United States District Court, D. Kansas
CHARLES R. LUTTRELL, Plaintiff,
JAMES K. BRANNON, et al., Defendants.
MEMORANDUM AND ORDER
L. TEETER UNITED STATES DISTRICT JUDGE.
case arises out of Defendants' medical treatment of
Plaintiff Charles R. Luttrell for roughly two and a half
years. Plaintiff alleges Defendants not only provided him
with inadequate medical care, but also engaged in a
complicated scheme to defraud both Plaintiff and Missouri
Medicaid. Plaintiff's Second Amended Complaint-the
operative complaint-asserts ten causes of
action against various Defendants, including: a
claim under the federal Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. §
1961, et seq; a civil conspiracy claim; a claim
under the Kansas Consumer Protection Act
(“KCPA”), K.S.A. § 50-623, et seq;
a vicarious liability claim; an alter ego liability claim;
and a punitive damages claim. Defendants seek dismissal of
these claims, alleging various pleading defects. Because the
Court concludes the RICO, civil conspiracy, KCPA, and alter
ego liability claims contain fatal pleading deficiencies, it
dismisses these claims. The Court also dismisses in part
Plaintiff's vicarious liability and punitive damages
claims, as more fully discussed below.
following facts are from the well-pleaded allegations of the
Second Amended Complaint and, consistent with the
well-established standards for evaluating motions to dismiss
under Federal Rule of Civil Procedure 12(b)(6), the Court
assumes the truth of these facts for purposes of analyzing
Defendants' motions to dismiss.
James Brannon, M.D. (“Dr. Brannon”) and Defendant
Mauricio Garcia, M.D. (“Dr. Garcia”) are
physicians who provided Plaintiff medical treatment between
2012 and March of 2015. Doc. 151 at 5. Dr. Brannon is also a
surgeon and the designer of a surgical device known as the
Titanium Hip Tool Locking Plate Bone Graft Stabilization
System (“Hip Tool”). Id. at 3.
Orthopedic Sciences, Inc. (“OSI”) manufactures
the Hip Tool for sale. Id. at 19. Dr. Brannon is the
president and 90% owner of OSI. Id. He is also a
sales representative of OSI and markets OSI's products.
Joint Preservation Institute of Kansas, L.L.C.
(“JPI”) is Dr. Brannon's practice entity. Dr.
Brannon is the designated manager and 100% owner of JPI.
Id. at 19.
Headache & Pain Center, P.A. (“HPC”) provides
facilities for patient treatment. Id. at 19. Dr.
Brannon and Dr. Garcia are the sole two members of the Board
of Directors for HPC. Id. at 18. HPC contracts with
JPI to allow Dr. Brannon to perform joint preservation
surgeries at HPC, during which surgeries Dr. Brannon implants
the Hip Tool. Id. HPC pays JPI significantly more
for each joint preservation surgery than any other procedure
performed at HPC. Id.
Doctors Hospital, L.L.C. (“Doctors Hospital”) is
an ambulatory surgical center that also contracts with JPI to
provide facilities where Dr. Brannon conducts joint
preservation surgeries. Id. at 18-19. Doctors
Hospital pays JPI significantly more for each joint
preservation surgery than any other procedure performed at
Doctors Hospital. Id. at 19.
PatientFirst Healthcare Alliance, P.A.
(“PatientFirst”) is the owner of HPC and Doctors
Hospital. Id. at 18. Dr. Brannon and Dr. Garcia are
the sole owners of PatientFirst and sit on its Board of
has suffered right hip pain for years. Id. at 6. He
established a physician-patient relationship with Dr. Brannon
when he sought evaluation for that hip pain. Id. For
roughly two and a half years between 2012 and the early
spring of 2015, Dr. Brannon, Dr. Garcia, and HPC routinely
provided Plaintiff prescriptions for narcotic pain
medications to address the hip pain. Id. at 5. Dr.
Brannon and Dr. Garcia were the primary physicians
prescribing these medications. Id.
Brannon ultimately diagnosed Plaintiff with avascular
necrosis (death of bone tissue) of the right hip.
Id. Dr. Brannon advised Plaintiff that the
traditional treatment for this condition was total hip
replacement, but that, in Plaintiff's case, this was
unnecessary. Id. Instead, Dr. Brannon recommended a
joint preservation surgery he “invented” himself.
Id. During the joint preservation surgery, Dr.
Brannon would implant a Hip Tool in Plaintiff. Id.
Dr. Brannon convinced Plaintiff to undergo the joint
preservation surgery and implantation of the Hip Tool in lieu
of total hip replacement. Id. Plaintiff underwent
the joint preservation surgery at Doctors Hospital and the
Hip Tool was implanted on March 4, 2015. Id.
his surgery, on February 18, 2015, Plaintiff underwent an
x-ray of his right hip at Doctors Hospital. Id. The
x-ray revealed that his right hip was normal in appearance
and there were no findings of avascular necrosis.
Id. at 6-7. Dr. Brannon knew the results of the
x-ray before he performed joint preservation surgery on
Plaintiff. Id. at 7. Despite knowing the results of
the x-ray, Dr. Brannon continued with the joint preservation
surgery and implantation of the Hip Tool. Id. Bone
samples were taken during the surgery and subsequent
pathology reports “argued against avascular
necrosis.” Id. at 7-8.
the joint preservation surgery, Plaintiff experienced severe
pain and discomfort in his right hip. Id. at 10. He
sought treatment from a different doctor, Dr. David Anderson
(“Dr. Anderson”), who diagnosed Plaintiff with a
fracture caused by implantation of the Hip Tool. Id.
Dr. Anderson concluded the joint preservation surgery,
including the Hip Tool, failed. Id. He also
diagnosed Plaintiff with severe osteoarthritis of the right
hip, “a clear contraindication” for the joint
preservation surgery that Dr. Brannon recommended and
performed. Id. Ultimately, Dr. Anderson performed a
total hip replacement surgery on Plaintiff's right hip
and removed the Hip Tool. Id. at 10-11. During
surgery, Dr. Anderson took bone samples. Id. at 11.
Subsequent pathology reports confirmed there was no evidence
of avascular necrosis. Id.
ultimately alleges that Defendants perpetrated a complex
scheme to supply him with powerful narcotic pain medications
to make him suggestable to Dr. Brannon's recommendations
to undergo an overly expensive and unnecessary medical
procedure (the joint preservation surgery) to implant an
overly expensive and unnecessary surgical device (the Hip
Tool). Id. at 11-14. Defendants specifically
targeted Plaintiff because they could profit from
Plaintiff's Missouri Medicaid benefits. Id. at
9. Plaintiff further alleges that Defendants'
interrelationships advanced the very purpose of
Defendants' scheme, allowing Defendants to conceal
numerous conflicts of interest (Defendants' financial
gain versus Plaintiff's medical care), none of which were
disclosed to Plaintiff. Id. at 11-14.
filed suit on March 3, 2017. Doc. 1. The original Complaint
included eight causes of action and a claim for punitive
damages. Id. Plaintiff originally identified only
Dr. Brannon, OSI, JPI, and Doctors Hospital as defendants.
Id. On December 21, 2017, Plaintiff filed a First
Amended Complaint adding Dr. Garcia, HPC, and PatientFirst as
additional defendants. Doc. 84. The First Amended Complaint
also added three additional causes of action. Id.
Dr. Brannon, JPI, Garcia, HPC, and PatientFirst subsequently
filed various motions to dismiss, and Doctors Hospital filed
a motion for judgment on the pleadings or motion for summary
judgment. Docs. 85, 87, 106, 108, 131. Defendants'
various motions included requests for dismissal of
Plaintiff's RICO, KCPA, and civil conspiracy claims.
Docs. 85, 87, 106, 108, 131.
Court ruled on Defendant's motions on June 19, 2018,
granting dismissal in part, denying dismissal in part, and
granting Plaintiff leave to amend certain claims. Doc. 149 at
1-2. Relevant to the Second Amended Complaint and
Defendants' instant motions are the following rulings:
RICO Claims: The Court dismissed all claims except
those predicated on damages representing Plaintiff's
out-of-pocket expenses for unnecessary medical treatment.
KCPA Claims: The Court dismissed all claims but
granted Plaintiff leave to amend to allege claims based on
acts of billing or pricing to the extent Plaintiff suffered
financial injury or loss from such acts.
Civil Conspiracy: The Court dismissed all claims but
granted Plaintiff leave to amend to allege claims based on
Plaintiff's surviving RICO and KCPA claims.
Id. at 2, 8, 31, 33.
Rule 12(b)(6), 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)). The plaintiff's claim is
facially plausible if he pleads sufficient factual content to
allow the Court “to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. The plausibility standard requires “more
than a sheer possibility that a defendant has acted
unlawfully” but “is not akin to a
‘probability requirement.'” Id.
“Where a complaint pleads facts that are ‘merely
consistent with' a defendant's liability, it
‘stops short of the line between possibility and
plausibility of entitlement to relief.'”
Id. (quoting Twombly, 550 U.S. at 557).
standard results in two principles that underlie a
court's analysis. Id. First, “the tenet
that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal
conclusions.” Id. Stated differently, though
the court must accept well-pleaded factual allegations as
true, it is “not bound to accept as true a legal
conclusion couched as a factual allegation.”
Twombly, 550 U.S. at 555 (internal citations and
quotations omitted). “Second, only a complaint that
states a plausible claim for relief survives a motion to
dismiss.” Iqbal, 556 U.S. at 679.
“[W]here the well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct, the
complaint has alleged-but it has not
‘shown'-‘that the pleader is entitled to
relief.'” Id. (quoting Fed.R.Civ.P.
8(a)(2) (original brackets omitted)). “In keeping with
these [two] principles, a court considering a motion to
dismiss can choose to begin by identifying pleadings that,
because they are no more than conclusions, are not entitled
to the assumption of truth.” Id. “When
there are well-pleaded factual allegations, a court should
assume their veracity and then determine whether they
plausibly give rise to an entitlement to relief.”
noted above, Plaintiff asserts RICO (Count III), civil
conspiracy (Count IV), KCPA (Count VI), vicarious liability
(Count IX), alter ego liability (Count X), and punitive
damages (Count XI) claims. Because the Court concludes the
RICO, civil conspiracy, KCPA, and alter ego liability claims
contain a fatal pleading deficiency, it dismisses these
claims. Plaintiff's vicarious liability claim against
PatientFirst is also dismissed in its entirety and is
dismissed in part as to OSI and JPI. Finally, because these
dismissals leave the punitive damages claim as
Plaintiff's sole remaining claim against Dr. Garcia, HPC,
Doctors Hospital, and ...