• New York Court Dismisses FCA Case Without Prejudice
  • March 31, 2010 | Author: Lora L. Greene
  • Law Firm: King & Spalding LLP - New York Office
  • On March 9, 2010, a federal district court in New York dismissed a False Claims Act qui tam case alleging Maimonides Medical Center engaged in fraudulent conduct causing the government to pay millions of dollars in Medicare reimbursement to which Maimonides was not entitled (United States ex rel. Pervez v. Maimonides Medical Center, S.D.N.Y., No. 1:06-cv-04989-LAP, 3/9/10). Judge Loretta B. Preska of the U.S. District Court for the Southern District of New York dismissed the case, agreeing with Maimonides that the relator, Najmudden Pervez, a former hospital administrator, improperly delayed serving the hospital with the complaint until nearly a year after the case was unsealed.

    Pervez argued that he exceeded the 120-day deadline allowed by Federal Rule of Civil Procedure 4(m) by 226 days as a result of discussions with the government on another case involving “place of service,” a prominent issue in this case. The court rejected Pervez’s contention that the delay was beneficial to Maimonides. “It is, of course, not [Pervez]’s counsel’s prerogative to decide when and when not to comply with the Federal Rules of Civil Procedure,” Judge Preska wrote. “The proper course of conduct would have been to serve the complaint in a timely manner and put Maimonides on notice of the claims against it, regardless of whether some of those claims would ultimately be voluntarily dismissed,” Preska said.

    The case was dismissed without prejudice because the court found that Pervez was never given notice from the court that his delay in serving the complaint made dismissal with prejudice imminent and while Pervez was less than diligent in prosecuting his claim, the court concluded that this delay was unlikely to further prejudice Maimonides. Although Pervez could re-file his claims in a new lawsuit, the without-prejudice dismissal is still significant because the statute of limitations would start anew, meaning that a new case, if filed this year, would only cover claims back to 2004 as opposed to the old case that could have covered claims as far back as 2000.