United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
J. CASPER, UNITED STATES DISTRICT JUDGE
Thomas Guilfoile (“Guilfoile”) has filed this
lawsuit against Defendants Shields Pharmacy, LLC, UMass
Memorial Shields Pharmacy, LLC, Shields Pharmacy Equity, LLC,
Shields Specialty Pharmacy Holdings, LLC, collectively d/b/a
Shields Pharmacy Services, a/k/a Shields Health Solutions and
John M. Shields, Sr., a/k/a Jack Shields
(“Shields”), in his individual capacity
(collectively, “Defendants”). D. 29. Guilfoile
alleges that Defendants retaliated against him in violation
of the federal False Claims Act, 31 U.S.C. § 3730(h) and
also asserts various state law claims against Defendants. D.
29 ¶¶ 99-163. Defendants have moved to dismiss all
such claims. D. 32; D. 34. For the reasons stated below, the
Court ALLOWS Defendants' motions to dismiss as to the
federal False Claims Act claim (Count IV), D. 32; D. 34, and
DISMISSES without prejudice Guilfoile's state law claims
because this Court declines to exercise supplemental
jurisdiction over them.
Standard of Review
Court will grant a motion to dismiss pursuant to Rule
12(b)(6) if the complaint fails to plead sufficient facts
that “state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). The Court “must assume the truth of
all well-plead[ed] facts and give the plaintiff the benefit
of all reasonable inferences therefrom.” Ruiz v.
Bally Total Fitness Corp., 496 F.3d 1, 5 (1st Cir. 2007)
(citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.
1999)). The Court accepts all non-conclusory factual
allegations listed in the complaint as true,
Ocasio-Hernández v. Fortuño-Burset,
640 F.3d 1, 12 (1st Cir. 2011), but does not have to consider
“bald assertions” or “unsupportable
conclusions.” Doyle v. Hasbro, Inc., 103 F.3d
186, 190 (1st Cir. 1996) (internal quotation mark and
following facts are alleged in Guilfoile's amended
complaint, D. 29, and taken as true for purposes of
considering Defendants' motions to dismiss.
alleges that, after having provided free business advice to
Shields for years, he officially began to work for Shields
full-time in August 2013. Id. ¶ 1. Guilfoile
asserts that in this capacity he worked for a single
integrated entity that was comprised of several businesses
including Shields Pharmacy LLC, UMass Memorial Shields
Pharmacy, LLC, Shields Pharmacy Equity, LLC and Shields
Specialty Pharmacy Holdings, LLC (collectively,
“Integrated Entity”). Id. ¶ 2.
Starting in August 2013, Guilfoile was the full-time
president of the Integrated Entity, which included serving as
the president of all of the joint ventures within the
Integrated Entity. Id. ¶¶ 34-37. Under the
terms of his August 2013 employment contract, Guilfoile would
receive an annual salary of $275, 000, an annual bonus, an
equity stake in any joint venture launched and incentive
bonuses. Id. ¶¶ 38-39. As the Integrated
Entity grew, the joint ventures contributed to
Guilfoile's salary alongside UMass Memorial Shields
Pharmacy, LLC (“UMSP”). Id. ¶ 46.
October 2014, on behalf of the Integrated Entity, Shields
modified the employment contract with Guilfoile such that the
equity promised to Guilfoile was clarified. Id.
¶¶ 47-48. Both parties accepted the new contract
and abided by it until Guilfoile's termination from the
Integrated Entity. Id. ¶¶ 48-49. The terms
of Guilfoile's employment were modified a second time
when the Integrated Entity planned to reorganize its business
structure: subject to this reorganization, Guilfoile agreed
to forego some of his equity rights to attract executive
talent to the Integrated Entity and agreed that his own
equity would vest over the course of three years' time in
lieu of the quarterly vesting for which he had previously
contracted. Id. ¶¶ 50-54. For all relevant
times until his termination, Guilfoile was an employee of the
Integrated Entity and Shields served as his immediate
supervisor. Id. ¶ 44.
Integrated Entity partnered with hospitals to provide
specialty pharmacy and related services to chronically ill
patients by operating a pharmacy directly within the hospital
facility and filling specialty prescriptions through an
off-site location. Id. ¶ 23. It also ran home
infusion and high-risk care management programs. Id.
In the course of its business, the Integrated Entity
processes prescriptions, bills patients' insurance,
provides patients with financial advice and conducts
follow-ups. Id. Guilfoile alleges that in the fall
of 2015 he became concerned about three areas of the
Integrated Entity's business practices. First, Guilfoile
learned of a contract between the Integrated Entity and
Michael Green (“Green”) in which the Integrated
Entity paid Green's consulting firm $35, 000 per quarter
for each hospital contract that Green successfully referred
to the Integrated Entity. Id. ¶¶ 63-65.
Guilfoile believed that this contract violated the federal
anti-kickback statute. Id. ¶¶ 63-70.
Guilfoile alerted Shields of his concerns, causing Shields to
convince Green to waive the payment yet to be made for one of
the two hospital referrals Green had made. Id.
¶ 72-74. Believing this was insufficient, Guilfoile
urged Shields to notify the board of the Integrated Entity of
the matter, but Shields refused. Id. ¶ 75.
Guilfoile further alleges that he learned that Shields
instructed Robbie Greenglass (“Greenglass”), the
Integrated Entity's Director of Business Development, to
spend part of his working hours helping Shields secure
private equity investments for another business that Shields
was preparing to launch independently and separately from the
Integrated Entity. Id. ¶ 76. Guilfoile believed
that this diverted business resources for Shields's
personal gain and constituted a breach of fiduciary duty.
Id. ¶¶ 76-77. Guilfoile approached Shields
to rectify the situation by classifying Greenglass as a
part-time employee, but Shields refused to do so.
Id. ¶ 78.
Guilfoile also asserts that he discovered that the Integrated
Entity misrepresented in its contracts for partnerships with
hospitals that it had a 24/7 call center when no such call
center existed. Id. ¶¶ 79-80. Guilfoile
urged Shields to remove the misrepresentation from the
contracts or build a 24/7 call center to meet the contract
obligations, but Shields refused. Id. ¶¶
December 2015, Shields told Guilfoile that he was concerned
that Guilfoile was “going over his head” and
suggested that the two consider “parting ways.”
Id. ¶¶ 86-89. On December 28, 2015, one
week after this discussion, Shields terminated
Guilfoile's employment with no further explanation.
Id. ¶ 91. The next day Shields emailed
Guilfoile to confirm his termination. Id. ¶ 92.
That same day, Guilfoile received a written termination
notice which stated that his termination was retroactive to
December 22, 2015. Id. ¶ 93. After being
terminated, Guilfoile submitted to the board a letter
explaining his concerns regarding the potential misconduct
which he had previously reported to Shields. Id.
¶ 94. He further alleges that following these
disclosures to the board, Shields threatened to sue him for
defamation and tortious interference. Id. ¶ 95.
Finally, on February 26, 2016, Guilfoile received a letter
which stated for the first time that he had been terminated
for cause. Id. ¶ 97.
instituted this action on April 1, 2016. D. 1. He filed an
amended complaint on June 10, 2016. D. 29. Defendants
subsequently moved to dismiss all claims in the amended
complaint. D. 32; D. 34. The Court heard the ...