870 F. Supp. 2d 1069
D. Or.2012Background
- Neighorn filed suit on Sept. 30, 2011 alleging FCA retaliation, Oregon whistleblower act, and common-law wrongful discharge against Quest and Rotech.
- Rotech provides home oxygen and related services and contracts with VA and CMS; operates nationwide with ~3,500 employees across 450 locations.
- In 2008, Rotech entered a Corporate Integrity Agreement with the OIG to implement compliance, non-retaliation policies, training, and documentation controls.
- Rotech maintains a Compliance Department, a Code of Conduct, and mandated training; employees certify receipt and understanding of policies.
- The dispute centers on a rural delivery practice called “porching” (leaving equipment with signatures or notes) and an internal compliance investigation leading to Neighorn’s termination in April 2010.
- Rotech conducted a compliance investigation and terminated several employees, including Coghill and Neighorn, while a JCAHO audit identified deficiencies at the Central Point office.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FCA retaliation claim viability | Neighorn engaged in protected FCA activity. | No protected activity or objective nexus to fraud evidenced. | FCA retaliation claim defeated; no protected activity shown. |
| ORS § 659A.199 retaliation claim viability | Neighorn engaged in protected activity and suffered retaliation. | Termination not adequately linked to protected activity. | Issue of material fact remains; ORS § 659A.199 claim survives. |
| Common-law wrongful discharge preclusion | Wrongful discharge independent remedy. | Adequate statutory remedy under ORS § 659A.199 precludes claim. | Precluded; § 659A.199 provides adequate remedy. |
| Private right of action for ORS § 652.750 (personnel file) | statutory remedy not exclusive; private action implied. | No private right of action; enforcement with BOLI suffices. | Summary judgment for Rotech; no private right of action implied. |
| Punitive damages on asserted claims | seeks punitive damages where warranted. | Evidence insufficient or inappropriate to award. | Punitive damages denied except as to potential FCA claim issues; overall punitive relief denied. |
Key Cases Cited
- Hopper v. Anton, 91 F.3d 1261 (9th Cir. 1996) (retaliation doctrine under FCA extensions; protected activity standards)
- Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir. 2011) (four elements for FCA false-certification/promissory fraud theories)
- Hendow v. Univ. of Phoenix, 461 F.3d 1166 (9th Cir. 2006) (false certification and implied false certification theories under FCA)
- Ebeid ex rel. U.S. v. Lungwitz, 616 F.3d 993 (9th Cir. 2010) (implied false certification doctrine in FCA context)
- Moore v. Cal. Inst. of Tech. Jet Propulsion Lab., 275 F.3d 838 (9th Cir. 2002) (protective scope of FCA retaliation; need for reasonable belief)
- Klamath Water Users Prot. Ass’n v. Patterson, 204 F.3d 1206 (9th Cir. 1999) (contract interpretation in federal regimes; plain language controls)