Case 5:21-cv-00025-JPB Document 24 Filed 02/16/21 Page 1 of 8 PageID #: 217
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
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`CHARLESTON DIVISION
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`MARIETTA AREA HEALTHCARE, INC., et al.,
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`Plaintiffs,
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`v.
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`MICHAEL A. KING, et al.,
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`CIVIL ACTION NO. 2:20-cv-00639
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`The Court has reviewed the Plaintiffs’ Complaint (Document 4), the Defendants’ Joint
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`Motion to Dismiss or Transfer (Document 13), the Memorandum in Support of Defendants’ Joint
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`Motion to Dismiss or Transfer (Document 14), the Plaintiffs’ Response to Defendant’s Joint
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`Motion to Dismiss or Transfer (Document 19), and the Defendants’ Joint Reply to Plaintiffs’
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`Response to Defendants’ Joint Motion to Dismiss or Transfer (Document 20). In addition, the
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`Court has reviewed the Plaintiffs’ Motion for Leave to File Sur-Reply in Opposition to Defendants’
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`Joint Motion to Dismiss or Transfer (Document 21). For the reasons stated herein, the Court finds
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`that this matter should be transferred to the Northern District of West Virginia.
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`FACTUAL ALLEGATIONS
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`The Plaintiffs, Marietta Area Healthcare, Inc., Marietta Memorial Hospital, and Marietta
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`Healthcare Physicians, Inc. (collectively, “Memorial Health”), initiated this suit against
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`Defendants Michael A. King and Michael D. Roberts, M.D., with their complaint filed on
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`September 25, 2020. Their allegations derive from a previous lawsuit, namely, a False Claims
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`Act (FCA) complaint that Mr. King and Dr. Roberts brought against Memorial Health as Relators.
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`The Plaintiffs are Ohio corporations with their principal places of business in Ohio. Mr. King is
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`a former officer of Camden Clark Medical Center, a hospital in Parkersburg, West Virginia. He
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`was no longer an officer at the time he initiated the FCA complaint, and the Complaint alleges that
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`he now resides in North Carolina. Dr. Roberts is a surgeon with a private practice in Parkersburg.
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`He is a West Virginia resident.
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`Memorial Health alleges that the Defendants deliberately made false and unsupported
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`allegations in the FCA complaint, triggering an expensive federal investigation into Memorial
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`Health. After a three-year investigation conducted by the U.S. Attorney’s Office for the Northern
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`District of West Virginia, the United States cleared Memorial Health of wrongdoing and declined
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`to intervene in the FCA case. The Defendants dismissed the case.
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`Prior to the filing of the FCA, Memorial Health was expanding, in part by purchasing local
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`physician practices and forming connections with area medical professionals. Dr. Roberts and
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`his two physician partners at Parkersburg Surgical Associates (PSA) had based their practice
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`largely at Camden Clark. In the summer of 2012, PSA was negotiating for Camden Clark to
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`purchase the practice and employ PSA as the exclusive provider of surgical services for the
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`hospital. PSA also approached Memorial Health about employing the physicians and potentially
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`purchasing the practice, but Memorial Health did not extend an offer. PSA applied for clinical
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`privileges at Memorial Health in September 2012. Dr. Roberts’ application was approved on
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`November 1, 2013. Memorial Health was awaiting additional information regarding the other
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`physicians. One of the PSA physicians sent Memorial Health a letter dated November 15, 2013,
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`requesting that the applications for clinical privileges be held in abeyance or withdrawn. The
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`PSA physicians had received an offer to serve as the exclusive provider of general surgical services
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`at Camden Clark. Mr. King was then the President and CEO of Camden Clark.
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`In November 2016, the Defendants filed the FCA in the Northern District of West Virginia,
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`asserting that Memorial Health “violated federal law in recruiting and paying physicians and that
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`it inappropriately submitted claims to federal health care programs – Medicare, Medicaid, and Tri-
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`Care – based on those violations.” (Compl. at ¶34.) The FCA complaint alleged that “Memorial
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`Health had paid certain physicians in excess of their fair market values in order to induce referrals”
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`in violation of the Stark Law and the Anti-Kickback Statute. (Id. at ¶ 47.) The FCA complaint
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`purports to detail meetings that never took place, misstates the content of emails and other
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`communications, falsely claims that Memorial Health offered each of the PSA physicians
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`$500,000 and made illegal employment offers to other physicians, and materially misstates factual
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`allegations that Memorial Health illegally overpaid to acquire, employ, or otherwise contract with
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`physicians and physician practices. (Id. at ¶ 50.) Although the allegations that were the subject
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`of the FCA involved medical practices and activity located primarily in the Parkersburg area, the
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`Defendants offered untrue and insufficient statements to support venue in the Northern District of
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`West Virginia.
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`As a result of the filing of the FCA, the United States began an investigation into Memorial
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`Health that continued for three years. During that time, Memorial Health produced documents
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`and participated in interviews. The federal investigators ultimately found that the claims in the
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`FCA complaint were unsubstantiated and opted not to intervene in the FCA case. The Defendants
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`continued to pursue their qui tam action until requesting dismissal on March 20, 2020. The
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`district court granted the dismissal request on March 23, 2020, and entered an amended order on
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`April 24, 2020. After the April 24, 2020 order, documents, including the FCA complaint, were
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`unsealed and Memorial Health had its first opportunity to review the allegations. (Id. at ¶ 52, 56-
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`58, 61.)
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`Rumors of the investigation interfered with Memorial Health’s business. One doctor
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`resigned employment at Memorial Health, and others chose other employment opportunities or to
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`affiliate with other hospitals. Memorial Health began experiencing increasing difficulties with
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`recruitment. It alleges that the FCA complaint caused “decreased revenues, higher expenses, and
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`lost business opportunities.” (Id. at 68.)
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`Memorial Health alleges the following causes of action: Count I – Malicious Prosecution;
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`Count II – Tortious Interference with Business Relationships and Expectancies; Count III – Abuse
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`of Process; Count IV – Fraudulent Legal Process in Violation of W. Va. Code § 61-5-27a; and
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`Count V – Punitive Damages. It seeks compensatory and consequential damages plus court costs
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`and expenses, pre-judgment and post-judgment interest, punitive damages, attorneys’ fees, and
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`any other relief to which it may be entitled.
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`VENUE
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`The Defendants contend that the proper venue for this action is the Northern District of
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`West Virginia. The Defendants are not all residents of West Virginia, and so they assert that
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`proper venue is the district “in which a substantial part of the events or omissions giving rise to
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`the claim occurred.” (Def.’s Mem. at 7, quoting 28 U.S.C. § 1391(b).) They argue that the
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`claims in this suit all arise from the filing of the qui tam, which took place in the Northern District
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`of West Virginia. The Defendants cite cases holding that the proper venue for suits alleging
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`malicious prosecution or other torts arising from the filing of a previous lawsuit is the venue in
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`which the underlying lawsuit was filed.
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`The Plaintiffs argue that venue in this District is proper. They contend that the Defendants
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`coordinated their conduct in the Southern District of West Virginia, and the underlying
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`relationships and circumstances developed in the Southern District of West Virginia. They argue
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`that many of the allegations contained in the FCA complaint involve conduct that occurred, or was
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`alleged to have occurred, in the Southern District of West Virginia, and venue for the FCA was
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`not properly in the Northern District of West Virginia.
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`28 U.S.C. § 1391(b) provides that:
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`A civil action may be brought in (1) a judicial district in which any
`defendant resides, if all defendants are residents of the State in
`which the district is located; (2) a judicial district in which a
`substantial part of the events or omissions giving rise to the claim
`occurred, or a substantial part of property that is the subject of the
`action is situated; or (3) if there is no district in which an action may
`otherwise be brought as provided in this section, any judicial district
`in which any defendant is subject to the court’s personal jurisdiction
`with respect to such action.
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`Section 1391(c)(2) goes on to state that a defendant is a “resident” of “any judicial district in which
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`such defendant is subject to the court’s personal jurisdiction with respect to the civil action in
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`question.”
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`“[I]t is possible for venue to be proper in more than one judicial district.” Mitrano v.
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`Hawes, 377 F.3d 402, 405 (4th Cir. 2004). Courts considering whether “a substantial part of the
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`events or omissions giving rise to the claim” occurred in the district are to consider “the entire
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`sequence of events underlying the claim” rather than “only on those matters that are in dispute or
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`that directly led to the filing of the action.” Id. (quoting First of Mich. Corp. v. Bramlet, 141 F.3d
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`260, 264 (6th Cir.1998)).
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`When a case is initiated in an improper district or division, Section 1406(a) permits courts
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`to either dismiss the case or transfer it to “any district or division in which it could have been
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`brought.” The plaintiff bears the burden of establishing that venue is proper, and must make either
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`a prima facie showing, absent an evidentiary hearing, or demonstrate proper venue by a
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`preponderance of the evidence, if the court hears evidence. Adhikari v. KBR, Inc., No.
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`115CV1248JCCTCB, 2016 WL 4162012, at *3 (E.D. Va. Aug. 4, 2016).
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`Courts may also transfer venue “for the convenience of parties and witnesses, in the interest
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`of justice” when venue is proper in both the transferring district and in another district. 28 U.S.C.
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`§ 1404(a). The Fourth Circuit has established four factors for consideration in deciding motions
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`to transfer under § 1404(a): “(1) the weight accorded to plaintiff's choice of venue; (2) witness
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`convenience and access; (3) convenience of the parties; and (4) the interest of justice.” Trustees
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`of the Plumbers & Pipefitters Nat. Pension Fund v. Plumbing Servs., Inc., 791 F.3d 436, 444 (4th
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`Cir. 2015).
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`The Plaintiffs seek to recover for malicious prosecution, tortious interference with business
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`relationships and expectancies, abuse of process, and fraudulent legal process. Each of their
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`claims arise from the filing of the FCA complaint. The nature of the claims establishes that the
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`underlying suit is the core action or event giving rise to these claims. Although some of the facts
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`supporting the allegations in the FCA complaint arose from actions or relationships in the Southern
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`District of West Virginia, the FCA complaint and ensuing investigation were centered in the
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`Northern District of West Virginia.1 The Northern District was the site of the allegedly false and
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`1 Given the Plaintiffs’ Ohio residence and principal place of business, presumably much of its efforts to cooperate
`in the investigation occurred there.
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`abusive claims against the Plaintiffs. The background information included in the instant
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`complaint regarding the relationship and communications between Dr. Roberts and Memorial
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`Health, much of which occurred in Parkersburg, is tangential to the causes of action the Plaintiffs
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`pled. The court that handled the FCA complaint, ruled on motions, and ultimately entered the
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`dismissal, is in the Northern District of West Virginia, as is the U.S. Attorney’s Office that
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`investigated the allegations. In short, accepting the allegations in the Complaint as true and
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`viewing the evidence in the light most favorable to the Plaintiffs, only minor, tangential events
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`occurred in the Southern District of West Virginia. The Plaintiffs did not set forth a prima facie
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`showing that a substantial part of the events giving rise to the claim occurred in this district.
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`Therefore, the Court finds that venue is not proper.
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`Even if venue were permissible under § 1391, the Court would find transfer appropriate
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`under § 1404. The Plaintiffs’ choice of venue, of course, would weigh in favor of retaining the
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`case. However, the convenience of witnesses and the parties weighs slightly in favor of transfer.
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`The Plaintiffs are Ohio corporations, and either district is accessible to all parties. Many
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`witnesses, including the investigators who made the decision not to intervene in the FCA case, are
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`based in the Northern District or in Ohio. Dr. Roberts is the only specific party or witness
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`identified in the pleadings as a resident of this District, although the Plaintiffs emphasize that others
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`mentioned in or impacted by the underlying suit reside in the Southern District. Finally, the
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`interest of justice weighs heavily in favor of transfer to the court that handled and is familiar with
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`the underlying FCA complaint, particularly given that portions of the underlying case remain
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`sealed.
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`CONCLUSION
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`Wherefore, after thorough review and careful consideration, the Court ORDERS that the
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`Defendants’ Joint Motion to Dismiss or Transfer (Document 13) be GRANTED to the extent it
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`requests transfer. The Court further ORDERS that this matter be TRANSFERRED to the
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`United States District Court for the Northern District of West Virginia, Wheeling Division.
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`The Court ORDERS that the Plaintiffs’ Motion for Leave to File Sur-Reply in Opposition
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`to Defendants’ Joint Motion to Dismiss or Transfer (Document 21) be TERMINATED AS
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`MOOT to permit that motion to be addressed by the court where venue is proper.
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`The Court DIRECTS the Clerk to send a certified copy of this Order to the Clerk for the
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`District Court for the Northern District of West Virginia, counsel of record and to any
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`unrepresented party.
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`ENTER:
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`February 16, 2021
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`8
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