787 F. Supp. 2d 1329
M.D. Ga.2011Background
- Plaintiff Parato, a relator, filed a qui tam FCA action against UnaHealth and its board related to Section 330 grant funding.
- UnaHealth received a $650,000 Section 330 grant (Dec. 1, 2004) and anticipated ~$1.95 million in funding over three years; grant notices incorporated applicable federal terms.
- Defendant Whyte served as interim CEO and allegedly acted as a Companion Technologies consultant, creating potential conflicts of interest with grant-funded purchases.
- Parato alleged conflicts of interest, noncompliance with grant requirements, and fraudulent Medicare/Medicaid claims; she informed the Board in Aug. 2005 with memoranda outlining concerns.
- Parato began as CEO on Aug. 15, 2005; she was placed on leave and terminated after raising concerns about regulatory noncompliance and potential fraud.
- The court later granted in part and denied in part the defendants’ summary judgment motions, ultimately resolving several FCA, retaliation, and contract claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| False certification under FCA | Parato contends certifications about compliance were false. | UnaHealth argues promissory assurances cannot be true false claims. | Granted summary judgment for Defendants on false certification. |
| Retaliation under FCA § 3730(h) | Parato's termination was in retaliation for protected conduct. | UnaHealth asserts legitimate nonretaliatory reasons and no supervisory employer liability. | Denied for Parato; summary judgment granted to individual Defendants; UnaHealth exception pending. |
| State law breach of contract | UnaHealth failed to fully reimburse relocation/travel expenses per employment offer. | Parato waived by not cashing a check and by stop-payment; tender extinguishes claim. | Denied to grant summary judgment; questions of fact remain on amount due and proper tender. |
Key Cases Cited
- Mack v. Augusta-Richmond County, Georgia, 365 F. Supp. 2d 1362 (S.D. Ga. 2005) (protected conduct analysis in FCA retaliation context)
- Mann v. Olsten Certified Healthcare Corp., 49 F. Supp. 2d 1307 (M.D. Ala. 1999) (prima facie retaliation standard and protected activity)
- Sanchez v. Lymphatx, Inc., 596 F.3d 1300 (11th Cir. 2010) (internal reports can support FCA litigation awareness)
- Hopper v. Anton, 91 F.3d 1261 (9th Cir. 1996) (promissory fraud under FCA; evidentiary threshold)
- U.S. ex rel. Lamers v. City of Green Bay, 998 F. Supp. 971 (E.D. Wis. 1998) (falsity and scienter linked in FCA claims)
- Hindo v. University of Health Sciences, 65 F.3d 608 (7th Cir. 1995) (imprecision in compliance cases not per se FCA)
- Roby v. Boeing, 100 F. Supp. 2d 619 (S.D. Ohio 2000) (requires objective falsehood for FCA liability)
- Bechtel Construction Co. v. Secretary of Labor, 50 F.3d 926 (11th Cir. 1995) (interpretation of retaliation and regulatory compliance standards)
- Clark County School Dist. v. Breeden, 532 U.S. 268 (Supreme Court 2001) (causal link in retaliation cases requires very close proximity when temporal)