BAEC Bulletin - July/August 2025

| July/August 2025 | BAEC Bulletin

BAEC Bulletin | July/August 2025 |

BY KEVIN M. HOGAN AND SEAN C. MCPHEE WESTERN DISTRICT CASE NOTES

peculiarly within the opposing party’s knowledge so long as the Complaint adduces specific facts supporting a strong inference of fraud. The Court then conducted a thorough examination of the elements of plaintiff’s claims under the False Claims Act and found that fraud had been alleged with sufficient particularity. Specifically, the Court observed that, under the False Claims Act, a plaintiff must allege a false or fraudulent claim for payment or approval, or a false record or statement material to a false or fraudulent claim. The Court then noted that False Claims Act claims are either factually false ( i.e. one that is untrue on its face—such as a request for reimbursement for goods or services never provided) or legally false (i.e. one that rests on a false representation of compliance with an applicable federal statute or contractual term). Moreover, legally false claims are subdivided into express false certification claims and implied false certification claims. Ultimately, the Court rejected plaintiff’s express false certification theory, but held that plaintiff’s allegations that defendant certified compliance with the COVID-19 Vaccination Program when it submitted claims for payment was sufficient under the implied false certification theory. And while plaintiff did not provide details of actual bills or invoices submitted by defendant to the government, that was not fatal to her claims because that information was peculiarly within defendant’s knowledge, and because plaintiff alleged specific and plausible facts from which the Court could infer that defendant submitted false claims. As a result, the Court denied that branch of defendant’s motion to dismiss, but because plaintiff’s “reverse false claims” count did not allege any independent facts, it was dismissed as redundant. First Amendment’s Free Speech Clause and New York’s Public Accommodation Laws In Emilee Carpenter, LLC, et al. v. James, et al., 21-cv-6303-FPG (May 22, 2025), plaintiff, a wedding photographer, alleged that New York’s public accommodation laws “threatened her ability to operate her business according to her faith,” because she objected to opposite sex marriages and preferred not to offer her wedding photography business services to celebrate such marriages. She brought this pre-enforcement challenge under 42 USC §1983 contending that the state’s public accommodation laws violated her free speech and free association rights, her right to freely exercise her religion, the Establishment Clause of the First Amendment, and her right to due process. Previously, this Court held that the Constitution did not prevent New York from insuring that all consumers in the marketplace, without regard to sexual orientation, have “equal access to publicly available goods and services,” and thus dismissed plaintiff’s complaint.

Before the Second Circuit could decide the appeal, the Supreme Court issued its decision in 303 Creative LLC v. Elenis , 600 U.S. 570 (2023) holding that the Free Speech Clause of the First Amendment barred states from applying their public accommodation laws to “expressive activity to compel speech.” Finding “little daylight” between the facts alleged here and those found in 303 Creative , the Second Circuit vacated the dismissal of plaintiff’s free speech claim and remanded plaintiff’s case to this Court for further proceedings. The Second Circuit distilled a two-part inquiry from the 303 Creative decision: first, does the law at issue compel a business owner to engage in activity she would not otherwise engage in; and, second, does the activity constitute “the owner’s expressive activity.” If so, then the law violates the First Amendment “because it impermissibly compels speech.” Here, on remand, the Court concluded that New York’s public accommodation law would compel plaintiff to engage in activity she would not otherwise engage in and that plaintiff’s photography was expressive activity for First Amendment purposes; therefore, plaintiff likely would succeed on the merits of her free speech claim. The Court had little difficulty concluding that the remaining factors favored a preliminary injunction, and proceeded to grant the motion. The Court emphasized, though, that the injunction was narrow and, beyond these “peculiar” circumstances, plaintiff remained fully obligated to comply with New York’s public accommodation laws and New York’s public officials remained fully empowered to police the public marketplace to ensure that “gay couples [are not] treated as social outcasts… inferior in dignity and worth.” Preliminary Injunctions and Supplemental Jurisdiction In A.A.C. et al., v. Starpoint Central School District, et al., 24-cv-1047-JLS (April 25, 2025), plaintiffs, on behalf of their minor children, sued under the federal and state Constitutions and state and federal statutes after defendants refused to allow plaintiffs’ daughter to attend school unless she received a Tdap vaccination which plaintiffs alleged would be detrimental to her health. In New York, “a child may be exempted from school immunization if ‘any’ state- licensed physician ‘certifies that such immunization may be detrimental to the child’s health.’” Here, plaintiffs submitted a facially and procedurally valid exemption which was completed by their daughter’s treating physician. According to the Court, defendants denied the exemption request after the school physician second guessed the treating physician’s conclusion. Turning first to whether any of the claims in the complaint were likely to succeed on the merits -- the second of the three prongs of the standard for a preliminary injunction against governmental action -- the Court held that the ten

Deadline for Removal In Sibley v. Meridian Wildlife Services , LLC, 25-cv-6154-FPG-MJP (May 20, 2025), plaintiff filed suit against defendants in state court asserting employment discrimination claims under federal and New York state law. Defendant removed the action on the basis that the case arose under federal law, and that the Court had pendent jurisdiction over plaintiff’s state law claims. Plaintiff then moved to remand. In doing so, plaintiff did not contest the Court’s subject matter jurisdiction in light of the federal claims alleged in his Complaint, but instead argued that the Notice of Removal was untimely because it was filed more than thirty days after defendant was served. Specifically, plaintiff argued that the thirty-day clock began to run when defendant’s counsel agreed by email to accept service of the Complaint in response to plaintiff’s request made pursuant to CPLR 312-a, which allows for service by mail if the defendant completes and returns an acknowledgement of receipt. In opposition, defendant argued that removal was timely because the Notice of Removal was filed less than thirty days after defendant’s counsel signed and returned the acknowledgement of receipt, and it was only then that service was completed. In deciding the motion, the Court recognized that

KEVIN M. HOGAN Partner Phillips Lytle LLP

“email agreements between counsel to accept service can constitute binding agreements, triggering the thirty-day clock for removal, ”

but that was not the case here because defendant’s agreement to accept service was contingent on other factors and was not itself an agreement to accept service. Indeed, in the email at issue, defendant’s counsel queried whether plaintiff would be sending her the waiver notice required by CPLR 312-a so as to “be clear on what date you served me on behalf of the company,” and plaintiff responded that he was “putting in the mail today the CPLR 312a Statement to you.” Thus, the exchange’s language demonstrated that defendant counsel’s acceptance of service was contingent upon plaintiff serving defendant’s counsel in accordance with CPLR 312-a, and under it, service was not complete until defendant’s counsel returned the required form as provided in the statute. Because defendant filed its Notice of Removal within thirty days after returning the acknowledgement form resulting in service being complete, the removal was timely, and plaintiff’s motion to remand was denied. Motion to Dismiss Claims Under False Claims Act In U.S. ex. rel. Conrad v. Rochester Regional Health , 23-cv-438-JLS-JJM (June 11, 2025), plaintiff—a Physician Assistant and former employee of defendant— alleged that defendant violated the False Claims Act by knowingly failing to report adverse events to the Vaccine Adverse Events Reporting System, as required both by statute and contract, while nevertheless submitting claims for payment to the United States through the Center for Disease Control and Prevention’s COVID-19 Vaccination Program. Defendant moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing that plaintiff failed to state a claim. Noting first that the False Claims Act is an anti-fraud statute and that substantive allegations are subject to the heightened pleading requirements of Fed. R. Civ. P. 9(b), the Court also recognized that allegations may nonetheless be based on information and belief when facts are

SEAN C. MCPHEE Partner Phillips Lytle LLP