United States District Court, W.D. Washington, Seattle
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION TO DISMISS
L. ROBART United States District Judge
the court is Defendants Sauk-Suiattle Indian Tribe of
Washington (“the Sauk-Suiattle” or “the
Tribe”), Community Natural Medicine, PLLC
(“CNM”), Christine Morlock, Robert Morlock, and
Ronda Metcalf's (collectively “Defendants”)
motion to dismiss Plaintiff Raju Dahlstrom's claims
against them. (MTD (Dkt. # 13).) Mr. Dahlstrom opposes
Defendants' motion. (Resp. (Dkt. # 19).) The court has
reviewed the motion, all of the parties' submissions
related to the motion,  the relevant portions of the record,
and the applicable law. Being fully advised, the court GRANTS
the motion with respect to Mr. Dahlstrom's claims against
the Sauk-Suiattle, but DENIES the motion with respect to Mr.
Dahlstrom's claims against CNM, Dr. Morlock, Mr. Morlock,
and Ms. Metcalf. The court declines to grant Mr. Dahlstrom
leave to amend his claims against the Sauk-Suiattle because
these claims fail as a matter of law. Finally, the court
DENIES Defendants' request for Federal Rule of Civil
Procedure 11 sanctions and attorney's fees.
January 12, 2016, Mr. Dahlstrom filed a complaint under seal
pursuant to the qui tam provisions of the False
Claims Act (“FCA”), 32 U.S.C. §§
3729-33, and the Washington State Medical Fraud and False
Claims Act (“MFFCA”), RCW 74.66.005 et
seq. (Compl. (Dkt. # 1).) The Sauk-Suiattle is a
federally recognized Native American tribe in Darrington,
Washington. (Id. ¶ 31; Gov't Mot. (Dkt. #
4) at 2.) CNM is a health clinic in Arlington, Washington,
owned by Dr. Morlock and Mr. Morlock. (See Gov't
Mot. at 2.) The complaint also lists Dr. Morlock, Mr.
Morlock, and Ms. Metcalf (collectively, “Individual
Defendants”), who is the Director of the Indian Health
Service (“IHS”) and the Health Clinic of the
Sauk-Suiattle, as defendants. (See Compl. at 2;
Gov't Mot. at 2.)
Sauk-Suiattle employed Mr. Dahlstrom from 2010 through his
termination on December 8, 2015. (Compl. ¶ 30.) The
Tribe initially hired Mr. Dahlstrom as a Case Manager, but in
April 2015, the Tribe promoted him to Director.
(Id.; Gov't Mot. at 3.) Mr. Dahlstrom alleges
that Defendants knowingly presented or caused to be presented
false or fraudulent claims to the United States-and by
extension, the State of Washington-by: (1) approving payments
of cosmetic dentistry for two individuals; (2) allowing an
individual to use vaccines specifically donated to the
Sauk-Suiattle for that individual's own private business;
(3) fraudulently certifying compliance with the IHS Loan
Repayment Program; (4) using government funds to secretly
purchase land originally meant for residential care for
children, and after acquiring that land, dropping the
programs for children; and (5) fraudulently using government
resources designated for healthcare facility costs.
(Id.; see generally Compl.)
September 26, 2016, the United States of America and
Washington State notified the court of their decision not to
intervene in the action. (Notice (Dkt. # 8) at 2 (citing 31
U.S.C. § 3703(b)(4)(B) and RCW 74.66.050).) Accordingly,
on September 28, 2016, the court unsealed the case and
ordered Mr. Dahlstrom to serve Defendants. (9/8/16 Order
(Dkt. # 9).)
January 12, 2017, Defendants filed the instant motion to
dismiss Mr. Dahlstrom's complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6). (MTD.) On the same day,
Defendants filed a supplement to their motion to dismiss to
move for sanctions and attorney's fees. (Supp. Mot. (Dkt.
# 14).) The court now considers Defendants' motions.
Standard for a Motion to Dismiss
considering a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), the court construes the complaint in the
light most favorable to the nonmoving party. Livid
Holdings, Ltd. v. Salomon Smith Barney, Inc., 416 F.3d
940, 946 (9th Cir. 2005). The court must accept all well-pled
facts as true and draw all reasonable inferences in favor of
the plaintiff. Wyler Summit P'ship v. Turner Broad.
Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). “To
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)); see Telesaurus VPC, LLC v. Power, 623 F.3d
998, 1003 (9th Cir. 2010). A court may dismiss a complaint if
it lacks a cognizable legal theory or states insufficient
facts under a cognizable legal theory. Balistreri v.
Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.
1990); Robertson v. Dean Witter Reynolds, Inc., 749
F.2d 530, 534 (9th Cir. 1984).
court need not accept as true a legal conclusion presented as
a factual allegation. Iqbal, 556 U.S. at 678.
Although the pleading standard of Federal Rule of Civil
Procedure 8 does not require “detailed factual
allegations, ” it demands more than “an
accusation.” Id. (citing Twombly, 550
U.S. at 555). A pleading that offers only “labels and
conclusions or a formulaic recitation of the elements of a
cause of action” will not survive a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6). Id.
argue that they are immune from Mr. Dahlstrom's claims
due to the Tribe's sovereign immunity. (MTD at 2.)
Defendants further claim that the Sauk-Suiattle's
sovereign immunity extends to all Defendants. (MTD at 5,
n.1.) Mr. Dahlstrom responds that sovereign immunity does not
exist “where, as here, the suit is brought by or on
behalf of the United States, ” and he contends ...