Hicks v. District of Columbia Office of the Inspector General
183 F.Supp.3d 159
D.D.C.
2016

Background

  • Hicks was Director of Medicaid Audits at D.C. OIG; he identified about $100 million in D.C. Medicaid payments that, he alleges, should have been suspended due to alleged provider fraud.
  • Hicks submitted draft audit reports (Nursing Home Performance; Medicaid State Plan/Program Integrity) including the suspended-payments finding; supervisors (notably Ronald King) resisted including that finding and later canceled the reports.
  • Hicks alleges King issued an unsatisfactory review, revoked his alternative work schedule, and ultimately Hicks was terminated effective August 15, 2014.
  • Hicks’ Amended Complaint brings, inter alia, retaliation claims under the Federal False Claims Act (31 U.S.C. § 3730(h)) and the D.C. False Claims Act, premised on efforts to stop reverse false claims (concealment of an obligation to pay/transmit money).
  • The District moved under Rule 12(b)(6) to dismiss only the two False Claims Act retaliation counts; it argued Hicks failed to plead a cognizable underlying false-claims theory (the District initially focused on forward false claims).
  • The Court denied the motion: accepting Hicks’ theory that he alleged protected activity in furtherance of stopping reverse false claims, the Court found the District had not shown failure to state a claim given the post-2009 statutory definition of “obligation.”

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether retaliation claims under the Federal and D.C. False Claims Acts can rest on efforts to stop reverse false claims Hicks says he engaged in protected activity by reporting and trying to stop the concealment of an obligation (suspension of ~$100M in Medicaid payments) — a reverse false claim D.C. argues Hicks failed to plead any false-claims obligation and relies on cases requiring a present obligation; contends no viable false-claims basis Court: Hicks plausibly alleged protected activity re: reverse false claims; Denied dismissal because Defendant didn’t show failure to state a claim, especially after statutory amendments broadening “obligation.”
Whether the complaint required an underlying forward false claim (a false claim submitted for payment) to support retaliation Hicks concedes he does not rely on a forward false-claim theory; his claims are limited to reverse false claims (concealment of obligations) D.C. framed the claim initially as requiring a forward false claim and argued Hicks failed that showing Court accepted Hicks’ clarification; forward false-claim requirement not necessary for his asserted retaliation theory
Whether “obligation” must be a present, fixed debt at time of concealment Hicks relies on the amended statutory definition (post-2009/2013) covering established duties, fixed or contingent, arising from statute/regulation/other sources D.C. relied on pre-amendment case law holding “obligation” meant an existing debt at the time of the statement Court: Statutory amendments broadened “obligation”; D.C. failed to show the amended definition does not cover Hicks’ allegations
Whether Defendant met the Rule 12(b)(6) standard to dismiss the retaliation counts Hicks argues his factual allegations plausibly show protected activity and retaliatory adverse actions tied to that activity D.C. argues the complaint cannot support a reverse-false-claims-based retaliation claim as a matter of law Court: Dismissal denied — factual allegations accepted as true for now and Defendant did not establish legal insufficiency

Key Cases Cited

  • Ralls Corp. v. Comm. on Foreign Inv. in U.S., 758 F.3d 296 (D.C. Cir.) (standards on accepting factual allegations vs. legal conclusions)
  • Hoyte v. Am. Nat. Red Cross, 518 F.3d 61 (D.C. Cir.) (discussion of reverse false-claim theory)
  • Bain v. Ga. Gulf Corp., 386 F.3d 648 (5th Cir.) (background on government recovery under FCA)
  • U.S. ex rel. Schweizer v. Oce N.V., 677 F.3d 1228 (D.C. Cir.) (describing two elements of FCA retaliation)
  • United States ex rel. Yesudian v. Howard Univ., 153 F.3d 731 (D.C. Cir.) (retaliation-causation framing under FCA)
  • Campbell v. D.C., 972 F. Supp. 2d 38 (D.D.C.) (treating D.C. FCA retaliation elements as mirroring federal FCA)
  • Grayson v. AT&T Corp., 980 A.2d 1137 (D.C.) (federal FCA cases guide interpretation of D.C. FCA)
  • Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
  • Ashcroft v. Iqbal, 556 U.S. 662 (distinguishing factual allegations from legal conclusions)
  • U.S. ex rel. New Mexico v. Deming Hosp. Corp., 992 F. Supp. 2d 1137 (D.N.M.) (observing the 2009 FCA amendments expanded whistleblower protection)
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