Court Opinion

ID: 8678919
Source: CourtListenerOpinion
Date Created: 2022-11-25 03:55:48.367704+00
Date Added: 2024-06-11T16:57:27.686626
License: Public Domain

KAREN NELSON MOORE, Circuit Judge,
dissenting.
I dissent because Sara Jones-McNamara (“McNamara”) established a prima facie case of retaliation and presented sufficient evidence to suggest that Holzer Health Systems’s (“Holzer”) reasons for firing her were pretextual. I would therefore vacate the district court’s entry of summary judgment and remand for trial.
*405To establish a prima facie case of retaliatory discharge, McNamara “must show: (1) [s]he engaged in a protected activity; (2) h[er] employer knew that [s]he engaged in the protected activity; and (3) h[er] employer discharged or otherwise discriminated against [her] as a result of the protected activity.” Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 566 (6th Cir.2003). The majority rests its decision on the first prong. Although it is undisputed that McNamara investigated allegations of kickbacks and reported her findings to Holzer officials, R. 102-36 (McNamara Email, 5/18/2010 at 1) (Page ID # 4904); R. 102-37 (McNamara Email, 5/19/2010 at 1-2) (Page ID #4906-07), the majority finds that these actions were not protected because McNamara did not have “a reasonable belief in [Anti-Kickback Statute (“AKS”), 42 U.S.C. § 1320a-7b] or [False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq.] violations.” Maj. Op. at 398.
As the majority recognizes, internal reports that “allege fraud on the government” constitute protected activity under 31 U.S.C. § 3730(h). See McKenzie v. BellSouth Telecomms., Inc., 219 F.3d 508, 516 (6th Cir.2000); 31 U.S.C. § 3730(h) (effective July 22, 2010) (protecting “lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter ”) (emphasis added). These reports, however, must “be reasonably connected to the FCA, which was designed to encourage and protect federal whistle-blowers.” McKenzie, 219 F.3d at 515. The majority is therefore correct that investigating and internally reporting on allegations of fraud on the government will be protected if “‘(1) the employee in good faith believes, and (2) a reasonable employee in the same or similar circumstances might believe, that the employer is committing fraud against the government.’ ” Maj. Op. at 399-400 (quoting Fanslow v. Chi. Mfg. Ctr., Inc., 384 F.3d 469, 480 (7th Cir.2004)). This belief need not ultimately be correct, Graham County Soil & Water Conservation District v. U.S. ex rel. Wilson, 545 U.S. 409, 416 & n. 1, 125 S.Ct. 2444, 162 L.Ed.2d 390 (2005), and employees retain protection from retaliation “while they are collecting information about a possible fraud, before they have put all the pieces of the puzzle together.” U.S. ex rel. Yesudian v. Howard Univ., 153 F.3d 731, 740 (D.C.Cir.1998). Accordingly, the objective component of the inquiry considers the reasonableness of the employee’s belief based upon the facts available to the employee at the time. See Fanslow, 384 F.3d at 480-81 (revers: ing grant of summary judgment where the record was “unclear” as to whether the employee had the requisite belief “at the time of his investigation and whether a reasonable employee in these circumstances would have thought the same”). A belief that ultimately turns out to be incorrect may nonetheless have been objectively reasonable in the midst of an investigation, based on incomplete facts.
McNamara’s belief that she was investigating fraud under the FCA was based upon a belief that she had uncovered a violation of the AKS, which prohibits the receipt of remuneration as inducement for referral of an individual for federally funded health care services. See 42 U.S.C. § 1320a-7b(b)(l). As the majority recognizes, remuneration under the AKS may be “ ‘anything of value in any form whatsoever,’ ” United States v. The Health Alliance of Gtr. Cincinnati, No. 1:03-CV-00167, 2008 WL 5282139, at *7 (S.D.Ohio Dec. 18, 2008) (quoting OIG Anti-Kickback Provisions, 56 Fed.Reg. 35952, 35958 (July 29, 1991)), yet the majority holds that the items McNamara learned about were of such little value that an investigator could *406never have a reasonable belief in the existence of possible inducement, Maj. Op. at 400-03. The majority continues that inducement under the AKS exists when that remuneration is provided with the intent “ ‘to lead or move by influence or persuasion,’ ” Maj. Op. at 401 (quoting OIG Anti-Kickback Provisions, 56 Fed.Reg. 35952, 35958 (July 29, 1991)), and is “directed towards an individual or entity ‘in a position to generate Federal health care program business,’ ” id. (quoting OIG Supplemental Compliance Program Guidance for Hospitals, 70 Fed.Reg. 4858, 4864 (Jan. 31, 2005)), but the majority finds unreasonable McNamara’s belief that the items were being given to doctors with authority to refer business to Life Ambulance (“Life”) because McNamara did not sufficiently investigate the issue, id. at 402-03. But McNamara need not prove that an actual violation of the AKS occurred. See Graham Cnty., 545 U.S. at 416 n. 1, 125 S.Ct. 2444 (holding that “proving a violation ... is not an element of a § 3730(h) cause of action”). The question is much more tentative: Did she put forth evidence from which a jury could find that she had an objectively reasonable belief as she was conducting the investigation and making her internal reports that she was “collecting information about a possible fraud.” Yesudian, 153 F.3d at 740. I would conclude that she did.
Baker reported to McNamara in May 2010 that Life had given jackets with its logo on them “to certain hospital ER doctors,” stated that “SEVERAL people got them,”1 and noted concerns with Holzer using Life frequently, given that “Life Air [was] more than double the distance and time” from Holzer than MedFlight. R. 102-31 (Baker Email) (Page ID # 4894); see also R. 50-1 (McNamara Dep. at 200:21-201:10) (Page ID #875-76) (describing a situation in which a patient had been transported from Holzer to another facility and “had died, and reportedly, the doctors were upset because there was a delay in transport,” which Baker attributed “perhaps” to the fact that “the nurse in the ER was forced to not call the closest ambulance but to call Life”).2 Soon after, *407McNamara learned that Life had also provided free hot dogs and hamburgers for barbeques at Holzer’s health and wellness fair. R. 105 (Sealed McNamara Notes at 5) (Page ID # 5139); see also R. 102-26 (2010 Health Fair Notice) (Page ID # 4889); R. 102-28 (2009 Health Fair Notice) (Page ID # 4891). After sending her May 18 and May 19 emails to Holzer officials regarding her concerns, McNamara determined that from January to April 2010, Holzer used Life Ambulance more than 90 percent of the time an ambulance company was used to transport patients. R. 102-29 (Chart) (Page ID # 4892).3 She then reported these figures to Holzer CEO Brent Saunders. See R. 50-1 (McNamara Dep. at 347:10-23) (Page ID #1005). From these facts, a jury could find that it was reasonable for McNamara to conclude that it was possible that Holzer was “receiving] ... remuneration ... in return for referring” its patients to Life Ambulance. 42 U.S.C. § 1320a-7b(b)(l). The majority notes decisions finding an FCA or AKS violation that involved more expensive food and drinks, Maj. Op. at 402, but the issue in this case is whether McNamara had, during the course of an incomplete investigation, a reasonable belief in the possibility of a violation. It is the province of a jury to weigh the value of the items given, Holzer’s near-exclusive use of Life, the reasons why Life was arguably not the best choice, and any other relevant facts to assess the reasonableness of McNamara’s belief.
It is also for a jury to determine the reasonableness of McNamara’s understanding that it was “the call of the doctor” to decide which ambulance provider to use, R. 50-1 (McNamara Dep. at 184:3-14) (Page ID #859) — and therefore that remuneration to doctors could induce a referral. The testimony of others that doctors did not usually refer in this manner, R. 99-1 (Mickunas Dep. at 27:17-28:6) (Page ID #4584-85), is beside the point. The issue is whether the information available to McNamara at the time could support a finding that she reasonably believed that the individuals she suspected were receiving remuneration from Life were in a position to refer business to Life. McNamara’s understanding that doctors were given referral authority was bolstered by the information she received from Baker that Life was giving jackets to doctors and receiving business from Holzer that Baker believed was unwarranted, R, 102-31 (Baker Email) (Page ID # 4894), including one situation in which a patient had died after a transportation delay, which Baker attributed “perhaps” to the fact that “the nurse in the ER was forced to not call the closest ambulance but to call Life.” R. 50-1 (McNamara Dep. at 200:21-201:10) (Page ID # 875-76). McNamara’s suspicion was also supported by her later discovery that Life received over 90 percent of Holzer’s business. See R. 102-29 (Chart) (Page ID #4892).4 The majority criticizes McNa*408mara for “never producing] the testimony or affidavit of any Holzer doctor verifying this understanding,” Maj. Op. at 403, but such evidence — although certainly helpful to her case — is not necessary to avoid summary judgment in light of other evidence that provides an arguable basis for McNamara’s belief. McNamara need not prove a violation of the False Claims Act, so long as her belief arising, during the course of her investigation was objectively reasonable. See Graham Cnty., 545 U.S. at 416 & n. 1, 125 S.Ct. 2444; Yesudian, 153 F.3d at 740.
McNamara’s belief arose in the context of an apparently ongoing investigation,5 and was not unreasonable as a matter of law. Her failure to investigate further, then, is not a basis for summary judgment, even if it could convince a jury that she could not have reasonably believed that anyone was being induced. The majority states: “A jury could not find McNamara engaged in protected activity when she based her allegations of illegal kickbacks solely on a high referral rate to a contractually (and legally) preferred supplier who gave a token jacket and hotdogs to unidentified Holzer employees that may or may not have had referral power.” Maj. Op. at 404. But a jury could find that she engaged in protected activity because her allegations were based upon that high referral rate, a report that the supplier was giving jackets to various doctors and obtaining referrals despite arguably being an inferior option, and McNamara’s separate understanding (bolstered by these facts) that doctors did have referral power, A jury could, of course, find that McNamara’s belief was not objectively reasonable — either because the jackets and food were of too little value to signify a potential inducement or because her understanding of doctors’ referral authority was unreasonable absent further investigation at that time. But it is not our job at the summary-judgment stage to decide these fact disputes.
I would therefore hold that McNamara demonstrated a sufficient basis for a jury to find that her belief that she was investigating a possible AKS violation was reasonable. McNamara also demonstrated a basis from which a jury could infer that she reasonably viewed that suspected AKS violation as an FCA violation, thereby triggering the protections of § 3730(h). Although AKS violations are not always FCA violations, “[a] claim that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purposes of [the FCA].” 42 U.S.C. § 1320a-7b(g). McNamara testified that, at the time of the investigation and internal reporting, she “didn’t know if we were billing for these patients that flew, or the ambulance company was, or if we billed for part of them and they billed part of them.” R. 50-1 (McNamara Dep. at 226:24-227:2) (Page ID # 901-02). At least, her belief that Holzer might bill Medicare directly for ambulance services *409was not unreasonable as a matter of law. If Holzer was billing Medicare for those services, that could have provided a basis for an FCA violation because Holzer would have been making a claim to the federal government for services tainted by an AKS violation. The record does not reveal when McNamara learned that Holzer does not actually bill Medicare for services provided by Life, R. 51-1 (McNamara Sealed Dep. at 246:18-21) (Page ID # 1219), and thus does not compel a finding that McNamara lacked a belief in the existence of an AKS violation at the time of her investigation and reports, or that such a belief would have been unreasonable. McNamara therefore has created a genuine issue of fact as to whether her actions were protected under § 3730(h). Because the majority’s affirmance of the district court’s grant of summary judgment to Holzer is based solely on a finding that McNamara’s investigative and reporting activity was not protected, I respectfully dissent.
McNamara also demonstrated genuine issues of fact relevant to the other elements of a prima facie case under § 3730(h). She pointed to sufficient evidence that she put Holzer on notice that she was undertaking activities to stop an FCA violation.6 McNamara additionally has pointed to sufficient evidence to create a genuine dispute whether her FCA investigation was the but-for cause of her termination.
Finally, McNamara has created a genuine dispute of material fact whether Holzer’s asserted reasons for firing her were pretextual. It bears emphasizing that Holzer articulated primarily subjective reasons for McNamara’s termination — that she was not a “good fit.” We have held “that decisions made on the basis of subjective criteria, such as whether an employee is an effective manager, can provide a ready mechanism for discrimination, and thus such decisions are carefully scrutinized.” Idemudia v. J.P. Morgan Chase, 434 Fed.Appx. 495, 504 (6th Cir.2011) (internal quotation marks omitted). McNamara did sufficiently dispute whether three of the asserted reasons had a basis-in-fact or were sufficient to warrant her termination. Beyond that, McNamara pointed to other evidence to suggest that Holzer’s articulated reasons were pretext. First, she produced evidence that creates a *410genuine dispute whether Holzer failed to follow its own policies in terminating her. We have held that “an employer’s failure to follow a policy that is related to termination or demotion can constitute relevant evidence of pretext.” DeBoer v. Musashi Auto Parts, Inc., 124 Fed.Appx. 387, 394 (6th Cir.2005). Second, McNamara argues that “[n]early all of the eight reasons given by Holzer ... were offered for the first time post-hoc during this litigation.” Appellant Br. at 35. Here, the only record evidence documenting why McNamara was fired when she was fired is her employee evaluation form, and the only specific negative feedback on that form is a “Poor” rating for “Situational Leadership.” R. 73-2 (Employee Eval. Rep. at 1) (Page ID # 3203). We have held that evidence that an employer’s asserted legitimate reasons for firing a plaintiff were concocted after-the-fact can be evidence of pretext. See, e.g., Gaglioti v. Levin Grp., Inc., 508 Fed.Appx. 476, 482 (6th Cir.2012); Wheet v. Greenwood Ford, Inc., No. 96-5368, 1997 WL 589270, at *3-4 (6th Cir. Sept. 23, 1997).
In sum, the evidence that McNamara introduced is sufficient to raise disputes of material fact regarding the elements of a prima facie case of retaliatory discharge and whether Holzer’s asserted reasons for terminating her were pretextual. I therefore dissent from the majority’s affirmance of the district court’s entry of summary judgment.

. The majority treats the issue as involving only one jacket, Maj. Op. at 401, and McNamara did testify that she ultimately confirmed the existence of only one such jacket, R. 711 (McNamara Dep. at 113:13-114:11) (Page ID # 2358-59), but the report from Baker was not so limited. See R, 102-31 (Baker Email) (Page ID # 4894). Moreover, McNamara testified that when she interviewed Dr. Mickunas during her investigation, he said that "he knew of a few people that had” jackets. R. 50-1 (McNamara Dep. at 205:23-206:1) (Page ID #880-81). The majority brushes aside this information, stating that "[t]he record, of course, contains no evidence outside McNamara's subjective mindset to support these statements,” Maj. Op, at 401 n. 5, but the record in fact contains such evidence. McNamara received an email from Baker and testified to having received a statement from Mic-kunas. Because the objective-reasonableness inquiry judges the reasonableness of an employee's belief based 'upon the information that was available to the employee at the time, Fanslow, 384 F.3d at 480-81 (test is "whether a reasonable employee in these circumstances would have thought the same”), these are external sources that a jury could find were sufficient to support a reasonable belief in the midst of an ongoing investigation. That Baker and Mickunas later testified to having no personal knowledge of these additional jackets does not affect the reasonableness of McNamara’s reliance on their statements to her unless McNamara knew this additional information at the time. Far from conflating the subjective and objective components of the test, this recognition is necessary to avoid transforming the objective component from requiring an objectively reasonable belief to an objectively correct belief.

. As the majority notes, Maj. Op. at 404 n. 9, Baker testified during her deposition that it was a different ambulance provider that had been responsible for the transportation of the patient who died. See R. 100-1 (Baker Dep. at 29:2-31:18) (Page ID # 4669-71). But Bak*407er’s email to McNamara did not mention this fact and McNamara’s testimony indicates that Baker told her that Life was the provider. The majority treats this as constituting an unreasonable belief as a matter of law because McNamara may ultimately have been incorrect, but the issue, again, is whether a jury could find that her belief at the time, given the information available to her, was objectively reasonable.

. The majority emphasizes that Holzer had a preferred-supplier agreement with Life, as a likely explanation for the disparity. Maj. Op. at 403. Even so, McNamara testified that the choice of whom to call remained nonetheless in the hands of the doctor. See R. 50-1 (McNamara Dep. at 184:3-14) (Page ID # 859).

. Although McNamara learned these statistics after her May 18 and May 19 emails, she reported them to Brent Saunders in person. *408See R. 50-1 (McNamara Dep. at 347:10-23) (Page ID # 1005).

. McNamara testified that her investigation was "stopped," but then indicated that she "completed the anti-kickback violation” but "did not complete the investigation of the— the emergency room issues.” See R. 50-1 (McNamara Dep. at 188:18-189:18) (Page ID # 863-64). Later, she testified again that her investigation had been "interrupted.” Id. at 202:16-204:18 (Page ID # 877-79). She later stated that the investigation concluded when she "showed Mr. Saunders the chart ... showing that we had, in fact, been using [Life] six times more than others.” Id. at 347:16-20 (Page ID # 1005). In any event, her investigation remained unfinished at the time she engaged in the activity she claims was protected — reporting regarding what she viewed as AKS violations and looking into the issues she had uncovered.

. Our decision in Yuhasz, 341 F.3d 559, interpreted § 3730(h) before it was amended and therefore Yuhasz's interpretation of the notice requirement does not control this case. In Yuhasz, we held that a plaintiff had failed to allege that he satisfied the notice requirement of an FCA retaliation claim because his normal job duties involved investigating potential fraud. Id. at 567. We explained that “[i]n light of their ordinary responsibilities, however, such persons [employees charged with investigating potential fraud] must make clear their intentions of bringing or assisting in an FCA action in order to overcome the presumption that they are merely acting in accordance with their employment obligations." Id. at 568 (internal quotation marks omitted). Given that the current version of § 3730(h) no longer limits protected activity to actions in furtherance of potential FCA actions, Yuhasz’s requirement that employees involved in investigating potential fraud must "make clear their intentions of bringing or assisting in an FCA action,” id., is no longer required by the statutory text. See, e.g., Mikhaeil v. Walgreens Inc., No. 13-14107, 2015 WL 778179, at *9 (E.D.Mich. Feb. 24, 2015) (reasoning that Yuhasz no longer applies in light of the amendments to § 3730(h)); Manfield v. Alutiiq Int'l Solutions, Inc., 851 F.Supp.2d 196, 204 (D.Me. 2012) ("Under the new statute, an employer's knowledge still mirrors the kind of activity in which the plaintiff must be engaged. Since a plaintiff now engages in protected conduct whenever he engages in an effort to stop an FCA violation, the act of internal reporting itself suffices as both the effort to stop the FCA violation and the notice to the employer that the employee is engaging in .protected activity.”).