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United States ex rel. Dicken v. Northwest Eye Center, P.A.

United States District Court, D. Minnesota

February 27, 2017

NORTHWEST EYE CENTER, P.A., CHRISTOPHER J. BORGEN, ERIC M. TJELLE, and SANFORD HEALTH NETWORK, a South Dakota non-profit corporation doing business in Minnesota, Defendants.


          JOAN N. ERICKSEN United States District Judge

         Plaintiff Dr. Robert A. Dicken, relator on behalf of the United States of America, brought claims against Defendants Northwest Eye Center, P.A., Dr. Christopher J. Borgen, and Dr. Eric M. Tjelle (collectively, the “Northwest Defendants”) for violations of the False Claims Act (“FCA”) and tortious interference. Dicken also brought claims against Sanford Health Network (“Sanford”) for retaliation and breach of contract. Both the Northwest Defendants and Sanford move for dismissal. For the following reasons, the Court grants Defendants' motions with respect to the federal claims and declines to exercise supplemental jurisdiction over the remaining state law claims.


         Both the Northwest Defendants and Sanford move to dismiss under Fed.R.Civ.P. 12(b)(6). (See Dkt. Nos. 49, 60.) The Northwest Defendants also move to dismiss the FCA claims against them under Fed.R.Civ.P. 9(b). (See Dkt. No. 60.) When ruling on motions under either rule, the Court accepts the alleged facts as true, drawing all reasonable inferences in favor of the non-moving party. See Drobnak v. Andersen Corp., 561 F.3d 778, 781 (8th Cir. 2009). “This tenet does not apply, however, to legal conclusions or ‘formulaic recitation of the elements of a cause of action'; such allegations may properly be set aside.” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009); see United States ex rel. Raynor v. Nat'l Rural Utils. Coop. Fin., Corp., 690 F.3d 951, 955-56 (8th Cir. 2012).

         On Rule 12(b)(6) motions, the Court evaluates whether the alleged facts are sufficient to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court draws on “its experience and common sense” to determine if the factual statements nudge a claim “across the line from conceivable to plausible.” Iqbal, 556 U.S. at 679-70. When reviewing a complaint for compliance with Rule 9(b), the Court determines whether the plaintiff “state[s] with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b).


         The Amended Complaint alleges the following: Dicken is a resident of Minnesota and has been a practicing board-certified ophthalmologist since 1987. (See Amend. Compl. ¶¶ 14, 30, Dkt. No. 37.) Borgen and Tjelle are optometrists and currently own and operate Northwest at its clinic location in Thief River Falls, MN. (See Id. ¶ 17.)

         Dicken started practicing in Northwest's clinic in January 1988. (Id. ¶ 29.) In 2001 and 2002, Borgen and Tjelle joined Northwest and took over the practice from a retiring optometrist. (Id. ¶¶ 29, 30.) Starting around that time, in July 2002, Dicken began practicing separately, but continued seeing patients at Northwest's location. (See Id. ¶ 14.) In April 2009, Dicken started working for a multi-specialty practice called MeritCare. (Id. ¶ 68.) When Sanford acquired MeritCare on January 1, 2010, Dicken became a Sanford employee. (Id.) Dicken continued to practice at Northwest's location until Sanford relocated him in August 2010. (See id.)

         In July 2002, Dicken began to discover that Borgen and Tjelle, through Northwest, were submitting false claims for reimbursement from Medicare. (See Id. ¶¶ 42, 79, 84, 93.) Dicken shared patients with the Northwest Defendants and had access to shared patient medical files. (See Id. ¶¶ 29, 37.) After “treating patients, going over their medical files, operating surgically on patients, and working with [Borgen and Tjelle], ” it became clear to Dicken that the Northwest Defendants were submitting false claims. (See Id. ¶¶ 29, 38, 51.) In making this determination, Dicken relied on his extensive medical experience and knowledge of CPT and ICD-9 codes, which are used for diagnosis and billing purposes. (See Id. ¶¶ 27, 41.)

         Starting in 2008, Dicken began reporting the Northwest Defendants' fraud to Sanford leadership and, eventually, the Government. (See Id. ¶¶ 68, 72.) Sanford discharged Dicken on April 30, 2011. (See Id. ¶ 68.)


         A. Pleading FCA Claims with Particularity

         Dicken brought two claims against the Northwest Defendants for violation of the FCA. The first claim (Count I) is for fraud and making false records and statements, under 31 U.S.C. § 3729(a)(1)(A)-(B). (See Amend. Compl. ¶¶ 81-104.) The second claim (Count II) is for conspiracy to violate the FCA in the ways claimed in Count I, under § 3729(a)(1)(C). (See Amend. Compl. ¶¶ 105-29.) Both claims must be pled with particularity under Rule 9(b). United States ex rel. Joshi v. St. Luke's Hosp., Inc., 441 F.3d 552, 556 (8th Cir. 2006).

         1. The FCA Fraud Claim

         In order to plead FCA fraud claims with particularity, relators must plead the “time, place, and content” of the fraud and “the details of the defendant's fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as a result.” Olson v. Fairview Health Servs. of Minn., 831 F.3d 1063, 1070 (8th Cir. 2016) (quoting Joshi, 441 F.3d at 556). This heightened degree of detail “is intended to enable the defendant to respond specifically and quickly to the potentially damaging allegations.” United States ex rel. Costner v. United States, 317 F.3d 883, 888 (8th Cir. 2003).

         The Northwest Defendants argue that Dicken failed to plead his FCA fraud claim with particularity under Rule 9(b) because he did not allege specific details of a fraudulent scheme, nor any specific examples of false claims submitted in furtherance of the scheme. (The Northwest Defendants' Memorandum in Support of Their Motion to Dismiss (“Nw. Def. Br.”) 3-4, Dkt. No. 51.) Dicken responds that the Amended Complaint alleges enough detail to put the Northwest Defendants on notice as to which of their Medicare claims are fraudulent, enabling an adequate defense. (See Dicken's Memorandum in Opposition to the Northwest Defendants' Motion to ...

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