United States Ex Rel. Akl v. Virginia Hospital Center-Arlington Health System

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
________________________________
)
UNITED STATES ex rel. )
ZIAD AKL, M.D., )
)
Plaintiff, )
) Civ. Action No. 12-03 (EGS)
v. )
)
VIRGINIA HOSPITAL CENTER– )
ARLINGTON HEALTH SYSTEM )
)
Defendant. )
________________________________)
MEMORANDUM OPINION
Relator-Plaintiff Ziad Akl, M.D., brings a qui tam action
against the Virginia Hospital Center-Arlington Health System
(“Defendant” or “VHC” or the “Hospital”) for allegedly filing
false cost reports with the United States Government in
violation of the False Claims Act (“FCA”), 31 U.S.C. § 3729.
The United States has declined to intervene. See Notice of
Election to Decline Intervention. No. 12-cv-3, ECF No. 3.
Defendant has moved to dismiss the complaint. Upon
consideration of Plaintiff’s complaint, Defendant’s motion to
dismiss, Plaintiff’s opposition and Defendant’s reply thereto,
the relevant case law, and the entire record, the Court hereby
GRANTS Defendant’s motion to dismiss Plaintiff’s complaint.
1
I. BACKGROUND
Dr. Akl is a physician specializing in internal medicine
and infectious diseases who is licensed to practice in the
District of Columbia, Virginia, and Maryland. Compl. ¶ 6. He
practiced medicine at VHC from September 2000, Compl. ¶ 10, to
August 3, 2004, 1 when the Hospital revoked his staff appointment,
Compl. ¶ 45.
A. Akl I
On November 17, 2004, Dr. Akl filed a complaint against
Defendant in a case captioned Akl v. Virginia Hospital Center
Arlington Health System et al., Chancery No. 04-722A (“Akl I”), 2
in the Arlington County Circuit Court of Virginia. Def.’s MTD,
Ex. B at 2. Plaintiff alleged, inter alia, that Defendant’s
termination of his medical staff privileges violated his right
to due process, id. at 11-14; that Defendant tortiously
interfered with his “contractual relationship or business
expectancy with the Hospital and his patients,” id. at 15; that
1
Paragraph 45 of the Complaint states that Plaintiff’s staff
appointment was revoked on August 3, 2006, but this seems to be
a typographical error in light of the sequence of foregoing
events, which all occurred in 2004.
2
The Court will adopt the sequential naming scheme (e.g., “Akl
I,” “Akl II”) that parties use in their briefing to refer to
prior cases. Though only some of Mr. Akl’s actions are detailed
below, he has filed 12 previous suits in state and federal
courts in Maryland, Virginia, and the District of Columbia
arising out of his termination. Def.’s MTD at 1-2.
2
Defendant breached its Medical Credentials Policy, id. at 16;
and that Defendant defamed him, id. at 17.
On April 22, 2005, the sustained the Hospital’s demurrer
and dismissed Plaintiff’s due process and tortious interference
with contract claims with prejudice, and his defamation claim
without prejudice. Id. at 21-22. The court overruled the
Hospital’s demurrer as to Plaintiff’s breach of contract claim.
Id. Dr. Akl subsequently filed an amended motion for judgment
on his remaining claims. See Def.’s MTD, Ex. D.
In response to “Plaintiff’s claims that the [hospital’s]
review panel was ‘fictitious’ or otherwise biased by virtue of
conflicts of interest,” Def.’s MTD, Ex. D. at 18, the court
conducted an in camera review of privileged documents regarding
Defendant’s review process leading up to its decision to revoke
Plaintiff’s staff appointment. On February 10, 2006, the court
found that the documents showed that the review process and
investigation were “substantial” and that the evidence directly
refuted Dr. Akl’s claims to the contrary. Id. at 19. Dr. Akl
then moved for nonsuit on his remaining claims, which the court
granted in an October 2, 2006 order. Id. at 28-29. Plaintiff
was also ordered to pay Defendant $616,114.41 in attorney’s fees
and costs. Id. at 33.
On April 11, 2007, the Virginia Supreme Court refused
Plaintiff’s appeal, finding “no reversible error in the judgment
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complained of.” Ex. D at 36. Plaintiff then filed a petition
for writ of certiorari contesting the lower court decision with
the United States Supreme Court, which was denied on October 1,
2007. Petition for Writ of Certiorari, Akl v. Virginia Hosp.
Ctr., 552 U.S. 887 (2007) (No. 07-39), 2007 WL 2000015, at *i;
Def.’s MTD, Ex. F at 39.
B. Akl V
Dr. Akl again filed suit in the Arlington County Circuit
Court against the Hospital in 2006 in a case captioned Akl v.
Virginia Hospital Center et. al., Case No. CL06-633 (“Akl V”).
Def.’s MTD, Ex. F at 2. In Akl V, Plaintiff again challenged
the revocation of his medical staff privileges at the Hospital
and raised claims of intentional misconduct, id. at 24;
defamation, id. at 26; tortious interference with economic
relationships, id. at 28; intentional infliction of emotional
distress, id. at 30; and civil conspiracy, id. at 31. In an
order dated August 17, 2006, the court granted VHC’s demurrer as
to all five claims and dismissed the case in its entirety. Id.
at 33-34. Dr. Akl appealed; the Virginia Supreme Court denied
his appeal on December 11, 2006. Id. at 37.
C. Akl VII
On January 25, 2007, Dr. Akl filed Akl v. Va. Hosp. Ctr.
(No. 1:07-cv-73-CMH) (“Akl VII”) in the United States District
Court for the Eastern District of Virginia alleging violations
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of due process, Def.’s MTD, Ex. H at 25; equal protection, id.
at 29; Section 1 of the Sherman Act, id. at 30; breach of
contract, id. at 38; defamation, id. at 40; actual fraud, id. at
48; aiding and abetting fraud, id. at 54; civil conspiracy, id.
at 55; and tortious interference with economic relationships,
id. at 57. He requested, inter alia, that the court void
Defendant’s revocation of his staff appointment at the hospital.
Id. at 63. On July 18, 2007, the court granted Defendant’s
motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) on all
counts. Id. at 65.
Plaintiff appealed that decision to the Fourth Circuit on
February 26, 2009. Ex. H at 105. On April 16, 2009, the Fourth
Circuit issued an order upholding the district court’s decision.
Id. at 106.
D. The Current Action
On January 3, 2012, Plaintiff filed a sealed complaint
against Defendant in this Court. See Compl. at 1. Plaintiff
alleges that between 2003 and 2010, Defendant certified in its
annual cost reports to the Department of Health and Human
Services (“HHS”) that it had complied with all Medicare
conditions of participation, in violation of the FCA. Compl. ¶
83. Plaintiff contends that as a condition of participating in
Medicare, Defendant is required to enforce its own policies
under 42 C.F.R. § 482.22(c). Compl. ¶ 85. He argues that
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Defendant violated these conditions, thus rendering the
certifications false, when it knowingly (1) did not investigate
Plaintiff’s complaints against certain nurses in 2003, and (2)
conducted a “fictitious and forged” peer-review of Plaintiff’s
behavior before revoking his staff appointment with the Hospital
in 2004. Compl. ¶¶ 87-88. Plaintiff also claims that because
the peer-review was conducted improperly, Plaintiff is
technically still a member of the hospital staff. See Compl. ¶
71. Thus, Plaintiff alleges that in 2004, 2006, and 2010,
Defendant falsely reported to the National Practitioner Data
Bank of the HHS that Plaintiff’s staff appointment had been
revoked, in violation of 18 U.S.C. § 1001. Compl. ¶¶ 67-70. As
a result, Plaintiff argues that each certification of compliance
submitted by the Hospital between 2003 and 2010 is false in
light of Defendant’s alleged failure to abide by its own
policies. Compl. ¶ 89. Thus, Plaintiff argues that Defendant
violated the FCA every time it submitted a Medicare
reimbursement claim between 2003 and 2010. Compl. ¶¶ 95-97.
On July 9, 2012, the United States announced its decision
not to intervene in the case. Notice of Election to Decline
Intervention No. 12-cv-3, ECF No. 3. Following that
announcement, the Court unsealed the Complaint and ordered
Plaintiff to serve Defendant on July 23, 2012. Id.6
The Hospital moved to dismiss Plaintiff’s complaint on
October 2, 2012 on the basis of res judicata, the applicable
statute of limitations, and failure to state a claim. Def.’s
MTD at 3. In support of the motion, Defendant has submitted
copies of court records from Dr. Akl’s prior state and federal
actions that purport to show that his current action is an
attempt to relitigate claims that have previously been
adjudicated on the merits and decided against him. See Def.’s
MTD, Ex.’s A-L; see also Def.’s Reply, Ex.’s A-B. Defendant’s
motion is ripe for determination by this Court.
II. STANDARD OF REVIEW
A motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6) tests the legal sufficiency of a complaint.
Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A
complaint must 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, 555 (2007) (internal quotation marks and citations
omitted). While detailed factual allegations are not necessary,
plaintiff must plead enough facts “to raise a right to relief
above the speculative level.” Id.“In determining whether a complaint states a claim, the
court may consider the facts alleged in the complaint . . . and
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matters of which it may take judicial notice,” Stewart v. Nat’l
Educ. Ass’n, 471 F.3d 169, 173 (D.C. Cir. 2006), including
public documents, such as court records, without converting the
motion to dismiss into a motion for summary judgment, Pearson v.
District of Columbia, 644 F. Supp. 2d 23, 45 n.19 (D.D.C. 2009).
The Court must construe the complaint liberally in plaintiff’s
favor and grant plaintiff the benefit of all reasonable
inferences that can be derived from the complaint. Kowal v. MCI
Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). However,
the Court need not accept plaintiff’s inferences that are
“unsupported by the facts set out in the complaint.” Id.“[O]nly a complaint that states a plausible claim for relief
survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009).
III. DISCUSSION 3
Defendant argues that Dr. Akl’s complaint should be
dismissed on the basis of res judicata because the allegations
upon which he bases his FCA claims arise from the same common
nucleus of fact as his prior claims against Defendant, which
were dismissed on the merits. Def.’s Reply at 6-7. Dr. Akl
counters that res judicata is an affirmative defense that is
3
Because the Court finds that Dr. Akl’s claims should be
dismissed because they are barred by res judicata, it does not
reach Defendant’s other grounds for dismissal.
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generally raised in a motion to dismiss, 4 and that his FCA claims
could not have been litigated earlier, because they arise in
part from events that occurred after Plaintiff filed his earlier
cases against Defendant. Pl.’s Opp. at 4-8.
“Under the doctrine of res judicata, or claim preclusion, a
subsequent lawsuit will be barred if there has been prior
litigation (1) involving the same claims or cause of action, (2)
between the same parties or their privies, and (3) there has
been a final, valid judgment on the merits, (4) by a court of
competent jurisdiction.” Capitol Hill Group v. Pillsbury,
Winthrop, Shaw, Pittman, LLC, 569 F.3d 485, 490 (D.C. Cir. 2009)
(internal citations and quotation marks omitted). Res judicata
does not only bar claims that were brought in a finally
adjudicated suit; it also “forecloses all that which might have
been litigated previously.” I.A.M. Nat’l Pension Fund v. Indus.
Gear Mfg., 723 F.2d 944, 949 (D.C. Cir. 1983); see also U.S. ex
rel. Folliard v. Synnex Corp., 798 F. Supp. 2d 66, 77-78 (D.D.C.
2011) (finding that a 12(b)(6) dismissal of plaintiff’s qui tam
4
This argument is devoid of merit. Although res judicata is an
affirmative defense that is generally pleaded in a defendant’s
answer, courts have also allowed parties to assert it in a Rule
12(b)(6) motion to dismiss. See Stanton v. D.C. Ct. of Appeals,
127 F.3d 72, 76-77 (D.C. Cir. 1997) (citing cases). “Res
judicata may be raised in a Rule 12(b)(6) motion to dismiss for
failure to state a claim when the defense appears on the face of
the complaint and any materials of which the court may take
judicial notice.” Koker v. Arora Loan Serv., 915 F. Supp. 2d
51, 58 (D.D.C. 2013).
9
suit precluded his second qui tam suit against the same
defendant because he could have easily brought the second suit
in his first one).
The only issue seriously in dispute in the instant action
is whether there is a common identity of causes of action in
this case and Dr. Akl’s prior lawsuits. Whether two cases
involve the same cause of action turns on “whether the facts are
related in time, space, origin, or motivation, whether they form
a convenient trial unit, and whether their treatment as a unit
conforms to the parties’ expectations or business understanding
or usage.” Apotex, Inc. v. Food & Drug Admin., 393 F.3d 210,
217 (D.C. Cir. 2004) (internal citations omitted). “There is an
identity of causes of action when the cases are based on ‘the
same nucleus of facts,’ because ‘it is the facts surrounding the
transaction or occurrence which operate to constitute the cause
of action, not the legal theory upon which a litigant relies.’”
Folliard, 798 F. Supp. 2d at 77 (citing Page v. U.S., 729 F.2d
818, 820 (D.C. Cir. 1984)).
Based on a comparison of the complaints filed in this case
and in Akl I, Akl V, and Akl VII, the Court finds that
Plaintiff’s FCA claims here share a common factual predicate:
the allegedly fictitious peer-review process and subsequent
revocation of Plaintiff’s staff appointment at the Hospital.
The Complaint here and the complaints in Akl I, Akl V, and Akl
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VII each allege that in 2000, Plaintiff obtained staff
privileges to practice at the Virginia Hospital Center in
Arlington, Virginia, see Compl. ¶ 10; Def.’s MTD, Ex. B at 5 (¶
13) (Akl I); Def.’s MTD, Ex. F at 9 (¶ 34) (Akl V); Def.’s MTD,
Ex. H at 7 (¶ 25) (Akl VII); and that a Medical Staff
Credentials Policy governed the procedure by which staff
appointments were peer reviewed, see Compl. ¶ 11; Def.’s MTD,
Ex. B at 5 (¶ 14); Def.’s MTD, Ex. F at 9 (¶ 35); Def.’s MTD,
Ex. H at 7 (¶ 26). Moreover, each complaint alleges a forged,
fictitious, or improper peer review process leading up to the
revocation of Plaintiff’s staff appointment, see Compl. ¶ 35-38,
43-44, 46-47; Def.’s MTD, Ex. B at 9-10 (¶¶ 42-50); Def.’s MTD,
Ex. F at 16-23 (¶¶ 88-107); Def.’s MTD, Ex. H at 17-21 (¶ 93),
and that Defendant failed to abide by its own Policy in
conducting a peer review of Plaintiff’s staff appointment, see
Compl. ¶ 47; Def.’s MTD, Ex. B at 16 (¶ 92); Def.’s MTD, Ex. F
at 18-22 (¶ 103); Def.’s MTD, Ex. H at 17-21 (¶ 93). In each
complaint, Dr. Akl alleges that he was denied adequate
opportunity to defend himself. See Compl. ¶¶ 47, 53, 61; Def.’s
MTD, Ex. B at 11 (¶¶ 57-58); Def.’s MTD, Ex. F at 18-22 (¶ 103);
Def.’s MTD, Ex. H at 17-21 (¶ 93). Finally, Dr. Akl alleges in
each complaint that Defendant filed false reports with the
National Practitioner Data Bank regarding Plaintiff’s behavior.
See Compl. ¶ 67; Def.’s MTD, Ex. B at 17 (¶ 98); Def.’s MTD, Ex.
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F at 28 (¶ 134); Def.’s MTD, Ex H at 41 (¶ 225). Because
Plaintiff’s FCA claims here arise from a set of alleged facts
that are “related in time, space, origin, [and] motivation,”
Apotex, 393 F.3d at 217, to those that Plaintiff alleged in
three prior lawsuits against Defendant, the Court finds that all
four cases share the same cause of action.
Plaintiff’s argument that his FCA claims arise in part from
facts that had not occurred by the time he had filed his earlier
lawsuits also fails. In Folliard, this Court barred a second
suit by a plaintiff-relator when “a brief perusal of relator’s
complaints reveal[ed] that he had all of the information he
needed to bring both suits at the time he brought the first.”
798 F. Supp. 2d at 78. The same is true here. Dr. Akl alleges
that Defendant falsely reaffirmed the accuracy of false reports
that it filed prior to 2007 in 2010, see Compl. ¶¶ 67-69, and
that doing so was, by itself, a false statement, Compl. ¶ 70.
The only way that Defendant’s 2010 statement could have been
false is if the earlier reports to which it referred were also
false. Plaintiff had alleged the existence of these pre-2007
reports in his complaint in Akl VII. Def.s’ MTD, Ex. H at 41 (¶
225). Therefore, like the relator-plaintiff in Folliard, when
Plaintiff filed Akl VII in 2007, he already had all of the
information he needed to bring an FCA claim.
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IV. CONCLUSION
Dr. Akl has already had numerous opportunities to present
his claims arising out of his termination from Virginia Hospital
Center in state and federal court. That he has never before
brought claims under the False Claims Act does not save the
present action because he was required to bring in a single suit
all claims arising from the termination of his staff privileges.
U.S. Indus. v. Blake Constr. Co., 765 F.2d 195, 203 (D.C. Cir.
1985). Dr. Akl’s claims are thus barred by res judicata. The
Court will therefore GRANT Defendant’s motion to dismiss and
hereby DISMISS Plaintiff’s complaint with prejudice. An
appropriate Order accompanies this Memorandum Opinion.
SO ORDERED.
SIGNED: Emmet G. Sullivan
United States District Court Judge
September 16, 2013
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