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United States ex rel. Doughty v. Oregon Health and Sciences University

United States District Court, D. Oregon

April 11, 2017

UNITED STATES OF AMERICA, ex rel., RICHARD DOUGHTY, Plaintiff-Relators,
v.
OREGON HEALTH AND SCIENCES UNIVERSITY, Defendant.

          BILLY J. WILLIAMS United States Attorney

          NEIL J. EVANS ALEXIS LIEN Assistant United States Attorneys Attorneys for Plaintiff

          SHELLEY D. RUSSELL Crispin Employment Lawyers, ELIZABETH FARRELL, Attorneys for Relator

          ROBERT C. WEAVER, JR. JOY ELLIS PATRICK J. CONTI, Garvey Schubert Barer, MICHAEL J. VERNICK JESSICA L. ELLSWORTH MARTA A. THOMPSON MORGAN L. GOODSPEED Attorneys for Defendant

          OPINION AND ORDER

          ANNA J. BROWN, United States District Judge

         This matter comes before the Court on Defendant's Motion (#54) to Dismiss. The Court concludes the record is sufficiently developed that oral argument on the pending Motion is not warranted. For the reasons that follow, the Court GRANTS Defendant's Motion and GRANTS Plaintiff-Relators leave to file an Amended Complaint to the extent that they can allege claims for unjust enrichment and/or payment by mistake that do not arise from the express contracts at issue.

         BACKGROUND

         On July 30, 2013, Relator Richard Doughty filed a qui tarn action pursuant to 31 U.S.C. § 3729 against Defendant Oregon Health and Sciences University (OHSU) alleging Defendant violated the False Claims Act (FCA), 31 U.S.C. § 3729(a)(1) and (a)(2), when it applied improper reimbursement rates to certain federally-sponsored projects.

         On October.18, 2016, the United States elected to intervene in this matter.

         On October 28, 2016, the United States filed a Complaint in, Intervention alleging three claims for violation of the FCA, a claim for payment by mistake, and a claim for unjust enrichment relating to Defendant's application of improper reimbursement rates to certain federally-sponsored projects.

         On January 17, 2017, Defendant filed a Motion to Dismiss on the grounds that OHSU is an arm of the State and, as such, is not a "person" subject to liability under the FCA and that Plaintiff-Relators' implied-contract claims are barred by their express contract claims.

         The Court took Defendant's Motion under advisement on March 1, 2017.

         STANDARDS

         I. Dismissal for Lack of Jurisdiction Pursuant to Rule 12(b)(1)

         Plaintiff has the burden to establish that the court has subject-matter jurisdiction. Robinson v. Geithner, 359 F.App'x 726, 728 (9th cir. 2009). See-also Ass'n of Am. Med. Coll. v. United States, 217 F.3d 770 (9th Cir. 2000).

         When deciding a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1), the court may consider affidavits and other evidence supporting or attacking the plaintiff's jurisdictional allegations. Rivas' v. Napolitano, 714 F.3d 1108, 1114 n.l (9th Cir. 2013). The court may permit discovery to determine whether it has jurisdiction. Laub v. United States Dep't of Interior, 342 F.3d 1080, 1093 (9th Cir. 2003}. When a defendant's motion to dismiss for lack of jurisdiction "is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Mavrix Photo, Inc. v. Brand Tech. r Inc., 647 F.3d 1218, 1223 (9th Cir. 2011) (citation omitted).

         II. Dismissal for Failure to State a Claim Pursuant to Rule 12(b) (6)

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." [Bell Atlantic v. Twombly, 550 U.S. 554');">550 U.S. 554, ] 570, 127 S.Ct. 1955 [(2007)]. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. . . . The plausibility-standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. at 557, 127 S.Ct. 1955');">127 S.Ct. 1955 (brackets omitted).

Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) . See also Bell Atlantic, 550 U.S. at 555-56. The court must accept as true the allegations in the complaint and construe them in favor of the plaintiff. Novak v. U.S., 795 F.3d 1012, 1017 (9th Cir. 2015).

         "In ruling on a 12(b) (6) motion, a court may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012)(citation omitted). A court, however, "may consider a writing referenced in a complaint but not explicitly incorporated therein if the complaint relies on the document and its authenticity is unquestioned." Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007} (citation omitted) .

         DISCUSSION

         I. ...


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