Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_12-cv-00245/USCOURTS-alnd-2_12-cv-00245-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 31:3729 False Claims Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

UNITED STATES OF AMERICA; )

DEBORA PARADIES, LONDON )

LEWIS; and ROBERT MANLEY, )

)

Plaintiffs, )

)

v. ) CIVIL ACTION NO:

) 2:12-CV-245-KOB

)

ASERACARE INC,; )

and GGNSC ADMINISTRATIVE )

SERVICES d/b/a Golden Living )

f/k/a Beverly Enterprises Inc., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

This matter comes before the court on “Defendants’ Motion for Reconsideration of Order

Granting Government’s Motion to Intervene.” (Doc. 136). The court granted the Motion for

Reconsideration and now reconsiders its July 3, 2012 Order, granting the Government’s Motion

to Intervene. The Defendants argue that the Government’s intervention will cause undue

prejudice and delay the adjudication in contravention of Rule 24(b). Fed. R. Civ. Pro. 24(b)(3).

The Government argues that the court should allow intervention “for good cause” under the False

Claims Act because of the discovery of new evidence after the initial intervention deadline. See

31 U.S.C. § 3730(c)(3). The court does not find the Defendants’ arguments for reversing its

decision granting the Government’s motion to intervene persuasive, and thus the court will

CONFIRM its July 3, 2012 Order, granting the Government’s Motion to Intervene. 

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FILED

 2012 Sep-24 PM 03:03

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:12-cv-00245-KOB Document 143 Filed 09/24/12 Page 1 of 6
I. Procedural History

The court granted the Government’s motion to intervene on July 3, 2012. (Doc. 115). The

court held a status conference on August 28, 2012. As a result of that status conference, the court

entered a revised scheduling order and consolidated Paradies (Civil Action No. 2:12-cv-245-

KOB) and Micca (Civil Action No. 2:12-cv-2264-KOB) for discovery purposes. (Doc. 135).

Three days later, the Defendants filed the motion for reconsideration of the court’s order granting

the Government’s motion to intervene. (Doc. 136). The court granted the motion for

reconsideration (doc. 138) and allowed a written response from the Government (doc. 141) and a

reply from the Defendants (doc. 142). 

II. Discussion

Under the False Claims Act, when the government declines to intervene in the qui tam

case initially, it may intervene at a later time upon a showing of good cause under 31 U.S.C. 

§ 3730(c)(3). The Act does not define “good cause,” but courts have found good cause in cases

where the government realized the magnitude of the alleged fraud was much larger than it had

originally anticipated; where the government received additional and new evidence about the

case; and where intervention would protect the interests of the relators. See U.S. ex rel. Hall v.

Schwartzman, 887 F. Supp. 60, 62 (E.D. N.Y. 1995) (granting government intervention when the

government had “uncovered information suggesting that the scope of the alleged fraud [was]

more extensive than originally anticipated”); U.S. ex rel. Stone v. Rockwell Intern. Corp., 950 F.

Supp. 1046, 1049 (D. Colo. 1996) (“Even if good cause requires a showing of new evidence, the

government has sustained that burden”); Id. (“Such reading leads us to the conclusion that the

‘good cause’ requirement of § 3730(c)(3) was intended to protect the interests of the relator.”

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(quoting 29 U.S.C. § 3730(c)(3))). 

In addition, the legislative history of the Act suggests that Congress intended for the

Government to be able to intervene upon the discovery of new information. See S. Rep. No. 99-

345, at 26 to 27 (1986) (discussing that the discovery of new evidence “could escalate the

magnitude or complexity of the fraud, causing the Government to reevaluate its initial

assessment or [make] it difficult for the qui tam relator to litigate alone”). 

The Government claims that after its initial decision not to intervene in this case, it

discovered new relevant information and evidence of the Defendants’ fraud. See Doc. 108, at 3

(“On several occasions after May 16, 2011, representatives of the United States met with counsel

for AseraCare to discuss the United States’ investigation, including new information that

AseraCare provided to the United States since May 2011"). The relators support the

Government’s intervention in this case. 

The Defendants argue that the Government’s intervention will result in duplicative

discovery and undue prejudice. Under Rule 24(b)(1)(A), the court may allow a party to intervene

who “is given a conditional right to intervene by a federal statute.” Fed. R. Civ. Pro. 24(b)(1)(A).

Under the False Claims Act, the Government is given a conditional right to intervene in qui tam

actions “for good cause” once the initial intervention period has expired. 31 U.S.C. § 3730(c)(3).

In deciding whether to allow a party to intervene, the court “must consider whether the

intervention will unduly delay or prejudice the adjudication of the original parties’ rights.” Fed.

R. Civ. Pro. 24(b)(3). 

As discussed at the August 28, 2012 status conference, the court is not persuaded that the

government’s intervention and accompanying revised scheduling order (doc. 137), including an

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Case 2:12-cv-00245-KOB Document 143 Filed 09/24/12 Page 3 of 6
appropriate discovery period, will unduly prejudice the Defendants. The discovery conducted in

this case before it was transferred from the Eastern District of Wisconsin to this court was

minimal, and the Wisconsin court recognized that the discovery was “only in the early stages”

when it transferred the case to this court. (Doc. 99, at 8). This court recognizes the need for

further meaningful discovery on the alleged fraud perpetrated by the Defendants. 

 The additional discovery that the Defendants may have to engage in because of the

Government’s intervention “is not sufficient . . . to deny any intervention absent a showing of

undue prejudice.” U.S. ex rel. Hall v. Schwartzman, 887 F. Supp. 60, at 62. Here, the court has

not found any showing of undue prejudice, and thus a possibility of broader discovery is not

enough to deny the Government’s intervention. 

The Defendants also argue that under United States v. Jefferson County, the court should

not allow the Government to intervene because the motion to intervene was not timely filed. 720

F.2d 1511, 1519 (11th Cir. 1983). The court is unaware of any court that has analyzed the

Government’s motion to intervene in a False Claims Act qui tam action under Jefferson’s factors

for permissive intervention. The court agrees with the Government in that “the very nature of

government intervention in FCA cases creates circumstances and considerations not present in

ordinary cases involving a non-party’s efforts to intervene under Rule 24.” Doc. 141, at 4. The

court, however, finds that the Government is entitled to intervention, even assuming the Jefferson

framework does apply to this situation.

 Under Jefferson, the district court must consider four factors when deciding whether to

allow intervention:

(1) the length of time during which the would-be intervenor knew or reasonably

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should have known of his interest in the case before he petitioned for leave to

intervene; (2) the extent of prejudice to the existing parties as a result of the

would-be intervenor's failure to apply as soon as he knew or reasonably should

have known of his interest; (3) the extent of prejudice to the would-be intervenor

if his petition is denied; and (4) the existence of unusual circumstances militating

either for or against a determination that the application is timely.

Id. at 1516. First, the Government gained new information in the time between when it initially

declined to intervene and its February 20, 2012 Motion to Intervene. Additionally, the

Government filed its Motion to Intervene within one month of the case being transferred to this

court. Second, as already discussed, the court does not find any significant prejudice to the

Defendants as a result of the Government’s intervention. Third, the Government’s intervention in

a False Claims Act case serves to protect the public interest which is of “paramount importance”

in cases such as this one. U.S. ex rel. Stone v. Rockwell Intern. Corp., 950 F. Supp. 1046 at 1049.

Finally, the unusual circumstances of a qui tam action under the False Claims Act and the

unususal and prolonged procedural history of this particular case “militate” for the finding of

timeliness and allowing the Government to intervene. Jefferson, 720 F.2d at 1516. 

III. Conclusion

The court is satisfied that the new evidence involving AseraCare’s hospice operations and

Medicare claims and the “full support” of the relators justify the Government’s intervention in

this case. U.S. ex rel. Stone v. Rockwell Intern. Corp., 950 F. Supp. at 1049. Additionally, under

the general intervention considerations of Rule 24 and Jefferson, the court finds that the

Defendants will not suffer any undue prejudice as a result of the Government’s intervention in

this case. Thus, the court CONFIRMS its July 7, 2012 Order, granting the Government’s Motion

to Intervene. 

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Case 2:12-cv-00245-KOB Document 143 Filed 09/24/12 Page 5 of 6
DONE and ORDERED this 24th day of September, 2012. 

____________________________________

KARON OWEN BOWDRE

UNITED STATES DISTRICT JUDGE

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