Court Opinion

ID: 9963876
Source: CourtListenerOpinion
Date Created: 2024-04-26 15:00:43.123353+00
Date Added: 2024-06-11T08:25:02.854588
License: Public Domain

23-374
     United States ex rel. Donohue v. Buffalo Pub. Sch. Dist.

                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                             SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1                 At a stated term of the United States Court of Appeals for the Second Circuit,
 2   held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
 3   New York, on the 26th day of April, two thousand twenty-four.
 4
 5   PRESENT:
 6               DENNIS JACOBS,
 7               MICHAEL H. PARK,
 8               ALISON J. NATHAN,
 9                     Circuit Judges.
10   _____________________________________
11
12   United States of America ex rel. Patrick
13   Donohue,
14
15                                 Plaintiff-Appellant,
16
17                               v.                                       23-374
18
19   Buffalo Public School District, Kriner
20   Cash, in his official capacity as
21   Superintendent, Stamford Public School
22   District, Dr. Tamu Lucero, Somerville
23   Public School District, Mary Skipper, in
24   her official capacity as Superintendent,
25   New York City Department of Education,
26   Richard Carranza, in his official capacity
27   as the former Chancellor of the New York
28   City Department of Education, Meisha
29   Porter, in her official capacity as the
30   current Chancellor of the New York City
 1   Department of Education, Chicago Public
 2   School District, Jose J. Torres, in his
 3   official capacity as Superintendent, Wake
 4   County Public School District, Cathy
 5   Quiroz Moore, in her official capacity as
 6   Superintendent, Niagara Falls Public
 7   School District, Mark Laurrie, in his
 8   official capacity as Superintendent,
 9
10                     Defendants-Appellees. *
11   _____________________________________
12
13   FOR PLAINTIFF-APPELLANT:                                 Rory J. Bellantoni & Ashleigh C. Rousseau,
14                                                            Brain Injury Rights Group, Ltd., New York,
15                                                            NY.
16
17   FOR DEFENDANTS-APPELLEES:                                Cavette A. Chambers, Corporation Counsel,
18                                                            & Robert E. Quinn, Deputy Corporation
19                                                            Counsel, City of Buffalo Law Department,
20                                                            Buffalo, NY for Buffalo Public School
21                                                            District & Kriner Cash, in his official
22                                                            capacity as Superintendent.
23                                                            Ryan P. Driscoll, Berchem Moses P.C.,
24                                                            Milford, CT for Stamford Public School
25                                                            District & Dr. Tamu Lucero.
26                                                            Joshua R. Coleman, Murphy, Lamere &
27                                                            Murphy, P.C., Braintree, MA for Somerville
28                                                            Public School District & Mary Skipper, in
29                                                            her official capacity as Superintendent.
30                                                            Richard Dearing, Susan Paulson, & Claude S.
31                                                            Platton, Assistant Corporation Counsel, for
32                                                            Sylvia O. Hinds-Radix, Corporation Counsel
33                                                            of the City of New York, New York, NY for
34                                                            New York City Department of Education,
35                                                            Richard Carranza, in his official capacity as
36                                                            the former Chancellor of the New York City
37                                                            Department of Education & Meisha Porter,
38                                                            in her official capacity as the current
39                                                            Chancellor of the New York City Department
40                                                            of Education.
41                                                            Joseph Victor Willey, Katten Muchin
42                                                            Rosenman LLP, New York, NY for Richard

           *
               The Clerk of Court is respectfully directed to amend the caption accordingly.

                                                         2
 1                                                       Carranza, in his official capacity as the
 2                                                       former Chancellor of the New York City
 3                                                       Department of Education & Meisha Porter,
 4                                                       in her official capacity as the current
 5                                                       Chancellor of the New York City Department
 6                                                       of Education.
 7                                                       Ruchi Verma, General Counsel, & Thomas
 8                                                       A. Doyle, Assistant Deputy General Counsel,
 9                                                       Board of Education of the City of Chicago,
10                                                       Law Department, Chicago, IL for Chicago
11                                                       Public School District & Jose J. Torres, in his
12                                                       official capacity as Superintendent.
13                                                       Christopher Seusing, Wood Smith Henning
14                                                       & Berman, LLP, New York, NY for Wake
15                                                       County Public School District & Cathy
16                                                       Quiroz Moore, in her official capacity as
17                                                       Superintendent.
18                                                       Jonathan P. Shaub & Nicholas Tam, Shaub,
19                                                       Ahmuty, Citrin & Spratt LLP, Lake Success,
20                                                       NY for Niagara Falls Public School District
21                                                       & Mark Laurrie, in his official capacity as
22                                                       Superintendent.
23          Appeal from an order of the United States District Court for the Southern District of New

24   York (Woods, J.).

25          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

26   DECREED that the order of the district court is AFFIRMED.

27          Proceeding on behalf of the United States under the False Claims Act, Patrick Donohue

28   brought claims against thousands of school districts and counties across the United States for

29   providing remote services to special needs students during the Covid-19 pandemic. He then filed

30   a Second Amended Complaint (“SAC”), which significantly reduced the number of defendants

31   but continued to press his claims that Appellees charged the federal government for remote

32   services provided to special needs students in violation of both the Individuals with Disabilities

33   Education Act (“IDEA”) and section 411(k)(13) of the Medicare Catastrophic Coverage Act of

                                                     3
1    1988, 42 U.S.C. § 1396b(c). Appellees moved to dismiss. A magistrate judge issued a report and

2    recommendation (the “R&R”) recommending dismissal of Donohue’s claims without leave to

3    amend, and the district court adopted the R&R in full. We assume the parties’ familiarity with the

4    remaining underlying facts, procedural history of the case, and issues on appeal.

5           Under Rule 72(b) of the Federal Rules of Civil Procedure, a party must file “specific written

6    objections” to proposed findings and recommendations in a magistrate judge’s R&R to avoid

7    waiver. We review those portions of a grant of a motion to dismiss that address such specific

8    objections de novo, and we consider all other arguments—including insufficiently specific

 9   arguments—waived. See, e.g., Mario v. P & C Food Markets, Inc., 313 F.3d 758, 766 (2d Cir.

10   2002). Donohue waived almost all of his arguments by failing to present them in his objections to

11   the R&R. We consider only the three that remain.

12          First, the district court properly reached common merits issues rather than first addressing

13   personal jurisdiction and the propriety of venue for each defendant because it was clear that it had

14   personal jurisdiction and that venue was proper for at least some defendants. See Chevron Corp.

15   v. Naranjo, 667 F.3d 232, 246 n.17 (2d Cir. 2012). The law of the case did not require the district

16   court to transfer venue for each defendant rather than dismissing even though the magistrate judge

17   previously had transferred claims against some defendants to the Eastern District of Virginia.

18   Whether there was personal jurisdiction over the remaining defendants, and whether venue for the

19   claims against them was proper in the Southern District of New York, was a new issue not

20   previously raised. Regardless, the law-of-the-case doctrine is discretionary, see Aramony v. United

21   Way of Am., 254 F.3d 403, 410 (2d Cir. 2001), and the district court had good reason to reach

22   common merits questions rather than to assess venue and personal jurisdiction for each defendant.

                                                      4
 1          Second, the district court properly dismissed Donohue’s worthless-services claims under

 2   the False Claims Act. Donohue did not object to the R&R’s recommendation that his claims be

 3   dismissed for failing to allege scienter—a sufficient reason to affirm. But even if he had objected,

 4   the SAC does not allege facts showing that any misrepresentation or omission in any claim made

 5   to the federal government was knowingly material. We evaluate materiality under the False

 6   Claims Act based on three factors: “(1) whether the government expressly designates compliance

 7   with a particular statutory, regulatory, or contractual requirement as a condition of payment; (2)

 8   the government’s response to noncompliance with the relevant contractual, statutory, or regulatory

 9   provision; and (3) whether the defendants’ alleged noncompliance was minor or insubstantial.”

10   United States ex rel. Forman v. AECOM, 19 F.4th 85, 110 (2d Cir. 2021) (internal quotation marks

11   omitted). The SAC pleads no facts tending to show that any of these factors weigh in favor of

12   materiality, and Donohue has misrepresented the content of the only alleged statutory requirement

13   for payment that he has identified—42 U.S.C. § 1396b(c). See United States ex rel. Donohue v.

14   Carranza, No. 22-cv-189(AJT/IDD), 2022 WL 3226191, at *5-6 (E.D. Va. July 1, 2022)

15   (dismissing the SAC’s transferred claims in part because Donohue’s “claims regarding [42 U.S.C.

16   § 1396b(c)’s] requirements are not reflected in the law’s text”), aff’d sub nom. United States ex

17   rel. Donohue v. Loudoun Cnty. Pub. Sch. Dist., No. 22-1835, 2023 WL 7548198 (4th Cir. Nov.

18   14, 2023) (per curiam).

19          Third, the district court properly denied leave to amend the SAC as futile. Donohue could

20   not plausibly allege scienter or materiality given the guidance of federal agencies indicating that

21   schools could provide remote services to students covered by the IDEA. He has never identified

22   even the type of factual allegations that he might add to the SAC to remedy its pleading

23   deficiencies. And his continued mistaken assertions below that his claims were subject to the

                                                      5
1   pleading standard set out by Rule 8 of the Federal Rules of Civil Procedure, rather than the more

2   stringent Rule 9(b) standard applicable to False Claims Act claims, see United States ex rel.

3   Chorches v. Am. Med. Response, Inc., 865 F.3d 71, 81 (2d Cir. 2017), refute any claim that he

4   could remedy the pleading defects in the SAC.

5                                                 ***

6          We have considered the remainder of Donohue’s arguments and find them to be without

7   merit. For the foregoing reasons, we AFFIRM the order of the district court.

8                                               FOR THE COURT:
9                                               Catherine O’Hagan Wolfe, Clerk of Court

                                                    6