Flanagan v. Fresenius Medical Care Holdings, Inc.

CourtDistrict Court, D. Maryland
DecidedSeptember 30, 2021
Docket1:14-cv-00665
StatusUnknown

This text of Flanagan v. Fresenius Medical Care Holdings, Inc. (Flanagan v. Fresenius Medical Care Holdings, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flanagan v. Fresenius Medical Care Holdings, Inc., (D. Md. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

UNITED STATES ex rel. * MARTIN FLANAGAN, * Plaintiff-Relator, * v. Civil Action No. GLR-14-665 * FRESENIUS MEDICAL CARE HOLDINGS, INC., d/b/a * FRESENIUS MEDICAL CARE NORTH AMERICA, *

Defendant. * *** MEMORANDUM OPINION

THIS MATTER is before the Court on Defendant Fresenius Medical Care Holdings, Inc. d/b/a Fresenius Medical Care North America’s (“Fresenius”) Motion to Transfer Pursuant to 28 U.S.C. § 1404(A) (ECF No. 57).1 The Motion is ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2021). For the reasons set forth below, the Court will grant Fresenius’ Motion.

1 Also pending before the Court is Fresenius’ Motion to Dismiss Relator’s Amended Complaint (ECF No. 58). Relator argues that, because Defendant’s Motion to Dismiss is based in part on jurisdictional grounds, the Court must address the Motion to Dismiss before the Motion to Transfer Venue. The Court is unpersuaded by Relator’s argument. See Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 431 (2007) (“[T]here is no mandatory sequencing of jurisdictional issues[.]” (internal quotation marks and citation omitted)); Morris v. Nuzzo, 718 F.3d 660, 665–66 (7th Cir. 2013) (“The district court . . . did not need to determine its own subject matter jurisdiction prior to transferring the case[.]”); Oldham v. Penn. State Univ., 507 F.Supp.3d 637, 643, 650 (M.D.N.C. 2020) (deciding to transfer venue prior to considering jurisdictional challenge). Accordingly, because the Court will grant Fresenius’ Motion to Transfer, the Court will decline to rule on Fresenius’ Motion to Dismiss. I. BACKGROUND2 Plaintiff-Relator Martin Flanagan (“Relator”) worked for Fresenius for twenty-nine

years, most recently as Director of Acute Market Development for the Fresenius Western Business Unit. (First Am. Compl. ¶ 11, ECF No. 51). Relator alleges that Fresenius engaged in a nationwide scheme to defraud Medicaid and Medicare. (Id. ¶¶ 1–2, 103). Among other things, Relator alleges that Fresenius violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (“AKS”), by offering remuneration to health care providers in order to secure referrals. (Id. ¶ 2). Relator asserts that Fresenius provided this remuneration by

providing acute care services to hospital inpatients below cost and by offering hospitals free services in order to obtain patient referrals after the patients were discharged from the hospital. (See generally id. ¶¶ 83–161). Relator is a resident of the state of Texas. (Id. ¶ 11). Fresenius is headquartered in Waltham, Massachusetts. (Id. ¶ 13). Fresenius operates approximately 2,400 outpatient

dialysis clinics in the United States, thirty-nine of which—i.e., roughly 1.6 percent—are in Maryland. (Id.). The First Amended Complaint does not indicate that Maryland has any special connection to this lawsuit—indeed, the word “Maryland” appears only ten times in Relator’s 147-page First Amended Complaint, none of which describe events or persons that occurred in Maryland.3 Indeed, Relator contends in his Opposition that “[w]hile [his]

2 Unless otherwise noted, the Court takes the following facts from Capella’s Complaint and accepts them as true. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted). 3 Relator may assert that he has alleged facts specific to Maryland, e.g., when he recounts information concerning the rates Fresenius charges for services delivered in Maryland. (See, e.g., First Am. Compl. ¶¶ 125, 126). These paragraphs, however, do not allegations span all fifty states, the [First Amended Complaint] includes specific examples of wrongdoing in California, Illinois, Indiana, Michigan, New Jersey, North Carolina,

Puerto Rico, Texas, and Washington.” (Pl.-Relator’s Opp’n Def.’s Mot. Transfer [“Opp’n”] at 1, ECF No. 62). Relator asserts that “[t]hird-party witnesses from these states . . . will be called to testify as to the facts of Defendant’s wrongdoing.” (Id.). Relator contends that the alleged unlawful practices that were the subject of the First Amended Complaint were “standard business practice,” that the strategy was known to “the highest level” of Fresenius management, that the decisions were “driven by corporate

management,” and that the practices “applied nationwide.” (First Am. Compl. ¶¶ 88, 93, 96, 103). These alleged corporate-wide practices would have originated in Fresenius’ headquarters in Massachusetts. (See Decl. Ronald Castle [“Castle Decl.”] ¶ 54, ECF No. 57-2 (“At all times, virtually all corporate functions were centered, in terms of strategy and policy, in [Fresenius’] corporate headquarters in Massachusetts. Corporate-level personnel

maintained offices in the headquarters facility in suburban Boston. Corporate records were maintained in the headquarters.”)). According to Fresenius, policies relating to physician compensation and the pricing and negotiation of the acute contracts “were devised and have been monitored and enforced by personnel whose offices are in the Massachusetts headquarters, and whose activities were centered and documents reside there.” (Id. ¶¶ 59–

62, 67–68).

describe conduct unique to Maryland, but rather use Maryland as an example of activity occurring throughout the country. Relator further alleges that certain joint venture arrangements Fresenius entered into with medical directors and other physicians violated the AKS. (First Am. Compl. ¶¶ 332–

75). According to the First Amended Complaint, Fresenius employees drafted joint venture contracts based on a company-wide template, and a joint venture’s profitability was analyzed by a team in Massachusetts and approved by Fresenius senior management. (Id. ¶¶ 342, 374). On March 6, 2014, Relator filed this qui tam action against Fresenius under seal. (ECF No. 1). The case was unsealed on August 27, 2020 after the Government informed

the Court it had decided not to intervene. (ECF Nos. 32, 33). Relator served the Complaint on Fresenius on November 20, 2020. (ECF No. 37). On January 19, 2021, Fresenius filed a Motion to Dismiss. (ECF No. 50). On February 5, 2021, Relator filed a First Amended Complaint (ECF No. 51). The three-count Amended Complaint alleges violations of the False Claims Act (“FCA”), 31

U.S.C. §§ 3729(a)(1)(A), (B), & (C). (Id. ¶¶ 376–88). On behalf of the United States, Relator seeks treble damages and penalties for each false claim, and on his own behalf seeks thirty percent of the government’s recovery as well as his costs and attorneys’ fees incurred in this action. (Id. at 144–45). Fresenius filed a second Motion to Dismiss, (ECF No. 58), along with the instant Motion to Transfer Venue, (ECF No. 57), on March 5, 2021.

On April 19, 2021, Relator filed Oppositions to both Motions, (ECF Nos. 62, 63), and Fresenius filed Replies on May 17, 2021, (ECF Nos. 66, 67). II. DISCUSSION A. Standard of Review

Motions to transfer are governed by 28 U.S.C. § 1404(a), which permits a district court to transfer a civil action to another district or division, “to prevent the waste of time, energy and money as well as to protect litigants, witnesses and the public against unnecessary inconvenience and expense.” Topiwala v. Wessell, No. WDQ-11-543, 2012 WL 122411, at *6 n.21 (D.Md. Jan.

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