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United States v. Sowell

United States District Court, W.D. North Carolina, Charlotte Division

March 23, 2015

UNITED STATES OF AMERICA and THE STATE OF NORTH CAROLINA, Plaintiffs,
v.
JAMES RICHARD SOWELL, M.D., JAMES RICHARD SOWELL M.D. d/b/a HEALTH-PRO MENTAL HEALTH SERVICES, PLLC, and HEALTH-PRO MENTAL HEALTH SERVICES, PLLC, Defendants.

ORDER

DAVID C. KEESLER, Magistrate Judge.

THIS MATTER IS BEFORE THE COURT on the State of North Carolina's "Motion To Compel Defendants' Discovery Responses" (Document No. 43); the Government's "Motion For Modification Of Scheduling Order" (Document No. 44); and the Government's "Motion For Leave To File A Second Amended Complaint" (Document No. 45). These motions have been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b), and are ripe for disposition. Having carefully considered the motions, the record, and applicable authority, the undersigned will grant the motions.

BACKGROUND

The United States of America ("United States") and the State of North Carolina ("the State") (together, "Plaintiffs" or "the Government") initiated this action with the filing of a "Complaint" (Document No. 1) on March 28, 2013. The Complaint seeks

treble damages and civil penalties against Defendants James Richard Sowell, M.D. ("Defendant Sowell"), and Defendant James Richard Sowell, M.D. d/b/a Health-Pro Mental Health Services, PLLC ("Defendant HPMHS") (collectively, "Defendants") pursuant to the False Claims Act, 31 U.S.C. §§ 3729-3733, the North Carolina False Claims Act, N.C. G.S. §§ 1-605 et seq., the North Carolina Medical Assistance Provider False Claims Act §§ 108A-70.10 et seq. and to recover all available damages, restitution and other monetary relief under the common law theories of unjust enrichment, payment by mistake, and recoupment.

(Document No. 1, pp.1-2). The Government asserts that this action arises out of Defendants' billing and submission of false claims by and through Defendant HPMHS. (Document No. 1, p.2). The "Answer Of Defendants James Richard Sowell, M.D. And Health-Pro Mental Health Services, PLLC" (Document No. 11) was filed on May 28, 2013.

On June 18, 2013, the Government's "Amended Complaint" (Document No. 15) was filed as a matter of course, adding Defendant Health-Pro Mental Health Services, PLLC. The "Answer Of Defendants James Richard Sowell, M.D., Individually And Doing Business As Health-Pro Mental Health Services, PLLC And Health-Pro Mental Health Services PLLC To Plaintiffs' Amended Complaint" (Document No. 17) was filed on July 5, 2013.

The Court then allowed a series of consent motions seeking to stay this matter pending a criminal investigation of Defendant Sowell. (Document Nos. 21, 25, and 27). On March 21, 2014, the Court ordered that the stay be lifted, and that the parties should file a Certification of Initial Attorney's Conference on or before April 8, 2014. (Document No. 32). Following receipt of the CIAC, the Court entered a "Pretrial Order And Case Management Plan" (Document No. 35) on April 11, 2014. The "... Case Management Plan, " inter alia, set the following deadlines: Discovery Completion - February 6, 2015; Mediation - February 6, 2015; Dispositive Motions - March 20, 2015; and Trial - July 6, 2015. (Document No. 35, p.1).

On November 6, 2014, the Government filed a consented to "Motion To Amend Scheduling Order" (Document No. 38) proposing to extend only the expert report deadlines. The next day, the Court allowed the motion, and set the deadlines for expert reports as December 19, 2014, and for rebuttal reports as January 20, 2015. (Document No. 39). On December 16, 2014, the Government filed a "Notice Of Need To File For Further Adjustment Of Scheduling Order" (Document No. 41). The "Notice..." advised the Court that expert reports could not be timely produced based on on-going "discovery issues relate to patient medical records." (Document No. 41).

On February 5, 2015, Plaintiffs filed the pending "Motion To Compel Defendants' Discovery Responses" (Document No. 43); "Motion For Modification Of Scheduling Order" (Document No. 44); and "Motion For Leave To File A Second Amended Complaint" (Document No. 45). These motions have been fully briefed and immediate review is appropriate.

STANDARD OF REVIEW

Rule 26 of the Federal Rules of Civil Procedure provides that:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.

Fed.R.Civ.P. 26(b)(1). The rules of discovery are to be accorded broad and liberal construction. See Herbert v. Lando, 441 U.S. 153, 177 (1979); and Hickman v. Taylor, 329 U.S. 495, 507 (1947). However, a court may "issue an order to protect a party or person from annoyance, embarrassment, oppression or undue burden or expense." Fed.R.Civ.P. 26(c)(1).

Whether to grant or deny a motion to compel is generally left within a district court's broad discretion. See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995) (denial of motions to compel reviewed on appeal for abuse of discretion); Erdmann v. Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988) (noting District Court's substantial discretion in resolving motions to compel); and LaRouche v. National Broadcasting Co., 780 F.2d 1134, 1139 (4th Cir. 1986) (same).

Federal Rule of Civil Procedure 15 applies to the amendment of pleadings and allows a party to amend once as a matter of course within 21 days after serving, or "if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier." Fed.R.Civ.P. 15(a)(1). Rule 15 further provides:

(2) Other Amendments. In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.

Fed.R.Civ.P. 15(a)(2).

Under Rule 15, a "motion to amend should be denied only where it would be prejudicial, there has been bad faith, or the amendment would be futile." Nourison Rug Corporation v. Parvizian, 535 F.3d 295, 298 (4th Cir. 2008) (citing HCMF Corp. v. Allen, 238 F.3d 273, 276-77 (4th Cir. 2001); see also, Foman v. Davis, 371 U.S. 178, 182 (1962). However, "the grant or denial of an opportunity to amend is within the discretion of ...


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