United States District Court, E.D. Kentucky, Southern Division, Pikeville
JENNIFER L. GRIFFITH, et al., Plaintiffs,
ERIC C. CONN, et al., Defendants.
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE
matter is before the Court pursuant to relators' motion
for summary judgment against defendant David B. Daugherty (DE
319). Specifically, the relators' move for judgment on
Counts VII, VIII, IX, and X of the third amended complaint
(DE 207). For the following reasons, relators' motion for
summary judgment (DE 319) is GRANTED IN PART
and TAKEN UNDER ADVISEMENT in part. The
motion is GRANTED as to defendant
Daugherty's liability on Counts VII, VIII, IX, and X of
the third amended complaint. The Court
RESERVES ruling on the issue of damages.
case has a long and complex procedural history. Previously,
the Court has set the stage as follows:
This story has been told many times. Griffith and Carver
allege that Eric Conn, a social security attorney and local
celebrity, and David Daugherty, an administrative law judge,
conspired to defraud the government. The scheme was simple:
Conn would bring social security cases on behalf of people
seeking disability benefits, Daugherty would assign those
cases to himself, and Daugherty would grant the benefits
irrespective of the merits. Conn would then submit claims to
the Social Security Administration (SSA) to collect
attorney's fees for bringing those cases. Those
submissions, according to the plaintiffs, violated the False
Claims Act (“FCA”).
(DE 274 at 1-2) (internal citations omitted). Griffith and
Carver (“relators”) originally brought this
action through the qui tam statute in 2011. (DE 2). After
preliminary review of the case, the government decided not to
intervene, and Griffith and Carver proceeded in prosecution
of the case. Several years later, the government partially
intervened, but only as to the Conn defendants. (DE 223;
252). Important to the course of this litigation is that fact
that both Conn and Daugherty have been pursued criminally for
actions related to the ones at issue in this case. Conn
pleaded guilty in his parallel criminal case, and in turn,
conceded liability on Counts I, XIII, and IX of this
litigation. See (DE 309; 310 at 1).
and Carver now move for summary judgment against defendant
Daugherty, pointing out that he too has now pleaded guilty in
his parallel criminal case. See United States v.
Daugherty, No. 5:17-CR-00066-DCR (May 12, 2017).
Specifically, Daugherty has admitted to two counts of
receiving gratuities in violation of 18 U.S.C. §
201(c)(1)(B). See Id. at (DE 15).
result of the parallel criminal cases, there is a large
amount of evidence that has been admitted by Daugherty and
Conn, and is now offered to prove summary judgment on the
relators' claims against Daugherty. Important in those
admissions is illumination on the fraudulent scheme existing
between Daugherty and Conn. Defendant Daugherty has not
responded to the relators' motion for summary judgment,
despite a specific request by the Court, and the evidence is
around October 2004, Daugherty solicited Conn for money,
remarking that Conn was the beneficiary of many of
Daugherty's decisions on disability claims. (DE 319-6,
Attach. A at 8). Eventually, Daugherty and Conn setup a
monthly payment system, in which Conn would pay Daugherty
$400 per favorable decision on Conn's cases for
disability benefits. Id. at 9. As a result of being
financially incentivized, Daugherty began to seek out and
self-assign Conn's cases or reassign them from other
Administrative Law Judges to himself. (DE 319-4, Attach. A at
3). Daugherty also began making monthly phone calls to the
Conn Law Firm, providing the identity of claimants for whom
Daugherty intended to award benefits, and specifically
identifying the type of medical evidence, whether evidencing
a physical or mental impairment, that Conn should submit to
support favorable decisions. Id. Conn, using several
medical professionals, fabricated documentation, including
physical pre-completed Residual Functional Capacities, which
he submitted to Daugherty via interstate facsimile or wire
transmissions from the Conn Law Firm to the Huntington Office
of Disability Adjudication and Review (“ODAR”).
(DE 319-6, Attach. A at 2-7, 10-11).
around January 2008, Daugherty contacted Conn by telephone
and confronted Conn about the repetitive submission of some
of the fabricated documentation. (Id. at 12).
Daugherty advised Conn, “this isn't going to work,
” and instructed Conn to create and submit a wider
variety of physical pre-completed Residual Functional
Capacities (“RFCs'). Id. During that same
phone call, Daugherty criticized the quality of the physical
pre-completed RFCs, remarking, “who's filling these
out for you? It must be an eighth grader writing these for
you.” Id. Conn discontinued using the original
five versions of the physical pre-completed RFCs, created ten
new versions, and submitted these newer versions to Daugherty
in support of disability determinations. Id. Like
their predecessors, the forms reported limitations that were
considered disabling by the SSA, irrespective of the
claimant's actual ability to perform work. Id.
admits that between October 2004 and April 2011, he received
more than $609, 000 from Conn in cash payments. (DE 319-4,
Attach. A at 5). Further, in Conn's cases wherein
Daugherty rendered favorable decisions and Conn paid illegal
gratuities to Daugherty, Conn ultimately received at least
$7, 100, 000 in representative fees from the SSA.
Id. Finally, those favorable decisions obligated the
Social Security Administration to pay more than $550, 000,
000 in lifetime benefits to claimants represented by Conn.
Id. at 5-6.
judgment is proper “if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party bears the initial burden and must
identify “those portions of the pleadings...which it
believes demonstrate the absence of a genuine issue of