U.S. Court in Utah Allows Claims Against Physician Who Allegedly Used Stolen Hard Drive as Basis of Qui Tam Claim
- April 17, 2020
The U.S. District Court for the District of Utah allowed several claims to proceed against a physician who allegedly used a hard drive stolen from plaintiff Sherman Sorensen, M.D. as the basis of a qui tam suit against him.
Although plaintiff was unable to sustain his claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the court allowed all other claims to survive defendant Dr. Gerald Polukoff’s motion to dismiss.
During his career, Sorensen developed an expertise in medical procedures known as patent foramen ovale and atrial septal defect closures and performed a large number of them at his practice, Sorenson Cardiovascular Group (SCG). Medical charts were stored at the SCG office while billing records were maintained digitally and were stored on a series of hard drives that were housed on the SCG site. A local technical support company, TecCon, Inc., performed the maintenance and periodic replacement of these hard drives for SCG as well as general IT services.
Polukoff entered into an employment agreement with SCG. He was not authorized to make decisions or formulate policies on behalf of SCG and was also not given authority to access patient medical records, charts, or any of SCG's billing records.
After Sorensen decided to retire, he approached Polukoff and said that he would either pay Polukoff the balance of his guaranteed salary or he would turn the SCG practice over to him. Polukoff indicated that he would consider the offer but needed to ensure the financial viability of SCG before making his decision.
Polukoff then met with TecCon without Sorensen’s authorization, knowledge, or consent. Polukoff falsely informed a TecCon technician that he would be assuming ownership of SCG, instructed that new backup hard drives be installed, and requested and obtained his own hard drive to take off site.
Polukoff subsequently met again with TecCon without Sorensen’s authorization, knowledge, or consent and instructed TecCon to set up and provide him with remote access to SCG's billing records. Polukoff also sent emails to TecCon falsely stating that he was authorized to access patient information.
Polukoff eventually declined the offer to take over Sorensen’s practice. On December 6, 2012, Polukoff initiated a qui tam action against Sorensen, SCG, St. Mark's Hospital, Intermountain Healthcare, Intermountain Medical Center, and HCA, Inc. alleging that Sorenson performed unnecessary medical procedures for which he improperly billed the government. Polukoff and his attorneys admit that they accessed and used information obtained from the hard drive in the qui tam action.
Sorensen later filed suit against Polukoff and others asserting multiple claims and requesting injunctive relief. The court dismissed some of Sorensen’s claims and declined to exercise supplemental jurisdiction over the remaining state law claims. Sorensen appealed the court’s decision that he failed to adequately plead a pattern of racketeering activity, and the Tenth Circuit reversed and remanded.
Sorensen filed a Revised Second Amended Complaint, and defendants sought to dismiss all claims.
In dismissing the RICO claim, the court found Sorensen failed to sufficiently plead continuity. According to the court, a "pattern of racketeering activity" must include "at least two acts of racketeering activity" in a ten-year period.
Here, Sorensen pleaded what was actually a closed-ended series of predicate acts constituting a single scheme to accomplish a discrete goal (to facilitate the qui tam action and induce former patients to bring malpractice actions) directed at a finite group of individuals with no potential to extend to other persons or entities, the court found.
Accordingly, the court dismissed the RICO claim. The court declined to dismiss Sorensen’s claims of civil conspiracy, receipt of stolen property, conversion, and misappropriation of trade secrets, among others, and claims against the lawyer defendants.
Sorensen v. Polukoff, No. 2:18-CV-67 TS-PMW (D. Utah Apr. 7, 2020).