Unied States ex rel. Murrill v. Midwest CES, LLC

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UNITED STATES OF AMERICA, ex rel. JODIE MURRILL, Personal Representative of the Estate of Gary Murrill, Plaintiff, v. MIDWEST CES, LLC Defendant.

No. 4:21-CV-00371-DGK

United States District Court, W.D. Missouri, Western Division

April 6, 2023

ORDER

GREG KAYS, JUDGE

Now before the Court is Defendant Midwest CES, LLC's (“Midwest”) Motion to Dismiss. ECF No. 12. Relator Jodie Murrill brought this qui tam action pursuant to the False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et seq., alleging that Midwest knowingly submitted false or fraudulent Consultative Examination (“CE”) reports to the United States Social Security Administration (“SSA”) to obtain payment and approval. The Government declined to intervene. Midwest seeks to dismiss Plaintiff's complaint based on Federal Rules of Civil Procedure 12(b)(5) (insufficient service of process) and 12(b)(6) (failure to state a claim). For the reasons stated below, Midwest's motion to dismiss is DENIED WITHOUT PREJUDICE, and the parties are ORDERED to conduct limited discovery to determine whether a public disclosure exists.

Standard of Review

In ruling on a motion to dismiss, the Court “must accept as true all of the complaint's factual allegations and view them in the light most favorable to the Plaintiff[].” Stodghill v. Wellston Sch Dist., 512 F.3d 472, 476 (8th Cir. 2008). To avoid dismissal, a complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Plaintiff need not demonstrate the claim is probable, only that it is more than just possible. Id.

In reviewing the complaint, the Court construes it liberally and draws all reasonable inferences from the facts in the plaintiff's favor. Monson v. Drug Enforcement Admin., 589 F.3d 952, 961 (8th Cir. 2009). The Court generally ignores materials outside the pleadings but may consider materials that are part of the public record or materials that are necessarily embraced by the pleadings. Miller v. Toxicology Lab. Inc., 688 F.3d 928, 931 (8th Cir. 2012).

Background

In 2019, Gary Murrill filed for disability benefits under the Social Security Act. The Disability Determination Services (“DDS”) office handles the medical component of disability claims. As part of the process, DDS orders a CE to obtain more information when the medical evidence in a claimant's file is insufficient or inconsistent. Midwest a limited liability company, contracts with DDS to provide CEs and reports. The SSA pays Midwest for each CE it performs and submits.

After reviewing Gary Murrill's file, DDS ordered him to undergo a CE with Midwest, which he attended on September 14, 2019, with his wife, Jodie Murrill (“Relator”). Jesal S. Amin, MD performed his CE and submitted a report. After reviewing the CE report, DDS denied Mr. Murrill's disability claim. Mr. Murrill sought review before an administrative law judge (“ALJ”) but died before his hearing. Relator was substituted as a party in that matter. Through counsel, Relator informed the ALJ that Mr. Murrill's CE report was inaccurate and that Midwest used boilerplate language in virtually every CE report. In her pre-hearing brief to the ALJ on December 12, 2020, Realtor alleged a pattern of misconduct by Midwest and shared a list with information about 42 other Midwest reports. See Murrill ALJ Corresp., Pl.'s Suggestions in Opp., ECF No. 15-4.

On June 3, 2021, Relator filed this suit under the FCA. As required by the FCA, the complaint and attached exhibits were filed under seal. In the complaint, Relator alleges Dr. Amin evaluated Mr. Murrill for less than five minutes, failed to take notes, and falsely stated that certain tests were performed. For instance, the report claimed Mr. Murrill was able to unbutton his shirt, write a sentence with a pen, and handle his personal belongings, although he was never asked to perform these tests. Relator also alleged that Midwest has generated thousands of these boilerplate reports, which has resulted in submission and payment by the SSA for false reports.

While the Government was deciding whether to intervene, it served civil demands on Midwest on at least two occasions. Ultimately, on August 9, 2022, the Government declined to intervene and requested that the complaint be unsealed. ECF No. 6. Later that day, the Court ordered the complaint be unsealed and served upon Midwest. ECF No. 7. On September 10, 2022, Relator filed a motion to re-seal Exhibits B and C, which the Court granted on September 12, 2022. ECF Nos. 8, 9. On September 15, 2022, Relator served the complaint on Midwest without the attached exhibits, namely Exhibit B (a list of other social security disability claimants for which Midwest submitted false claims to the government) and Exhibit C (multiple CE reports prepared by Midwest for claimants who are not parties to this action). On November 7, 2022, Midwest moved to dismiss this case.

Relevant to this case is a 2019 federal lawsuit against the SSA in the Western District of Missouri, Ryan v. Kijakazi, No. 4:19-cv-00772-BP (W.D. Mo. Sept. 23. 2019), explained in more detail below. Midwest believes Ryan and potentially other lawsuits filed by BurnettDriskill-the law firm representing Relator-are “public disclosures” that bar Relator's claim.

The background of Ryan v. Kijakazi is a follows: Claimant Michael Ryan filed for social security disability benefits after a serious car accident in 2015. He was denied disability benefits at the initial level and subsequently appealed to an ALJ. The ALJ determined Ryan should be examined by an orthopedist or an orthopedic surgeon and that additional imaging be conducted. Ryan was referred to Midwest for a CE, where he was examined by an ear, nose, and throat specialist rather than an orthopedic specialist. No evidence in the record indicated the specialist administered additional imaging or evaluated Ryan's prior records. Instead, the specialist indicated Ryan's physical ailments “began in 2015 due to an unknown etiology.” Regardless of these deficiencies, the ALJ concluded Ryan retained the Residual Functional Capacity (“RFC”) to perform sedentary work. Ryan then appealed this determination in federal court arguing, in part, that the RFC was not supported by substantial evidence. Chief Judge Beth Phillips presided over the case.

On June 23, 2020, Judge Phillips reversed the commissioner's denial of benefits and remanded the case after concluding the RFC was not supported by substantial evidence, in part, because of the CE deficiencies identified above-that the CE was not performed by an orthopedic specialist as the ALJ requested, no additional imaging occurred, and nothing indicated the specialist evaluated Ryan's prior records. See Judge Phillips's Order at 2-3, Df.'s Suggestions in Supp., ECF No. 13-3.

On October 2, 2022, the Kansas City Star published an article titled, They were denied disability benefits after medical exams in KC. But was it fraud? (the “Article”), that discusses Midwest's fraudulent scheme. The article interviews various claimants, including Ryan, who were sent to Midwest for CEs and who now claim those exams were “fraudulent, incomplete, inadequate, misleading and contained false information.” Article at 4, Df.'s Suggestions in Supp., ECF No. 13-2. Importantly, the Article states, “[t]he Kansas City law firm of BurnettDriskill has filed at least 15 lawsuits on behalf of its clients . . . against the Social Security Administration or physicians working for Midwest CES.” Id.

Discussion

I. Midwest's motion to dismiss under Rule 12(b)(5) is denied.

Midwest requests the Court dismiss this case pursuant to Fed.R.Civ.P. 12(b)(5) due to insufficient service of process since Relator did not serve a copy of Exhibits B and C-which were attached to the complaint-on Midwest. Relator claims it substantially complied with Rule 4 because the Government's civil demands put Midwest on notice (specifically on notice of the case number and information contained in the exhibits), and therefore, Midwest could have viewed the exhibits on CM/ECF during the short period of time they were unsealed. Regardless, Relator claims she cured any potential deficiency in service by serving Midwest with the exhibits just one week after Midwest filed its motion to dismiss.

Under Rule 10(c) “[a] copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” And Rule 4(c)(1) requires service of “a copy of the complaint.” Interpreted together “some courts have held that ‘if a plaintiff fails to serve a document attached to his complaint, he fails to serve the complete pleading, and service is improper.'” See, e.g., Doe #1 v. Am. Fed'n of Gov't Emps., 554 F.Supp.3d 75, 124 (D.D.C. Aug. 11, 2021) (quotation omitted) (citing cases). Midwest cites this non-binding case in claiming that dismissal is required here. According to the Eighth Circuit, however, when service is improper, it is within the district court's discretion to either (1) dismiss the suit, or (2) retain the suit, quash service, and allow the plaintiff to re-serve the defendant. See Adams v. AlliedSignal Gen. Aviation Avionics, 74 F.3d 882, 886 (8th Cir. 1996). The Court is inclined to retain the suit. And since Relator served the exhibits on Midwest only one week after receiving notice that the exhibits were not attached to the complaint (thus, curing any potential defect), it would be futile to make Relator re-serve Midwest now. As such, Midwest's motion to...