United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
J. BOYLE UNITED SPATES DISTRICT JUDGE
the Court is Defendant Baylor Research Institute d/b/a Baylor
Scott & White Research Institute's (Baylor's)
Motion to Dismiss (Doc. 9). For the reasons that follow, the
Court GRANTS in part and DENIES in
part Defendant's Motion.
a whistleblower case. Plaintiff Christy Nichols alleges that
her employer retaliated against her for engaging in
“protected activity.” Ms. Nichols was employed as
an Abdominal Transplant Research Registered Nurse by
Defendant Baylor, from January 29, 2018 until March 8, 2019.
Doc. 8, First Amend. Compl., ¶¶ 2, 5. Starting in
or around June 2018, Ms. Nichols began expressing her
concerns to Baylor management about several of its practices.
Id. ¶¶ 6-7. The First Amended Complaint
(Complaint) details various instances where Ms. Nichols
reported her concerns to Baylor management. They are as
in June 2018, Ms. Nichols met with supervisors and explained
that she had discovered double-billing practices in two
doctors' studies. Id. Specifically, Ms. Nichols
“discovered that Baylor was receiving payment from
pharmaceutical companies as well as insurance companies,
including billing Medicare.” Id. ¶ 7.
Baylor had billed procedures or tests to insurance companies
“that [were] not standard of care and not covered in
the Medicare-required Coverage Analysis.” Id.
Baylor would then receive payment from the pharmaceutical
in November and December of 2018, Ms. Nichols reported to
Baylor that it “was creating medical records without
consent and using Social Security Numbers in violation of IRS
requirements, ” and “Baylor was not clearly
disclosing to [test] subjects nor adequately differentiating
between non-taxable reimbursements of expenses and taxable
compensation to be reported on IRS 1099-MISC forms.”
Id. ¶ 14. As a result, nontaxable
reimbursements were included in the 1099 forms to subjects.
Id. In doing so, Baylor failed to follow federal
law, which was a condition for “receiving federal
grants for its research programs . . . .” Id.
Baylor was also required to “immediately notify the
National Institutes of Health (NIH) of noncompliance with
federal law.” Id.
in December 2018, Ms. Nichols reported to Baylor that the
current storage temperature was minus 80 degrees Fahrenheit,
which was lower than the minus 20 degrees protocol.
Baylor's receipt of federal funds was conditioned on an
agreement to store specimens at minus 20 degrees, and
therefore “the release of these specimens to the NIH
would result in false information being provided to the
NIH.” Id. ¶¶ 11, 17.
again in December 2018, Ms. Nichols reported that she and a
co-worker had “discovered a pattern of negligence and
mismanagement” at Baylor. Id. ¶ 25.
Specifically, one doctor had been forced to submit incomplete
and inaccurate information to Baylor's Institutional
Review Board (IRB); physicians responsible for a study were
not consulted about their opinion “and
direction”; and patients were not given proper notice
of the risks of a study. Id. The Complaint notes how
“[t]hese actions violated requirements to comply with
Federal Drug Administration (FDA) and NIH rules with respect
to study applications and compliance, which were requirements
for the receipt of federal funds.” Id. Fifth,
in January 2019, Ms. Nichols spoke to human resources about
her “concerns regarding study conduct and that her
previous complaints made to managerial staff had not been
addressed.” Id. ¶ 30. The Complaint
alleges that the “studies were . . . not in compliance
with requirements to meet NIH requirements for the receipt of
federal grants and/or would result in improper Medicare
billing.” Id. ¶ 29.
in February 2019, Ms. Nichols again voiced her concerns about
the double-billing procedures through emails and during
meetings. Id. ¶ 33.
again in February 2019, presumably dissatisfied with
Baylor's response to her complaints, Ms. Nichols emailed
the Office of Human Research Protection (OHRP) and the FDA to
report her concerns about pharmaceutical and NIH-funded
studies. Id. ¶ 34.
later that February, Ms. Nichols notified Baylor of her
report to the FDA. Id. ¶ 35. This began a long
process by which Baylor asked Ms. Nichols about her report,
and subsequently put her employment on “pause.”
Id. ¶¶ 36-37. Shortly after a meeting
between Baylor and Ms. Nichols on March 5, 2019, Ms. Nichols
was notified that “it was [Baylor's] opinion that
[Ms. Nichols] would continue to have concerns if she were to
return to work, and management did not feel that [Ms.
would be successful if she returned.” Id.
¶¶ 48-52. Ms. Nichols was offered a severance
package, which she did not sign. Id. ¶ 54. Ms.
Nichols was subsequently terminated. Id. ¶ 62.
Nichols then brought this civil action, alleging that her
discharge was an unlawful retaliation in violation of 31
U.S.C. § 3730(h)(1). Id. at 11
-12. Baylor then filed a motion to dismiss
(Doc. 9). All briefing has been filed in relation to this
motion, and the motion is now ripe for review.
Federal Rule of Civil Procedure Rule 8(a)(2), a complaint
must contain “a short and plain statement of the claim
showing that the pleader is entitled to relief . . . .”
Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) authorizes the Court to
dismiss a complaint for “failure to state a claim upon
which relief can be granted . . . .” Id.
12(b)(6). To survive a 12(b)(6) motion, “enough facts
to state a claim to relief that is plausible on its
face” must be pled. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
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 this stage, a court
“must accept all well-pleaded facts alleged in the
complaint as true and must construe the allegations in the
light that is most favorable to the plaintiff.”
J&J Sports Prods., Inc. v. Live Oak Cnty. Post No.
6119 Veterans of Foreign Wars, 2009 WL 483157, at *3
(S.D. Tex. Feb. 24, 2009) (quoting Cent. Laborers'
Pension Fund v. Integrated Elec. Servs., 497 F.3d 546,
550 (5th Cir. 2007)).
Fifth Circuit has held that dismissal is appropriate
“if the complaint lacks an allegation regarding a
required element necessary to obtain relief.”
Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th
Cir. 1995) (internal citation omitted). Essentially,
“the complaint must contain either direct allegations
on every material point necessary to sustain a recovery . . .
or contain allegations from which an inference fairly may be
drawn that evidence on these material points will be
introduced at trial.” Campbell v. City of San
Antonio, 43 F.3d 973, 975 (5th Cir. 1995) (internal
the False Claims Act (FCA), a private person can sue any
person who has submitted false claims for payment to the
United States Government. 31 U.S.C. §§ 3729(a),
3730(b)(1). The suit is a qui tam action in which
“[t]he suit is brought in the Government's name,
and the Government has the exclusive opportunity to
intervene.” United States ex rel. Johnson v. Kaner
Med. Grp., P.A., 641 Fed.Appx. 391, 393 (5th Cir. 2016)
(per curiam) (citing 31 U.S.C. § 3730(b)(1), (4)-(5)).
protects these private whistleblowers who bring qui
tam actions. The act gives a private cause of action to
a whistleblower employee who is “discharged, demoted,
suspended, threatened, harassed, or in any other manner
discriminated against in the terms of conditions of
employment” in response to their acts done “in
furtherance of an action under this section or other efforts
to stop 1 or more violations of” the FCA. 31 U.S.C.
§ 3730(h)(1). This cause of action “is intended to
encourage those with knowledge of fraud to come
forward.” Roberston v. Bell Helicopter Textron,
Inc., 32 F.3d 948, 951 (5th Cir. 1994).
establish a claim under § 3730(h), a party must show (1)
that she was engaged in protected activity with respect to
the False Claims Act; (2) that her employer knew she was
engaged in protected activity; and (3) that she was
discharged because she was engaged in protected
activity.” Thomas v. ITT Educ. Serv., Inc.,
517 Fed.Appx. 259, 262 (5th Cir. 2013) (per curiam) (citing
Robertson, 32 F.3d at 951).
threshold matter, Ms. Nichols argues that at the motion-to-
dismiss stage, she need not plead these three elements. Doc.
12, Pl.'s Opp. to Def.'s Mot. to Dismiss and Br. in
Supp. (“Pl.'s Br.”), 3 n.1. However, this
Court has previously required that a plaintiff adequately
plead all three elements at the motion-to-dismiss stage.
See Jamison v. Fluor Fed. Sols., LLC, 2017 WL
3215289, at *5 (N.D. Tex. July 28, 2017) (Boyle, J.).
Additionally, United States ex. rel. George v. Boston
Scientific Corporation, a case upon which Ms. Nichols
heavily relies, analyzed all three elements of a retaliation
claim at this stage of litigation. 864 F.Supp.2d 597, 603-04
(S.D. Tex. 2012).
the Court will consider whether Ms. Nichols adequately pled
all three elements of an FCA retaliation claim. In brief,
this Court finds that, as pled, Ms. Nichols' internal
complaints concerning the double billing, were protected
activity of which Baylor had notice, while her other
complaints were not protected activity.