knowledgeable about PHMC's submissions to DPW in his capacity as Welfare Program Specialist II for the Southeastern Region of DPW, plaintiff does not offer a single specific example of the false claims allegedly submitted by PHMC under the EPSDT cost reimbursement contracts. Rather, in his affidavit and memorandum, plaintiff attempts to introduce matters not pleaded in his complaint regarding the propriety of Hobbs' former service as a member of PHMC's Board of Directors, the propriety of a continued series of negotiated contracts "between and amongst the Defendants" as opposed to public bidding, and the general propriety of PHMC's overall corporate surplus of $ 640,000 during the years in question. Not only do these matters go beyond the allegations of the complaint, but they are not within the ambit of the False Claims Act. For example, the Act does not proscribe negotiations, contracting, or the creation of general surpluses or reserves per se. It proscribes false claims submitted to the United States for payment. As such, these matters cannot constitute disputed issues of material fact which would preclude granting a motion for summary judgment.
Aside from these matters, plaintiff's affidavit addresses two additional areas in an attempt to establish the existence of genuine issues of fact. He asserts that PHMC made a surplus of $ 768,000 under the EPSDT Program during the years 1974-1977. However, the affidavits and statements submitted by PHMC establish that any EPSDT surplus it may have had during the years 1974-1977 did not result from an excess of revenues over expenses under the cost reimbursement contracts alleged in plaintiff's complaint. The logical inference is that the alleged EPSDT surplus flowed from revenues received under other EPSDT contracts. For example, PHMC has established by affidavit that it received payment from the Commonwealth under the Administrative Phase of the EPSDT program pursuant to fixed fee contracts. It is logical to assume that these contracts were a source of the surplus. In any event, even if the court could ignore this logical inference, it remains that plaintiff has not alleged nor produced evidence that false claims were submitted under non-cost reimbursement EPSDT contracts.
In his affidavit, plaintiff also asserts that certain alleged inconsistencies existed in the allocation of expenses under the Outreach Program contracts.
In setting forth these alleged inconsistencies, plaintiff does not challenge the central fact that there was no surplus under the Outreach Program. Rather, he simply sets forth these discrepancies and labels them as "illogical" and "intentionally deceptive."
Without evidence that there was some irregularity in the method of allocation, plaintiff's statements constitute mere conjecture which cannot constitute evidence sufficient to defeat a motion for summary judgment. Plaintiff does not allege in his complaint, nor assert in his affidavit, that these inconsistent allocations amounted to false claims. In spite of his asserted access to "documents, reports, financial statements and other written material" relating to the programs and expenditures of DPW and PHMC, plaintiff does not come forward with a single example of an instance in which PHMC "padded" or misrepresented its expenses. Defendants have produced affidavits by independent auditors, which state that the figures contained in these statements are accurate and fair in all material respects. Plaintiff's speculations about PHMC's method of allocating its expenses do not constitute specific facts sufficient to raise a genuine issue for trial, particularly in light of the undisputed statements of these independent auditors.
Reduced to its simplest terms, the plaintiff's argument is that because the defendant made a surplus under the EPSDT Program, the defendant must have submitted false claims. The plaintiff has the burden of producing some probative and competent evidence to support this bare allegation. He has not produced such evidence and nothing in plaintiff's pleadings or affidavit show that he might reasonably be able to do so. Defendants should not be subjected under such circumstances to discovery fishing expeditions. See United States ex rel. Brensilber v. Bausch & Lomb Optical Co., 131 F.2d 545, 547 (2nd Cir. 1942).
Broadly speaking, the objectives of the False Claims Act are to protect the federal treasury. United States v. Neifert-White Co., 390 U.S. 228, 233, 88 S. Ct. 959, 962, 19 L. Ed. 2d 1061 (1968). Nonetheless, the Act and the court decisions interpreting it do not excuse a plaintiff from meeting its burden of proof. Speculation and conjecture form the basis of plaintiff's complaint and counter affidavit. Such will not suffice to overcome a motion for summary judgment. Robin Construction Co. v. United States, 345 F.2d 610, 614 (3d Cir. 1965).
The foregoing discussion relates with equal force to plaintiff's claims against defendant Hobbs insofar as they are based upon his purported authorization and approval of PHMC's alleged false claims. In view of the court's dismissal of the complaint against all defendants, it shall not be necessary to reach Hobbs' remaining alternative arguments addressed to plaintiff's allegation that Hobbs authorized and approved Littlejohn's alleged false claims.
Given the above disposition of the claims against all three defendants, the only claim which remains to be addressed is defendant Littlejohn's counterclaim against plaintiff for abuse of process. For the reasons set forth below, Littlejohn's counterclaim is dismissed without prejudice.
In its counterclaim, defendant Littlejohn asserts that plaintiff brought suit against Littlejohn without probable cause; that plaintiff's allegations are unfounded, patently untrue; that plaintiff knew, or by reasonable effort could have known that they are untrue; and that the action is willful, wanton and carried out with reckless disregard for the facts. From these allegations, it is unclear whether Littlejohn intends to assert an action for malicious prosecution or for abuse of process.
(In addition, Littlejohn has failed to assert the basis of subject matter jurisdiction under which it proceeds.) To the extent that Littlejohn asserts a counterclaim for abuse of process which accrued prior to February 17, 1981, it fails to state a claim upon which relief can be granted, since there is no allegation of a seizure of person or property. To the extent that Littlejohn asserts a counterclaim for malicious prosecution, the claim is not ripe. For these reasons, Littlejohn's counterclaim is dismissed without prejudice.
Simkins Industries, Inc. v. Fuld & Co., 392 F. Supp. 126 (E.D.Pa.1975).
An appropriate order follows.
AND NOW, this 6th day of August, 1981, it is hereby ORDERED that:
1. Defendant Philadelphia Health Management Corporation's motion for summary judgment is hereby GRANTED and Count I of plaintiff's complaint is DISMISSED with prejudice.
2. Count II of plaintiff's complaint is DISMISSED without prejudice.
3. Defendant Littlejohn's counterclaim against plaintiff is DISMISSED without prejudice.
4. Defendant Wilbur E. Hobbs' motion for summary judgment is GRANTED in part, insofar as it relates to knowledge, authorization and approval of matters alleged in Count I of plaintiff's complaint. Therefore, Count III of plaintiff's complaint is DISMISSED with prejudice, insofar as Count III relates to Hobbs' knowledge, authorization and approval of matters alleged in Count I of plaintiff's complaint. Count III of plaintiff's complaint is DISMISSED without prejudice, insofar as it relates to Hobbs' knowledge, authorization and approval of matters alleged in Count II of plaintiff's complaint.