United States of America ex rel. June Raffington v. Bon Secours Health System

Background

June Raffington filed a complaint under the federal False Claims Act and the New York State False Claims Act. She alleged, among other things, that Bon Secours Health System, Inc., Bon Secours New York Health System, and Schervier Long Term Home Health Care Program submitted millions of dollars in false claims to Medicare and New York’s Medicaid program for home-health services. The complaint was amended six times; the sixth amended complaint was filed on February 1, 2018.

The order reviewed two rulings by Magistrate Judge Gabriel W. Gorenstein. First, on March 29, 2021, Judge Gorenstein granted the defendants’ motion to exclude an expert report prepared by investigator Jessica Schmor. He found that the report, as then written, was not relevant because it addressed whether the defendants’ services had been authorized by a doctor or another person, while the sixth amended complaint addressed allegedly forged claims without relying on physician authorization.

Second, on October 13, 2021, Judge Gorenstein granted in part and denied in part Raffington’s motion for leave to amend her complaint. He allowed her to add allegations concerning the nurses’ assessments claim, which had appeared in earlier versions of the complaint. He denied leave to add a new False Claims Act theory based on a lack of timely physician authorization, finding that the proposed claim did not relate back to the existing complaint and would therefore be futile because it was time-barred.

Legal standard

Because the two challenged rulings concerned nondispositive matters—matters that do not decide a party’s claim or defense—Judge Berman reviewed them under the “clearly erroneous or contrary to law” standard. Under that deferential standard, a ruling is clearly erroneous only when the reviewing court is firmly convinced that a mistake occurred. A ruling is contrary to law if the magistrate judge failed to apply or misapplied relevant law, rules, or statutes.

Analysis

Judge Berman held that both rulings were nondispositive. He stated that excluding expert testimony is considered nondispositive and that a magistrate judge’s ruling on a motion to amend a complaint is also nondispositive.

As to the expert report, Judge Berman concluded that Judge Gorenstein had carefully reviewed the sixth amended complaint, the record, and the parties’ arguments. He agreed that the complaint did not notify the defendants that physician approvals were at issue and that the report was therefore not relevant to the claims pleaded.

As to the proposed amendment, Judge Berman concluded that Judge Gorenstein had carefully considered relation-back principles, undue delay, bad faith, futility, and undue prejudice. He agreed that the proposed physician-authorization theory had not actually been pleaded, did not relate back to the complaint, and would be futile. He also noted that Raffington had offered no satisfactory explanation for her delay.

Disposition

The court denied Raffington’s objections to Judge Gorenstein’s March 29, 2021 order and denied Raffington’s objections to Judge Gorenstein’s October 13, 2021 order. The court affirmed both rulings.