299 F. Supp. 3d 278
D.D.C.2018Background
- Sheppard was an at‑will MDS coordinator at Essex from June 2012 until her termination on January 5, 2015; her duties involved reviewing documentation used for Medicaid reimbursements.
- In fall 2014 she refused to participate in alleged "upscoring" (inflating patients' needs to increase Medicaid reimbursement) and reported suspected manipulation to supervisors.
- She received a performance improvement plan (PIP) on November 18, 2014, was suspended December 5, 2014, and terminated January 5, 2015; she claims these adverse actions were retaliation for her internal complaints about Medicaid fraud.
- After summary judgment briefing on promissory estoppel and wrongful termination, Sheppard moved to amend to add MFCA claims: a qui tam action on behalf of the Commonwealth and an individual retaliation claim under Mass. Gen. Laws ch. 12, § 5J.
- The court found the proposed qui tam amendment futile for failure to satisfy Rule 9(b) particularity and MFCA seal/service requirements, but allowed amendment to plead an individual MFCA retaliation claim supported by the record.
- The court denied as moot Essex’s motion for summary judgment on the common‑law wrongful termination claim and dismissed claims against unserved defendants for lack of service.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Sheppard amend to bring a qui tam MFCA claim on behalf of the Commonwealth? | Sheppard seeks to allege specific MFCA violations and proceed qui tam. | Essex argues the proposed qui tam allegation fails Rule 9(b) particularity and did not comply with MFCA seal/service. | Denied — amendment futile for failure to plead with Rule 9(b) particularity and for not meeting MFCA procedural requirements. |
| Can Sheppard amend to bring an individual retaliation claim under MFCA §5J? | Sheppard alleges protected internal reporting and timely adverse actions (PIP, suspension, termination). | Essex contends its employment actions were for legitimate poor performance. | Allowed — record provides substantial evidence of protected conduct, employer notice, temporal causation, and issues of pretext. |
| Do heightened fraud‑pleading rules and MFCA procedural rules bar a retaliation claim? | Sheppard argued retaliation claims are not subject to MFCA qui tam pleading/seal rules. | Essex argued Rule 9(b) and MFCA procedures should apply broadly. | Mixed — Rule 9(b)/seal rules bar the qui tam amendment, but retaliation claims need not meet Rule 9(b) or MFCA seal/service and may proceed. |
| Effect on pending summary judgment and unserved defendants? | N/A (plaintiff sought amendment; summary judgment sought earlier) | Essex sought summary judgment on the common‑law wrongful termination claim. | Court denied summary judgment as moot given allowed MFCA retaliation amendment; claims against unserved parties dismissed for lack of service. |
Key Cases Cited
- Resolution Trust Corp. v. Gold, 30 F.3d 251 (1st Cir.) (proposed amendment after discovery must be grounded in record)
- Lawton ex rel. United States v. Takeda Pharm. Co., 842 F.3d 125 (1st Cir.) (Rule 9(b) applies to state‑law fraud claims in federal court)
- United States ex rel. Karvelas v. Melrose‑Wakefield Hosp., 360 F.3d 220 (1st Cir.) (FCA retaliation claims not subject to Rule 9(b) and elements of retaliation claim)
- United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52 (1st Cir.) (protected conduct is conduct that reasonably could lead to an FCA action)
- Maturi v. McLaughlin Research Corp., 413 F.3d 166 (1st Cir.) (employer knowledge/notice requirement for FCA retaliation)
- Harrington v. Aggregate Indus. N.E. Region, Inc., 668 F.3d 25 (1st Cir.) (McDonnell Douglas burden‑shifting and evidence of pretext)
- Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409 (U.S. Supreme Court) (retaliation plaintiff need not prove defendant submitted a false claim)