Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_14-cv-00061/USCOURTS-alnd-2_14-cv-00061-2/pdf.json

Nature of Suit Code: 375
Nature of Suit: False Claims Act
Cause of Action: 31:3729 False Claims Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

BARRY TAUL, ex rel., UNITED

STATES OF AMERICA,

Plaintiff,

v.

NAGEL ENTERPRISES, INC., et

al., 

Defendants.

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Case No.: 2:14-CV-0061-VEH

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

The primary issue for the court to decide is which claims arising under the

False Claims Act (“FCA”) in Counts I-V of the First Qui Tam Amended

Complaint (the “Amended Complaint”)(doc. 47)1 brought by Plaintiff Relator

Barry Taul (“Taul”) are actionable against Defendants Nagel Enterprises, Inc. and

Jed Nagel (“Defendants”). As explained below, some of Taul’s claims are barred

by their respective statutes of limitations, while others are not. Additionally,

Taul’s reverse FCA claims are due to be dismissed as inadequately alleged. This

court retains jurisdiction to decide Taul’s timely claims, and Defendants’ Motion

1

 All references to (Doc. __) correspond with the court’s CM/ECF numbering system.

FILED

 2017 Feb-01 AM 10:16

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:14-cv-00061-VEH Document 98 Filed 02/01/17 Page 1 of 39
To Dismiss (doc. 85) is due to be GRANTED IN PART and DENIED IN PART. 

II. PROCEDURAL BACKGROUND

Taul commenced this action against Defendants on January 13, 2014.

2,3

 On

May 19, 2015, Taul filed an Amended Complaint, asserting five grounds for relief:

violations of (1) 31 U.S.C. § 3729(a)(1)(A); (2) 31 U.S.C. § 3729(a)(1)(C); (3) 31

U.S.C. § 3729(a)(1)(B); (4) retaliation under 31 U.S.C. § 3730(h); and (5) FCA

violations based on violations of 42 U.S.C. § 1320a-7b(b)(2). (Doc. 47). On July

13, 2015, Defendants filed their Answer, which raised the statute of limitations as

an affirmative defense. (Doc. 58). On July 30, 2015, Defendants moved for

summary judgment (Doc. 61), and on January 25, 2016, this court granted in part

and denied in part Defendants’ Motion for Summary Judgment. (Doc. 80). 

Currently pending before the court are the following Motions:

1. Defendants’ Motion To Dismiss, filed on October 7, 2016 (doc.

85);

2

 A complaint is first filed under seal to allow the government time to investigate and

potentially intervene. 31 U.S.C. § 3730(b)(2). If the government declines to intervene, the relator

may proceed with the action, id.§ 3730(c)(3), and if successful, may recover between 25 and 30

percent of the judgment or settlement, plus reasonable expenses, attorney fees, and costs, id.§

3730(d)(2). An FCA violator is also subject to statutory penalties of between $5,000 and $10,000

per claim and treble damages. 31 U.S.C. §3729(a). The United States declined to intervene in this

qui tam action. (Doc. 6). 

3

 On August 31, 2011, a criminal case arising from the same facts and circumstances as

this whistleblower action was filed. In the criminal case, Demosthenes Lalisan and Richard Alan

Hicks were charged with a conspiracy to defraud the United States and two counts of healthcare

fraud. They pleaded guilty in the spring of 2012. See Memorandum Opinion, (Doc. 80 at 2). 

2

Case 2:14-cv-00061-VEH Document 98 Filed 02/01/17 Page 2 of 39
2. Defendants’ Motion To Quash Plaintiff’s Second Deposition

Notice and Accompanying Request To Produce Documents at

Deposition, filed on October 21, 2016 (doc. 86);

3. Defendants’ Motion To Strike/Defendants’ Objections to

Plaintiff’s Second Set of Interrogatories and Requests for

Production, filed on October 21, 2016 (doc. 87);

4. Defendants’ Motion To Amend/Correct his (doc. 86) Motion

To Quash, filed on October 21, 2016 (doc. 88);

5. Defendants’ Motion for Leave To File a Response to Plaintiff’s

Surreply, filed on November 23, 2016 (docs. 96 and 97).4

On November 4, 2016, Taul filed a Response to Defendants’ Motion

To Dismiss for Lack of Jurisdiction. (Doc. 90). On November 9, 2016,

Defendants filed their Reply. (Doc. 92). On November 21, 2016, Taul filed

his Surreply. (Doc. 95). All of the above Motions are now ripe for the

court’s disposition. 

III. MOTION TO DISMISS STANDARD

A Rule 12(b)(6) motion attacks the legal sufficiency of a complaint. FED. R.

CIV. P. 12(b)(6) (“[A] party may assert the following defenses by motion: (6)

failure to state a claim upon which relief can be granted[.]”). The complaint must

4

 CM/ECF documents 96 and 97 are identical, though they were filed in two different

ways. Doc. 96 is styled as a “Motion for Leave To File Response to Plaintiff’s Surreply,” and

Doc. 97 is styled as “Motion for Permission to File Response to Plaintiff’s Surreply to

Defendants 2nd Motion To Dismiss.”

3

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provide a short and plain statement of the claim that will “give the defendant fair

notice of what the plaintiff’s claim is and the grounds upon which it rests.” Conley

v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 103, 2 L. Ed. 2d 80 (1957) (quoting FED.

R. CIV. P. 8(a)(2)), abrogated by Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

556, 127 S. Ct. 1955, 1965, 167 L. Ed. 2d 929 (2007); see also FED. R. CIV. P. 8(a)

(requiring that general pleading in a complaint include “a short and plain

statement of the claim showing that the pleader is entitled to relief”). 

A plaintiff must set forth grounds for entitlement to relief to survive a

motion to dismiss. Twombly, 550 U.S. at 555, 127 S. Ct. at 1964 (citing Conley,

355 U.S. at 47, 78 S. Ct. at 103). Once a claim has been set forth adequately, it

may be “supported by showing any set of facts consistent with the allegations in

the complaint.” Twombly, 550 U.S. at 563, 127 S. Ct. at 1969. If well-pleaded

factual allegations support the complaint, a court “should assume their veracity

and then determine whether they plausibly give rise to an entitlement to relief.”

Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868

(2009). A claim is considered plausible when the plaintiff “pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.” Id. at 678. The complaint must establish “more than a

sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly,

4

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550 U.S. at 556, 127 S. Ct. at 1965). 

IV. STANDARD OF REVIEW FOR A STATUTE OF LIMITATIONS

DEFENSE

Defendants’ Motion To Dismiss (doc. 85) does not specify under which

Federal Rule of Civil Procedure they seek to dismiss Taul’s claims as untimely. In

this Circuit, “[a] Rule 12(b)(6) motion to dismiss for failure to state a claim is an

appropriate method for raising a statute of limitations defense. Mann v. Adams

Realty Co., 556 F.2d 288, 293 (5th Cir. 1977);5see also Edwards v. Apple

Computer, Inc., 645 F. App’x 849, 851 (11th Cir. 2016) (internal citations

omitted)(“A complaint is subject to dismissal when its allegations, on their face,

show that an affirmative defense bars recovery on the claim . . . [t]hus, a motion to

dismiss for failure to state a claim is an appropriate method for raising a statute of

limitations defense.”).6 Accordingly, the court construes Defendants’ Motion To

Dismiss as a challenge under Rule 12(b)(6) of the Federal Rules of Civil

Procedure.7 The court construes the Amended Complaint in the light most

5

 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981)(en banc), the

Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed

down prior to 1981. 

6

 In the Eleventh Circuit, unpublished decisions are not binding precedent, but they may

be cited as persuasive authority. 11th Cir. R. 36-2. 

7

 Taul’s Response (doc. 90) construes Defendants’ Motion as a 12(b)(1) facial challenge,

but he cites no authority for his proposition that 12(b)(1) is the proper Rule under which this

statute of limitations-based Motion should be brought. Plaintiff also admits that the standard of

5

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favorable to Taul and takes the factual allegations contained therein as true.

V. FACTUAL ALLEGATIONS

Taul alleges the following facts in his Amended Complaint (doc. 47):

10. Relator Barry Taul started working for Nagel-Abanks from June

2006 until September 2009.

11. The owner and principal of Nagel-Abanks is Defendant Jed Nagel.

12. The Alabama Organ Center is the only federally designated Organ

Procurement Organization for the State of Alabama.

13. The Alabama Organ Center coordinates the equitable use of organs

and tissues for life-saving transplants and medical research.

14. In and around June 2003, Nagel-Abanks and the Alabama Organ

Center, by and through their respective agents Jed Nagel, Demosthenes

“Dem” Lalisan (Director of the Alabama Organ Center), and Richard

Alan Hicks (Associate Director of the Alabama Organ Center), entered

into an agreement to harvest tissue at Nagel’s facility. This agreement

involved the harvesting of tissue, bone, muscle, and tendons but not

organs.

15. Under the agreement between Nagel and the Alabama Organ Center,

when a bone or tissue donor died, the organ center called Abanks with

the death information. Abanks, by and/or at the direction of Nagel,

would remove the donor from the place of death and bring them to

Abanks for harvesting. After the tissue had been harvested the donor

would then be transported by Abanks to the funeral home of the

deceased’s choosing. One particular division of the Alabama Organ

Center that was involved in the agreement was the[n] called the gift of

body program (hereinafter “GOB”). 

review under a 12(b)(1) facial argument is the same as a standard of review under Rule 12(b)(6).

Id. at 6. Therefore, the court will apply the 12(b)(6) standard, as encouraged by this Circuit. 

6

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16. After the harvesting, the GOB donor’s remains were cremated and

returned to the donor family. Because Nagel-Abanks also operated a

crematory, this Defendant was paid pursuant to the agreement to do the

cremation.

17. In or around June 2003, Lalisan and Hicks convinced the Alabama

Organ Center to enter into the aforementioned agreement with

Nagel-Abanks by arguing that it would be more cost efficient for the

Center to perform all tissue recoveries in Birmingham. Lalisan and

Hicks reasoned that they could have a tissue recovery team on the ready

24 hours a day in Birmingham. Further, the Alabama Organ Center

could pay Nagel-Abanks to remove the donors from anywhere in the

state of Alabama and bring them to its Birmingham facility; pay for the

use of Nagel-Abanks’ embalming room, pay for tissue harvesting

performed by Nagel-Abanks, and pay Nagel-Abanks for cremations

performed on the GOB donors.

18. In reality Lalisan and Hicks promoted the services of Nagel-Abanks

in exchange for kickback paymentsfrom Nagel-Abanks. Consequently,

from approximately June 2003 until approximately June 2011

Defendants Nagel-Abanks and Jed Nagel made illegal kickback

payments to Lalisan and Hicks in exchange for the contractual referral

business from the Alabama Organ Center.

19. For each month from June 2003 until approximately June 2011, in

Birmingham, Alabama, Lalisan and Hicks would meet at Nagel-Abanks

with Nagel to discuss the Alabama Organ Center’s bill for the previous

month’s services. At these monthly meetings Lalisan, Hicks and Nagel

would cook the books by fabricating charges to the Alabama Organ

Center.

20. For example, for each month from June 2003 until approximately

June 2011, in Birmingham, Alabama, Lalisan, Hicks and Nagel would

add miles onto transportation services. Further, if a GOB donor was

disqualified for tissue harvesting, the books might indicate that the GOB

donor did have tissue harvested so the embalming room charge could be

used as well as the cremation charge.

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21. It is standard in the death care industry to have a removal fee for

picking up a body from the place of death. Usually this is a flat rate that

includes a certain geographical area. If the removal requires going

outside that area there is a per mile charge that takes place.

22. The Nagel-Abanks transportation, embalming, cremation and

harvesting chargesto the Alabama OrganCenter were well over national

averages and often were inflated. At the monthly meetings of Nagel,

Lalisan, and Hicks, they determined how much the bills would be for the

previous month. Consequently, the bills were submitted to UAB (the

University of Alabama Birmingham) for payment. Once the bills were

paid, twenty percent of the bill would be given back to Hicks and

Lalisan by Nagel; Hicks and Lalisan received ten percent each of the

kickback. 

23. Under the kickback scheme, which violated both the False Claims

Act and the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b),

Lalisan and Hicks guaranteed that Nagel-Abanks would be able to bill

$50,000.00 to $60,000.00 each month to the Alabama Organ Center.

This bill was paid for with government grants, Medicare, and other

federal and taxpayer dollars as these donor services were free to the

donor families.

24. In approximately the first week of June 2009, in Birmingham,

Alabama, Relator Barry Taul became of aware of the aforementioned

fraud and illegal kickbacks.

25. In approximately the first week of June 2009 Taul, an employee of

Nagel-Abanks and Nagel at that time, was sent from Nagel-Abanks’

Birmingham Alabama location to deliver cremains to a funeral home in

Columbiana, AL.

26. While Taul was on this delivery run the only person at

Nagel-Abanks was Jed Nagel.

27. When he arrived back at Nagel-Abanks’ mortuary he entered the

back of the building. When Taul entered the building he was not heard

8

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because the crematory, a very loud machine, was in full operation.

28. As Taul walked to the front of the building, he heard voices coming

from the front office. Taul did not recognize the voices at first so he

paused before going into the office area because he wanted to know if

this was a family in the office making cremation arrangements. If this

was this case, Taul didn’t want to be disrespectful of a grieving family

and barge in on their arrangement conference.

29. In approximately the first week of June 2009, as he approached

however, Taul recognized the voices in the front office as those of

Lalisan, Hicks, and Nagel. Because Taul was on a first name basis with

all three individuals, he approached the office to announce hisreturn. At

this point, Taul overheard Nagel telling Lalisan and Hicks that if they

wanted to continue to get ten percent they were going to have to pad

“this bill a little more.” Taul knew these comments were improper but

didn’t fully understand the full scope of the conversation at that

moment.

30. When Taul entered the office Nagel, Lalisan and Hicks were

shocked to see him. The three men stopped talking immediately and then

changed the subject. All three seemed very nervous. Lalisan and Hicks

left very shortly after. Nagel then called Taul into the office and told him

that he didn’t hear anything. Nagel told Taul that it takes a little grease

on some palmssometimesto make money. At this point, Nagel informed

Taul of the kickback scheme and fraudulent billing referenced above in

¶¶15-29. 

31. In approximately the first week of June 2009, Nagel told Taul that

if he (Taul) ever told anybody about the fraud and the kickback scheme

Taul had overheard, he (Nagel) would cremate Taul alive and no one

would ever find Taul’s remains.

32. Nagel is a huge man and Taul took Nagel’s threat very seriously.

Nagel also said that he knew where Taul lived, where Taul’s parents

lived and that he (Nagel) would also torture or kill them as well. After

these threats, Nagel became very verbally abusive towards Taul during

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Taul’s everyday work environment.

33. Nagel also became physically abusive. For example, between June

2009 and October 2009, in Birmingham, Alabama, Nagel would kick

doors into Taul. Also, Nagel often would slap Taul open handed. Once,

between June 2009 and October 2009, Nagel even threw an open

embalming fluid bottle at Taul resulting in embalming fluid, a very

dangerous chemical, spilling all over Taul.

34. During the same time frame, between June 2009 and October 2009,

Nagel once threw feces from deceased individuals at Taul. Also, during

this same time frame Nagel once took a full catheter bag from a

deceased and emptied it on Taul’s back. This abusive behavior was

designed to scare and intimidate Taul so that he would be too fearful of

the consequences of disclosing the fraudulent scheme involving

Nagel-Abanks, Nagel, Lalisan and Hicks.

35. The foregoing behavior resulted in Taul fearing retribution to

himself and his family from Nagel if Taul were to disclose what he

knew about the aforementioned fraud/kickback scheme.

36. After Relator Taul became aware of this fraud and kickback scheme

in approximately June 2009 and began suffering abusive behavior from

Nagel, Taul began to actively look for employment at another funeral

home. Subsequently, in approximately October 2009, Taul found

employment at Valhalla funeral home in Midfield, Alabama.

37. In approximately, August 2010, Barry Taul informed the FBI of the

fraud and illegal kickback scheme described above involving Lalisan,

Hicks, [and] Nagel/Abanks.

38. Relator Taul disclosed the fraud and illegal kickback scheme

described above to the government before any public disclosure was

made and therefore Relator Taul is the original source regarding said

information. 

39. Relator Taul has knowledge independent of the public disclosure

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relating to this matter that “materially adds” to the disclosure and said

knowledge and/or information was provided to the government before

Relator Taul filed his lawsuit.

40. Shortly after informing the FBI of the fraud and illegal kickbacks

described above, in or around August 2010, Taul received a plain card

hand addressed to him at Valhalla funeral home in Midfield, Alabama.

On one side the card stated, “He knows it was you.” Taul gave this card

to the FBI and the FBI retained the card.

41. After this incident, in approximately October 2010, Taul’s regional

manager at Valhalla funeral home talked to him about an anonymous

letter that had been received stating that Taul was a thief. Shortly after

this incident, in or around February 2011, Taul was fired from Valhalla

funeral home. No good reason was given by Valhalla funeral home for

terminating Taul.

42. After he was terminated from Valhalla funeral home, it became

virtually impossible for Taul to get a job in the funeral business in

Birmingham, Alabama despite having worked in the funeral business in

that area since 1985.

43. However, Taul finally found a job at a funeral home in Jasper, AL

in approximately September 2012.

44. The Jasper funeral home used Nagel to perform their cremations. In

late Fall 2012, one of Nagel-Abanks’ employees came to the Jasper, Al

funeral home to pick up a body to cremate. The employee of

Nagel-Abanks saw Taul and asked if he was working at the funeral

home. Shortly thereafter, on or about December 26, 2012, Taul wasfired

from the funeral home in Jasper, Al.

45. Since the time that Taul informed the FBI of the fraud and illegal

kickbacksin August 2010, Taul hasreceived several threats from Nagel

against himself and his family.

46. Relator Taul has clearly been retaliated against by Nagel-Abanks

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and Nagel and continues to suffer the economic and emotional effects

of this retaliation.

47. As a result of their actions Nagel-Abanks, Jed Nagel, Demosthenes

“Dem” Lalisan and Richard Alan Hicks have violated the False Claims

Act and defrauded the Government.

(Doc. 47 at 3-9).

VI. ANALYSIS

In his Amended Complaint, Taul alleges that the relevant statute of

limitations for his FCA claims has been tolled since October 11, 2002, pursuant to

the Wartime Suspension of Limitations Act (“WSLA”) because the United States

has been at war, as defined by the WSLA, since 2002. (Doc. 47 at 2). As of the

time the Amended Complaint was filed on May 19, 2015, Taul’s position was still

good law. However, seven days later, on May 26, 2015, the Supreme Court held in

Kellogg Brown & Root Services, Inc., v. United States ex rel. Carter, 135 S.Ct.

1970, 191 L. Ed. 2d 899 (2015), that the tolling provisions of the WSLA apply

only to criminal cases. Because the WSLA does not apply in this civil case, the

applicable statute of limitations for FCA claims is found under 31 U.S.C. §

3731(b), and the applicable statute of limitations for retaliatory claims is found

under 31 U.S.C. § 3730(h)(3). 

A. The Applicable Statutes of Limitations

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The FCA’s statute of limitations states as follows:

(b) A civil action under section 3730 may not be brought - 

(1) more than 6 years after the date on which the violation of

Section 3729 is committed, or

(2) more than 3 years after the date when facts material to the

right of action are known or reasonably should have been known

by the official of the United States charged with responsibility to

act in the circumstances, but in no event more than 10 years after

the date on which the violation is committed, 

whichever occurs last. 

31 U.S.C. § 3731(b)(1-2). The statute of limitations for retaliatory claims states as

follows:

(h) Relief from retaliatory actions.–

. . . .

(3) Limitation on bringing civil action.– A civil action under

this subsection may not be brought more than 3 years after

the date when the retaliation occurred.

31 U.S.C. § 3730(h)(3). 

B. Statute of Limitations for Taul’s Retaliation Claims (Count IV)

 The court previously held that some, but not all, of Taul’s retaliation claims

in Count IV were barred. See Memorandum Opinion, (doc. 80 at 25) (“[Taul] is

correct [in stating that not all alleged retaliatory actions were more than three

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years old at the time of the filing of his initial Complaint on January 13, 2014],

since one of [the] alleged instances of harassment occurred in the fall of 2012 . . .

[t]he retaliation alleged in paragraph 44 of the complaint survives, but summary

judgment is granted as to any other claims of retaliation.”).

Despite the court’s earlier ruling, Defendants erroneously continue to claim

that the statute of limitations on all of Taul’s retaliation claims has run because

Taul has not alleged any retaliatory events occurring in the fall of 2012 or

thereafter. (Doc. 92 at 1, 9). This is simply incorrect, see (Doc. 47 at 9, ¶¶ 43-46),

and Defendants’ argument is not well taken by this court.

Therefore, as previously ordered, Taul’s retaliation claims from fall 2012

survive, but Plaintiff’s other retaliation claims are barred by the 3-year statute of

limitations pursuant to Section 3730(h)(3).

C. Statute of Limitations for FCA Claims (Counts I, II, and III)

Count I of the Amended Complaint asserts a claim under Section

3729(a)(1)(A) of the False Claims Act, which holds any person liable who

“knowingly presents, or causes to be presented, a fraudulent claim for payment or

approval.” 31 U.S.C. § 3729(a)(1)(A). Count II asserts a claim under Section

3729(a)(1)(C), which creates liability for those who “conspire[] to commit a

violation of subparagraph (A), (B), (D), (E), (F), or (G)” of Section 3729. 31

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U.S.C. § 3729(a)(1)(C). Count III asserts a claim under Section 3729(a)(1)(B),

which holds any person liable who “knowingly makes, uses, or causes to be made

or used, a false record or statement material to a false or fraudulent claim.” 31

U.S.C. § 3729(a)(1)(B).

Defendants posit their argument as though the statute of limitations, once

triggered by any violation of the FCA, also cuts off from judicial review any

timely claims of the same kind or character. However, they cite no authority for

this argument. Defendants also clearly misconstrue the FCA statute of limitations

in Section 3731. They claim that all of Taul’s claims are barred by the three-year

period found in 3731(b)(2) because Taul related facts to the FBI in 2010 but did

not file his initial Complaint until January 2014. 

Yet, Section 3731(b)(2) is a tolling provision, not a statute of limitations

provision. See, e.g., United States ex rel. Lewis v. Walker, No. 3:06-CV-16, 2007

WL 2713018, at *5 (M.D. Ga. Sept. 14, 2007) (Land, J.) (referring to Section

3731(b)(2) as a tolling provision). Defendants “muddy the waters” by treating the

statutorily-created tolling provision in Subsection (b)(2) as shortening the general

statute of limitations otherwise applicable under Subsection (b)(1). They also

ignore the fact that Section 3731 states that a plaintiff’s claims are subject to either

3731(b)(1) or 3731(b)(2), whichever occurs last.

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Under the facts of this case, in which Taul became aware of the alleged

FCA violations more than six years before the date on which he filed his initial

Complaint, any FCA violations committed within six years are timely under

Subsection (b)(1). In fact, Taul concedes that the tolling provision in Section

3731(b)(2) does not apply to this litigation. See (Doc. 90 at 4) (“In the instant

matter . . . the tolling provisions of 3731(b)(2) . . . are [not] applicable”).

Accordingly, the court need not reach a decision as to whether, and how, Section

3731(b)(2) applies to relators, a question that has divided federal courts.8

 The sixyear statute of limitations period in Section 3731(b)(1) applies to Taul’s FCA

claims. 

The alleged FCA violations began in June 2003 and ended in June 2011.

Taul claims that he first became aware of the violations in June 2009. He informed

the FBI of the violations in August 2010, and he filed his initial Complaint on

January 13, 2014. Under Section 3731(b)(1), Taul’s allegations of violations that

occurred after January 13, 2008, fall within the six-year limitations period and are

timely. Counts I, II, and III all allege some timely and some untimely violations.

9

8

 See, e.g., United States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211, 1218 (9th Cir.

1996); United States ex rel. Malloy v. Telephonics Corp., 68 F. App’x 270, 273 (3d Cir. 2003). 

9

 See, e.g. (Doc. 47 at 4-5, ¶¶ 18, 19, 20) (alleging violations that occurred both before

and after January 13, 2008).

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All FCA claims in Counts I, II, and III based on allegations taking place before

January 13, 2008, are barred by the statute of limitations. All claims in Counts I,

II, and III based on allegations taking place after January 13, 2008, are timely. 

D. Statute of Limitations for Count V Claims

Count V of Taul’s Amended Complaint asserts an FCA violation, pursuant

to Sections 3729(a)(1)(A-B), “vis-à-vis violation of the Anti-Kickback Statute.”

(Doc. 47 at 15-18). Defendants’ Motion To Dismiss summarily states that all of

Taul’s claims are time barred, but their Motion does not specifically address what

Defendants believe is the applicable statute of limitations for Count V. In fact,

neither Defendants’ Motion To Dismiss (doc. 85) nor their reply brief (doc. 92)

even reference the violations of the Anti-Kickback (“AKS”) statute that Taul

alleges have occurred.

Taul’s Response (doc. 90) to Defendants’ Motion To Dismiss similarly fails

to clarify for the court what the applicable statute of limitations should be for the

claims in Count V. In his Response, Taul states that Defendants failed “to consider

the fact that Relator’s FCA claims arising from the Anti-Kickback (“AKS”) statute

were clearly filed within the applicable limitations period,” (doc. 90 at 4), but Taul

fails to cite to any authority to support this proposition, much less explain why his

claim should be “clear” to the court. 

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The Anti-Kickback Statute, in relevant part, prohibits individuals from the

following acts involving federal health care programs:

(2) Whoever knowingly or wilfully offers or pays any remuneration

(including any kickback, bribe, or rebate) directly or indirectly,

overtly or covertly, in cash or in kind to any person to induce such

person - 

(A) to refer an individual to a person for the furnishing or

arranging for the furnishing of any time or service for

which payment may be made in whole or in part under a

Federal health care program, or 

(B) to purchase, lease, order, or arrange for or recommend

purchasing, leasing, or ordering any good, facility,service,

or item for which payment may be made in whole or in part

under a Federal health care program, 

shall be guilty of a felony and upon conviction thereof, shall be fined not

more than $25,000 or imprisoned for not more than five years, or both.

42 U.S.C. § 1320a-7b(b)(2). As the Eleventh Circuit has explained, a violation of

the AKS occurs when the defendant “(1) knowingly and wilfully, (2) pays money,

directly or indirectly, to doctors, (3) to induce the doctors to refer individuals to

the defendants for the furnishing of medical services, (4) paid for by Medicare.” 

United States ex rel. Mastej v. Health Mgmt. Assocs., Inc., 591 F. App’x 693, 698

(11th Cir. 2014) (citing United States v. Vernon, 723 F.3d 1234, 1252 (11th Cir.

2013) (setting forth the elements of an Anti-Kickback Statute violation under §

1320a–7b(b)(2)(A))).

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In addition to the criminal penalties provided for in the statute above,

violations of the AKS can lead to civil monetary penalties under the Civil

Monetary Penalties Law (“CMPL”) for submitting false claims for Medicare

reimbursement. See 42 U.S.C. § 1320a-7a.10

In addition to these criminal and civil monetary penalties, violations of the

AKS may serve as the basis for a false or fraudulent claim for purposes of the

FCA. See 42 U.S.C. §1320a-7(b)(g) (“In addition to the penalties provided for in

this section [1320a-7b] or section 1320a-7a of this title [the civil monetary

penalties section], a claim that includes items or services resulting from a violation

of this section constitutes a false or fraudulent claim for the purposes of

10

 As the Tenth Circuit has explained, 

On August 13, 1981, Congress enacted the CMPL, a statute providing for civil

monetary penalties and assessments for individuals who file false Medicare or

Medicaid claims. 42 U.S.C. § 1320a–7a(a)(1)(A). Such were “in addition to anyother

penalties that may be prescribed by law . . . .” 42 U.S.C. § 1320a–7a(a). The CMPL

also provided that upon conviction a false claimant would be excluded from

continued participation in the Medicare and Medicaid programs. 42 U.S.C. §

1320a–7a(a).

The CMPL, as enacted in 1981, was intended to promote an administrative adjunct

to criminal proceedings as an additional means of sanctioning persons who submit

false claims for payment under the Medicare and Medicaid programs.

Bernstein v. Sullivan, 914 F.2d 1395, 1397 (10th Cir. 1990). An action under the CMPL may not

be initiated “with respect to any claim, request for payment, or other occurrence” later than “six

years after the date the claim was presented, the request for payment was made, or the occurrence

took place.” 41 U.S.C. § 1320a-7a(c)(1); see also Bernstein, 914 F.2d at 1398. 

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subchapter III of chapter 37 of Title 31 [the FCA].”);11

see also Miller v. Abbot

Laboratories, 648 F. App’x 555, 561 (6th Cir. 2016) (internal citations omitted)

(“AKS violations can constitute FCA violations where a claim submitted to the

government for reimbursement includes items or services resulting from a

violation of the AKS, or where cost reports submitted to the government for

reimbursement include an express certification that the underlying claims comply

with the AKS.”).

Count V of the Amended Complaint, which alleges that an AKS violation

occurred, clearly asserts an FCA claim. (Doc. 47 at 17, ¶ 63) (“By reason of the

violation of 31 U.S.C. §§ 3729(a)(1)(A) and 3729(a)(1)(B), Defendants have

knowingly or recklessly damaged the United States Government in an amount to

be determined at trial).12 Further, Taul’s prayer for relief in Count V requests

treble damages and a civil penalty of $5,500-$11,000, which derives from Section

3729(a)(1) of the FCA as adjusted for inflation. 31 U.S.C. § 3729(a); see also

11

 See United States ex rel. Wilkins v. United Health Group, Inc., 659 F.3d 295, 311 n. 19

(3d Cir. 2011) (“As part of the comprehensive health care legislation Congress enacted in 2010,

it amended the AKS to clarify that “a claim that includes items or services resulting from a

violation of this section constitutes a false or fraudulent claim for purposes of [the FCA].”

Patient Protection and Affordable Care Act of 2010 (“PPACA”), Pub. L. No. 111–148 § 6402(f),

124 Stat. 119, 759 (to be codified at 42 U.S.C. § 1320a–7b(g)).”).

12

 Taul’s heading under Count V also clarifies that he is asserting AKS violations as the

basis of an FCA claim. See (Doc. 47 at 15) (alleging a “[v]iolation of the False Claims Act, 31

U.S.C. §§ 3729(a)(1)(A) vis-à-vis a violation of the Anti-Kickback Statute.”). 

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Kane ex rel. United States v. Healthfirst, Inc., 120 F. Supp. 3d 370, 379 n. 12

(S.D.N.Y. 2015) (“The 1986 amendments [to the FCA] included a penalty range of

$5,000 to $10,000 for each false claim . . . to be adjusted by the Federal Civil

Penalties Inflation Adjustment Act of 1990, S. Rep. 111-10, 22, 2009

U.S.C.C.A.N 430, 444. Today, due to inflation, the available penalty is a range of

$5,500 to $11,000.”). Based on the language of Count V and the damages

requested, the alleged kickback scheme serves as the basis for a false claim under

Section 3729(a)(1) of the FCA. 

The court has not found any authority, and Defendants point to no source,

stating that any statute of limitations other than the FCA statute of limitations

found in Section 3731(b)(1) should apply to Count V merely because the Count is

based on a violation of another statute. Therefore, like Counts I, II, and III, the

statute of limitations for Taul’s claims in Count V is 6 years, per Section

3731(b)(1). All claims in Count V based on allegations taking place on or before

January 13, 2008 are time barred. All claims in Count V based on allegations

taking place after January 13, 2008 are timely. 

E. “Retention of Overpayments” and the “Reverse False Claims”

Provision

Taul’s Response brief alleges - for the first time in this litigation - that he

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has pled facts to support a “retention of overpayments” claim. He asserts that the

“Statute of Limitations is Effectively Extended for Retention of Overpayments that

violate Section 3729(a)(1)(A), (B), (C), or (G).” (Doc. 90 at 10). Defendants’

Reply fails to directly address Taul’s “retention of overpayment” argument headon, asserting instead that Taul has failed to plead any “reverse false claim”

violations under Section 3729(a)(1)(G). (Doc. 92 at 2). Because both parties argue

past each other and fail to cite to any authority to support their claims, the court

will first begin with a discussion of both the “retention of overpayments” statute

and the “reverse false claims” FCA provision.

i. Statutory Overview and Recent Changes

In 2009, Congress passed the Fraud Enforcement and Recovery Act

(“FERA”), which amended the “reverse false claims” provision of the FCA. See

Fraud Enforcement and Recovery Act, Pub. L. No. 111-21, § 4, 123 Stat. 1617,

1621-25 (2009). Under the pre-amendment version, a reverse false claim violation

occurred when a person “knowingly makes, uses, or causes to be made or used, a

false record or statement to conceal, avoid, or decrease an obligation to pay or

transmit money or property to the Government.” 31 U.S.C. § 3729(a)(7) (1986). 

After the 2009 FERA amendment, a reverse false claims violation occurs

when a person “knowingly makes, uses, or causes to be made or used, a false

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record or statement material to an obligation to pay or transmit money or property

to the Government, or knowingly conceals or knowingly and improperly avoids or

decreases an obligation to pay or transmit money or property to the Government.”

31 U.S.C. § 3729(a)(1)(G). An obligation under the FCA is now defined as “an

established duty, whether or not fixed, arising from an express or implied

contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or

similar relationship, from statute or regulation, or from the retention of any

overpayment.” 31 U.S.C. § 3729(b)(3) (emphasis added).

The Patient Protection and Affordable Care Act (“PPACA”) then defined an

“overpayment” as “any funds that a person receives or retains under subchapter

XVIII [Medicare] or XIX [Medicaid] of this chapter to which the person, after

applicable reconciliation, is not entitled under such subchapter.” Patient Protection

and Affordable Care Act of 2010, Pub. L. No. 111–148 § 6402, codified as 42

U.S.C. § 1320a-7k(d)(4)(B). All overpayments must now be reported and refunded

to the government within “60 days after the date on which the overpayment was

identified” or “the date any corresponding cost report is due.” 42 U.S.C. § 1320a7k(d)(2)(A-B). Significantly, the PPACA also provided that a “repayment retained

by a person after the deadline for reporting and returning the overpayment” is an

“obligation” for purposes of Section 3729 of the FCA. 42 U.S.C. § 1320a23

Case 2:14-cv-00061-VEH Document 98 Filed 02/01/17 Page 23 of 39
7k(d)(3). Therefore, the retention of a Medicare or Medicaid overpayment from

the government past the 60-day deadline creates an obligation for purposes of

Section 3729 of the FCA. 

ii. Whether a Retention of Overpayment “Obligation” May Be

Brought Pursuant to any FCA Provision Other Than Section

3729(a)(1)(G)

Taul’s Response and Surreply briefs assert that Defendants’ alleged

retention of overpayments violates not only Section 3279(a)(1)(G) of the FCA but

also Sections 3729(a)(1)(A-C). See (Doc. 90 at 10); (Doc. 95 at 2). Defendants’

Reply brief altogether fails to address whether retention of overpayment

allegations may be brought pursuant to any subsection other than Section

3729(a)(1)(G); instead, Defendants hang their hat on their contention that Taul has

not properly pled a claim under subsection (a)(1)(G).13

It appears to be an open question in this Circuit whether retention of

overpayment claims may be brought pursuant to subsections (a)(1)(A-C) of

Section 3729. The PPACA amendments state only that an overpayment retention

is an “obligation” for the purposes of “section 3729.” 42 U.S.C. § 1320a-7k(d)(3).

However, the court finds it unlikely, based on the language added by the PPACA

13

 While Defendants do not say so expressly, the court assumes that Defendants intend

to argue that Plaintiff’s newly-raised retention of overpayments claim has not been pled with any

particularity pursuant to Section 3729(a)(1)(G) or any other subsection. 

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describing an overpayment retention as an “obligation,” that a retention of an

overpayment claim may be brought pursuant to any subsection of Section 3279

that does not use the word “obligation.” While Section 3729(a)(1)(G) incorporates

the word “obligation,” Sections 3729(a)(1)(A-C) do not.

14

Additionally, the court notes that when the Eleventh Circuit has previously

faced retention of overpayment claims, these violations have been presented as

obligations pursuant to the reverse false claim provision of the FCA rather than

any other FCA statutory provision. See, e.g., United States ex rel. Matheny v.

Medco Health Solutions, Inc., 671 F.3d 1217, 1223 (11th Cir. 2012) (stating that a

contractual obligation to remit excess government property is an obligation for

14

 See 31. U.S.C. §§ 3729(a)(1)(A),(B),(C), and (G)(emphasis added), imposing liability

for any person who: 

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for

payment or approval; 

(B) knowingly makes, uses, or causes to be made or used, a false record or statement

material to a false or fraudulent claim; 

(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G); 

. . . .

(G) knowingly makes, uses, or 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

knowingly conceals or knowingly and improperly avoids or decreases an obligation

to pay or transmit money or property to the Government . . . .

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purposes of Section 3729(a)(7))15

; United States v. Pemco Aeroplex, Inc., 195 F.3d

1234, 1237 (11th Cir. 1999) (finding allegations of contractual obligations to

identify and return excess government property were sufficient to state a reverse

false claim violation); see also United States v. Crumb, No. 15-655, slip op. at *8

(S.D. Ala. Aug. 24, 2016) (Steele, J.) (analyzing a retention of overpayment claim

brought pursuant to Section 3729(a)(1) as a claim under Subsection (a)(1)(G)). Yet

again, Taul has cited to no authority

16

 for his proposition that retention of

overpayment claims may be brought pursuant to Sections 3729(a)(1)(A),(B), or

(C) rather than pursuant to the reverse false claims provision found in Section

3729(a)(1)(G). 

For these reasons, this court declines to consider Taul’s newly-raised

“retention of overpayment” claims under any FCA statutory provision that does

not include the word “obligation.” As Sections 3729(a)(1)(A-C) do not include the

term “obligation” as an element of the claim, Taul’s retention of overpayment

15

 31 U.S.C. § 3729(a)(7) is the pre-FERA amendment version of the reverse false claims

provision. Section 3729(a)(7) was re-designated as 31 U.S.C. § 3729(a)(1)(G), effective May 20,

2009. 

16

 On this basis alone, the court is not required to address this underdeveloped argument.

See Flanigan’s Enters., Inc. v. Fulton County, Ga., 242 F.3d 976, 987 n.16 (11th Cir. 2001) (a

party waives an argument if the party “fail[s] to elaborate or provide any citation of authority in

support” of the argument); Ordower v. Feldman, 826 F.2d 1569, 1576 (7th Cir. 1987) (stating

that an argument made without citation to authority is insufficient to raise an issue before the

court).

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allegations may not be brought pursuant to those statutory sections. For the

purposes of this litigation, and in accordance with previous Eleventh Circuit cases,

the court will consider Taul’s retention of overpayment allegations in the context

of a reverse false claim pursuant to Section 3729(a)(1)(G). The remaining question

for the court is whether Taul has properly pled a claim pursuant to that statutory

subsection. 

iii. Taul Did Not Properly Plead a Retention of Overpayments

Violation or Otherwise Establish a Reverse False Claim

Defendants argue that Taul’s Amended Complaint (doc. 47) fails to plead a

violation of Section 3729(a)(1)(G) with particularity, as required under Federal

Rule of Civil Procedure 9(b). (Doc. 92 at 5-7). Though Defendants do not say so

expressly, their argument implies that there is no way for this court to address the

timeliness of any alleged overpayment retention for the purposes of the FCA

statute of limitations because there are no factual allegations that plausibly support

such a claim.

In the Eleventh Circuit, any FCA claim, including a reverse false claim,

must meet the heightened pleading requirements under Rule 9(b). United States ex

rel. Clausen v. Laboratory Corp. of Am., 290 F.3d 1301, 1308-09 (11th Cir. 2002).

Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must state with

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particularity the circumstances constituting fraud or mistake” but “[m]alice, intent,

knowledge, and other conditions of a person’s mind may be alleged generally.

FED. R. CIV. P. 9(b). As the Eleventh Circuit has explained, 

At the pleading stage, a complaint alleging violations of the FCA must

satisfy two pleading requirements. First, the complaint must provide “a

short and plain statement of the claim showing that the pleader is

entitled to relief.” FED. R. CIV. P. 8(a)(2). A complaint cannot merely

recite the elements of a cause of action but must contain factual

allegations sufficient to raise the right to relief above the speculative

level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955,

167 L. Ed. 2d 929 (2007). Second, a complaint must comply with Rule

9(b)'s heightened pleading standard, which requires a party to “state

with particularity the circumstances constituting fraud or mistake.” FED.

R.CIV.P.9(b);Clausen, 290 F.3d at 1308–09 (holdingRule 9(b) applies

to FCA claims). The purpose of Rule 9(b) isto “alert[ ] defendants to the

precise misconduct with which they are charged and protect[ ]

defendants against spurious charges . . . .” Ziemba v. Cascade Int'l, Inc.,

256 F.3d 1194, 1202 (11th Cir. 2001) (citation and internal quotation

marks omitted).

The particularity requirement of Rule 9(b) is satisfied if the complaint

alleges “facts as to time, place, and substance of the defendant's alleged

fraud, specifically the details of the defendants' allegedly fraudulent

acts, when they occurred, and who engaged in them.” Hopper v. Solvay

Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009) (internal quotation

marks omitted) (citingClausen, 290 F.3d at 1310);see also Ziemba, 256

F.3d at 1202 (noting the pleading standards are satisfied if alleging

precisely what statements were made in what documents, when, where

and by whom, the content, the manner in which they misled the plaintiff,

and what the defendants obtained as a consequence of the fraud).

Matheny, 671 F.3d at 1222. 

The applicable pleading standard for reverse false claims depends on

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whether the claims are brought under the version of the FCA that pre-dates or

post-dates the 2009 FERA amendment, which became effective May 20, 2009. See

Matheny, 671 F.3d at 1223 n. 9. 

As another district court within this Circuit has stated, 

For the reverse false claim pleaded as Count III of the Amended

Complaint, the applicable legalstandard depends on whether the claims

are brought under the version of the False Claims Act that predated the

Fraud Enforcement & Recovery Act of 2009, § 4(a), Pub. L. No. 111-21,

123 Stat. 1617, 1621-22 (2009) ( “FERA”), or whether they proceed

under the version of the Act that prevails post-FERA. Under the

pre-FERA iteration of the FCA, a plaintiff generally must allege “(1) a

false record or statement; (2) the defendant's knowledge of the falsity;

(3) that the defendant made, used, or caused to be made or used a false

statement or record; (4) for the purpose to conceal, avoid, or decrease an

obligation to paymoney to the government, and (5) the materiality of the

misrepresentation.” Matheny, 671 F.3d at 1224. After FERA, however,

reverse false claims liability attaches either (i) when a person

“knowingly makes, uses, or 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 (ii) when a person “knowingly conceals or

knowingly and improperly avoids or decreases an obligation to pay or

transmit money or property to the Government.” 31 U.S.C. §

3729(a)(1)(G);see also United States ex rel. Petratos v. Genentech, Inc.,

141 F. Supp. 3d 311, 322 (D.N.J. 2015) (observing that § 3729(a)(1)(G)

“creates liability for two categories”). “Both of these prongs only apply

where there is an obligation to pay the Government.” Petratos, 141 F.

Supp.3d at 322. 

Crumb, No. 15-655, slip op. at *8 (citing to the post-FERA version of the reverse

false claims statutory subsection). 

Although this case was commenced after the 2009 FERA amendment, the

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claims alleged “bridge that timeframe and implicate both versions of the law”

because the 2009 FERA amendments to the reverse false claim provision do not

apply retroactively. United States ex rel. Keeler v. Eisai, Inc., 568 F. App’x 783,

784 n. 1 (11th Cir. 2014); Matheny, 617 F.3d at 1223 n. 9. Therefore, the court

must look to both versions to determine whether Taul has properly pled a reverse

false claim. 

Fortunately, this court’s analysis is simplified by the fact that under both

versions of the statute, the plaintiff relator is required to identify an obligation to

re-pay the government and allege other details of the claim with particularity. See

Matheny, 671 F.3d at 1223 (“To sustain a reverse false claim action, relators must

show that the defendants owed an obligation to pay money to the United States . . .

“) (pre-FERA amendment); Petratos, 141 F. Supp.3d at 322 (noting that reverse

false claims liability necessitates a showing of “a ‘clear’ obligation or liability to

the government”) (citations omitted) (pre-FERA amendment); Crumb, 15-655, slip

op. at *8 (“To be sure, a reverse false claim cause of action requires an ‘obligation

to pay or transmit money or property to the government.’”) (post-FERA

amendment). A reverse false claim action, however, does not require that the

presentment of a false claim be pled. Matheny, 671 F.3d at 1224 n.12. 

In Matheny, applying the reverse false claim language predating the FERA

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amendment, the Eleventh Circuit concluded that the relators adequately alleged

with particularity the existence of an obligation to pay money to the government

because their complaint contained detailed allegations of the defendants’ express

contractual obligation to remit any overpayments; outlined the procedures the

defendants should have used to remit any identified overpayments; and identified

the particular document or statement alleged to be false, who made it, when the

statement was made, how the statement was false, and what the defendants

obtained as a result. Id. at 1223-1125. The complaint in Matheny also contained

“detailed allegations that the Overpayments were received from Medicare,

Medicaid, or other federally funded healthcare programs” and specified specific

amounts, invoice numbers, and carrier codes. Id. at 1227.

In Crumb, applying the reverse false claim language postdating the FERA

amendment, the court found that the complaint identified sufficient facts to show

that the defendants had a “concrete obligation to pay the Government at the time

of the alleged avoidance.” 15-655, slip op. at *16. The complaint specifically pled

facts to support a reverse false claim, including that the defendants “did not take

any steps to identify and return” overpayments received but instead “knowingly

continued with the same course of conduct”; that they “did not conduct a selfaudit, investigate, or inquire into whether” any of the relevant claims might

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necessitate repayment, even after the Government began an FCA investigation into

the claims; and that defendants “failed to take any corrective or repayment action.”

Id. at *4, *16.

In the Amended Complaint, Taul only cursorily references the receipt of

government funds in paragraphs 22 and 23, which also describe the alleged

kickback scheme between the Alabama Organ Center and Defendants. Paragraph

22 alleges that the transportation, embalming, cremation, and harvesting charges

to the Alabama Organ Center were above national averages and were inflated

when they were submitted to the University of Alabama Birmingham. (Doc. 47 at

5, ¶ 22). Then, once the bills were paid, employees of the Alabama Organ Center

received twenty percent as a kickback. Id. Paragraph 23 alleges that under the

kickback scheme, Defendants billed “$50,000.00 to $60,000.00 each month to the

Alabama Organ Center. This bill was paid for with government grants, Medicare,

and other federal and taxpayer dollars as these donor services were free to the

donor families.” (Doc. 47 at 5, ¶ 23). 

Simply put, Taul has not pled facts as to the time, place, or substance of any

retained overpayments sufficient to sustain a reverse false claim under Rule 9(b).

Despite specifically citing to other FCA statutory provisions, Taul’s Amended

Complaint makes no mention of reverse false claims, Section 3729(a)(7), or

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Section 3729(a)(1)(G). Unlike in Matheny or in Crumb, the Amended Complaint

does not specify which reverse false claims resulted in overpayments; has not

alleged the receipt of federal funds with particularity; and, unlike in Matheny,

makes no detailed allegations that any overpayments received actually originated

from a federally funded healthcare program. In fact, he does not identify the

federal government as the source of any overpayment or use the term

“overpayment” at all.

Taul’s briefing also fails to clarify which particular set of facts in the

Amended Complaint supports allegations that Defendants retained certain

overpayments from the government. The Amended Complaint, as it currently

stands, does not provide either Defendants or the court with enough information

regarding the substance of his reverse false claim or the retention of an

overpayment that serves as the obligation underlying that claim. 

For these reasons, Taul has failed to allege with specificity if or when

Defendants retained any overpayments to the government that would constitute an

obligation under Section 3729(a)(1)(G). Accordingly, the court does not need to

reach the question of how the 60-day clock for retention of overpayments would

impact the FCA statute of limitations. Taul’s reverse false claim cause of action

based on alleged retentions of overpayments is HEREBY DISMISSED as

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inadequately pled pursuant to Federal Rules of Civil Procedure 8(a)(2) and 9(b).

iv. Taul’s Request To Amend his Complaint

In his Surreply, Taul also requested permission to amend his complaint in

order to plead a claim under the reverse false claims provision, Section

3729(a)(1)(G).17 (Doc. 95 at 9-10). To the extent that Taul’s request may be

construed as a motion for leave to amend, it was filed far outside the court’s

deadline to amend pleadings

18

 and therefore must meet the requirements of Rule

16(b)(4). Under the Federal Rules of Civil Procedure, “a schedule may be

modified only for good cause and with the judge’s consent.” FED. R. CIV. P.

16(b)(4). 

 It has been noted that,

[w]here . . . a motion to amend “comes long after the deadlines for filing

motions to amend established in the scheduling orders entered in [a]

case,” a plaintiff must “show good cause under Federal Rule of Civil

Procedure 16(b).” Mann v. Taser Int'l, Inc., 588 F.3d 1291, 1312 (11th

Cir. 2009). Simply put, [the motion to amend] is governed in the first

17

 The court notes that Counts I, II, and III already assert claims under §§ 3729(a)(1)(AC). If Taul truly believed that a retention of overpayments was an actionable obligation pursuant

to Sections 3729(a)(1)(A-C) as well as 3729(a)(1)(G), it would be unnecessary for him to amend

his Complaint in order to include his retention of overpayments claim.

18

 The court’s June 9, 2014, Scheduling Order set the deadline to amend pleadings as

March 31, 2015 and the discovery deadline as June 30, 2015. (Doc. 25). While the court’s June

30, 2015, Order extended the discovery deadline to 30 days after the completion of Nagel’s

criminal case, the Order also stated explicitly that no other deadlines were extended. (Doc. 57).

Therefore, more than twenty-one months have passed since Taul’s deadline to amend his

pleadings expired on March 31, 2015. 

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instance by Rule 16(b)(4)'s “good cause” requirement, not by Rule

15(a)(2)'s “freely give leave” standard. See Smith v. School Bd. of

Orange County, 487 F.3d 1361, 1367 (11th Cir.2007) (“despite Smith's

argument on appeal that the district court should have granted his

motion to amend his complaint in accordance with the liberal

amendment instructions of Rule 15(a), Smith still had to comply with

Rule 16(b)'s good cause requirement because he filed his motion to

amend . . . after the court's deadline for such motions”); Sosa v. Airprint

Systems, Inc., 133 F.3d 1417, 1419 (11th Cir.1998) (“[B]ecause Sosa's

motion to amend was filed after the scheduling order's deadline, she

must first demonstrate good cause under Rule 16(b) before we will

consider whether amendment is proper under Rule 15(a).”). 

Under well-settled law, the “good cause” standard prescribed by Rule

16(b) “precludes modification unlessthe schedule cannot be met despite

the diligence of the party seeking the extension.” [Sosa v. Airprint Sys.,

Inc., 133 F.3d 1417, 1418 (11th Cir. 1998)] (citation and internal

quotation marks omitted).

“Diligence, not lack of prejudice, is the touchstone of the Rule 16(b)(4)

inquiry.” Roberson, 2013 WL 4870839, at *2 (citations omitted); see

also De Varona v. Discount Auto Parts, LLC, 285 F.R.D. 671, 672–73

(S. D. Fla. 2012) (“diligence is the key to satisfying the good cause

requirement”); Southern Track & Pump, Inc. v. Terex Corp., 722 F.

Supp. 2d 509, 521 (D. Del. 2010) (“the good cause standard under Rule

16(b) hinges on diligence of the movant, and not on prejudice to the

non-moving party”) (citation omitted).

Jasper Wood Products, LLC v. Jordan Scrap Metal, Inc., No. CIV. A. 13-0407-WSC, 2014 WL 3720530, at *3-4 (S.D. Ala. July 25, 2014) (Steele, J.). 

Taul failsto cite to Rule 16 at all in his Surreply and makes no attempt to argue

“good cause” for the court to modify its scheduling order and allow him to re-amend

his complaint thislate in the course of thislitigation. Accordingly, the court construes

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Taul’s request to amend his pleadings and add a Count pursuant to 31 U.S.C. §

3729(a)(1)(G) as a Motion for Leave To Amend, which is hereby DENIED for his

failure to mention, much less show, good cause under Rule 16(b). 

F. Defendants’ Two Motionsfor Leave To File a Response To Plaintiff’s

Surreply

Defendants’(doc. 97) Motion for Permission To File a Response To Plaintiff’s

Surreply is a duplicate filing of its (doc. 96) Motion for Leave To File a Response To

Plaintiff’s Surreply. Both Motions state Defendants’ intent to discuss the heightened

Rule 9(b) pleading requirements for FCA claims and their belief that the FCA statute

of limitations bars all available claims under the FCA. Defendants’ Motion (doc. 85)

and Reply (doc. 92) already brought both issuesto the court’s attention, and the court

has already addressed both matters in this Opinion. The court will not permit

Defendantsto rehash argumentsthey have alreadymade. Therefore, both Motions are

due to be DENIED. 

G. Defendants’ Pending Discovery Motions

On June 30, 2015, this court extended the deadline to complete discovery in

this case until thirty days after the completion of Jed Nagel’s Alabama criminal trial,

including any appeals. (Doc. 57). The last joint status report filed by the parties on

February 1, 2016, informed the court that the related criminal trial had been continued

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until July 11, 2016. (Doc. 83 at 1). The court has received no further update since

February 2016 on the status of this criminal trial. 

On October 21, 2016, Defendants filed a Motion To Quash Plaintiff’s Second

Deposition Notice and AccompanyingRequest To Produce Documents at Deposition

(doc. 86, the “Motion To Quash”); a Motion To Strike/Defendants’ Objections To

Plaintiff’s Second Set of Interrogatories and Requests for Production (doc. 87, the

“Motion To Strike”); and a Motion To Amend/Correct the prior (doc. 86) Motion To

Quash (doc. 88, the “Motion To Amend”). In each Motion, Defendants object to

discovery requests made by Taul because they incorrectly claim, as they did in their

Motion To Dismiss, that the statute of limitations has run on every claim asserted in

the Amended Complaint. See (Doc. 86 at 1, ¶ 2); (Doc. 87 at 2, ¶2); (Doc. 88 at 2, ¶2).

Taul has not responded to any of these Motions. 

The Motion To Quash and Motion To Amend both ask the court to enter an

order quashing the Plaintiff’ssecond notice of deposition, which wasset to take place

on November 2, 2016. The court has no idea whether the deposition has already taken

place or did not go forward due to the pending Motions. Defendants’ Motion To

Strike objects to Taul’s second set of interrogatories and request for production of

documents, particularly documents relating to allegations of retaliation. (Doc. 87 at

2). Because Taul has not responded to this Motion, the court cannot tell if he is

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contesting it. Due to the ambiguousstatus of the overriding discovery deadline in this

case, all three discovery Motions (docs. 86, 87, and 88) are due to be DENIED

WITHOUT PREJUDICE to refiling them, but only to the extent that they are not

now MOOT and only to the extent that they do not rehash arguments already rejected

by this court. Further, both parties are hereby ORDERED to file a joint status report

regarding the status of Nagel’s Alabama criminal case, including any appeals, by

February 10, 2017.

VII. CONCLUSION

Taul’s reverse FCA claims, to the extent that they have been pled at all, are not

pled adequately. Accordingly, they are hereby DISMISSED.

Although some of Taul’s other FCA claims are barred by their respective

statutes of limitations, not all are so barred. As a result, this court retains jurisdiction

to decide Taul’s timely FCA claims. All untimely FCA claims are hereby

DISMISSED. Specifically, Defendants’ Motion To Dismiss (doc. 85) is hereby

DENIED as to the following timely claims:

Counts I, II, and III: FCA claims brought pursuant to 31 U.S.C. §§

3729(a)(1)(A-C), occurring after January 13, 2008;

Count IV: FCA retaliation-based claims from fall 2012;

Count V: FCA claims based on violations of the Anti-Kickback Statute,

occurring after January 13, 2008.

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In all other respects, such Motion is GRANTED. Further, Defendants’ Motion for

Leave To File a Response to Plaintiff’s Surreply (doc. 96) and Motion for Permission

To File Response to Plaintiff’s Surreply (doc. 97) are hereby DENIED. Additionally,

the discovery motions (docs. 86, 87, and 88) are hereby DENIED. 

Both parties are hereby ORDERED to file a joint status report regarding the

status of Nagel’s Alabama criminal case, including any appeals, by February 10,

2017. The joint status report must also address whether the issues raised in the three

discovery-related Motions (docs. 86, 87, and 88) have been resolved.

DONE and ORDERED this the 1st day of February, 2017. 

 

 VIRGINIA EMERSON HOPKINS

United States District Judge

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