Opinion
Civil Action No. 13-12200-LTS
01-31-2014
MARYANNE DINEEN, Plaintiff, v. DORCHESTER HOUSE MULTI-SERVICE CENTER, INC., Defendant.
ORDER ON DEFENDANT'S MOTION TO DISMISS COUNT II
SOROKIN, C.M.J.
Defendant Dorchester House Multi-Service Center, Inc. ("DHMC") seeks partial dismissal of the Complaint (Doc. No. 1) filed against it by the plaintiff, Maryanne Dineen. For the reasons that follow, the motion (Doc. No. 16) is ALLOWED, and Count II of the Complaint is DISMISSED.
I. BACKGROUND
The following facts are drawn from Dineen's Complaint. DHMC is a community health center. Doc. No. 1 at ¶ 4. It is one of five multi-service health centers in Massachusetts that are associated with Boston Medical Center. Id. The other four health centers are as follows: East Boston Neighborhood Health Center ("East Boston"); South Boston Community Health Center ("South Boston"); Codman Square Health Center ("Codman Square"); and Greater Roslindale Medical and Dental Center ("Roslindale") (collectively the "Centers"). Id. The Centers provide similar services, share common business and billing practices, and bill Medicare Part B under the Boston Medical Center hospital license. Id. at ¶ 5. Because of their nearly identical requirements, DHMC and Codman Square together pay a third party servicer ("Servicer") to manage their grant writing and information technology needs, including their computer billing systems. Id. at ¶ 6.
In keeping with the standard of review applicable to motions brought pursuant to Fed. R. Civ. P. 12(b)(6), factual allegations are recited as if true. See Arturet-Velez v. R.J. Reynolds Tobacco Co., 429 F.3d 10, 13 (1st Cir. 2005).
In 2001, DHMC hired Dineen as a patients account manager. Id. at ¶ 7. Dineen was promoted to Director of Patient Accounts in 2008. Id. Her duties were to coordinate all patient-related billing functions and assist in billing submissions to Medicare Part B. Id. Dineen's personnel file reflects consistently positive reviews of her work. Id. at ¶ 8.
On February 28, 2013, the patient account manager of Codman Square called Dineen to discuss certain billing practices under scrutiny by Medicare Part B. Id. at ¶ 9. In particular, Codman Square had submitted claims which, according to a Medicare Part B representative, improperly designated Codman Square's "place of service" as "Office," rather than "Outpatient Hospital." Id. at ¶¶ 10, 11. Purportedly, Codman Square should have billed as an "Outpatient Hospital" because it was affiliated with Boston Medical Center and was billing under the Boston Medical Center license. Id. at ¶ 11. The Medicare Part B representative told Codman Square that its improper "place of service" designation constituted fraud because "Offices" receive higher payments for services than "Outpatient Hospitals." Id. at ¶ 12. To avoid penalties, Codman Square was instructed to correct the practice and self-report the erroneous billing to the federal government. Id.
Having received this information, Dineen reviewed DHMC's Medicare Part B claims for payment and discovered that DHMC was designating its place of service as "Office," and that it had submitted claims to Medicare Part B using that designation. Id. at ¶ 13. Dineen then undertook an investigation as to whether DHMC's Medicare Part B billing practices were fraudulent. Id. at ¶ 14. After searching government websites on the Internet and conferring with two of the remaining Centers, East Boston and South Boston, which were billing Medicare Part B as Outpatient Hospitals, Dineen concluded that DHMC's designation as "Office" was improper and had resulted in DHMC overbilling the federal government. Id. at ¶¶ 14, 15.
On March 1, 2013, the Servicer informed Dineen that it was updating Codman Square's computer billing system to change the "place of service" to "Outpatient Hospital." Id. at ¶ 16. Dineen instructed the Servicer to implement the same change for DHMC. Id.
Subsequently, Dineen consulted with Walter Ramos, President and CEO of DHMC, apprised him of her findings regarding the billing system, and advised him that DHMC was committing fraud against the federal government. Id. at ¶ 18. She sought a meeting with Ramos and Michelle Martin, an outside consultant on all patient billing matters, and later that day, reported the matter directly to Martin. Id. at ¶¶ 17, 18, 21. Martin indicated she would report Dineen's concerns to Ramos, but would advise him that DHMC was not billing Medicare Part B improperly. Id. at ¶ 24.
On March 4, 2013, Dineen told a co-worker that she had directed the Servicer to make the "place of service" change in the computer billing system. Id. at ¶ 25. The co-worker reported this to Martin. Id. The next day, Ramos convened a meeting at which he asked Dineen to defend her actions in changing DHMC's Medicare Part B billing system. Id. at ¶ 26. After Dineen explained her research and investigation, Ramos characterized her actions as "insubordination" and placed Dineen on unpaid administrative leave. Id. at ¶¶ 27, 28. On March 13, 2013, DHMC sent Dineen a letter terminating her employment due to "facts regarding the Medicare billing issue" in addition to Dineen's statements regarding the issue. Id. at ¶ 29.
On September 5, 2013, Dineen filed a two-count Complaint in this Court for violation of the Federal False Claims Act ("FCA"), 31 U.S.C. § 3730(h) (Count I), and wrongful termination in violation of public policy (Count II). Doc. No. 1. Thereafter, DHMC moved to dismiss Count II, Doc. Nos. 16-17, and Dineen filed an opposition, Doc. Nos. 21-22. The parties have consented to proceed before the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(c). Doc. No. 7.
II. STANDARD OF REVIEW
To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court "must take the allegations in the complaint as true and must make all reasonable inferences in favor of the plaintiff[]." Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). "[F]actual allegations" must be separated from "conclusory statements in order to analyze whether the former, if taken as true, set forth a plausible, not merely a conceivable, case for relief." Juarez v. Select Portfolio Servicing, Inc., 708 F.3d 269, 276 (1st Cir. 2013) (internal quotations omitted). This "highly deferential" standard of review "does not mean, however, that a court must (or should) accept every allegation made by the complainant, no matter how conclusory or generalized." United States v. AVX Corp., 962 F.2d 108, 115 (1st Cir. 1992). Dismissal for failure to state a claim is appropriate when the pleadings fail to set forth "factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory." Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir. 1988)) (internal quotation marks omitted).
"[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. A court's assessment of the pleadings is "context-specific" requiring "the reviewing court to draw on its judicial experience and common sense." Id. at 679; accord Maldonado v. Fontanes, 568 F.3d 263, 268 (1st Cir. 2009). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'show[n]' - 'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
III. DISCUSSION
DHMC argues that Dineen's wrongful termination state tort claim should be dismissed because: (1) Dineen complained only internally about DHMC's alleged fraud on Medicare Part B, and therefore, no public policy was implicated; and (2) Dineen has an adequate statutory remedy for her alleged retaliatory termination, thereby barring her state common law wrongful termination claim. Dineen responds that her internal complaints can, and do, implicate a recognized public policy, and that the FCA neither preempts Massachusetts common law, nor provides the same redress available for wrongful termination.
In Massachusetts, "[t]he general rule is that an employment-at-will contract can be terminated at any time for any reason or for no reason at all." U.S. ex rel. Provuncher v. Angioscore, Inc., No. 09-12176-RGS, 2012 WL 1514844, at *7 (D. Mass. May 1, 2012) (quoting Folmsbee v. Tech Tool Grinding & Supply, Inc., 417 Mass. 388, 394 (1994)). As an exception to the general rule, the Massachusetts Supreme Judicial Court has recognized that "an at-will employee has a cause of action for wrongful termination only if the termination violates a clearly established public policy." King v. Driscoll, 418 Mass. 576, 582 (1994) (citing Flesner v. Technical Commc'ns Corp., 410 Mass. 805, 810 (1991)). As a starting point, "[r]edress is available for employees who are terminated for asserting a legally guaranteed right (e.g., filing workers' compensation claim), for doing what the law requires (e.g., serving on a jury), or for refusing to do that which the law forbids (e.g., committing perjury)." Smith-Pfeffer v. Superintendent of the Walter E. Fernald State Sch., 404 Mass. 145, 149-50 (1989). Discharge of an employee in retaliation for his cooperation with a law enforcement investigation concerning his employer, also can be actionable. See Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 473 (1992) (citing Flesner, 410 Mass. at 811).
Dineen does not allege that she was other than an at-will employee of DHMC. "In Massachusetts, employment is presumed to be at-will unless there exists an express or implied contract governing its terms and conditions." Day v. Staples, Inc., 555 F.3d 42, 58 (1st Cir. 2009).
While the Supreme Judicial Court "consistently has interpreted the public policy exception narrowly[]" so as not to "'convert the general rule . . . into a rule that requires just cause to terminate an at-will employee[,]'" King, 418 Mass. at 582 (quoting Smith-Pfeffer, 404 Mass. at 150), the Supreme Judicial Court has stated: "We think that the reasons for imposing liability in the categories of cases set forth in Smith-Pfeffer also justify legal redress in certain circumstances for employees terminated for performing important public deeds, even though the law does not absolutely require the performance of such a deed." Flesner, 410 Mass. at 810. The Supreme Judicial Court's example of such a situation that "may" fall into this category: "'Whistleblowing.'" Id. at 810 n.3 (citing Mello v. Stop & Shop Cos., Inc., 402 Mass. 555, 560 n.6 (1988)); Korb v. Raytheon Corp., 410 Mass. 581, 584 n.3 (1991).
The policy that gives rise to the exception, the Supreme Judicial Court has suggested, may be a federal, as well as state, policy. See Fairneny v. Savogran Co., 422 Mass. 469, 471-72 (1996) (citing GTE Products Corp. v. Stewart, 421 Mass. 22, 33 (1995)) (assuming, without deciding, that discharge of employee in retaliation for carrying out fiduciary duty in connection with plan governed by ERISA would be recognized as wrongful termination — though preempted by ERISA). The First Circuit has concluded that the Supreme Judicial Court would treat federal law in the same manner as state law in the public policy analysis. See Valerio v. Putnam Assocs. Inc., 173 F.3d 35, 45-46 (1st Cir. 1999).
While neither the Massachusetts Appeals Court nor the Supreme Judicial Court have determined that an exception to the common law rule applies in the case of an employee terminated for engaging in activity protected by either the FCA or the corresponding state false claims statute, Mass. Gen. Laws ch. 12, §§ 5A-5O ("MFCA"), for purposes of this decision I assume that the Supreme Judicial Court would do so in light of the above cited case law. See also Morton St. LLC v. Sheriff of Suffolk Cnty., 453 Mass. 485, 491-92 (2009) (refusing to apply principles of estoppel where public's interest in protecting public fisc supports exception to common law rule).
DHMC asserts that even if such an exception exists Dineen may not invoke it because her complaints of false claims were lodged internally, only. In light of my resolution of the defendant's other arguments, I need not resolve this issue.
Nonetheless, Dineen's wrongful termination count must fail. The Supreme Judicial Court has made clear that "a statute itself may provide that an employer may not terminate an employee for exercising rights conferred by the statute, and in such a case, the common law public policy exception is not called into play." King, 418 Mass. at 585 n.7 (citing Mello, 402 Mass. at 557 (liability can be found where public policy is expressed by Legislature "unless no common law rule is needed because the Legislature has also prescribed a statutory remedy[]")). Here, the federal statute provides a remedy to Dineen for termination. 31 U.S.C. § 3730(h) (2010). Her common law claim not only invokes the same public policy established by the federal statute, it arises from the very acts giving rise to her federal claim. Compare Complaint at ¶ 35 (describing basis for federal claim as "Plaintiff investigated, inquired of, corrected and reported . . . issues concerning . . . knowing submission of false or fraudulent claims") with ¶ 39 (describing basis for state law claim as "Plaintiff investigated, inquired of, corrected, and reported . . . issues concerning . . . knowing submission of false or fraudulent claims"). Thus, the public policy exception, to borrow the Supreme Judicial Court's phrase, "is not called into play." King, 418 Mass. at 585 n.7; see Valerio, 173 F.3d at 46 ("[t]he rationale for implying a private remedy under the 'public policy exception' to the traditional rule governing at-will employment contracts is that, unless a remedy is recognized, there is no other way to vindicate such a public policy[]" (quoting Melley v. Gillette Corp., 19 Mass. App. Ct. 511, 511-12 (1985), aff'd, 397 Mass. 1004 (1986)); Carter v. Tropicana Products Sales, Inc., No. 07-10921-RWZ, 2008 WL 190791, at *2 (D. Mass. Jan. 4, 2008) (Zobel, J).
Dineen asserts, however, that the common law exception is inapplicable only when the available statutory remedies are comprehensive and adequate. There are several problems with this position. First, the federal statute appears to provide a comprehensive and adequate set of remedies. It provides that an employee "shall be entitled to all relief necessary to make that employee . . . whole" and authorizes specifically a reasonably robust set of remedies: "reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees." 31 U.S.C. § 3730(h)(1)-(2). Second, the Supreme Judicial Court, the final arbiter of the contours of the exception to the common law rule, never imposed the term "comprehensive" as a precondition. See King, 418 Mass. at 585 n.7. Third, the authority upon which Dineen relies, Briones v. Ashland, Inc., 164 F. Supp. 2d 228 (D. Mass. 2001), touched only briefly upon the topic and, in the teeth of the Supreme Judicial Court's pronouncements and the terms of the FCA, is not controlling authority on the question. Fourth, another judge of this Court, after a detailed analysis of the law, rejected the contention that statutory limitations on the available remedies requires allowing a common law claim:
The MFCA remedies mirror those set forth in the FCA. Mass. Gen. Laws ch. 12, § 5J (2012).
Briones Court pointed solely, and obliquely, to Melley, 19 Mass. App. Ct. at 513, in which the court held that "where, as here, there is a comprehensive remedial statute, the creation of a new common law action based on the public policy expressed in that statute would interfere with that remedial scheme." This language is not contrary to King, which Briones never cited or discussed.
More important, the proper inquiry is not whether the remedial statute provides a petitioner with all of the remedies that might be available at common law. A legislature may validly decide that the proper balance consists in limiting the remedies available to a claimant; this should not preclude the statute from being considered "comprehensive." Indeed, in Melley, the court reasoned that if a common law claim were allowed despite the existence of a comprehensive statutory scheme, "serious problems would be posed as to the extent of the remedy to be provided" because the statutory scheme and common law claim resulted in differing remedies. Melley, 475 N.E.2d at 1229; see also Riley v. Cameron and Colby, Inc., Civ. No. 86-2287-C, 1987 WL 17537, at *5 (D.Mass. Aug. 31, 1987) (common law claim for wrongful termination precluded because of private right of action embodied in Mass. Gen. Laws ch. 12, § 11I, which provides only for "injunctive and other equitable relief ... including the award of compensatory money damages"); Grubba v. Bay St. Abrasives, Div. of Dresser Indus., Inc., 803 F .2d 746, 747-48 (1st Cir.1986) (same).Carter, 2008 WL 190791, at *3. This Court follows Carter as the better-reasoned interpretation of Massachusetts law. Finally, Dineen cites United States ex rel. Wilson v. Bristol-Myers Squibb, Inc., No. 06-12195-MLW, 2013 WL 1331007, at *7 (D. Mass. Mar. 30, 2013) and Joyce v. GF/Pilgrim, No. 020517B, 2003 WL 22481100 (Mass. Super. Sept. 30, 2003). Wilson is not directly on point as it concerned a claim arising under the common law of California not Massachusetts. 2013 WL 1331007, at *7. Joyce does not support Dineen's argument; the Court held that Joyce had "no common-law claim for termination in violation of [] public policy[]" because the relevant Act creating the public policy "provides a comprehensive remedial scheme to vindicate the public policy" it established. 2003 WL 22481100, at *7. Moreover, Joyce cited a number of cases reaching similar results including Lohnes v. Darwin Partners, No. 021299, 2002 WL 31187688 (Mass. Super. July 23, 2002), in which Justice Gants, then a Justice of the Superior Court, rejected a common law claim because "[w]ith an adequate statutory remedy, there is no need for the common-law tort of wrongful termination to protect the public policy." Id. at *3. The FCA's remedial scheme for retaliatory discharge is both comprehensive and adequate. It sets forth rights through protected conduct, provides judicial procedure for relief, specifies remedies, and defines a statute of limitations. See Melley, 19 Mass. App. Ct. at 512-13; Carter, 2008 WL 190791, at *4.
IV. CONCLUSION
For the foregoing reasons, DHMC's Motion to Dismiss (Doc. No. 16) is ALLOWED, and Count II of Dineen's Complaint is DISMISSED.
SO ORDERED.
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Leo T. Sorokin
Chief United States Magistrate Judge