Judge Rules to Transfer False Claims Act Suit to Northern District of West Virginia

Back-and-forth litigation between a group of Ohio health care providers and two individuals in West Virginia arising from allegations of False Claims Act (FCA) violations will continue upstate, a judge ruled Tuesday.

Although a 2016 complaint by Michael A. King and Michael D. Roberts MD against Marietta Area Healthcare Inc., Marietta Memorial Hospital, and Marietta Healthcare Physicians Inc. (collectively Memorial Health) alleging FCA violations was dismissed, the defendants then in the case filed suit against the plaintiffs in 2020, alleging that the individuals’ allegations caused the providers “decreased revenues, higher expenses, and lost business opportunities.” Judge Irene C. Berger of the Southern District of West Virginia has ordered to transfer the action to the Northern District of West Virginia after finding the Southern District venue was improper.

The now-plaintiffs filed their complaint Sept. 25, 2020, against King and Roberts that alleged that the individuals’ lawsuit “trigger(ed) an expensive federal investigation into Memorial Health” through claims that Memorial Health “violated federal law in recruiting and paying physicians and that it inappropriately submitted claims to federal health care programs — Medicare, Medicaid, and Tri-Care — based on those violations,” among other allegations, such as violating the Stark Law and Anti-Kickback Statute, according to the individuals’ complaint.

Ultimately, the U.S. found that the individuals’ claims were unsubstantiated and “opted not to intervene.” The individuals continued litigating, but eventually abandoned their cause and requested dismissal on March 20, 2020.

However, after self-dismissal, Memorial Health brought forth various causes of action, including malicious prosecution and fraudulent legal process, proffering that the proper venue is the Southern District of West Virginia. They argued that the defendants “coordinate their conduct” in the Southern District, with “underlying relationships and circumstances developed” there. The defendants claimed that the Northern District is proper, arguing that the basis of the plaintiffs’ claims arose from their suit that they filed in the Northern District.

The judge agreed with the defendants, explaining that because Memorial Health’s causes of action arise from the individuals’ FCA complaint filed in the Northern District, the matter should head north.

“Although some of the facts supporting the allegations in the FCA complaint arose from actions or relationships in the Southern District of West Virginia,” the judge explained, “(i)n short, accepting the allegations in the Complaint as true and viewing the evidence in the light most favorable to the Plaintiffs, only minor, tangential events occurred in the Southern District of West Virginia.”

Further, the judge noted that transfer in this case would be preferable regardless of “tangential events” because many witnesses are based in the Northern District and in Ohio.

The plaintiffs are represented by Hissam Forman Donovan Ritchie. Carey, Douglas, Kessler & Ruby are representing both King and Roberts, with Jackson Kelly also representing King and Fowler, Flanagan, Brown & Poe additionally representing Roberts.