UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

UNITED STATES OF AMERICA, ex 

rel., JOHN N. KRAMER,

Plaintiff,

v.

ROBERT A. DOYLE, JR., et al.,

Defendants.

Case No. 1:18-cv-373

JUDGE DOUGLAS R. COLE

OPINION AND ORDER

John Kramer believes dentists in eastern Ohio performed medically 

unnecessary dental procedures and billed those procedures to Medicaid. He brought 

a qui tam action against multiple defendants, including CDC Martins Ferry, LLC and 

CDC Steubenville, LLC (CDC defendants), under the False Claims Act. (Doc. 1). On

November 14, 2018, after this litigation began but before the Court unsealed the 

matter,

1 the CDC defendants sold their dental practices to North American Dental 

Management, LLC (NADM) and Professional Dental Alliance, LLC (PDA). (Doc. 87-

1, #2073). Kramer did not know about PDA’s involvement at the time, but he did

learn of NADM’s role and amended his Complaint to include it. (3d Am. Compl., Doc. 

37). 

1 Kramer filed his Complaint under seal on May 31, 2018. (Doc. 1). The sale occurred 

November 14, 2018. (Doc. 87-1, #2073). The Court unsealed the case on September 12, 2019. 

(Doc. 17). Defendants moved to dismiss three months later. (Doc. 48).

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Defendants, including NADM and the CDC defendants, moved to dismiss. 

(Docs. 48 and 49). The Court granted in part and denied in part the CDC defendants’ 

motion and granted the NADM defendants’ motion. (Doc. 67). On one hand, Kramer

had plausibly alleged the CDC defendants submitted false claims. (Id. at #1388–90). 

But he had not plausibly alleged the same for NADM. (Id. at #1396–97). The Court 

dismissed the latter with prejudice but did not enter judgment. (Id. at #1403). 

Discovery commenced. 

Now, Kramer says discovery has produced sale contracts proving that NADM 

and PDA bear liability for the CDC defendants’ false claims. (Mtn. to Join, Doc. 71, 

#1439–40). He moved under Federal Rule of Civil Procedure 25(c) to assert his claims 

against NADM and PDA, arguing they bear liability as the CDC defendants’ 

successors. (Doc. 71). Kramer also moved under Rule 60(b) for the Court to set aside 

its earlier ruling dismissing NADM with prejudice, saying he did not know of the

transfer’s full extent until he saw the contracts. (Id. at #1439–40). The Court takes 

each request in turn.

Rule 25(c) provides that “[i]f an interest is transferred, the action may be 

continued by or against the original party unless the court, on motion, orders the 

transferee to be substituted in the action or joined with the original party.” Fed. R. 

Civ. P. 25(c). It provides a procedural tool and does not typically impact the parties’ 

substantive rights. Luxliner P.L. Export, Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 72–

73 (3d Cir. 1993). The Rule turns on the transferor having transferred away, at least 

to some extent, a relevant litigation interest. See Maldonado v. Valsyn S.A., 434 F. 

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Supp. 2d 90, 91–92 (D.P.R. 2006) (allowing a plaintiff to continue litigation against a 

transferee after the defendant transferred away the litigation’s target). In other 

words, it assumes that transferor “no longer maintains the same interest in the 

outcome” as the transferee. McMoran Oil & Gas Co. v. KN Energy, Inc., 907 F.2d 

1022, 1025 (10th Cir. 1990), rev’d on other grounds by Freeport-McMoran, Inc. v. K N 

Energy, Inc., 498 U.S. 426 (1991).

As Rule 25(c) is only procedural, the Court must next locate the substantive 

law that governs whether an entity has indeed transferred a litigation interest. 

Kramer maintains the CDC defendants contractually transferred away liability

through the Asset Purchase Agreement, so the doctrine of successor liability appears 

to be the best candidate here. As for what law would govern such successor liability, 

Kramer, NADM, and PDA all converge, though without much discussion, on Ohio.

(Doc. 71, #1452–53; Doc. 77, #1526). And the Court sees at least some reasons to 

conclude that is right. First, the Agreement states Ohio law will govern any litigation 

relating to it. (Doc. 87-1, #2121). Moreover, under Ohio’s choice of law rules, Ohio law 

governs because the parties appear to have executed the contracts in Ohio. See 

Bamerilease Cap. Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992). Thus, as no 

one has argued to the contrary, the Court applies Ohio successor-liability law.2

2 The False Claims Act itself says nothing about successor liability. But as the False Claims 

Act is federal law, one could perhaps argue that federal common law should govern that issue. 

See, e.g., United State ex rel. Geschrey v. Generations Healthcare, LLC, 922 F. Supp. 2d 695, 

709 (N.D. Ill. 2012) (applying federal common law to determine successor liability in a False 

Claims Act case). That said, the United States Supreme Court has suggested that courts 

should create federal common law only in very limited circumstances. See Atherton v. FDIC, 

519 U.S. 213, 218 (1997). And, generally, courts should not do so absent a conflict between a 

relevant federal interest and state substantive law. See Mickowski v. Visi-Trak Worldwide, 

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Under Ohio law, “[t]he well-recognized general rule of successor liability 

provides that the purchaser of a corporation’s assets is not liable for the debts and 

obligations of the seller corporation.” WRK Rarities, LLC v. United States, 165 F. 

Supp. 3d 631, 637 (N.D. Ohio 2016) (quoting Welco Indus., Inc. v. Applied Cos., 617 

N.E.2d 1129, 1132 (Ohio 1993)). This includes a seller’s tort and fraud liability. See 

Buckholz v. First Fed. Sav. Bank, 657 N.E.2d 346, 347–48 (Ohio Ct. App. 1995); 

Flaugher v. Cone Automatic Mach. Co., 507 N.E.2d 331, 336 (Ohio 1987). Four limited

exceptions exist: “(1) the buyer expressly or impliedly agrees to assume such liability; 

(2) the transaction amounts to a de facto consolidation or merger; (3) the buyer 

corporation is merely a continuation of the seller corporation; or (4) the transaction 

is entered into fraudulently for the purpose of escaping liability.”3 Welco Indus., 617 

N.E.2d at 1132. 

Now apply that framework to the facts set forth in Kramer’s Motion. As noted, 

under Ohio law, successor liability turns largely on the transaction’s structure. Here, 

the Asset Purchase Agreement, Transition Services Agreement, and Transition 

Professional Services Agreement memorialized the relevant transfer.

4 (Docs. 87-1, 

87-2, 87-3). Kramer argues these agreements show the CDC defendants, by selling

LLC, 415 F.3d 501, 512–13 (6th Cir. 2005). Here, no party suggests that federal common law 

governs, let alone articulates any relevant federal interest or conflict with Ohio law. 

3 True, some have suggested the general Welco successor liability rules do not apply in cases 

involving federal interests, like labor and civil rights. Buckholz, 657 N.E. 2d at 347–48. But 

as noted elsewhere, the Court declines to break new ground on federal successor liability. 

4 These agreements have been filed under seal with the Court. (Opinion, Doc. 85). Given the 

limited nature of this Order, the Court discusses the contracts in general terms and only 

describes clauses where necessary.

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their assets, also transferred their liabilities (i.e., the “interest” that is the subject of 

this litigation) to NADM and PDA. (Doc. 71, #1436–37). And he says Rule 25(c) allows 

him to bring the latter two into (or in NADM’s case, back into) this litigation to be 

held accountable for those false claims. (Id.).

Kramer is mistaken. Rule 25(c) has no bearing because, under Ohio law, the 

liabilities, and so the litigation interest, did not change hands. See Welco, 617 N.E.2d 

at 1132. NADM and PDA did not expressly or impliedly assume the CDC defendants’ 

liabilities. Just the opposite. The Asset Purchase Agreement explicitly says the CDC 

defendants did not transfer their own pre-closing liability. (Doc. 87-1, #2087–88). In 

other words, the selling entities “maintained the same interest” in this case’s outcome

(at least as to pre-closing conduct) as they held before the sale. McMoran Oil & Gas, 

907 F.2d at 1025. Granted, NAMD and PDA expressly accepted liability for conduct 

following the closing. (Doc. 87-1, #2087–88). Perhaps, then, NAMD and PDA directly 

incurred liability for post-closing false claims. Perhaps not. But as for a “transfer,” 

the Agreement is clear—assets changed hands, liabilities did not. 

The other Welco factors follow the same path. No party alleges a merger or 

consolidation occurred. NAMD and PDA cannot be considered “mere continuations” 

of the CDC defendants; NAMD and PDA and the CDC defendants evidently

conducted a good-faith, arm’s-length transaction and have different owners. See WRK 

Rarities, 165 F. Supp. 3d at 637 (finding the mere continuation doctrine inapplicable

“when the asset transfer occurs at arm’s length between entities with different 

owners”). And the Court detects no fraudulent intent in the transaction. After all, this 

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litigation remained under seal for almost a year after the closing. (See Doc. 17; Doc. 

87-1, #2073). 

In sum, under Ohio’s successor liability doctrine, no relevant transfer occurred. 

Rather, accepting Kramer’s allegations at face value, he may hold the CDC 

defendants liable for pre-closing false claims and hold NADM and PDA liable for postclosing false claims. Rule 25(c) adds nothing to the mix.

That leaves Rule 60(b). That Rule allows a Court to “relieve a party or its legal 

representative from a final judgment, order, or proceeding.” Fed. R. Civ. P. 60(b). 

After receiving the contracts, Kramer claims surprise and argues that principles of 

justice warrant the Court to revisit its prior Opinion dismissing NADM with 

prejudice. (Doc. 71, #1459). Not so. After denying Kramer’s Rule 25(c) Motion, the 

Court has no basis to “relieve” anything. The Court held that Kramer’s operative 

Complaint did not state a plausible claim against NADM. (Doc. 67, #1397–98). 

Kramer has not sought leave to amend, so his operative Complaint (the same 

Complaint as before) remains equally deficient now as then. And of course, that 

Complaint contains zero allegations against PDA. The Court denies Kramer’s request 

under Rule 60(b).

To be sure, Kramer presents evidence in his motion that may support a motion 

for reconsideration coupled with a renewed motion to amend his Complaint. Should 

he so move, the Court will consider those requests at that time. But as things stand,

the Court cannot grant Kramer his requested relief under either Rule 25(c) or Rule 

60(b). The Court DENIES Kramer’s Motion to Join Parties (Doc. 71).

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SO ORDERED.

June 20, 2023

DATE DOUGLAS R. COLE

 UNITED STATES DISTRICT JUDGE

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