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Scates v. Shenandoah Memorial Hospital

United States District Court, W.D. Virginia, Harrisonburg Division

October 26, 2016




         In this case, Tonya Ranee Scates ("Scates") claims her former employer, Shenandoah Memorial Hospital ("SMH"), terminated her employment in retaliation for her complaints about false billing practices for ultrasound exams. Before the court is SMH's motion for summary judgment, ECF No. 52. SMH also brings a motion in limine, ECF No. 48, and a motion to exclude certain plaintiffs witnesses, ECF No. 50. Scates brings motions in limine as well. ECF Nos. 70, 71. The matter has been fully briefed, and the court heard oral argument on September 21, 2016. For the reasons set forth below, the court finds that Scates has failed to establish a genuine issue of material fact, and SMH is entitled to judgment as a matter of law. Accordingly, the court will GRANT SMH's motion for summary judgment (ECF No. 52). The parties' remaining motions (ECF Nos. 48, 50, 70, 71) are DENIED as moot.


         Defendant SMH is a medical facility that offers medical imaging and other services. ECF No. 26, ¶ 4. SMH is a member of a network of hospitals known as Valley Health. Id. Plaintiff Tonya Scates worked as an ultrasound technician and radiologic technologist at SMH from February 2014 until January 27, 2015.14 ¶¶ 7, 42, 44. Her duties included performing ultrasound exams. In October 2014, Scates attended an ultrasound seminar, during which she overheard the instructor discussing billing procedures for ultrasounds, including the Current Procedural Terminology ("CPT") billing codes promulgated by the American Medical Association. Id. ¶ 21. Based on this information, Scates believed that ultrasounds performed at SMH failed to meet CPT billing standards, because technicians at SMH took fewer ultrasound photos than required. Id. ¶ 25. "Scates feared that SMH would face charges of fraud" for this failure to meet CPT billing requirements. Id. ¶ 27.

         Upon returning from the seminar, Scates claims she reported her billing concerns to her supervisor, James Ziner ("Ziner"). M, ¶ 28. Ziner is the Radiology Director at SMH. Id. ¶ 9. Scates allegedly told Ziner that "[f]raud cases are on the rise, " and asked him to clarify CPT billing requirements. Id. ¶ 28, 29. Ziner told Scates that he would look into it. Id. ¶ 31. Scates also dscussed her concerns with Gayle Wellard, who allegedly agreed with Scates that SMH failed to meet CPT billing requirements. Id. ¶ 33. Scates and Wellard then spoke to Ziner together; Ziner did not respond to their concerns. Id. ¶ 34.

         During roughly the same period, Scates was involved in several workplace dsputes, [1] most notably with her coworker, Laurice Corbitt ("Corbitt"). See ECF No. 26, ¶¶ 14-20, 38, 40-41. Corbitt complained that Scates "would not give her information that would be helpful to patient care, " and that she would "tattle to Jim [Ziner]" about Corbitt's behavior. Heishman Dep. Tr. 94:13-16. Scates, in turn, reported Corbitt for serious errors in her work several times, including in October 2014. ECF No. 26, ¶¶ 19, 20.

         On November 6, 2014, Scates met with Ziner, SMH Vice President Lisa Stokes, and SMH Human Resources Officer Debbie Campisi. Id. ¶ 36. Ziner and Stokes gave Scates a "corrective action document" outlining several complaints filed by coworkers against Scates. Id. Scates claims that Ziner recognized that these complaints were false. Id. ¶ 37. Corbitt never received a corrective action document. Campisi Dep. Tr. 22:6-11. In December 2014, Ziner requested that Corbitt and Scates meet to resolve the issues between them; Corbitt refused. ECF No. 26, ¶ 40.

         Scates filed another complaint against Corbitt in January 2015. Id. ¶ 41. On January 27, 2015, Scates met with Ziner and Stokes. Id. ¶ 42. During this meeting, Ziner said he was "tired of dealing" with Scates's workplace conflicts. Id.; see Ziner Dep. Tr. 100:1-22. Ziner and Stokes terminated Scates and prohibited her from working at any hospital within the Valley Health network. ECF No. 26, ¶¶ 44, 45.

         Scates brought this suit in May 2015, alleging a claim for retaliation under the False Claims Act, 31 U.S.C. § 3730(h) ("FCA"), and a state-law wrongful termination claim. ECF No. 1. SMH filed a motion to dismiss the original complaint, ECF No. 4, which was denied as moot after Scates moved to amend her original complaint. ECF Nos. 13, 14. Scates then filed her amended complaint, ECF No. 15, and SMH again moved to dismiss. ECF No. 16.

         On October 19, 2015, the court granted SMH's motion to dismiss, finding Scates "failed to allege sufficient facts to state a prima facie case for retaliation" under the FCA, and that her claims under Virginia law were implausible. ECF No. 24, at 1. The court dismissed with prejudice Scates's claims under Virginia law, but granted her leave to file a second amended complaint, asserting "additional allegations against SMH on her FCA retaliation claim only." Id. at 19. Scates did so, ECF No. 26, and SMH filed a motion for summary judgment on July 25, 2016. ECF No. 52.


         Pursuant to Federal Rule of Civil Procedure 56(a), the court must "grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Glynn v. EDO Corp., 710 F.3d 209, 213 (4th Or. 2013). When making this determination, the court should consider "the pleadings, depositions, answers to interrogatories, and admissions on file, together with . . . [any] affidavits" filed by the parties. Celotex, 477 U.S. at 322. Whether a fact is material depends on the relevant substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id. (citation omitted). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If that burden has been met, the non-moving party must then come forward and establish the specific material facts in dispute to survive summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

         In determining whether a genuine issue of material fact exists, the court views the facts and draws all reasonable inferences in the light most favorable to the non-moving 1 party. Glynn. 710 F.3d at 213 (citing Bonds v. Leavitt, 629 F.3d 369, 380 (4th Cir. 2011)). Indeed, "[i]t is an 'axiom that in ruling on a motion for summary judgment, the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in [her] favor."' McAirlaids. Inc. v. Kimberly-Clark Corp., No. 13-2044, 2014 WL 2871492, at *1 (4th Cir. June 25, 2014) (internal alteration omitted) (citing Tolan v. Cotton, 134 S.Ct. 1861, 1863 (2014) (per curiam)). Moreover, "[credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ." Anderson, 477 U.S. at 255. However, the non-moving party "must set forth specific facts that go beyond the 'mere existence of a scintilla of evidence.'" Glynn, 710 F.3d at 213 (quoting Anderson, 477 U.S. at 252). Instead, the non-moving party must show that "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Res. Bankshares Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 635 (4th Cir. 2005) (quoting Anderson, 477 U.S. at 249). "In other words, to grant summary judgment the [c]ourt must determine that no reasonable jury could find for the nonmoving party on the evidence before it." Moss v. Parks Corp.. 985 F.2d 736, 738 (4th Cir. 1993) (citing Perini Corp. v. Perini Const. Inc., 915 F.2d 121124 (4th Cir. 1990)).


         The whistleblower provision of the FCA prohibits retaliation against employees because of "lawful acts done ... in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter." 31 U.S.C. § 3730(h). To establish retaliation, a plaintiff must show (1) she engaged in "protected activity, " (2) her employer knew about that activity; and (3) her employer took action against her as a result. Glynn v. EDO Corp.. 710 F.3d 209, 214 (4th Cir. 2013).

         SMH argues it is entitled to summary judgment on all three of these requirements: Scates's "vague concern about billing was not 'protected activity' under the FCA, was not sufficient to put SMH on notice of any such activity, and was not the reason for her termination." ECF No. 53, at 2. The court agrees that Scates has failed to show that a reasonable jury could find for her on elements (1) that she engaged in protected activity; and (3) that SMH fired her as a result of this activity. Because all three elements are necessary to establish a retaliation claim, and either finding is sufficient to compel the grant of summary judgment to SMH, the court will not reach element (2): the issue of whether SMH was on notice of Scates's activity.

         A. Protected Activity

         Congress amended § 3730(h) in 2010 by adding "efforts to stop 1 or more violations" of the FCA as protected activity under the statute. Thus, employee action is protected if it is taken (1) "in furtherance of an action" under the FCA, or represents (2) "other efforts to stop 1 or more" FCA violations. 31 U.S.C. § 3730(h). Proof that the FCA has been violated is not necessary to establish protected activity. Graham Cty. Soil & Water Conservation Dist. v. United States ex rel. Wilson. 545 U.S. 409, 416 n.1 (2005). In fact, in some circumstances, § 3730(h) "protects an employee's conduct even if the target of an investigation or action to be filed [is] innocent." Id. at 416.

         Activity is protected under the first prong if it meets the "distinct possibility" standard. Mann v. Heckler & Koch Def.. Inc.. 630 F.3d 338, 344 (4th Or. 2010); Layman v. MET Labs. Inc.. No. RDB-12-2860, 2013 WL 2237689, at *7 (D. Md. May 20, 2013). "Under this standard, protected activity occurs when an employee's opposition to fraud takes place in a context where 'litigation is a distinct possibility, when the conduct reasonably could lead to a viable FCA action, or when . . . litigation is a reasonable possibility.'" Mann. 630 F.3d at 338 (ellipsis in original) (quoting Eberhardt v. Integrated Design & Const, Inc., 167 F.3d 861, 869 (4th Or. 1999)).

         The second prong ("other efforts to stop" FCA violations) protects a wider range of activity. Carlson v. DynCorp Int'l LLC., No. 14-1281, 2016 WL 4434415, at *3 (4th Cir. Aug. 22, 2016) (unpublished); see Smith v. Clark/Smoot/Russell. 796 F.3d 424, 434 (4th Cir. 2015) (second prong "plainly encompasses more than just activities undertaken in furtherance of a False Claims Act lawsuit"). In Carlson, the plaintiff argued he was retaliated against for his efforts to stop an FCA violation by his employer. 2016 WL 4434415, at *1. The court "assume[d], without deciding, " that "efforts to stop 1 or more violations" are "protected activity where those efforts are motivated by an objectively reasonable belief that the employee's employer is violating, or soon will violate, the FCA."[2] Id. at *4.

         SMH argues Scates cannot prevail under either prong because her belief that SMH engaged in fraud was objectively unreasonable. See ECF No. 53, at 21; ECF No. 75, at 6. Because Scates's first concern was related to SMH's potential underbilling (which cannot be considered fraudulent), and her second concern merely reflects her own misunderstanding of how to bill for certain ultrasounds, SMH concludes that neither concern raises an objectively reasonable possibility of fraud, and "therefore, Scates did not engage in 'protected activity' by raising her concerns." ECF No. 53, at 21 (quoting Mann. 630 F.3d at 345-47). The court agrees.

         Scates broadly describes her concerns as related to "inconsistencies in descriptions of services provided by ultrasound technicians." ECF No. 67, at 5. These inconsistencies fall into three categories. First, Scates was concerned about ultrasound technicians' failure to consistentiy document the use of a transvaginal probe.[3] See Scates Dep. Tr. 155:14-19, 162:8-163:25, 205:18-206:14. Sometimes an order for an "ultrasound complete" would include use of a transvaginal probe, despite the fact that "ultrasound complete with transvaginal" was often separately requested. Id. at 155:12-19. Scates's second concern is similar: she claims technicians often used a technique known as duplex Dopplar[4] when it was not requested, despite the fact that other orders specifically ...

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