Summary Judgment Granted After Cross-Motions in Termination, Fraudulent Billing, False Claims Act Case

On Monday, Judge Daphne A. Oberg of the District of Utah entered judgment on claims and counterclaims by an individual plaintiff and her former employer, defendant Granger Medical Clinic P.C., in a False Claims Act (FCA) case, granting summary judgment in favor of the defendant as to the plaintiff’s retaliation claim under the FCA, while partially granting and partially denying the plaintiff’s motion for summary judgment against the defendant’s counterclaims.

Rebekah Gatti filed a complaint against her former employer, Granger Medical Clinic, alleging that Granger unlawfully terminated her in retaliation for reporting purportedly fraudulent billing practices, specifically through “overcoding patient encounters and performing unnecessary procedures,” thus committing Medicare fraud — and signaling that she may file an action under the FCA. The employer brought counterclaims against Gatti, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and trade secret misappropriation, among others.

The court’s analysis found that Gatti’s pleadings did not support her claim that she was fired because she threatened legal action over what she believed was fraud.

In order to plausibly show that she was retaliated against for reporting the alleged fraud and to be protected under the FCA, Gatti would have had to show evidence that she was engaging in “protected activity” under the FCA, that the employer acknowledged and then took an action, such as termination, against the employee because of the protected activity. While finding that Gatti did engage in protected activity — her attempts at reporting what she believed to be fraud — the court said she did not sufficiently establish that such activity was the reason she was terminated, citing only the short time elapsed between her threats of filing a lawsuit and her termination.

“The temporal proximity between these two events is insufficient, on its own, to permit an inference of causation,” the court stated.

Gatti’s own motion for summary judgment on Granger’s counterclaims that Gatti “improperly retained confidential documents belonging to Granger after her termination and obtained secret recordings of three company meetings from another former employee” was granted as to the breach and trade secret misappropriation claims due to Granger’s failure to provide sufficient evidence that it suffered damages resulting from Gatti’s alleged retention of company information, the court found.

However, the court’s judgment on the defendant’s claim for injunctive relief under Utah’s Uniform Trade Secrets Act fell in favor of the defendant, requiring Gatti to return any confidential information in her possession to Granger in order to prevent the misappropriation of trade secrets.

Gatti is represented by the Law Firm of Josh Borsellino P.C. and Michael Smith. Granger is represented by Cohne Kinghorn and Litchfield Cavo LLP.