Liss v. Heritage Health & Housing, Inc.

Background

Jane Liss sued Heritage Health & Housing, Inc., alleging that Heritage terminated her employment in retaliation for investigating and reporting suspected financial fraud and failures to safeguard government grant money. She asserted claims under the federal False Claims Act and the New York False Claims Act.

Liss became Heritage’s chief executive officer in May 2018. After gaining access to Heritage’s bank records, she and the chief financial officer identified suspicious checks and wire transfers involving accounts bearing the names of a former chief executive officer and Board members. Liss reported her concerns to the Board on October 17, 2018; emailed the Board on October 22; discussed them with an HRSA representative; and reported them to a police detective on October 30. Heritage’s Board terminated her employment that evening.

At the same time, five Heritage staff members had complained about Liss’s alleged treatment of employees and workplace behavior. Board member Adrienne Thomas had begun advocating for Liss’s termination before Liss presented her financial concerns to the Board. Heritage said it terminated Liss because of those staff complaints, while Liss disputed the complaints and argued that the timing and circumstances showed retaliation.

Legal standard and analysis

The court applied the summary-judgment standard. Summary judgment is appropriate when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. The court had to view the evidence in the light most favorable to Liss.

For a False Claims Act retaliation claim, Liss had to show that she engaged in protected conduct, Heritage knew about that conduct, and Heritage took adverse action because of it. The court held that Liss had presented enough evidence on the first two elements. A reasonable fact-finder could conclude that she had an objectively reasonable basis to suspect that Heritage was involved in fraud against the federal healthcare system or was failing to safeguard government funds. Her reports to the Board, the HRSA representative, and law enforcement were also sufficient to support a finding that Heritage knew about her protected activity.

The court held, however, that Liss could not establish causation. Heritage offered a legitimate, non-retaliatory reason for the termination: multiple staff complaints about Liss’s conduct and management style. The court concluded that no reasonable juror could find that this explanation was a pretext, or cover, for retaliation. The concerns and termination efforts began before Liss reported the suspected fraud; the Board encouraged her to report the matter to law enforcement; and the Board ultimately relied on the staff complaints when it terminated her. The court found that the close timing between Liss’s reports and her termination was insufficient to overcome this evidence.

Disposition

The court granted Heritage’s motion for summary judgment. It concluded that Liss could not establish the causation element of her federal or New York False Claims Act retaliation claims. The Clerk’s Office was directed to enter judgment in favor of Heritage and close the case. Judge Laura Taylor Swain’s opinion resolved docket entry number 35.