United States District Court, D. Minnesota
Benjamin E. Ford, Esq. and Paul W. Shaw, Esq., Verrill Dana,
LLP; W. Anders Folk, Esq., Stinson Leonard Street LLP,
counsel for Plaintiffs.
Jacqueline A. Mrachek, Esq., and Nicole A. Truso, Esq.,
Faegre Baker Daniels LLP, counsel for Defendant.
REPORT AND RECOMMENDATION
BECKY
R. THORSON, United States Magistrate Judge.
This
matter is before the Court on Defendant's motion to
dismiss for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6), or in the alternative, for summary
judgment pursuant to Federal Rule of Civil Procedure 56.
(Doc. No. 118.)
Defendant
argues that the Amended Complaint should be dismissed
pursuant to releases in Plaintiffs' separation
agreements. Defendant also argues that Plaintiffs'
retaliation claims under the False Claims Act
(“FCA”) are time-barred. This Court held a
hearing on October 25, 2016. (Doc. No. 146.) For the reasons
stated below, this Court recommends that the motion to
dismiss be converted to a motion for summary judgment and
that the motion be granted.
This
case is an offshoot of a qui tam action brought in
the District of Massachusetts on December 2, 2011. United
States of America ex rel. Herman, et al. v. Coloplast Corp.,
et al., Civil Action No. 11-12131-RWZ (D. Mass.); (Doc.
No. 1.) The underlying qui tam action remained under
seal while the United States investigated the claims until
approximately October 2014. (Doc. No. 142, Pls.' Br. 9.)
On November 20, 2014, two of the relators in that case,
Kimberly Herman and Kevin Roseff, amended the qui
tam complaint to bring individual FCA retaliatory
discharge claims against one of the defendants, Coloplast
Corporation. (Doc. No. 21.) On June 1, 2015, Herman and
Roseff amended the complaint again to add claims against
Coloplast under the Minnesota Whistleblower Act. (Doc. No.
40.)
On May
11, 2016, the district court in Massachusetts severed the new
claims from the qui tam action and transferred them
to the District of Minnesota. (Doc. No. 116.) After the
transfer, Defendant moved to dismiss (Doc. No. 118), and the
motion was referred to this Court. (Doc. No. 124.)
I.
Background
A.
Employment of Herman and Roseff by Coloplast
Defendant
Coloplast Corporation (“Coloplast”), is a
Minnesota-based company that manufactures ostomy and
continence care products reimbursed by Federal health care
programs. Plaintiffs were former employees of Coloplast who
were retained or hired in 2009 and terminated in 2011.
1.
Herman was Hired in 2009 and Terminated in April
2011
Kimberly
Herman was retained by Defendant as a consultant in 2009,
hired as Vice President of Marketing in 2010, and promoted to
President in April 2010. Herman's employment as President
was governed by an Executive Employment Agreement
(“Employment Agreement”). (Doc. No. 138, Aff. of
Jacqueline Mrachek (“Mrachek Aff.”), Ex. E.)
Under this agreement, Herman would be entitled to severance
if she was fired without cause and signed a general release
of all claims against the Defendant. (Id. §
2.06(f).)
Herman's
employment was terminated on April 15, 2011. On May 5, 2011,
Herman signed a Separation Agreement and Release
(“Separation Agreement and Release”). Under the
Separation Agreement and Release, Herman received payments
exceeding $600, 000: (1) $345, 100 (equal to 52 weeks of
Herman's base salary); (2) COBRA premiums for up to 52
weeks; (3) $92, 957 representing a pro-rated cash incentive
bonus; (4) $54, 774 representing a pro-rated long-term
incentive bonus; (5) $102, 000 representing a long-term
incentive bonus for prior years; (6) reimbursement of her
housing lease for two months; (7) use of her fleet vehicle
for approximately two months post-termination; (8)
reimbursement of relocation costs for her family to return to
Florida; and (9) six months of outplacement services.
(Mrachek Aff., Ex. D.) The Separation Agreement and Release
included the following release language:
In consideration of the Severance Compensation and other
benefits described herein including but not limited to
Articles 4 through 8, you, on behalf of yourself and any of
your agents, representatives, insurers, heirs, executors,
administrators and assigns, absolutely and unconditionally
release and agree not to sue, file claims against, or pursue
recovery of any alleged damages in any forum from Coloplast
and any of Affiliates or its past or current parent
corporations, subsidiaries, and divisions, and all respective
past and present officers, directors, employees, agents,
representatives, attorneys, insurers, indemnitors, successors
and assigns of Coloplast, for any and all claims you may have
against them up to the date you sign this Agreement, whether
you now know of their existence. This includes but is not
limited to claims or causes of action directly or indirectly
relating to your employment including its termination; claims
for breach of contract; any tort claims; claims of
discrimination on the basis of age, race, national origin,
gender, religion, creed, disability, marital status, or any
other protected class. This includes but is not limited to
claims arising under the Age Discrimination in Employment
Act, the Older Workers Benefits Protection Act, Title VII of
the Civil Rights Act, the Minnesota Human Rights Act, the
Civil Rights Act of 1991, the Americans with Disabilities
Act, the Minnesota Whistleblowing Statute, or any other
federal, state or local statute, ordinance, common law or
other principle of law.
You are not, however, waiving any claims that may arise after
the date on which you sign ...