Labor & Employment Law Daily Wrap Up, WHISTLEBLOWERS—W.D.N.Y.: FCA claim tied to contractual duty to report vaccine adverse events survives dismissal, (Jun 16, 2025)

By Justin Marcus Smith, J.D.

The viability of the relator’s allegations turned on whether the court could plausibly infer submission of claims that falsely certified compliance with contractually required reporting of COVID-19 vaccine adverse reactions in the VAERS database.

A qui tam relator adequately pleaded implied legally false certification claims under the False Claims Act (FCA), in connection with a purported contractual COVID-19 vaccine adverse event reporting requirement, held the federal district court in Buffalo, New York. The provider agreement was the only basis for liability. The court accordingly denied dismissal of the relator’s FCA claim insofar as it was based on implied false certification facially tied to a healthcare provider’s agreement with the Centers for Disease Control and Prevention (CDC). The court also declined to dismiss the relator’s FCA retaliation claim and state law retaliation claim. However, the court dismissed the relator’s other claims of FCA conspiracy and FCA reverse false claims (U.S. ex rel. Conrad v. Rochester Regional Health, No. 1:23-cv-00438-JLS-JJM (W.D.N.Y. Jun. 11, 2025)).

Background. A physician assistant (relator) brought this qui tam action on the basis that her employer, Rochester Regional Health, and United Memorial Medical Center (collectively, RRH), violated the False Claims Act (FCA) by failing to report adverse COVID-19 vaccine events to the Vaccine Adverse Event Reporting System (VAERS), despite submitting claims for federal reimbursement under the Centers for Disease Control (CDC) COVID-19 Vaccination Program. Per the United States Department of Health and Human Services, VAERS is a “national early warning system to detect possible safety problems in vaccines used in the United States.” See VACCINE ADVERSE EVENT REPORTING SYSTEM, https://vaers.hhs.gov/reportevent.html (last visited June 9, 2025).

The relator alleged that RRH prevented her from submitting 170 serious adverse events to VAERS. She alleged multiple specific examples of patients she administered COVID shots to who shortly afterward presented with a range of systems like bradycardia, arm pain, and dizziness.

The relator asserted VAERS reporting was mandatory under the National Childhood Vaccine Injury Act (NCVIA) and the emergency use authorization provisions of the Food, Drug and Cosmetic Act (EUA) as well as an “express material condition” of payment under the RRH Vaccination Program Provider Agreement (Provider Agreement) with the CDC. The relator’s amended complaint lodged claims for:

1. presenting and causing false claims in violation of 31 U.S.C. § 3729(a)(l)(A);

2. false records in violation of 31 U.S.C. § 3729(a)(l)(B);

3. conspiracy in violation of 31 U.S.C. § 3729(a)(l)(C);

4. reverse false claims in violation of 31 U.S.C. § 3729(a)(l)(G);

5. retaliation, in violation of 31 U.S.C. § 3730(h); and,

6. violation of New York Labor Laws §§ 740 and 741.

The relator alleged that, under the Provider Agreement, RRH was responsible for reporting serious adverse events after vaccination, but RRH said only its employees involved in the handling of the COVID-19 vaccine could cause liability under the Provider Agreement. RRH moved to dismiss under Fed. R. Civ. P. 12(b)(6).

Reporting responsibility. The court held that RRH was ultimately responsible for VAERS reporting under the instant Provider Agreement. The court saw, on its face, that the proffered Provider Agreement made RRH officers as well as “the Organization” “accountable for compliance.” RRH was therefore responsible for reporting adverse events the relator’s example patients purportedly experienced. The relator presented a valid theory of liability under the FCA.

However, the Provider Agreement had its limitations. It did not require RRH to report adverse reactions regardless of where the patient was vaccinated. The reporting requirement was “dose specific.” It only applied to shots administered by RRH, not by anyone outside of RRH.

Moreover, the court disagreed that NCVIA and the EUA imposed any COVID vaccine reporting obligations on RRH. Under NCVIA, each health care provider and vaccine manufacturer is expected to report the occurrence of any event set forth in the Vaccine Injury Table. The COVID shot was not listed in the table. The Provider Agreement did not mention the table. NCVIA could not be the basis of liability. Likewise, the relator failed to link EUA liability to a FCA claim. Accordingly, the Provider Agreement was the only possible basis of liability in this matter.

R. 9(b) particularity. The court held the relator’s allegations satisfied R. 9(b) particularity with respect to implied legally false certification claims, not as to factually false claims.

First, as to factually false claims, the relator alleged that RRH failed to report a patient who died after a vaccination and altered that patient’s medical records to “conceal” the patient’s recent vaccine. These allegations were deficient under the heightened fraud pleading requirement of Fed. R. Civ. P. 9(b). The relator did not connect this example to an RRH claim for reimbursement that was “untrue on its face” about the details of goods or services provided.

As for legally false claims, claims that rested on a false representation of statutory, regulatory, or contractual compliance, there are two kinds in the FCA context: express false certification claims and implied false certification claims. The relator alleged both kinds, but the court agreed with RRH that the relator did not sufficiently plead express false claims under R. 9(b).

Therefore, the case only concerned the implied false certification theory. However, the relator had to meet two conditions. First, the alleged false claim does not merely seek payment but also makes specific representations about goods or services provided. Second, the submitter's failure to disclose noncompliance with legal requirements makes those specific representations misleading half-truths.

The court found the relator asserted a legal basis for liability under the Provider Agreement contract. The contract facially called for compliance with moderate and severe adverse event VAERS reporting. It also facially specified that federal reimbursement would not be available if RRH did not comply with that reporting with respect to the administered COVID-19 vaccine dose. Therefore, the relator facially proposed that RRH made specific representations that it complied with the Provider Agreement VAERS reporting obligation each time it submitted a claim for payment. “On this record, particularity is alleged.”

Second, as for materiality, the relator plausibly alleged that the condition at issue here, reporting adverse events to VAERS, was material to the government’s payment decision. The Provider Agreement not only specified that the VAERS reporting requirements were conditions of payment, it went a step further in stating the conditions were “material” to the government payment decision. Although, government agencies the relator contacted did not respond or take any action, there was no indication that they continued to pay, hence this factor or aspect was neutral. As for whether alleged RRH noncompliance was substantial, RRH argued the relator identified at most five patients and did not link them to legally obligated VAERS reporting failures. However, the court said the Provider Agreement reporting obligation was not limited to the vaccine clinic or handlers. It extended to anyone RRH vaccinated and later admitted for an adverse reaction. The court concluded the Provider Agreement facially addressed this issue and linked it to payment.

Third, as for scienter, the court found the relator adequately alleged RRH had actual knowledge that reporting to VAERS was material to the Government’s payment decision. The Provider agreement expressed on its face that VAERS reporting was a “material condition of payment.” Among other things, the court also found the relator alleged removal of vaccine information from a patient death certificate and that RRH facially acknowledged it needed to help healthcare providers comply with their responsibility to report adverse events. Accepting such allegations as true on the RRH motion to dismiss, the relator plausibly alleged scienter with required R. 9(b) particularity.

Chorches. The court found the relator also sufficiently alleged RRH actually submitted false claims under R. 9(b) as inferentially permitted under Chorches. See United States ex rel. Chorches for Bankr. Est. of Fabula v. Am. Med. Response, Inc., 865 F.3d 71, 81 (2d Cir. 2017) (citations omitted).

RRH argued the relator did not satisfy R. 9(b) because she did not allege anything about vaccine clinic events or the personnel involved in handling COVID vaccines. However, the court already found this RRH interpretation too narrow. RRH was facially responsible at the organization level, and the relator said she directly observed adverse events and RRH reporting.

Although the relator did not work in billing, her allegations were enough, per Chorches, to permit an inference that RRH submitted specific claims. This was so where the relator alleged four instances of patients that received a vaccine at RRH, experienced an adverse event, and went back to RRH, circumstances allegedly not reported to VAERS. She also alleged that RRH generally maintained detailed billing records. Accepting these allegations as true on a motion to dismiss, the court found RRH facially failed to adhere to the provider agreement such that one could plausibly infer that RRH facially submitted false claims.

Reverse false claims. The court found the relator did not adequately allege any facts, independent of the facts alleged in support of her false claims submission and records reporting counts, in support of her reverse false claims count. The court dismissed the reverse false claims account accordingly.

Conspiracy claim. The court found the relator also failed to allege a conspiracy claim because the intra-corporate conspiracy doctrine applied. An entity cannot conspire with its employees. The court did not find any allegations that would support the personal interests exception to the doctrine. The court granted RRH dismissal of the conspiracy claim.

Retaliation. The court found the relator plausibly alleged that RRH retaliated against her when it fired her. Particularity of pleading under R. 9(b) did not apply here. The court declined to dismiss the retaliation claim.

Protected activity. The court found the relator plausibly alleged that she engaged in protected activity. RRH argued that the relator failed to allege that she suspected fraud, she had only expressed concerns about VAERS reporting, but the court said a Second Circuit case rejected dismissal of a retaliation claim on that basis. See Pilat v. Amedisys, Inc., No. 23-566, 2024 WL 177990, at *2 (2d Cir. Jan. 17, 2024).

The relator alleged that she refused to participate in alleged wrongdoing and took specific actions to try to stop alleged FCA violations, when, among other things, she allegedly identified and reported over 160 adverse events to VAERS. She also alleged four examples of RRH vaccination adverse events that RRH supposedly did not report to VAERS per the Provider Agreement. The court inferred her alleged acts amounted to a facial effort to stop FCA violations. Id. at *2. RRH did not appear to contest that it knew, among other things, that the relator tried to report adverse events to VAERS.

As for adverse action, temporal proximity between alleged protected activities and the relator’s termination applied. For example, the relator said termination occurred shortly after she retained legal representation to send a letter to RRH about purported VAERS underreporting.

State law claim. The court elected to exercise supplemental jurisdiction over the relator’s New York labor law claim. RRH did not contest the claim substantively, and there did not appear to be any reason to decline supplemental jurisdiction.

The case is No. 1:23-cv-00438-JLS-JJM.

Judge: Sinatra, J.

Attorneys: David M. Coriell, U.S. Attorney's Office, for the U.S. Aaron Siri (Siri & Glimstad LLP) for Deborah Conrad and the U.S. Alexander E. Hartzell (Greenberg Traurig, LLP) for Rochester Regional Health and United Memorial Medical Center.

Companies: Rochester Regional Health; United Memorial Medical Center

Cases: Retaliation Whistleblowers CoverageLiability ContractClaims Covid19 NewYorkNews