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United States of America Ex Rel. v. New York University Medicalcenter and New York University School of Medicine

January 25, 2012


The opinion of the court was delivered by: McKENNA, D.J.


Defendants New York University Medical Center and New York University School of Medicine (collectively, "Defendants" or "NYU"), move for summary judgment pursuant to Federal Rule of Civil Procedure 56 dismissing plaintiff-relator Terence Sasaki's ("Plaintiff") claims brought under the qui tam provisions of the False Claims Act, 31 U.S.C. §§ 3729-3733. For the reasons set forth below, Defendants' motion is granted.

I. Background and Procedural History

A. NYU's Relationship with the Veteran's Administration

Plaintiff's complaint arises out of an educational and professional partnership between NYU and the United States Department of Veterans Affairs ("VA"), which operates the VA Medical Center in Manhattan, NY ("Manhattan VA"). As part of this relationship, NYU residents*fn1 and other physicians train at the Manhattan VA, which then reimburses NYU for the shared costs of providing a joint educational program. (Defs. New York Univ. Medical Center and New York Univ. School of Medicine's Local Civil Rule 56.1 Stmt. of Material Facts Not in Dispute, Sept. 30, 2011, ("Defs.' Rule 56.1 Stmt.") ¶¶ 35, 39, 41; Pl.-Relator Terence Sasaki's Response to Defs.' Local [Civil] Rule 56.1 Stmt. of Material Facts Not in Dispute, Oct. 28, 2011, ("Pl.'s Rule 56.1 Stmt.") ¶¶ 35, 39, 41.) The payments are governed by a "disbursement agreement" pursuant to which NYU invoices the Manhattan VA quarterly to bill for the number of approved "pay lines", or resident physician reimbursements. (See Defs.' Rule 56.1 Stmt. ¶¶ 41, 43, 48, 49; Pl.'s Rule 56.1 Stmt. ¶¶ 41, 43, 48, 49.)

B. Plaintiff's Residency and Termination from NYU

In July 2000, Plaintiff began a medical residency at NYU in a combined program in neurology, radiology, and neuroradiology. (See Defs.' Rule 56.1 Stmt. ¶ 1; Pl.'s Rule 56.1 Stmt. ¶ 1.) As part of his residency, Plaintiff took part in medical rotations at the Manhattan VA. (See Tr. of Dep. of Terence Sasaki, Aug. 12, 2010, attached as Ex. A to Decl. of Brian A. Burns, Sept. 30, 2011, ("Burns Decl."), at 181:14-17.) Between 2003 and 2004, NYU placed Plaintiff on remediation twice and on probation twice due to alleged academic and professional deficiencies. (See Defs.' Rule 56.1 Stmt. ¶¶ 5, 7, 13, 15; Pl.'s Rule 56.1 Stmt. ¶¶ 5, 7, 13, 15.) On May 18, 2005, NYU terminated Plaintiff from the combined program citing a failure to satisfy the requirements of Plaintiff's most recent probation. (See Ltr. from Dr. Michael Ambrosino, Dr. Edmond A. Knopp, and Dr. Robert I. Grossman to Dr. Terence Sasaki, May 18, 2005 ("Termination Ltr."), attached as Ex. F to Burns Decl.)

On April 11, 2005, roughly one month prior to his termination, Plaintiff submitted a telephone complaint to the VA's Office of the Inspector General ("VA OIG") alleging that NYU was defrauding the Manhattan VA. (See Hotline Input Transaction for Complaint Received Apr. 11, 2005, Aug. 3, 2005 ("Pl.'s Tel. Compl."), attached as Ex. 26 to Decl. of Charles M. Yoon in Opp'n to NYU's Mot. for Summ. J., Oct. 28, 2011 ("Yoon Decl.").) In his telephone complaint, Plaintiff alleged, inter alia, that NYU radiology residents were not performing their duties at the Manhattan VA in person and that NYU was forcing residents to sign attendance sheets on behalf of others who were not present during their required shifts at the Manhattan VA. (See id.) On Apr. 28, 2005, Plaintiff sent the VA OIG an email further delineating his complaint and alleging that after he raised his concerns with NYU, he was "immediately retaliated against" and harassed for his role as a "whistleblower". (See Email from Dr. Terence Sasaki to VA OIG Hotline, Apr. 28, 2005 ("Pl.'s Email Compl."), attached as Ex. 27 to Yoon Decl.)

C. Plaintiff's Qui Tam Action

Following his termination and complaints to the VA OIG, Plaintiff brought this qui tam action on behalf of the government against NYU alleging violations of the federal False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733. Plaintiff's complaint states two causes of action. First, Plaintiff alleges that NYU has violated FCA Section 3729 by fraudulently billing the Manhattan VA for the full amount of resident pay lines despite the fact that residents often do not show up for their assignments at the Manhattan VA. (See Verified Compl., July 1, 2005, ¶¶ 17, 18, 48.) Second, Plaintiff alleges that NYU has unlawfully retaliated against him for his complaints to the VA OIG, in violation of FCA Section 3730(h). (See id. ¶¶ 52-55.)

Following a period of investigation into Plaintiff's claims, the government declined to take over the action pursuant to 31 U.S.C. § 3730(b)(4)(B). (See Unsealing Order, Sept. 3, 2008.) Defendants now seek to dismiss both of Plaintiff's causes of action on summary judgment.

II. Discovery Issues

Before addressing Defendants' motion for summary judgment, the Court will address Plaintiff's request for clarification regarding various discovery matters. (See Ltr. from Heather S. Dixon to Court, June 27, 2011; Ltr. from Theodore K. Chang to Court, Nov. 30, 2011.)

On November 4, 2010, Magistrate Judge Pitman issued an oral ruling in this case denying Plaintiff's request for certain additional discovery. (See Tr. of Proceedings Before Mag. J., Nov. 5, 2010, attached as Ex. 1 to Pl.-Relator's Reply in Further Supp. of Objections to Non-Dispositive Ruling by the Mag. J., Dec. 9, 2010, at 116:23-117:20.) On December 10, 2010, this Court affirmed Magistrate Judge Pitman's ruling because Plaintiff had not shown that the ruling was clearly erroneous or contrary to law. (See Endorsed Mem., Dec. 10, 2010 (citing 28 U.S.C. § 636(b)(1)(A)).) On November 16, 2010, Magistrate Judge Pitman issued a second set of oral rulings again denying Plaintiff additional discovery. (See Tr. of Proceedings Before Mag. J., Nov. 16, 2010 ("Nov. 16, 2010, Tr."), attached as Ex. 1 to Pl.-Relator's Objections to NonDispositive Rulings by the Mag. J., Mar. 4, 2011 ("Pl.'s Mar. 4, 2011, Objections"), at 32:15-33:3, 69:8-13, 74:10-75:5.) On March 4, 2011, Plaintiff objected to the November 16, 2010, rulings (see Pl.'s Mar. 4, 2011, Objections), and on June 20, 2011, this Court issued another order via endorsement stating that "Plaintiff's objections to the November 2010 rulings of Magistrate Judge Pitman are overruled" (see Endorsed Mem., June 20, 2011).

Plaintiff now seeks clarification regarding "whether or not his objections to the November 16, 2010 rulings . . . were considered by [the Court] and ruled upon in the June 20, 2011 endorsement". (Ltr. from Heather S. Dixon to Court, June 27, 2011.) The Court clarifies that it considered Plaintiff's objections to Magistrate Judge Pitman's November 16, 2010, rulings when issuing its June 20, 2011, order, and that the rulings are affirmed because Plaintiff has not shown that they are clearly erroneous or contrary to law. See 28 U.S.C. § 636(b)(1)(A).

In the interest of alleviating any confusion, however, the Court will address each of Plaintiff's objections in detail.

Pursuant to Federal Rule of Civil Procedure 72(a), a district court "must consider timely objections [to a magistrate judge's order] and modify or set aside any part of the order that is clearly erroneous or is contrary to law." See also 28 U.S.C. § 636(b)(1)(A) ("A judge . . . may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.") "Under this highly deferential standard of review, magistrates are afforded broad discretion in resolving [non-dispositive] disputes and reversal is appropriate only if their discretion is abused." AMBAC Fin. Servs., LLC v. Bay Area Toll Auth., No. 09 Civ. 7062 (RJH), 2010 WL 4892678, at *2 (S.D.N.Y. Nov. 30, 2010) (citation omitted). "The reviewing court must be left with the definite and firm conviction that a mistake has been committed to overturn the magistrate judge's resolution of a nondispositive matter." Id. (citation and internal quotation omitted).

Plaintiff makes multiple objections to Magistrate Judge Pitman's November 16, 2010, rulings.*fn2 First, Plaintiff argues that Magistrate Judge Pitman erred by denying Plaintiff document discovery relating to (i) additional time periods of potential fraudulent conduct by NYU; (ii) medical departments other than radiology, specifically emergency medicine and psychiatry; and (iii) the work and coverage provided by NYU attending physicians. (See Pl.'s Mar. 4, 2011, Objections at 8.) Second, Plaintiff objects to Magistrate Judge Pitman's denial of two additional depositions, both of radiology doctors who, Plaintiff argues, may have knowledge relevant to Plaintiff's claims. (See id. at 20.)

A. Document Discovery

At the November 16, 2010, conference, Magistrate Judge Pitman reviewed information supplied by Plaintiff in support of additional document discovery, which included an affidavit from the Plaintiff himself, and concluded that it was "speculative". (Nov. 16, 2010, Tr. at 19:9.) Magistrate Judge Pitman further explained that expanding discovery in a case on the "cusp of dispositive motions", "is just going to result in undue delay and undue resolution of the claims that are asserted." (Id. at 32:15-33:3.) He also expressed concern that Plaintiff's complaint did not put Defendants on notice that other medical departments were involved in the allegations, notwithstanding Plaintiff's counsel's belief that departments such as psychiatry and emergency medicine were "contained within [their] original characterization" of Plaintiff's combined program of study. (Id. at 30:19-31:24, 33:4-8; see also Compl. ¶¶ 11, 18-19, 22-24.) Finally, Magistrate Judge Pitman questioned whether the United States would have a right to separately investigate new allegations with respect to the additional departments--a development that would likely delay the case further. (Nov. 16, 2010, Tr. at 33:8-10.) These rulings are well within the ambit of Magistrate Judge Pitman's broad discretion concerning non-dispositive disputes (see AMBAC Fin. Servs., 2010 WL 4892678, at *2), and are neither clearly erroneous nor contrary to law. The Court therefore overrules Plaintiff's objections.

B. Additional Depositions

Federal Rule of Civil Procedure 30(a)(2)(A) "presumptively caps the number of depositions in a case at ten, and Rule 26 gives district courts broad authority to limit discovery, taking into account the needs of the case and other relevant factors." Universal City Studios, Inc. v. Reimerdes, 104 F. Supp. 2d 334, 342 (S.D.N.Y. 2000). Rule 26(b)(2)(C) states that a court "must limit the frequency or extent of discovery" if it finds that "(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues."

As Magistrate Judge Pitman noted, Plaintiff had at the time of his request already taken 10 depositions. (Nov. 16, 2010, Tr. at 56:3-6.) Since then, Plaintiff has taken three more depositions. (See Defs.' Discovery Mem. at 6.) Nonetheless, Plaintiff sought to depose an additional NYU doctor, Dr. Grossman, who had signed the letter terminating Plaintiff from the NYU program. (Id. at 53:8-17.) However, Plaintiff's counsel acknowledged at the hearing that the letter outlines the reasons for which NYU terminated Plaintiff, and Defendants' counsel noted that Plaintiff's termination had been addressed in other depositions. (Id. at 53:18-54:25.) Plaintiff also sought to ask Dr. Grossman whether he signed a "program letter agreement" between NYU and the Manhattan VA and whether NYU was responsible for the monetary claims it submitted to the VA hospital. (Id. at 56:14-19, 58:3-4, 62:9-20.) However, Magistrate Judge Pitman ordered the production of the program letter agreement itself, and counsel for NYU acknowledged that NYU was responsible for claims submitted. (Id. at 63:8-16, 69:8-13.) Accordingly, Magistrate Judge Pitman reasonably concluded that a deposition of Dr. Grossman was unnecessary. (Id. at 69:8-13.) This ruling was neither clearly erroneous nor contrary to law.

Finally, Plaintiff sought to depose a Dr. Kantor because he "was the chief of radiology at the VA [hospital] in Brooklyn" and because in 2001, he "expressed concern about the lack of residents showing up at the Brooklyn VA [hospital] and providing coverage there." (Id. at 69:15-71:1.) However, as Magistrate Judge Pitman noted and Plaintiff's counsel admitted, because Dr. Kantor was based in Brooklyn, he was unlikely to have first-hand knowledge of the practices undertaken at the Manhattan VA hospital--the subject of Plaintiff's complaint--in the relevant time period. (Id. at 72:6-12.) Thus, Magistrate Judge Pitman ...

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