United States v. Rochester Regional Health

UNITED STATES DISTRICT COURT STATES DISTRIGS

WESTERN DISTRICT OF NEW YORK Comin

JUN 11 2025

DNBORAT COME AD. AMERICA ex rel.

Plaintiff/Relator,

v. 23-CV-438 (JLS)

ROCHESTER REGIONAL HEALTH and

UNITED MEMORIAL MEDICAL

CENTER,

Defendants.

DECISION AND ORDER

Relator Deborah Conrad brought this False Claims Act (“FCA”) case against

Rochester Regional Health and United Memorial Medical Center (collectively,

“RRH”). Dkt. 1, 34. RRH moved to dismiss Relator’s amended complaint. See Dkt.

37-38. For the reasons set forth below, the motion to dismiss is granted in part and

denied in part.

PROCEDURAL HISTORY

Relator Conrad filed the original complaint under seal on May 17, 2023. Dkt.

1. The United States declined to intervene, Dkt. 7, and the Court unsealed the case.

Dkt. 8.

RRH filed a motion to dismiss on May 28, 2024. Dkt. 21. Relator responded

(Dkt. 27), and RRH replied. Dkt. 28. The parties appeared for oral argument on

August 20, 2024, and this Court granted the motion to dismiss with leave to amend.

See Dkt. 29-30.

Relator then filed an amended complaint that RRH again moved to dismiss.

Dkt. 34, 37-38. Relator responded (Dkt. 45), and RRH replied. Dkt. 46. The Court

held oral argument on March 11, 2025. See Dkt. 47.

AMENDED COMPLAINT

Relator alleges that RRH violated the FCA because it knowingly failed to

report adverse events to the Vaccine Adverse Event Reporting System (“VAERS”)!,

but nevertheless submitted claims for payment to the United States, through the

Centers for Disease Control and Prevention’s (“CDC”) COVID-19 Vaccination

Program. See Dkt. 34 3.

Relator is a Physician Assistant. Id. § 11. She was employed by RRH until

she was fired on October 6, 2021. Id. J] 49, 90. During her employment, Relator

allegedly observed RRH disregard its reporting obligations. Id. § 5. Relator alleges

that RRH submitted “thousands” of claims for payment, despite failing to comply

with its reporting obligations. Id. { 6.

She also alleges that she saw RRH patients suffer serious adverse events

following the COVID shot. Jd. § 53. And she learned that these events must be

reported through VAERS. Id. { 54. Because Relator had concerns about RRH’s

reporting efforts, she took the initiative to submit VAERS reports on her own,

1 VAERS is a “national early warning system to detect possible safety problems in

vaccines used in the United States.” VACCINE ADVERSE EVENT REPORTING SYSTEM,

https://vaers.hhs.gov/reportevent.html (last visited June 9, 2025).

sometimes even after her shift ended. See id. § 55. She allegedly submitted 160

VAERS reports. Jd. But she claims the problem “escalated” from May 27, 2021 to

October 6, 2021, when RRH prevented her from submitting 170 serious adverse

events to VAERS. Id. { 5.

Noteworthy here, Relator alleges specific examples, including:

e Patient E.F., who presented with sudden shortness of breath and

fatigue, one day after receiving the vaccine;

e Patient S.B., who experienced syncope, convulsions, fevers, chills, and

myalgias, one day after receiving the vaccine;

e Patient J.F., who presented with arm pain and induration, three days

after receiving the vaccine;

e Patient M.D., who was admitted due to hypertensive urgency;

e Patient N.M., who was admitted for bradycardia, AMS, and weakness;

e Patient D.A., who experienced an unknown illness; and

e Patient C.M., who experienced dizziness and unsteady gate.

Id. § 91.

RRH had administered COVID shots to Patients M.D., N.M., D.A., and C.M.,

but the provider for the remaining patients in paragraph 91 is “unknown.” Id.

Relator claims that she tried numerous times to escalade the issue to her

higher leadership, but she was turned away. See, e.g., id. J] 57, 68, 65, 68, 69, 70,

71, 72, 73, 74, 75, 77, 78, 81, 86, 87. She further alleges that RRH knew it needed to

report to VAERS, but failed to provide proper education and training to staff. See

id. {{{ 58, 68, 76. RRH fired Relator after her several attempts to address the issue

with RRH. See id. 90.

Relator alleges that RRH, as a vaccination provider, must report to VAERS

under statute and contract. Id. {| 44. She asserts that VAERS reporting is

mandatory under statute—specifically, the National Childhood Vaccine Injury Act

(“NCVIA”) and the emergency use authorization provisions under the Food, Drug

and Cosmetic Act, 21 U.S.C. § 360bbb-3 (““EUA”). See id. J§ 6, 19-38. She also

alleges that RRH’s reporting obligation is an “express material condition” of

payment under the Vaccination Program Provider Agreement (“Provider

Agreement”) that RRH agreed to. Id. J] 6, 39-48.

The amended complaint contains claims for: (1) presenting and causing false

claims, in violation of 31 U.S.C. § 3729(a)(1)(A), see id. |] 123-27; (2) false records,

in violation of 31 U.S.C. § 3729(a)(1)(B), see id. ¢] 128-33; (3) conspiracy, in

violation of 31 U.S.C. § 3729(a)(1)(C), see id. 134-39; (4) reverse false claims, in

violation of 31 U.S.C. § 3729(a)(1)(G), see id. 9 140—48; (5) retaliation, in violation

of 31 U.S.C. § 3730(h), see id. | 149-56; and (6) violation of New York Labor Laws

§§ 740 and 741, see id. 157-61.

LEGAL STANDARDS

I. Motion to Dismiss

On a motion pursuant to Federal Rule of Civil Procedure 12(b)(6), a “court’s

task is to assess the legal feasibility of the complaint.” Lynch v. City of New York,

952 F.3d 67, 75 (2d Cir. 2020). The court “must take the facts alleged in the

complaint as true, drawing all reasonable inferences in [the plaintiffs] favor.” In re

NYSE Specialists Sec. Litig., 503 F.3d 89, 91 (2d Cir. 2007). To survive a Rule

12(b)(6) motion, 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) Gnternal quotation marks and citation omitted). Courts “are

not bound to accept as true a legal conclusion couched as a factual allegation,” and

“(t]hreadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.” Jd. Gnternal quotation marks and citation

omitted).

This standard demands “more than a sheer possibility that a defendant has

acted unlawfully.” Jd. Plausibility depends on many considerations: “the full

factual picture presented by the complaint, the particular cause of action and its

elements, and the existence of alternative explanations so obvious that they render

[the] plaintiffs inferences unreasonable.” Fink v. Time Warner Cable, 714 F.3d 739,

741 (2d Cir. 2018) (internal quotation marks and citation omitted).

II. False Claims Act and Rule 9(b)

The False Claims Act is an anti-fraud statute “enforced not just through

litigation brought by the Government itself, but also through civil qui tam actions

that are filed by private parties, called relators, in the name of the

Government.” United States ex rel. Chorches for Bankr. Est. of Fabula v. Am. Med.

Response, Inc., 865 F.3d 71, 81 (2d Cir. 2017) (quoting Kellogg Brown & Root

Servs., Inc. v. United States ex rel. Carter, 575 U.S. 650, 653 (2015)) Gnternal

quotation marks omitted). In relevant part, the FCA imposes liability on any

person who “knowingly presents, or causes to be presented, a false or fraudulent

claim for payment or approval” by the United States Government, 31 U.S.C. §

3729(a)(1)(A), “knowingly makes, uses, or causes to be made or used, a false record

or statement material to [such] a false or fraudulent claim,” id. § 3729(a)(1)(B), or

“conspires to commit [either] violation,” id. § 3729(a)(1)(C). The FCA defines a

“claim” as “any request or demand... for money or property’ that is presented,

directly or indirectly, to the United States.” Chorches, 865 F.3d at 81 (quoting 31

U.S.C. § 8729(b)(2)(A)).

Substantive FCA allegations are subject to the heightened pleading

requirements of Federal Rule of Civil Procedure 9(b). Jd. (first citing United States

ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 26 (2d Cir. 2016), and then citing Gold v.

Morrison-Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. 1995)). When allegations

involve fraud, Rule 9(b) requires that a party “state with particularity the

circumstances constituting fraud.” Fed. R. Civ. P. 9(b). An FCA complaint alleging

fraud? ordinarily must “(1) specify the statements that the plaintiff contends were

fraudulent, (2) identify the speaker, (3) state where and when the statements were

made, and (4) explain why the statements were fraudulent.” Chorches, 865 F.3d at

81 Gnternal quotation marks and citation omitted). Courts sometimes characterize

this pleading standard “as the ‘who, what, when, where, and how’ of the alleged

2 The pleading requirements for FCA retaliation claims are discussed infra.

fraud.” United States ex rel. Monda v. Stkorsky Aircraft Corp., No. 3:99CV1026

(JBA), 2005 WL 1925903, at *2 (D. Conn. Aug. 11, 2005), aff'd, 207 F. App’x 28 (2d

Cir. 2006) (citations omitted).

The adequacy of particularized allegations under Rule 9(b) is “case-and

context-specific.” Chorches, 865, F.3d at 81 (internal quotation marks and citation

omitted). Courts have described the “threefold” purpose of Rule 9(b) as “designed to

provide a defendant with fair notice of a plaintiffs claim, to safeguard a defendant’s

reputation from improvident charges of wrongdoing, and to protect a defendant

against the institution of a strike suit.” Ladas, 824 F.3d at 25 (internal quotation

marks and citation omitted). A court must dismiss a complaint under Rule 9(b)

where FCA claims under Sections 3729(a)(1)(A) and (B) rest on “speculation and

conclusory allegations.” United States ex rel. Duhaine v. Apple Health Care Inc., No.

3:19-CV-00963 (KAD), 2022 WL 3226631, at *5 (D. Conn. Aug. 10, 2022) (quoting

United States ex rel. Gelbman v. City of New York, 790 F. App’x 244, 249 (2d Cir.

2019)) Gnternal quotation marks omitted).

Despite Rule 9(b)’s strict pleading requirements, allegations may be based

on “information and belief when facts are peculiarly within the opposing party’s

knowledge.” Chorches, 865 F.3d at 81-82 (internal quotation marks and citation

omitted). Where pleading is permitted on information and belief, the complaint

must “adduce specific facts supporting a strong inference of fraud.” Id. at 82

(internal quotation marks and citation omitted). §

3 Chorches will be discussed further below.

DISCUSSION

Relator alleges that each time RRH submitted a claim for payment, it

certified compliance with the Vaccine Provider Agreement, the NCVIA, and the

EVA. Dkt. 344101. Although the Provider Agreement serves as a basis to support

potential FCA liability, Plaintiff fails to plead sufficiently any allegations that

support a statutory violation.

I. The Vaccine Provider Agreement may impose liability on the

Organization

Relator alleges that, under the Provider Agreement, RRH is responsible for

reporting serious adverse events following vaccination. See id. J 40. But RRH

argues that only its employees “involved in handling [the] COVID-19 Vaccine” may

trigger liability under the Provider Agreement. See Dkt. 38, at 10.4

RRH’s interpretation is too narrow. Under the “Organization Identification”

section, the Provider Agreement lists the “Organization’s legal name,” the

“Organization telephone number,” and the “Organization address.” Dkt. 34-24, at 1.

RRH is the organization. But the Provider Agreement does not request contact

information from the smaller entities, like the vaccination locations that are

“affiliated” with the organization.® Seeid. Instead, the Provider Agreement only

asks for how many vaccination locations the agreement covers. Id. This reveals

4 Page numbers referenced refer to the CM/ECF pagination.

5 The Provider Agreement states that Section B “must be completed for each

vaccination [ljocation,” but that section must be filled out for “each vaccination

[location covered under the Organization listed in Section A.” Jd. (emphasis

added). Section A only requests contact information from the organization. Id.

that the parent company or, here, RRH, is ultimately responsible under this

contract. In fact, the Provider Agreement states that “this is an agreement between

[the] [o]rganization and CDC.” Id. at 2.

Additionally, the organization’s “chief medical officer (or equivalent) and chief

executive officer (or chief fiduciary) ... must complete and sign the [Provider

Agreement].” Id. at 1. And they are required to provide their contact information;

there is a section on the form specifically for “Responsible Officers,” particularly, the

Chief Medical Officer (or equivalent) and the Chief Executive Officer (or Chief

Fiduciary). Id. Responsible officers—as well as “the Organization”—are

“accountable for compliance.” Id. Thus, the Provider Agreement imposes

obligations and potential liability on RRH, not the individual vaccination locations

or the handlers at those locations. RRH bears “organizational responsibility” as a

vaccine provider under this contract. See Dkt. 34 § 44. Under the Provider

Agreement, RRH, and its employees, must adhere to the requirements set forth

therein.

Because RRH is liable under this agreement, it must report adverse events

for patients who were vaccinated at RRH. Here, Relator alleges four patients who

experienced adverse events after receiving the COVID vaccine at RRH. See id. { 91.

Thus, under the Provider Agreement, RRH was responsible for reporting any

adverse events that these patients experienced. And this theory is valid under the

FCA.

But the agreement has its limitations. The Provider Agreement, for example,

does not require RRH to report adverse reactions regardless of where the patient

was vaccinated. Indeed, the Agreement’s reporting obligations are dose specific

(Dkt. 34-24, at 3) and apply to the shots administered by RRH—not by anyone

outside of RRH.

Relator alleges that the NCVIA and the EUA also impose reporting

obligations on Defendants and that, because Defendants failed to report adverse

events to VAERS, they violated the FCA. See Dkt. 34 44] 19-38. The Court

disagrees.

Under the NCVIA, “[e]ach health care provider and vaccine manufacturer

shall report ... the occurrence of any event seé forth in the Vaccine Injury Table

.... 42 U.S.C. § 300aa-25(b)(1)(A) (emphasis added). The COVID shot, however,

is not listed on this table. See Dkt. 38, at 14-15; see also Dkt. 34-28. And the

Provider Agreement does not reference the table either. See Dkt. 34-24. Thus, the

NCVIA is not a basis for liability here.

Moreover, under the EVA, the Secretary of Health and Human Services

(“HHS”) is authorized to introduce a “drug, device, or biological product intended for

use in an actual or potential emergency ....” 21 U.S.C. §§ 321(d), 360bbb-3(a)(1).

Plaintiff, however, fails to link a violation under this statute to an FCA claim.6

6 And even if the EUA does create a basis for liability, it does not expand the

obligations imposed under the Provider Agreement. See Dkt. 38, at 16.

10

In sum, there is no statutory basis under the NCVIA or EUA for RRH to be

liable under the FCA. This leaves the allegations raised under paragraph 91 as the

only possible FCA claim—based on the Provider Agreement—if Relator alleged

them with sufficient particularity under Rule 9. This is analyzed below.

II. The Amended Complaint alleges fraud with sufficient particularity

as to paragraph 91

A. Falsity/Misrepresentation (Implied Certification Theory)

Under the FCA, a plaintiff must allege a “false or fraudulent claim for

payment or approval” or “false record or statement material to a false or fraudulent

claim.” 31 U.S.C. § 3729(a)(1)(A)—(B); see also Fed. Deposit Ins. Corp. v. Fifth Third

Bank, N.A., No. 23-209-cv, 2023 WL 7130553, at *2 (2d Cir. Oct. 30, 2023). Plaintiff

asserts claims for both. Dkt. 34 44 123-133. A “claim” includes “direct requests to

the [g]overnment for payment as well as reimbursement requests made to the

recipients of federal funds under federal benefits programs.” United States ex rel.

Gelbman v. City of New York, No. 14-CV-771 (VSB), 2018 WL 4761575, at *5

(S.D.N.Y. Sept. 30, 2018), aff'd, 790 F. App’x 244 (2d Cir. 2019) (quoting Universal

Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 182 (2016)). FCA

claims are either factually false or legally false. Gelbman, 2018 WL 4761575, at *5;

see also United States ex rel. Foreman v. AECOM, 19 F.4th 85, 104 (2d Cir. 2021). A

“factually false claim” is one that is “untrue on its face,” such as “a claim that

‘include[s] an incorrect description of goods or services provided or a request for

reimbursement for goods or services never provided.” Foreman, 19 F.4th at 104 n.7

11

(quoting United States v. Kellogg Brown & Root Servs., Inc., 800 F. Supp. 2d 143,

154 (D.D.C. 2011)).

Here, Relator first alleges that RRH submitted factually false claims because

it “misrepresented the nature of services provided when seeking payment.” Dkt. 34

§ 103. Particularly, Relator claims that RRH failed to report a patient that died

after a vaccination and altered that patient’s medical records to “conceal” the

patient’s recent vaccine. Jd. { 104. But this is not sufficient. Relator fails to

connect this example to a claim RRH submitted that is “untrue on its face,” like

providing an incorrect description or failing to provide certain goods or services. In

other words, Relator does not allege that RRH submitted a claim where it

represented that this patient received a COVID vaccine, but changed the medical

records to indicate otherwise, or that RRH submitted a VAERS report for that

patient, when it really did not. Thus, Relator does not adequately plead that RRH

submitted factually false claims.’

7 Additionally, Relator alleges that “RRH fraudulently induced its participation in

the vaccination program by initially certifying it would comply with all safety

monitoring requirements while never intending to implement comprehensive

adverse event reporting.” Id. § 107. Defendants argue that this is “wholly

conclusory” and “should not be assumed true” because “Relator has not plausibly

alleged any facts describing representations that RRH made to the CDC to induce

its entrance into the Vaccination Provider Agreement.” Dkt. 38, at 24. This Court

agrees. See United States v. Strock, 982 F.3d 51, 60 (2d Cir. 2020) (“Under this

fraudulent inducement theory, FCA liability attaches not because a defendant has

submitted any claim for payment that is literally false, but instead because the

contract under which payment [is] made is procured by fraud.”) Gnternal quotation

marks and citations omitted).

12

But Relator also alleges that RRH submitted legally false claims. A legally

false claim rests on “a false representation of compliance with an applicable federal

statute, federal regulation, or contractual term.” United States ex rel. Askari v.

PharMerica Corp., No. 23-909-CV, 2024 WL 1132191, at *2 (2d Cir. Mar. 15, 2024)

(internal quotation marks and citation omitted). There are two types of legally false

claims that a relator can rely on to support an FCA claim. Jd. The first is an

express false certification claim. In addition, in some circumstances, “implied false

certification” can amount to a false or fraudulent claim. United States ex rel. Yu v.

Grifols USA, LLC, No. 22-107, 2022 WL 7785044, at *2 (2d Cir. Oct. 14, 2022)

(citing Escobar, 579 U.S. at 186).

Relator alleges both—specifically, that RRH expressly and implicitly certified

compliance with the COVID-19 Vaccination Program when it submitted claims for

payment. See Dkt. 34 4 101. Defendants argue that Relator does not sufficiently

plead any particularized allegations that support an express false certification

theory. Dkt. 38, at 21-22. The Court agrees. Thus, this case concerns only the

implied false certification theory.

Under the implied false certification theory, “when a defendant submits a

claim, it impliedly certifies compliance with all conditions of payment.” Escobar,

579 U.S. at 180. But “if that claim fails to disclose the defendant’s violation of a

material, statutory, regulatory, or contractual requirement... the defendant has

made a misrepresentation that renders the claim ‘false or fraudulent’ under

[section] 3729(a){1)(A).” Id.

13

In some instances, the implied false certification theory can be a basis for

liability “when the defendant submits a claim for payment that makes specific

representations about the goods or services provided, but knowingly fails to disclose

the defendant’s noncompliance with a statutory, regulatory, or contractual

requirement.” Jd. at 181. In these circumstances, “liability may attach if the

omission renders those representations misleading.” Jd. But not all

misrepresentations are actionable; the challenged claim must omit “critical

qualifying information.” Fed. Deposit Ins. Corp., 2023 WL 7130558, at *2 (citing

Escobar, 579 U.S. at 188-89).

Liability for failing to disclose violations of legal requirements “does not turn

upon whether those requirements were expressly designated as conditions of

payment.” Escobar, 579 U.S. at 181. While that is relevant, it is not dispositive.

Id. at 190. And even if a requirement is expressly designated as a condition of

payment, “not every violation of such requirement gives rise to liability.” Id. at 181.

What matters is “whether the defendant knowingly violated a requirement that the

defendant knows is material to the [g]overnment’s payment decision.” Id.

(emphasis added). Materiality and knowledge (or scienter) are “rigorous” pleading

requirements that are “strictly enforced.” Fed. Deposit Ins. Corp., 2023 WL

7130558, at *2 (citing Escobar, 579 U.S. at 192). A failure to plead either is fatal.

Fed. Deposit Ins. Corp., 2023 WL 7130558, at *2.

In sum, the implied certification theory can be a basis for liability when at

least two conditions are met. First, “the claim does not merely request payment,

14

but also makes specific representations about the goods or services provided... .”

Escobar, 579 U.S. at 190; see also Fed. Deposit Ins. Corp., 2023 WL 7130553, at *2.

And second, “the defendant’s failure to disclose noncompliance with material

statutory, regulatory or contractual requirements make those representations

misleading half-truths.” Escobar, 579 U.S. at 190.

As relevant here, there is a contractual basis of potential liability—

specifically as to the allegations raised in paragraph 91. The issue, then, is whether

those allegations satisfy Rule 9.

The Provider Agreement lists “Agreement Requirements” that “are material

conditions of payment for COVID-19 Vaccine-administration claims submitted by

[the] [o]rganization to any federal healthcare benefit program....” Dkt. 34-24, at

2-3 (emphasis added). And “[t]o receive one or more of the publicly funded COVID-

19 vaccines (COVID-19 Vaccine), constituent products, and ancillary supplies at no

cost, [the] [o]rganization agrees that it will adhere to . . . [these] requirements[.]”

Id. at 2.

At issue is the requirement that an organization “must report moderate and

severe adverse events following vaccination to [VAERS].” Jd. at 3. Further, under

this contract, reimbursement for administering the vaccine “is not available under

any federal healthcare program if [the] [o]rganization fails to comply with these

requirements with respect to the administered COVID-19 Vaccine dose.” Id. When

the organization submits a reimbursement claim for COVID-19 Vaccine

15

administration, that organization “expressly certifies that it has complied with

these requirements with respect to that administered dose.” Id.

Accordingly, each time RRH submits a claim for payment, under this

Provider Agreement, it is not merely requesting payment, but instead making

specific representations that it has complied with the requirements set forth

therein. Escobar, 579 U.S. at 190; see also Fed. Deposit Ins. Corp., 2023 WL

7130553, at *2.

On this record, particularity is alleged.

B. Materiality

A misrepresentation about compliance with a statutory, regulatory, or

contractual requirement “must be material to the [g]lovernment’s payment decision

in order to be actionable under the False Claims Act.” Escobar, 579 U.S. at 192. A

relator, therefore, must plead materiality “with particularity under Rule 9(b).” Fed.

Deposit Ins. Corp., 2023 WL 7130558, at *8 (citation omitted).

“Material” is defined as “having a natural tendency to influence, or be

capable of influencing, the payment or receipt of money or property.” 31 U.S.C. §

3729(b)(4). To assess materiality, the court must look to “the effect on the likely or

actual behavior of the recipient of the alleged misrepresentation . .. rather than

superficial designations.” Yu, 2022 WL 7785044, at *2 (quoting Foreman, 19 F.4th

at 109).

The Supreme Court identified three factors in assessing materiality: “(1)

whether the government expressly designates compliance with a particular

16

statutory, regulatory, or contractual requirement as a condition of payment; (2) the

government’s response to noncompliance with the relevant contractual, statutory, or

regulatory provision; and (3) whether the defendants’ alleged noncompliance was

minor or insubstantial.” Yu, 2022 WL 7785044, at *2 (quoting Foreman, 19 F.4th at

110) Gnternal quotation marks omitted); see also Escobar, 579 U.S. at 194-96. This

inquiry is “holistic,” meaning a court should weigh these factors. See Foreman, 19

F.4th at 110, 117.

1. Express Condition of Payment

Relator alleges that reporting to VAERS is material to the Government’s

payment decision because it is required by the Provider Agreement. See Dkt. 34 □□

40, 41, 119. Moreover, the Provider Agreement expressly states that each

requirement is a “condition of payment,” and that the Government will not

reimburse RRH if it fails to comply. See Dkt. 34-24, at 3. Thus, although not

determinative, it is relevant that the Provider Agreement specifies that the

requirements are “conditions of payment.” This factor weighs in Relator’s favor.

Escobar, 579 U.S. at 190 (‘Whether a provision is labeled a condition of payment is

relevant to but not dispositive of the materiality inquiry”).

2. Government’s Response to Noncompliance

As to the second factor, evidence that the Government “consistently refuses to

pay claims in the mine run of cases based on noncompliance with the particular

statutory, regulatory, or contractual requirement at issue can prove materiality.”

Yu, 2022 WL 7785044, at *3 (quoting Escobar, 579 U.S. at 195) (internal quotation

17

marks omitted). But “if the [glovernment pays a particular claim in full despite its

actual knowledge that certain requirements were violated, that is very strong

evidence that those requirements are not material.” Id. Thus, this factor requires

examining the Government’s reaction to noncompliance in other similar cases’ and

in the case at issue. See Foreman, 19 F.4th at 111-12 (citing Escobar, 579 USS. at

194-95).

Here, RRH argues that Relator reached out to the FDA, CDC, and New York

State Department of Health about the reporting obligations to VAERS, and she

retained a law firm to mail letters to the HHS and CDC, but these agencies did

“nothing” in response. Dkt. 38, at 25. Defendants contend that this is “highly

probative that the alleged fraud is immaterial.” Id.

Although these agencies did not respond or take any action, it is unclear

whether the CDC had “actual knowledge.” There is no indication that the CDC

investigated or audited RRH and continued to pay, despite any wrongdoing. See

Foreman, 19 F.4th at 115, 117-18; see United States ex rel. McBride v. Halliburton

Co., 848 F.3d 1027, 1034 (D.C. Cir. 2017) (concluding that the government’s

response showed strong evidence that the requirements at issue were not material,

where it investigated the allegations and did not disallow any charged costs). And

even if the Government had actual knowledge, the Government may choose to

continue funding this type of contract given its extensive approach to COVID-19—

making the issue not particularly probative here. See Foreman, 19 F.4th at 115

8 Here, neither side references any similar cases.

18

(“There may be circumstances where the government’s payment of a claim or failure

to terminate a contract despite knowledge of certain alleged contractual violations

will not be particularly probative of lack of materiality.”); see also United States ex

rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 908, 917 (4th Cir.

2008). Thus, at best, this factor is neutral.

3. Substantiality

The last factor is whether RRH’s noncompliance was substantial. Materiality

“cannot be found where noncompliance is minor or insubstantial .. . because

material falsehoods are those that go to the very essence of the bargain.” Foreman,

19 F.4th at 116 Gnternal quotation marks and citation omitted). Relator must

demonstrate more than a “superficial designation,” but instead show “sufficiently

widespread deficiencies in the contractor’s performance or identified

misrepresentations that go to the heart of the bargain, such that any regulatory,

statutory, or contractual violations would likely affect the Government’s payment

decision.” Jd. (internal quotation marks and citation omitted).

Defendants argue that the alleged noncompliance is not substantial because

Relator only identified four to five patients RRH vaccinated and later admitted.

Dkt. 38, at 26. Additionally, Defendants argue that “Relator has not plausibly

linked up VAERS reporting failures occurring at the hospital with violations of

either contractual or statutory duties, which, to the extent they apply, only impose

obligations in geographical and temporal proximity to the vaccine clinic and those

who handle vaccines.” Id.

19

But the Provider Agreement applies here. And this obligation is not limited

to the vaccine clinic or handlers—it extends to any patient RRH vaccinates and

later admits for an adverse reaction. Additionally, although Relator only alleges

four patients that RRH vaccinated, admitted, and did not report to VAERS (Dkt. 34

4 91), in accordance with the Provider Agreement, discovery has not occurred.? In

other words, the key at this stage is whether these “identified misrepresentations

... go to the heart of the bargain.” Foreman, 19 F.4th at 116 (internal quotation

marks and citation omitted). Here, they do. The Agreement specifically addresses

this issue and linked it to payment.

Relator alleges that the FDA and CDC maintain that VAERS reporting is a

material condition and that the Provider Agreement demonstrates this. See Dkt. 34

{ 118. The Provider Agreement, which is incorporated by reference to the amended

complaint, is persuasive here. The contract does not just state that the

requirements listed are “conditions of payment;” it goes one step further in stating

that the conditions are “material” to the Government’s payment decision. Dkt. 34-

24, at 3. And it claims that if the organization does not comply with the terms, that

organization may be liable under federal law, including, inter alia, the FCA. Id.

The intention is clear here—these twelve conditions, including reporting to

VAERS, are essential to this contract. They go to the “heart of the bargain” and are

necessary to carry out the COVID Vaccination Program. This intention also aligns

9 She also alleges that RRH failed to report an additional 170 patients, but their

vaccination locations are “unknown” at this time. Id. {J 92-93.

20

with Relator’s allegations regarding the purpose behind VAERS—specifically, that

VAERS gives the “CDC and FDA vital information to help quickly identify potential

health concerns and ensure vaccines are safe.” Dkt. 34 { 23. Thus, this factor

weighs in Relator’s favor.

Therefore, weighing all factors, Relator has plausibly alleged with

particularity that the condition at issue here—reporting adverse events to

VAERS—is material to the Government’s payment decision. Foreman, 19 F.4th at

118 (“Taken together with the substantiality factor, which also weighs in favor of

materiality as to the .. . allegations, [the relator] has sufficiently pled materiality

with respect to his claims... .”); see also Strock, 982 F.3d at 65.

C. Scienter

Under the implied certification theory, a defendant must have “knowingly

violated a requirement that the defendant knows is material to the [glovernment’s

payment decision.” Escobar, 579 U.S. at 181. The terms “knowing” and

“knowingly” mean that a person, with respect to information: “(i) has actual

knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity

of the information; or (iii) acts in reckless disregard of the truth or falsity of the

information.” 31 U.S.C. § 3729(b)(1)(A). Additionally, “knowledge” does not require

“proof of specific intent to defraud.” Jd. § 3729(b)(1)(B).

To comply with Rule 9(b), a relator may assert knowledge “generally,” but

must still “plead the factual basis which gives rise to a strong inference of

fraudulent intent.” Strock, 982 F.3d at 66 Gnternal quotation marks and citation

21

omitted). To show a “strong inference of fraud,” relator may either: (1) allege facts

showing that the defendants had “both motive and opportunity to commit fraud,” or

(2) allege facts constituting “strong circumstantial evidence of conscious

misbehavior or recklessness.” Jd. internal quotation marks and citation omitted).

Defendants argue that Relator fails to allege any facts “bearing on RRH’s

knowledge that could support a strong inference of fraudulent intent,” and her

allegations instead involve differences in medical opinions and in interpreting the

reporting obligations. Dkt. 38, at 30, 32. The Court disagrees.

Relator adequately alleges that Defendants had actual knowledge that

reporting to VAERS was material to the Government’s payment decision. See Dkt.

34 94 110-11. To participate in the COVID Vaccination Program, the Provider

Agreement requires an organization to certify that “all relevant officers, directors,

employees, and agents of [the] [o]rganization involved in handling COVID-19

Vaccine understand and will comply with the agreement requirements listed... .”

Dkt. 34-24, at 3; Dkt. 34 7 111. It also expressly states that reporting to VAERS is

a “material condition of payment.” Dkt. 34-24, at 3. Additionally, Dr. Gellasch

agreed with Relator that “we must report to VAERS per guidance.” Dkt. 34 65,

110. And RRH acknowledged that it needed to help healthcare providers comply

with their responsibility to report adverse events. Id. □□ 80, 110.

Relator also asserts “strong circumstantial evidence of... recklessness” as to

materiality—particularly in the instances where Relator is dealing with RRH. See

Strock, 982 F.3d at 66. For example, RRH allegedly ordered Relator to “dial...

22

back” her reporting efforts. Dkt. 34 § 112. And despite RRH certifying that its

“officers, directors, employees, and agents... understand and [will] comply with the

agreement requirements,” its President told Relator that “it is not the

organization|[]s duty to educate providers.” Jd. § 114; Dkt. 34-24, at 3. Thus,

Relator’s allegations about her interactions with RRH are sufficient to allege

scienter.

Moreover, Relator asserts that RRH “remov[ed] vaccine information from [a

patient’s] death certificate and discharge summary” to conceal reportable events.

Dkt. 34 § 116. Not only does this further support that RRH acted recklessly in

carrying out its reporting obligations, but, when paired with Relator’s allegation

that RRH wanted to prioritize high vaccination numbers over mandatory safety

monitoring, it suggests a motive to commit fraud. Id.

Therefore, accepting these allegations as true, Relator has plausibly alleged

scienter with particularity to support a claim under the FCA.

D. Chorches

A relator must also sufficiently allege that the defendant submitted false

claims for payment. Here, Relator satisfies this requirement.

FCA claims are subject to Rule 9(b). Chorches, 865 F.3d at 81. Rule 9(b) is

generally a rigid requirement; however, “allegations may be based on information

and belief when facts are peculiarly within the opposing party’s knowledge.” Id. at

81-82. Pleading on information and belief is a “desirable and essential expedient

when matters that are necessary to complete the statement of a claim are not

23

within the knowledge of the plaintiff but he [or she] has sufficient data to justify

interposing an allegation on the subject.” Jd. at 82 Gnternal quotation marks and

citation omitted). In other words, Rule 9(b) does not require that “every qui tam

complaint provide details of actual bills or invoices submitted to the government,” if

the relator “makes plausible allegations ... that lead to a strong inference that

specific claims were indeed submitted and that information about the details of the

claims submitted are peculiarly within the opposing party’s knowledge.” Id. at 93.

Here, Relator alleges that RRH submitted reimbursement claims for

“thousands” of COVID vaccinations, certifying that it reported adverse events to

VAERS. See Dkt. 34 | 95. And she alleges that she learned about these claims

from other employees and publicly available information. Jd. Defendants argue

that Relator fails to satisfy Rule 9(b) because she does not allege anything about

events taking place at the vaccine clinic or the personnel involved in handling

COVID vaccines. Dkt. 38, at 27. But as stated previously, this interpretation is too

narrow. The Provider Agreement imposes an obligation on RRH, not the individual

vaccination locations and handlers, to comply with VAERS reporting. And because

Relator worked at RRH from 2007 to 2021, when the alleged “scheme” occurred, she

directly observed patients experiencing adverse events and how RRH handled its

reporting efforts. See Dkt. 34 4 49-94.

Relator did not work in billing, and does not attach actual bills or invoices to

her amended complaint, but her allegations are plausible and “lead to a strong

inference that specific claims were indeed submitted ....” Chorches, 865 F.3d at

24

93. She asserts that “RRH, like all healthcare organizations, uses sophisticated

accounting and billing systems to track services and ensure payment.” Dkt. 34 {

97. Particularly, for each COVID vaccine dose administered, RRH records the

service in the patient’s medical record, documents it in the NYSIIS system, and

then generates a claim for payment. Jd. Namely, RRH tracks each vaccine dose,

through the payment process.

Defendants argue that Relator fails to allege facts showing a strong inference

that RRH submitted specific claims because the patients that Relator provides as

examples did not all receive their vaccines at the RRH clinic. Dkt. 38, at 27.

Although Relator does not list a vaccination location for every patient, she does

allege (in paragraph 91) four patients, who received a vaccine at RRH, experienced

an adverse event, went back to RRH, and as to whom RRH did not submit VAERS

reports. Dkt. 34 | 91. Accepting these allegations as true, RRH failed to adhere to

the Provider Agreement. RRH was presumably paid for all shots given. Thus,

Relator alleges specific and plausible facts from which this Court may infer that

Defendants submitted false claims. See Chorches, 865 F.3d at 84.

Relator also plausibly alleges that the “claims submitted are peculiarly

within the opposing party’s knowledge.” Jd. at 98. Defendants contest this,

claiming that Relator accessed RRH’s systems to learn about her patients’

vaccination statuses. Dkt. 38, at 28-29. While she could look up whether a patient

received a vaccine, nowhere does Relator allege that she had access to RRH’s billing

records. To the contrary, she asserts that RRH controls its billing system

25

exclusively, and the billing records are in RRH’s possession. Dkt. 34 {4 97, 108.

And she alleges “sufficient data to justify interposing an allegation on the subject,”

despite not having access to the billing system. Chorches, 865 F.3d at 82 (internal

quotation marks and citation omitted). For instance, she asserts that she “knows

RRH’s billing department processes vaccine administrative records into claims

seeking the standard $40 payment per dose through established federal health

program billing procedures, including Medicare, Medicaid and HRSA Covid-19

Uninsured Program.” Dkt. 34 § 97. She also states that the billing records,

documenting the false claims, include: (1) claim submission dates; (2) certification

language; and (3) administration details demonstrating systematic false claims. Id.

{ 108.

In sum, Defendants’ motion to dismiss is denied as to Relator’s FCA claim

(Count 1) to the extent based on the implied false certification theory, as it relates

to the Provider Agreement, and involving patients who received a COVID shot at

RRH. The motion to dismiss is also denied as to Relator’s section 3729(a)(1)(B)

claim (Count 2) for the same reasons set forth in connection with her section

3729(a)(1)(A) claim. RRH knew reporting to VAERS was a material condition of

payment, under the Provider Agreement, but allegedly falsified records to conceal

reportable events in connection with the false claim. See, e.g., id. Jf 104, 116.

Ill. Relator’s reverse false claims count is dismissed

Relator alleges liability for reverse false claims pursuant to section

3729(a)(1)(G). That section states that any person who “knowingly makes, uses, or

26

causes to be made or used, a false record or statement material to an obligation to

pay or transmit money or property to the Government,” or who “knowingly conceals

or knowingly and improperly avoids or decreases an obligation to pay or transmit

money or property to the Government” is liable under the FCA. 31 U.S.C. §

3729(a)(1)(G). Reverse false claims counts are also subject to Rule 9(b)’s heighted

pleading standard. Foreman, 19 F.4th at 119.

A court should dismiss such a count if the complaint “makes no mention of

any financial obligation that the [defendants] owed to the government,” and “does

not specifically reference any false records or statements used to decrease such an

obligation... Jd. (nternal quotation marks and citation omitted). Additionally,

the Second Circuit recognized that “several district courts, some of them within this

Circuit, have concluded that a reverse false claim cannot turn on the same conduct

underlying a traditional false claim.” Jd. at 119. And to conclude otherwise would

mean that “any time a defendant violated sub-sections (a)(1)(A) or (B) and received

payment, the defendant would also necessarily violate sub-section (G) if it failed to

repay the Government the fraudulently-obtained payments.” Jd. at 120 (internal

quotation marks and citation omitted). Thus, this “[t]lype of redundant false claim

is not actionable under subsection (a)(1)(G).” Jd. Gnternal quotation marks and

citation omitted).

Here, other than the conduct underlying Relator’s false claims under sections

3729(a)(1)(A) and (B), Relator does not adequately allege any independent facts that

27

support her reverse false claims count, and, as such, it is dismissed. See Dkt. 38, at

32-33.

IV. Relator’s FCA conspiracy claim is dismissed

Relator also fails to allege a conspiracy claim pursuant to section

3729(a)(1)(C), which states that “any person who... conspires to commit a violation

of subparagraph (A), (B), (D), (E), (F), or (G) .. . is able to the United States

Government....” 31 U.S.C. § 3729(a)(1)(C).

Defendants argue that the Court should dismiss this claim in accordance

with the intra-corporate conspiracy doctrine. Dkt. 38, at 33-34. The Court agrees.

Under the intra-corporate conspiracy doctrine, “one entity cannot conspire

with its employees” and “it is well established that one corporation and wholly-

owned subsidiary cannot conspire with each other.” Untied States ex rel. Ross v.

Indep. Health Corp., No. 12-CV-2998, 2023 WL 24055, at *12 (W.D.N.Y. Jan 3,

2023) (quoting Pencheng Si v. Laogat Rsch. Found., 71 F. Supp. 3d 73, 98 (D.D.C.

2014)); see also United States ex rel. Schwartz v. Document Reprocessors of N.Y.,

Inc., 692 F. Supp. 3d 71, 81 n.3 (W.D.N.Y. 2023) (““Relator’s cursory attempt to

assert a conspiracy between a corporation and its owner/corporate officers runs

afoul of the intra-corporate conspiracy doctrine.”).

Here, Relator alleges that “RRH and its administrators entered into

agreements with each other to violate the False Claims Act....” Dkt. 34 | 120.

Relator is, thus, attempting to plead a conspiracy claim in violation of the intra-

28

corporate conspiracy doctrine. A corporation and its employees (including its

owners and officers) generally cannot conspire among each other.

Courts in this Circuit recognize an exception to this doctrine “when a party

acts pursuant to personal interests ‘separate and apart from the entity.” Ross,

2023 WL 24055, at *12 (quoting Vegas v. Artus, 610 F. Supp. 2d 185, 205 (N.D.N.Y.

2009)). But the amended complaint does not contain any such allegations.

Therefore, the Court grants Defendants’ motion to dismiss the conspiracy claim.

V. The Amended Complaint alleges a plausible retaliation claim

The FCA’s anti-retaliation provision states:

Any employee, contractor, or agent shall be entitled to all relief

necessary to make that employee, contractor, or agent whole, if that

employee, contractor, or agent is discharged, demoted, suspended,

threatened, harassed, or in any other manner discriminated against in

the terms and conditions of employment because of lawful acts done by

the employee, contractor, agent or associated others 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)(1).

To state a retaliation claim under the FCA, courts “generally require[ ]a

plaintiff to show that (1) he [or she] engaged in activity protected under the statute,

(2) the employer was aware of such activity, and (3) the employer took adverse

action against him [or her] because he [or she] engaged in the protected activity.”

Dhaliwal v. Salix Pharms., Ltd., 752 F. App’x 99, 100 (2d Cir. 2019) (quoting

Chorches, 865 F.3d at 95) Gnternal quotation marks omitted). If an employee’s

alleged actions “are sufficient to support a reasonable conclusion that the employer

could have feared being reported to the government for fraud or sued in a qui tam

29

action by the employee,” then the employee has stated a retaliation claim under

section 3730(h). U.S. ex rel. Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1304 (11th

Cir. 2010).

FCA-based retaliation claims are not subject to the more stringent pleading

requirements of Rule 9(b). See Chorches, 865 F.3d at 95 (“The particularity

requirement of Rule 9(b) does not apply to retaliation claims under the FCA.”).

Rather, a plaintiff must “show a good faith basis, or objectively reasonable basis, for

believing that he or she was investigating matters in support of a viable FCA case.”

Swanson v. Battery Park City Auth., No. 15-CV-6938 (JPO), 2016 WL 3198309, at *3

(S.D.N.Y. June 8, 2016) (internal quotation marks and citation omitted).

Ultimately, the conduct must be “directed at exposing a fraud upon the

government.” Mirza v. Garnet Health, No. 20-CV-556 (PMH), 2022 WL 826410, at

*9 (S.D.N.Y. Mar. 17, 2022), aff'd sub nom. Mirza v. Orange Reg'l Med. Ctr., No. 22-

815-CV, 2024 WL 30422389 (2d Cir. June 18, 2024) (internal quotation marks and

citations omitted).

Here, Relator plausibly alleges that RRH retaliated against her when it fired

her.

A. Protected Activity

A relator engages in protected activity if he or she tries to stop one or more

FCA violations. See 31 U.S.C. § 3730(h)(1); see also Pilat v. Amedisys, Inc., No. 23-

566, 2024 WL 177990, at *2 (2d Cir. Jan. 17, 2024). Such efforts “can include both

complaining internally to supervisors about suspected fraudulent practices and

30

refusing to engage in such practices.” Pilat, 2024 WL 177990, at *2. A party,

however, “need not succeed on the underlying FCA claim to successfully show

retaliation, but ‘he [or she] must demonstrate that he [or she] had been

investigating matters that were calculated, or reasonably could have led, to a viable

FCA action.” Schwartz, 692 F. Supp. 3d at 81 (quoting United States v. N. Adult

Daily Health Care Ctr., 205 F. Supp. 3d 276, 298 (E.D.N.Y. 2016)).

Here, Defendants assert that Relator did not engage in protected activity

because she fails to allege that she suspected fraud; she only had concerns about

RRH’s reporting obligations to VAERS. See Dkt. 38, at 35-36. But, in Pilat, the

Second Circuit disagreed with dismissing a retaliation claim on that basis. See

Pilat, 2024 WL 177990, at *1—2 (“The district court determined that [the] [r]elators

did not allege that they engaged in protected activity because the complaints to

supervisors they rely on to support their retaliation claims did not have anything to

do with potential false claims and were more appropriately characterized as

concerns about patient care ... We disagree... .”) (internal quotation marks and

citation omitted). Thus, because Defendants make a similar argument here, it is

not sufficient.

Relator alleges that she refused to participate in the alleged wrongdoing. She

asserts that she “undertook specific actions to stop [D]efendants’ False Claims Act

violations,” when she “identified and reported over 160 adverse events to VAERS,

documented additional unreported cases, alerted management to their reporting

obligations, and maintained records of systematic non-compliance.” Dkt. 34 4 151.

bl

Furthermore, she alleges four examples where RRH vaccinated a patient—who

experienced an adverse event—and subsequently did not report the adverse event

to VAERS, in accordance with the Provider Agreement. Id. § 91. In drawing all

reasonable inferences in Relator’s favor, her acts were an “effort[ ] to stop 1 or more

violations” of the FCA. See Pilat, 2024 WL 177990, at *2 (internal quotation marks

and citation omitted).

Relator also alleges numerous examples where she complained internally to

supervisors about the suspected fraudulent practices. See, e.g., Dkt. 34 4 57, 68,

65, 68, 69, 70, 71, 72, 73, 74, 75, 77, 78, 81, 86, 87. For instance, on one occasion,

Relator emailed Dr. Tara Gellasch, UMMC’s Chief Medical Officer, about an

unreported adverse event, stating: “I want this case reported and I want their

VAERS case number for my records because now having knowledge of this case and

not reporting it myself as I have been instructed to do by the system, puts me in a

position to knowingly violate the law.” Dkt. 34-16; see also Dkt. 34 J 75. Not only

does this example support that Relator notified her leadership about the issue, but

also that she refused to engage in, and tried to stop, the suspected fraudulent

activity.

Thus, the amended complaint plausibly alleges that Relator engaged in

protected activity.

B. Awareness of that Activity

As noted, to satisfy the second element, Relator must sufficiently plead that

Defendants knew she was engaging in protected activity. Chorches, 865 F.3d at 95.

32

Relator alleges that “[m]Janagement specifically acknowledged her VAERS

reporting efforts, audited her submissions,!° and received multiple communications

from her regarding their legal obligations to report.” Dkt. 34 {| 153. These

allegations are plausible because Relator also provides examples to support these

assertions. For instance, she alleges, inter alia, that she emailed UMMC’s Chief

Medical Officer and President about reporting to VAERS, and she volunteered to

report on her colleagues’ behalf until RRH educated or trained its employees and

developed a better system for reporting. Id. { 57.

Defendants also do not appear to contest this element. See Dkt. 38, at 34-38;

see also Dkt. 45, at 41. Thus, in accepting these allegations as true, the second

element is satisfied.

C. Adverse Action

Lastly, Relator must show that Defendants took “adverse action” against her

for engaging in protected activity. See N. Adult Daily Health Care Ctr., 205 F.

Supp. 3d at 299 (“The retaliatory discharge must occur because of the protected

conduct.”) (citations omitted). At the motion to dismiss stage, temporal proximity

between the protected conduct and adverse action is a sufficient basis for a claim to

go forward. See Garcia v. Aspira of N.Y., Inc., No. 07 CIV. 5600 (PKC), 2011 WL

1458155, at *5 (S.D.N.Y. Apr. 13, 2011).

10 The Hospital’s Chief Quality Officer allegedly audited her and concluded she

overreported to VAERS. See Dkt. 34 { 74.

33

Here, RRH terminated Relator on October 6, 2021, after she engaged in the

protected activity described above. Dkt. 34 4 90. Most notably, RRH fired Relator

shortly after Relator retained a law firm (Siri & Glimstad LLP) to send a letter to

RRH about its underreporting.) Jd. 79, 83. This alleged temporal proximity,

combined with the allegations about her protected conduct, satisfies the causation

prong at this early 12(b)(6) stage. Beckles-Canton v. Lutheran Soc. Sers. of N.Y.,

Inc., No. 20 CIV. 4379 (KPF), 2021 WL 3077460, *9-10 (§.D.N.Y. July 20, 2021).

Thus, the amended complaint plausibly alleges that RRH took adverse action

against Relator for engaging in protected conduct.

Defendants’ argue that RRH terminated Relator because she refused to get a

COVID vaccine, but this is insufficient to dismiss the retaliation claim at this stage

because temporal proximity is plausibly alleged here. Dkt. 38, at 37.12 Thus,

Defendants’ motion to dismiss is denied as to Relator’s FCA-based retaliation claim.

11 The amended complaint alleges that Siri & Glimstad LLP sent RRH letters on

June 28, 2021 and July 21, 2021 regarding its reporting obligations. Id. {{ 79, 88.

RRH fired Relator on October 6, 2021—less than three months after the last letter

sent. Id. § 90.

12 Tn light of this, the Court denies Defendants’ request for this Court to take

judicial notice of a declaration submitted in connection with a state court case, as

well as the docket associated with that action. See id. at 37n.8. Relator’s request

to strike Exhibit D to the Declaration of James E. Peacock, Esq. (Dkt. 38-1) is also

denied as moot. See Dkt. 45, at 44.

34

VI. Relator’s state law claim survives

The amended complaint also asserts a retaliation claim under state law—

specifically N.Y. Labor Law §§ 740-41. See Dkt. 34 | 157-61. Defendants fail to

set forth any substantive argument as to whether this Court should exercise

supplemental jurisdiction if Relator’s federal claims survive, as some do here. See

Dkt. 38, at 38; see also Dkt. 45, at 44. Because this issue is not contested, and for

the below reasons, the motion to dismiss is denied as to the state law claim.

Under section 1367(a), a federal court may exercise supplemental jurisdiction

“over all other claims that are so related to claims in the action within such original

jurisdiction that they form part of the same case or controversy under Article III of

the United States Constitution.” 28 U.S.C. § 1367(a). Claims “form part of the

same case or controversy” if they “derive from a common nucleus of operative fact.”

Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 245 (2d Cir. 2011)

(internal quotation marks and citation omitted). Here, the state and federal actions

arise from the same set of facts—particularly, that RRH retaliated against Relator

because she tried to stop RRH from committing False Claims Act violations. See

Dkt. 34 { 158. Thus, section 1367(a) is satisfied.

When section 1367(a) applies, “the discretion to decline supplemental

jurisdiction is available only if founded upon an enumerated category of subsection

1367(c).” Shahriar, 659 F.3d at 245 Gnternal quotation marks and citation

omitted). Under section 1367(c), a court may decline to exercise supplemental

jurisdiction over a claim if:

35

(1) the claim raises a novel or complex issue of State law, (2) the claim

substantially predominates over the claim or claims over which the

district court has original jurisdiction, (8) the district court has

dismissed all claims over which it has original jurisdiction, or (4) in

exceptional circumstances, there are other compelling reasons for

declining jurisdiction.

28 U.S.C. § 1367(c).

But these do not appear to apply. Here, there are remaining claims the

Court has original jurisdiction over, so that category does not apply. Nor does the

state law claim appear to raise a “novel or complex issue of State law.” The state

law claim also does not predominate here—this is primarily a FCA case, which the

Court has original jurisdiction over. Lastly, the Court does not foresee any other

compelling reasons as to why it should decline jurisdiction.

Therefore, the Court will exercise supplemental jurisdiction over the state

law claim.

36

CONCLUSION

For the reasons discussed above, the Court DENIES Defendants’ motion as to

Relator’s false claims counts, solely as to the allegations raised in paragraph 91

(and any alike) involving patients who received COVID vaccines from RRH as set

forth above (Counts 1 and 2); FCA retaliation claim (Count 5); and state law

retaliation claim (Count 6). The Court GRANTS the remainder of Defendants’

motion to dismiss the amended complaint.

SO ORDERED.

Dated: June 11, 2025

Buffalo, New York (~

int L. SINATRA, JR.

(UNITED STATES DISTRICT JUDGE

37