Foluso Fakorede v. Mid-South Heart Center, P.C.
709 F. App'x 787
| 6th Cir. | 2017Background
- Fakorede, a cardiologist recruited to Jackson, Tennessee, was employed by Mid‑South and covered by a Hospital District support account guaranteeing $500,000 compensation under a recruiting agreement.
- Mid‑South paid Fakorede $500,000, accounted for his collections, and directed draws against the Hospital District support account; Fakorede would owe draws back if he left early but was indemnified by Mid‑South against any accounting determination.
- About ten months in Fakorede requested documentation about Mid‑South’s expense calculations; about fourteen months in he voiced concerns about expenses attributed to him and requested an independent review/line‑item audit.
- Fakorede was terminated roughly one week after reminding the Hospital District that only expenses permitted by federal law should be charged to the support account; a later audit showed Mid‑South had improperly attributed over $200,000 (later reported ~314,000) in expenses.
- Fakorede sued under the False Claims Act anti‑retaliation provision, 31 U.S.C. § 3730(h), claiming he was discharged for efforts to stop FCA violations; the district court granted Mid‑South’s Rule 12(b)(6) motion and dismissed for failure to plead protected activity.
- The Sixth Circuit majority affirmed, holding Fakorede failed to plausibly allege he engaged in protected activity aimed at preventing fraud against the federal government prior to termination; Judge Stranch dissented.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fakorede pleaded engagement in FCA‑protected activity before termination | Fakorede argues his requests for expense documentation, expressed concerns about improper expenses, request for audit, and references to Stark/anti‑kickback violations show a reasonable belief he was preventing fraud against federal programs | Mid‑South argues his conduct only sought accounting information and compliance with state entity reimbursement rules and did not show a reasonable belief that federal fraud (tainted Medicare claims) was occurring | Held: No — complaint fails to plausibly allege Fakorede reasonably believed he was trying to stop fraud against the federal government and thus fails the first element of an FCA retaliation claim |
| Whether employer had knowledge of protected activity | Fakorede contends his communications and audit requests put Mid‑South and the Hospital on notice | Mid‑South contends communications concerned private accounting and Hospital District reimbursement, not federal fraud | Held: Not reached as independent basis; because protected activity was not plausibly alleged, knowledge element unnecessary to decide affirmance |
| Whether alleged retaliatory discharge was causally connected to protected activity | Fakorede asserts temporal proximity and pre‑termination complaints show causation | Mid‑South asserts termination followed routine disputes over accounting and lacked connection to federal‑fraud reporting | Held: Not addressed on merits because plaintiff failed to allege protected activity required to trigger § 3730(h) protection |
| Proper pleading standard for FCA retaliation after 2009 amendment | Fakorede (dissent) argues the amended § 3730(h) protects broader “efforts to stop” violations and need not plead particularity; his facts suffice | Majority applies Iqbal/Twombly plausibility standard and requires factual allegations showing a reasonable belief of federal fraud | Held: Majority applies plausibility review and finds plaintiff’s factual allegations insufficient; dissent would have found them sufficient under the amended statute |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards; plausibility review)
- Yuhasz v. Brush Wellman, Inc., 341 F.3d 559 (6th Cir.) (elements of FCA retaliation claim)
- D'Ambrosio v. Marino, 747 F.3d 378 (6th Cir. 2014) (Rule 12(b)(6) pleading requirements)
- McKenzie v. BellSouth Telecommunications, Inc., 219 F.3d 508 (6th Cir. 2000) (urging compliance with regulation is not protected activity)
- United States ex rel. Kosenske v. Carlisle HMA, Inc., 554 F.3d 88 (3d Cir. 2009) (false certification re: Stark/Anti‑Kickback can give rise to FCA liability)