¶¶ 24, 28, 31, 40. Lott told Defendant's CEO, David Small, about many of the issues he spotted and e-mailed Defendant's Board of Directors about the need for a strong compliance program. Id. ¶¶ 37-38, 45.

         One of the issues that came to Plaintiffs attention was a harassment complaint made by Sonia Edwards, a Human Resources employee, concerning her manager. Id. ¶ 24. As a result of the harassment, Edwards took leave from work as permitted under the Family Medical and Leave Act ("FMLA"), 29 U.S.C. § 2601 et seq., and the companion leave statute under District of Columbia law, but was fired for "job abandonment" while on leave. Am. Compl. ¶ 41. Plaintiff alleges that he told Small on June 8, 2015, that Edwards's termination "maybe afoul" of federal and District of Columbia laws, that Defendant has an obligation to comply with the law, and that Defendant cannot fire employees who are on FMLA leave or who complain of harassment. Id. ¶ 42. Small agreed that Edwards's firing might have been wrongful and directed Plaintiff to contact Human Resources to have Edwards rehired and promoted. Id. When Plaintiff spoke with the department the next day, notwithstanding Small's directive, the Executive Vice President of Human Resources refused to rehire Edwards. Id. ¶ 43.

         Another matter that came to Plaintiff s attention involved billing irregularities to the federal Centers for Medicare & Medicaid Services ("CMS"). On June 30, 2015, Plaintiff advised Defendant's Board of Directors that aspects of the hospital's billing practices did not comply with federal Office of Inspector General ("OIG") guidelines. Id. ¶ 45. Plaintiff estimates that Defendant's non-compliant practices resulted in the improper billing of nearly $40, 000 per day to CMS. Id. ¶¶ 46, 62. In a separate incident, on July 29, 2015, Plaintiff learned that the hospital had been billing the federal government for patient treatment by a Dr. Cyril Allen, even though Dr. Allen no longer worked at the hospital. Id. ¶ 56. Plaintiff alleges that he reported such conduct as billing fraud, but he does not say to whom he made this disclosure. Id. ¶ 57. Someone- Plaintiff does not identify who-raised the billing matter with the hospital's Chief Financial Officer and the District of Columbia Office of Integrity and Oversight. Id. According to Plaintiff, he "state[d] publicly"-he does not say when-that Defendant's IT department should identify the person responsible for entering Dr. Allen's name, presumably, into the hospital's billing software. Id. The District of Columbia later repaid the federal government the amounts the hospital received for work billed under Dr. Allen's name. Id.

         Three months into Plaintiffs tenure, a colleague warned Plaintiff that he might not last through his six-month probationary period. On July 16, 2015, the Executive Vice President of Human Resources, Jackie Johnson, told Plaintiff that he was "not getting along with people and for that reason you will not make your probation." Id. ¶ 51. Plaintiff brushed off the criticism, contending that his job was to ensure compliance rather than be a popular figure. Id. The next day, Andrew Davis replaced Small as Defendant's CEO. Id. ¶ 52. Plaintiff subsequently met with Davis to discuss problems at the hospital, at which time Davis told Plaintiff that he wanted Plaintiff to remain in his post. Id. ¶ 53. Yet, just two weeks later, on July 30, 2015, Davis fired Plaintiff because he was "not a good fit" and his work was "unsatisfactory." Id. ¶ 59.

         B. Procedural History

         Plaintiff filed this action against Defendant and the District of Columbia on July 29, 2016. Compl., ECF No. 1. Because Plaintiff asserted a claim under the False Claims Act("FCA"), he filed his complaint under seal and served it upon the United States alone, as the Act requires, to afford it the opportunity to investigate the basis of his claim and to decide whether to intervene. See 31 U.S.C. § 3730(b). Upon investigating Plaintiffs FCA claim, the government decided not to intervene, leaving Plaintiff alone to pursue the FCA claim on behalf of the United States. See United States' Notice of Election to Decline Intervention, ECF No. 5.

         On December 20, 2016, the court unsealed the Complaint and ordered service upon both Defendants, Not-For-Profit Hospital Corporation and the District of Columbia. See Order, Dec. 20, 2016, ECF No. 6. Upon completing service, Plaintiff amended his complaint on March 29, 2017, see Am. Compl., after which motions to dismiss followed from both Defendants, see District of Columbia Mot. to Dismiss, ECF No. 22; Not-For-Profit Hospital Corp. Mot. to Dismiss, ECF No. 23 [hereinafter Def's Mot.]. The court granted the District of Columbia's motion on May 8, 2017, after Lott did not oppose the District's dismissal. -See Minute Order, May 8, 2017; Pl's Opp'n to DC. Mot. to Dismiss, ECF No. 26. As a result, only Defendant Not-For-Profit Hospital's Motion to Dismiss remains before the court.


         Plaintiffs Amended Complaint contains six counts. The first five allege that Defendant retaliated against Plaintiff in violation of: (1) the National Defense Authorization Act, 41 U.S.C §4712; (2) the FCA; (3) the D.C. Human Rights Act, D.C. Code § 2-1401.01 et seq.; (4) the FMLA; and (5) the D.C. FMLA, D.C. Code § 32-501 et seq. See generally Am. Compl. ¶¶ 64-101. Additionally, in Count II, Plaintiff alleges a substantive violation of the FCA, notwithstanding the United States' decision not to intervene. See Am. Compl. ¶¶ 70-71. Finally, Count VI alleges that Defendant breached its contract with Plaintiff by firing him before completing his sixth month of work. Id. ΒΆΒΆ 102-106. Plaintiff withdrew Count I after Defendant noted that Plaintiff had not exhausted his ...

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