UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 20-cv-23242-BLOOM/Otazo-Reyes

UNITED STATES OF AMERICA ex rel.

SEDONA PARTNERS LLC, 

 

Plaintiff/Relator, 

v. 

ABLE MOVING & STORAGE, INC.; ARPIN

VAN LINES, INC.; CARTWRIGHT

INTERNATIONAL VAN LINES, INC.;

COLEMAN AMERICAN MOVING SERVICES,

INC.; DEWITT COMPANIES LIMITED, LLC; 

HILLDRUP COMPANINES, INC.; J.K. MOVING

& STORAGE INC.; MAYFLOWER TRANSIT,

LLC; NEW WORLD VAN LINES, INC.; 

PARAMOUNT TRANSPORTATION SYSTEMS;

PAXTON VAN LINES, INC.; and WESTERN

EXPRESS FORWARDING, LLC,

Defendants.

__________________________________________/ 

OMNIBUS ORDER ADOPTING MAGISTRATE JUDGE’S 

REPORT AND RECOMMENDATIONS AND 

DENYING MOTION FOR LEAVE TO FILE THIRD AMENDED COMPLAINT

THIS CAUSE is before the Court upon Defendants Able Moving & Storage Inc. (“Able”), 

Arpin International Group, Inc. (“Arpin”), Cartwright International Van Lines, Inc.

(“Cartwright”), Coleman American Moving Services, Inc. (“Coleman”), DeWitt Companies 

Limited, LLC (“DeWitt”), Hilldrup Companies, Inc. (“Hilldrup”), J.K. Moving & Storage, Inc.

(“J.K.”), New World International, Ltd. (“New World”), Paramount Transportation Systems

(“Paramount”), Paxton Van Lines, Inc. (“Paxton”), and Western Express Forwarding, LLC’s 

(“Western”) (collectively, “Defendants”) Joint Motion to Dismiss the Corrected Second Amended 

Complaint and to Strike Allegations Derived from Discovery, ECF No. [226] (“Motion to 

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Dismiss”). Relator Sedona Partners LLC (“Relator” or “Sedona”) filed a Response in Opposition, 

ECF No. [238] (“Response”), to which Defendants filed a Reply, ECF No. [241] (“Reply”).

Magistrate Judge Alicia Otazo-Reyes issued a Report and Recommendations (“R&R”), 

recommending that the Motion to Dismiss be granted, allegations based on information obtained 

by Relator in discovery be stricken, and the Corrected Second Amended Complaint (“SAC”) be 

dismissed with prejudice. See ECF No. [251]. Relator timely filed Objections, ECF No. [255]

(“Relator’s Objections”), arguing that the Motion to Dismiss should not be granted. Defendants

also timely filed an Objection, ECF No. [254] (“Defendants’ Objection”), arguing that Magistrate 

Judge Otazo-Reyes erroneously rejected the application of the public disclosure bar. The parties 

filed their respective Responses to the Objections, ECF Nos. [257], [258]. The United States 

(“Government”) filed a Statement of Interest, ECF No. [256] (“Government’s Statement”), 

indicating that it was not taking a position on the Motion to Dismiss or the R&R but requesting 

that if the Court were to grant the Motion to Dismiss that the dismissal be without prejudice as to 

the Government. 

Also before the Court is Relator’s Motion for Leave to File Third Amended Complaint, 

ECF No. [259] (“Motion to Amend”). Defendants have filed a Response in Opposition, ECF No. 

[261], to which Relator filed a Reply, ECF No. [264].

The Court has conducted a de novo review of the R&R and the record in this case in 

accordance with 28 U.S.C. § 636(b)(1)(C). See Williams v. McNeil, 557 F.3d 1287, 1291 (11th 

Cir. 2009) (citing 28 U.S.C. § 636(b)(1)). For the reasons set forth below, the Court determines

that Relator’s Objections are without merit and that the Court need not reach Defendants’ 

Objection. The Court further agrees with the Government’s position that the dismissal should be 

without prejudice as to the Government. The Court thus adopts the R&R and grants the Motion to 

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Dismiss. The Court has also considered the Motion to Amend, the record in this case, the 

applicable law, and otherwise fully advised. For the reasons set forth below, the Motion to Amend

is denied.

I. BACKGROUND

On August 20, 2021, Relator filed the First Amended Complaint (“FAC”), ECF No. [149], 

asserting two counts of False Claims Act (“FCA”) violations against all Defendants: (1) presenting 

false claims in violation of the FCA (“presentment claim”); and (2) making or using false records 

or statements material to payment or approval of payment in violation of the FCA (“make-or-use 

claim”). Defendants subsequently filed three separate Motions to Dismiss, ECF Nos. [153], [155], 

[162]. On December 16, 2021, Magistrate Judge Otazo-Reyes issued her first Report and 

Recommendations, recommending that two of the Motions to Dismiss be granted and the FAC be 

dismissed with one opportunity to amend. See ECF No. [207]. The Court adopted the first Report 

and Recommendation and dismissed with FAC without prejudice. See ECF No. [218].1

On February 9, 2022, Relator filed the SAC, asserting the same two counts against all 

Defendants. See generally ECF No. [222]. The SAC alleges that Defendants submitted “low-ball 

bids” from 2008 to 2018 to obtain shipping contracts from the United States Department of State 

(“DOS”). Id. ¶ 6. Defendants then allegedly submitted false foreign flag waivers (“Waiver 

Requests”), claiming that there were no U.S. flag vessels available and requesting permission to 

use foreign flag vessels. See id. ¶ 7. The use of cheaper foreign flag vessels, rather than more 

1 The remaining Motion to Dismiss filed by Defendant DeWitt was denied as moot after DeWitt and Relator 

filed a Joint Notice of Proposed Settlement, ECF Nos. [201], [208]. However, on January 13, 2022, Relator 

reported that Relator was no longer willing to enter into a settlement with DeWitt and requested that DeWitt 

be allowed to re-file its Motion to Dismiss. See ECF No. [213]. DeWitt filed a Motion for Reconsideration 

requesting that the Court consider DeWitt’s Motion to Dismiss rather than order DeWitt to re-file its Motion 

to Dismiss. See ECF No. [217]. Because this Court had dismissed Relator’s FAC, DeWitt’s Motion for 

Reconsideration was denied as moot and DeWitt’s Motion to Dismiss remained denied as moot. See ECF 

No. [218].

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expensive U.S. flag vessels, allowed Defendants to earn a profit despite the low-ball bids. See id. 

¶ 80. Relator alleges that Defendants’ use of foreign flag vessels in such a manner fraudulently 

circumvented the “America-First” policy. See id. ¶ 12. Defendants subsequently filed the instant 

Motion to Dismiss. See ECF No. [226].

On July 7, 2022, Magistrate Judge Otazo-Reyes issued her second R&R, recommending 

that the Motion to Dismiss be granted, the waiver requests obtained by Relator in discovery be 

stricken, and the SAC be dismissed with prejudice. See ECF No. [251]. The R&R states that

dismissal is warranted for Relator’s improper use of discovery materials alone. See id. at 7-10. The 

R&R also states that even if the Court were to consider the waiver requests obtained through 

discovery, Relator failed to plead fraud with particularity as required by Rule 9(b) with regard to 

its presentment claim and make-or-use claim. See id. at 12-17. 

On July 21, 2022, Relator filed its Objections, arguing that Magistrate Judge Otazo-Reyes

erred because: (1) the use of materials obtained in discovery does not warrant dismissal of the 

SAC; (2) the SAC adequately alleges a “presentment” claim; (3) the SAC adequately alleges a 

“make-or-use” claim; and (4) if the Court were to dismiss the SAC, the Court should grant leave 

to amend. See ECF No. [255]. On the same date, Defendants filed their Objection, in which 

Defendants argue that Magistrate Judge Otazo-Reyes erroneously rejected the application of the 

public disclosure bar. See ECF No. [254] at 2. On August 4, 2022, the Parties filed their respective 

Responses to the Objections. See ECF Nos. [257], [258]. On August 12, 2022, Relator also filed a 

Motion to Amend seeking leave to file a Third Amended Complaint should the Court dismiss the 

SAC. ECF No. [259]. 

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II. LEGAL STANDARD

a. Objections to Magistrate Judge’s R&R

“In order to challenge the findings and recommendations of the magistrate judge, a party 

must file written objections which shall specifically identify the portions of the proposed findings 

and recommendation to which objection is made and the specific basis for objection.” Macort v. 

Prem, Inc., 208 F. App’x 781, 783 (11th Cir. 2006) (quoting Heath v. Jones, 863 F.2d 815, 822 

(11th Cir. 1989)) (alterations omitted). The objections must also present “supporting legal 

authority.” S.D. Fla. L. Mag. J.R. 4(b). The portions of the report and recommendation to which 

an objection is made are reviewed de novo only if those objections “pinpoint the specific findings 

that the party disagrees with.” United States v. Schultz, 565 F.3d 1353, 1360 (11th Cir. 2009); see 

also Fed. R. Civ. P. 72(b)(3). If a party fails to object to any portion of the magistrate judge’s 

report, those portions are reviewed for clear error. Macort, 208 F. App’x at 784 (quoting Johnson 

v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999)); see also Liberty Am. Ins. Grp., Inc. v. 

WestPoint Underwriters, L.L.C., 199 F. Supp. 2d 1271, 1276 (M.D. Fla. 2001). A district court 

may accept, reject, or modify a magistrate judge’s report and recommendation. 28 U.S.C. 

§ 636(b)(1).

b. Rule 9(b) Pleading Standard

Generally, Rule 8 of the Federal Rules of Civil Procedure requires that a pleading contain 

“a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. 

P. 8(a)(2). Although a complaint “does not need detailed factual allegations,” it must provide 

“more than labels and conclusions, and a formulaic recitation of the elements of a cause of action 

will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009) (explaining that Rule 8(a)(2)’s pleading standard “demands more than an 

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unadorned, the-defendant-unlawfully-harmed-me accusation”). In the same vein, a complaint may 

not rest on “‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678 

(quoting Twombly, 550 U.S. at 557 (alteration in original)). 

In addition to Rule 8(a)’s short and plain statement requirement, Rule 9(b) imposes a 

heightened pleading standard for claims sounding in fraud: “In alleging fraud or mistake, a party 

must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). 

Rule 9(b) thus forces a plaintiff to “offer more than mere conjecture,” U.S. ex rel. Clausen v. 

Laboratory Corp. of America, Inc., 290 F.3d 1301, 1313 (11th Cir. 2002), and “requires that a 

complaint plead facts giving rise to an inference of fraud,” W. Coast Roofing & Waterproofing, 

Inc. v. Johns Manville, Inc., 287 F. App’x. 81, 86 (11th Cir. 2008). This requirement is intended 

to alert defendants to the “precise misconduct with which they are charged.” Durham v. Bus. Mgmt. 

Associates, 847 F.2d 1505, 1511 (11th Cir. 1988) (quoting Seville Indus. Mach. Corp. v. Southmost 

Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984)); see also Ziemba v. Cascade Int’l, Inc., 256 F.3d 

1194, 1202 (11th Cir. 2001) (“The particularity rule serves an important purpose in fraud actions 

by alerting defendants to the precise misconduct with which they are charged and protecting 

defendants against spurious charges of immoral and fraudulent behavior.” (internal quotation and 

citation omitted)). The Eleventh Circuit has held that a party satisfies the particularity requirement 

for fraud when the pleading sets forth: (1) precisely what statements were made; (2) the time and 

place of each statement and the person responsible for making (or in the case of omissions, not 

making) it; (3) the content of such statements and the manner in which they caused the plaintiff to 

be misled; (4) what the defendants obtained as a result of the fraud. See Zarrella v. Pac. Life Ins. 

Co., 755 F. Supp. 2d 1231, 1236 (S.D. Fla. 2011) (citing Ziemba, 256 F.3d at 1202). 

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c. FCA

The FCA imposes liability on any person who: 

(A) knowingly presents, or causes to be presented, a false or fraudulent claim for 

payment or approval; 

(B) knowingly makes, uses, or causes to be made or used, a false record or statement

material to a false or fraudulent claim; 

31 U.S.C. § 3729(a)(1). 

In regard to a presentment claim, the Eleventh Circuit has held that “a relator must allege 

the actual submission of a false claim” and “offer some indicia of reliability . . . to support the 

allegation of an actual false claim for payment being made to the government.” Carrel v. AIDS 

Healthcare Found., Inc., 898 F.3d 1267, 1275 (11th Cir. 2018) (internal quotation marks and 

citation omitted). In regard to a make-or-use claim, the Eleventh Circuit has determined that an 

“FCA relator must allege: (1) a false record or statement; (2) the defendant’s knowledge of the 

falsity; (3) that the defendant made, used, or caused to be made or used a false statement or record; 

(4) for the purpose to conceal, avoid, or decrease an obligation to pay money to the government, 

and; (5) the materiality of the misrepresentation.” See U.S. ex rel. Matheny v. Medco Health Sols., 

Inc., 671 F.3d 1217, 1224 (11th Cir. 2012). Further, “[i]n order to plead the submission of a false 

claim with particularity, a relator must identify the particular document and statement alleged to 

be false, who made or used it, when the statement was made, how the statement was false, and 

what the defendants obtained as a result.” See id. at 1225. 

d. Motion for Leave to Amend

Generally, Rule 15 of the Federal Rules of Civil Procedure governs amendment to 

pleadings. Apart from initial amendments permissible as a matter of course, “a party 

may amend its pleading only with the opposing party’s written consent or the court’s leave.” Fed. 

R. Civ. P. 15(a)(2). “The court should freely give leave when justice so requires.” Id. However, 

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“[a] district court need not . . . allow an amendment where there has been undue delay, bad faith, 

dilatory motive, or repeated failure to cure deficiencies by amendments previously allowed; (2) 

where allowing amendment would cause undue prejudice to the opposing party; or (3) where 

amendment would be futile.” Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001). Ultimately, 

“the grant or denial of an opportunity to amend is within the discretion of the District Court[.]”

Foman v. Davis, 371 U.S. 178, 182 (1962); see also Espey v. Wainwright, 734 F.2d 748, 750 (11th 

Cir. 1984) (“This policy of Rule 15(a) in liberally permitting amendments to facilitate 

determination of claims on the merits circumscribes the exercise of the trial court’s discretion; 

thus, ‘[u]nless there is a substantial reason to deny leave to amend, the discretion of the district 

court is not broad enough to permit denial.’”) (citation omitted). 

In addition, under the Federal Rules of Civil Procedure, district courts are required to enter 

a scheduling order that limits the time to amend the pleadings. See Fed. R. Civ. P. 16(b)(3). 

Scheduling orders may be modified only “for good cause and with the judge’s consent.” See id. at 

Rule 16(b). Accordingly, when a motion to amend is filed after a scheduling order deadline, Rule 

16 is the proper guide for determining whether a party’s delay may be excused. Id. at 1418 n.2; see

also Smith v. Sch. Bd. of Orange Cty., 487 F.3d 1361, 1366-67 (11th Cir. 2007) (holding that 

“where a party files an untimely motion to amend, [we] must first determine whether the party 

complied with Rule 16(b)’s good cause requirement,” before considering whether “justice so 

requires” allowing amendment). 

Therefore, when a motion for leave to amend a pleading is filed after the deadline set in a 

court’s scheduling order, the court employs a two-step analysis. Id. at 1419. First, the movant must 

demonstrate good cause under Rule 16(b) of the Federal Rules of Civil Procedure. If the movant 

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demonstrates good cause, then the court proceeds to determine whether an amendment to the 

pleadings is proper under Rule 15(a) of the Federal Rules of Civil Procedure. Id.

III. ANALYSIS

a. Relator’s Objections and Motion to Amend 

As noted above, Relator raises four objections to the R&R: (1) the use of materials obtained 

in discovery does not warrant dismissal of the SAC; (2) the SAC adequately alleges a 

“presentment” claim; (3) the SAC adequately alleges a “make-or-use” claim; and (4) if the Court 

were to dismiss the SAC, the Court should grant leave to amend. See ECF No. [255]. In a separate

Motion, Relator seeks leave to file a Third Amended Complaint should the Court dismiss the SAC. 

ECF No. [259]. The Court begins by addressing Relator’s first objection.

i. Use of Materials Obtained in Discovery

The R&R states that Bingham v. HCA Inc., 783 F. App’x 868 (11th Cir. 2019), establishes 

that materials obtained by relators in discovery may not be used to satisfy Rule 9(b) requirements 

in an amended complaint. See ECF No. [251] at 8. As such, Magistrate Judge Otazo-Reyes 

recommends that the Court strike allegations derived from materials obtained in discovery, 

specifically (1) documents produced by Cartwright, J.K., and Able in response to Relator’s 

discovery requests; and (2) documents produced by non-party Maersk Line, Limited (“Maersk”) 

in response to Relator’s subpoena (“Maersk Subpoena”). See id. at 9. The documents at issue are 

Waiver Requests that form the factual predicate for Relator’s presentment and make-or-use claims. 

See ECF No. [222] ¶¶ 86-93, 96-104, 106-114, 117-118, 120-129, 132-141, 143-152, 155-164, 

166-174, 176-184, 186-195 (collectively, “Waiver Request Allegations”). The R&R points out 

that Relator conceded at the June 6, 2022 hearing before Magistrate Judge Otazo-Reyes 

(“Hearing”) that it used the Waiver Requests produced in discovery by Cartwright, J.K. and Able 

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as the predicate for its Waiver Request Allegations against the three Defendants. See id. at 9-10. 

Relator also conceded at the Hearing that the other source of the Waiver Requests Allegations was 

Maersk’s document production, in which Maersk produced materials Maersk had obtained through

a Freedom of Information Act (“FOIA”) request. See id. at 10. Therefore, Magistrate Judge OtazoReyes determined that the Waiver Requests was from discovery Relator had conducted in this 

action, and that Bingham compels the striking of the Waiver Request Allegations and the dismissal 

of the SAC. See id.

Relator first argues that Relator never conceded at the Hearing that the source for the 

Waiver Request Allegations was Maersk’s document production. See ECF No. [255] at 10. Relator 

claims that it made clear that it did not receive documents from Maersk in response to the 

subpoena. See id. (citing ECF Nos. [238] at 6, [252] at 38-42). Second, with respect to Cartwright, 

J.K., and Able, Relator argues that it should be permitted to use materials from discovery and that 

Bingham is inapposite because (1) the striking of allegations is a “draconian sanction” reserved for 

“redundant, immaterial, impertinent, or scandalous” material and improper when Defendants have 

suffered no prejudice; (2) Bingham is an outlier case that does not categorically require the striking 

of information in an amended complaint; (3) the reasoning behind the Bingham holding – namely, 

requiring compliance with Rule 9(b) – is not implicated in this case as the use of discovery 

materials promotes the purposes of Rule 9(b); (4) Bingham is an unpublished, non-binding 

decision; and (5) striking the allegations “would deny justice to the American taxpayer on a 

procedurally improper and unjustifiable technicality.” Id. at 12-14.

Defendants respond that Relator did concede at the Hearing that it received documents 

from Maersk. See ECF No. [257] at 3. According to Defendants, Relator attempts to contrive a 

distinction by claiming that Relator did not receive documents from Maersk in response to the 

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subpoena and that Relator simply received the documents from Maersk. See id. at 4. Defendants 

submit that the contrived distinction is immaterial. Relator obtained the documents during the 

discovery period from Maersk, who was under compulsion to produce the documents pursuant to 

the Maersk Subpoena. The fact that Maersk did not expressly state that it was producing the 

documents pursuant to the Maersk Subpoena is immaterial given that the Maersk Subpoena was 

served and Maersk was compelled to produce the discovery materials. Second, with respect to 

Cartwright, J.K., and Able, Defendants argue that (1) the striking of allegations is warranted 

considering Bingham and Fed. R. Civ. P. 12(f), which permits the striking of allegations that are 

“an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter[;]” (2) 

Bingham is controlling precedent; (3) the reasoning behind the Bingham holding – namely, 

requiring compliance with Rule 9(b) – is implicated in this case; and (4) striking the allegations 

will not deny justice to the American taxpayer because the Government would still have the right 

to pursue the FCA claims. See id. at 3-6. 

The Court agrees with the R&R. As an initial matter, the Court must address the 

applicability of Bingham, 783 F. App’x 868. The Eleventh Circuit held that materials obtained in 

discovery may not be used to satisfy the Rule 9(b) pleading requirements in an amended complaint. 

The Eleventh Circuit held, in relevant part, as follows: 

Although courts should freely grant leave to amend pleadings, see Fed. R. Civ. P. 

15(a)(2), amendments that include material obtained during discovery, prior to a 

final decision on the motion to dismiss, may not be appropriate in cases to which 

the heighted pleading standard of Rule 9(b) applies if the amendment would allow 

the plaintiff to circumvent the purpose of Rule 9(b). Applying Rule 9(b) to False 

Claims Act claims ensures that the relator’s strong financial incentive to bring [a 

False Claims Act] claim—the possibility of recovering between fifteen and thirty 

percent of a treble damages award—does not precipitate the filing of frivolous suits.

Id. at 876 (internal citations and quotation marks omitted). 

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Although Relator correctly argues that Bingham did not categorically require the striking 

of allegations based on materials obtained in discovery as indicated by the Eleventh Circuit’s use 

of the word “may,” the Eleventh Circuit stated that the striking of allegations based on materials 

obtained during discovery is proper if it prevents relators from circumventing the particularity 

requirement of Rule 9(b). See id. Therefore, the Court is not persuaded by Plaintiff’s argument that 

the striking of allegations is a “draconian sanction” reserved for “redundant, immaterial, 

impertinent, or scandalous” material, and thus improper when Defendants have suffered no 

prejudice. The Eleventh Circuit plainly instructs district courts to strike allegations to promote 

compliance with Rule 9(b) and to ensure that a relator’s strong financial incentive to bring an FCA 

case does not precipitate in the filing of frivolous lawsuits. See id. (“We agree with the district 

court that, in this case, the goals of applying Rule 9(b) to False Claims Act cases are advanced by 

striking information in Relator’s SAC that was learned through discovery, prior to a final decision 

on the motion to dismiss, because, as discussed further below, Relator’s FAC did not satisfy the 

heightened pleading standard of Rule 9(b).”). 

To the extent that Relator argues that Bingham is an unpublished outlier case that the Court 

should not consider, the Court is not persuaded. The Court is unaware of, and Relator fails to cite, 

any legal authority from the Eleventh Circuit that contravenes the Eleventh Circuit’s holding in 

Bingham. As Relator did in its prior Response to Defendants’ Objection to the first Report and 

Recommendations, ECF No. [215] at 2 n.2, Relator merely relies on non-Eleventh Circuit cases. 

See ECF No. [255] at 13-14 (citing Darryl Battle, et al. v. CLI Atlas Deerwood LLC, et al., No. 

EDCV202358JGBSPX, 2021 WL 3616108, at *2 (C.D. Cal. June 24, 2021); United States ex rel. 

Fox Rx, Inc. v. Omnicare, Inc., No. 1:11-cv-962-WSD, 2013 WL 2303768, at *4 n.9 (N.D. Ga. 

May 17, 2013); Remmes v. Int’l Flavors & Fragrances, Inc., 453 F. Supp. 2d 1058, 1071–72 (N.D. 

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Iowa 2006); United States ex rel. Knapp v. Calibre Sys., Inc., No. 2:10-cv-4466-ODW, 2012 WL 

1577420, at *2 (C.D. Cal. May 4, 2012); United States ex rel. Galmines v. Novartis Pharm. Corp., 

88 F. Supp. 3d 447, 451 (E.D. Pa. 2015)). 

 Next, the Court is not persuaded by Relator’s argument that the Eleventh Circuit’s concerns 

about Rule 9(b) are not implicated in this case because the discovery materials substantiate the 

claims in the FAC. Allowing Relator to rely on information it obtained from discovery, simply 

because the information substantiates the claims asserted in the FAC, does not promote the 

purposes of Rule 9(b). If the Court were to allow Relator to use information it obtained in 

discovery, it would effectively be permitting relators to make baseless allegations, conduct 

discovery in hopes of discovering information that will substantiate their allegations, and amend 

pleadings to state a viable claim if they discover corroborating evidence. The Court declines to 

render the Rule 9(b) heightened pleading standard a nullity in such a manner by permitting the use 

of information obtained during the course of discovery, even if it substantiates Relator’s initial 

claims.

The Court also rejects Relator’s argument that striking the allegations “would deny justice 

to the American taxpayer on a procedurally improper and unjustifiable technicality” and grant 

“absolute immunity to any defendant that produces evidence of its violations in discovery.” ECF 

No. [255] at 14 (emphasis in original). As Defendants correctly argue, the dismissal of Relator’s 

claims would be with respect to Relator only, not to the Government’s rights to bring the same 

FCA claims. As such, the Government can seek justice for the American taxpayer if it chooses to 

do so. Given the Government’s continuing right to pursue the FCA claims, striking Relator’s 

improper allegations will not provide absolute immunity to Defendants. 

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With the backdrop of Bingham in place, the Court turns to whether the Waiver Requests 

were obtained during discovery. First, with respect to Cartwright, J.K., and Able, Relator concedes

that the Waiver Requests pertaining to those three Defendants were obtained during discovery. See 

ECF No. [252] at 40, 79-81. Second, with respect to the remaining Defendants, Relator argues that 

it never conceded at the Hearing that the source for the Waiver Request Allegations was Maersk’s 

document production. However, upon review of the Hearing transcript, it is apparent that Relator 

did concede that the Waiver Requests were from Maersk’s document production. See ECF No. 

[252] at 45-46. To the extent that Relator argues that it did not obtain the documents pursuant to 

the Maersk Subpoena, Defendants correctly point out that that difference is immaterial. Relator 

obtained the documents during the discovery period from Maersk, who was under compulsion to 

produce the documents. Bingham’s holding applies to documents obtained through discovery 

whether they were in response to a subpoena or otherwise. The import of Bingham is to prevent 

the filing of frivolous complaints and post-hoc attempts to gain the necessary information to 

substantiate the complaints through discovery. Bingham makes no distinction between the manner 

in which the information was obtained during discovery.

As such, Defendants’ request to strike the Waiver Request Allegations is granted. Without 

the Waiver Request Allegations, Relator fails to sufficiently state a claim for the presentment claim 

or the make-or-use claim, and dismissal of the SAC is warranted. Given the Court’s determination 

the Court need not address Relator’s remaining arguments with regard to the presentment claim or 

the make-or-use claim.

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ii. Dismissal With Prejudice & Motion to Amend

The R&R determines that the dismissal of Relator’s claims should be with prejudice given 

the Court’s prior Order granting Relator only one opportunity to replead. See ECF No. [251] at 16 

(citing ECF No. [218] at 19). 

Relator argues, in the alternative, that it should be given an opportunity to file a Third 

Amended Complaint. See ECF No. [255] at 24-25. Relator claims that it has additional information

regarding Cartwright, J.K., and Able that was not obtained through discovery. See id. Relator also 

submits that it should be permitted an opportunity to include additional allegations explaining its 

new theory of why Defendants were required to use or disclose available U.S. flag carriers in other 

ports, an issue that was not addressed in the first round of Motions to Dismiss. See id. Relator 

raises similar arguments in its Motion to Amend. See ECF No. [259]. In the Motion to Amend, 

Relator specifically argues that there is good cause to permit another amendment and that there 

was no undue delay, bad faith, dilatory motive, repeated failures to cure deficiencies, or undue 

prejudice to Defendants. See id. at 4-8. Relator also contends that the amendment would not be 

futile. Finally, Relator requests a hearing on its Motion to Amend. See id. at 8.

Defendants respond that the Court should not grant another opportunity to amend the SAC

because any proposed amendment would be futile. See ECF Nos. [257] at 19-20; [261]. In its 

Response to the Motion to Amend, Defendants maintain that there is no good cause to deviate 

from the Court’s Scheduling Order in granting leave to amend and the proposed amendment would 

be futile. See ECF No. [261]. Defendants’ futility argument is based in part on Bingham and the 

fact that without the Waiver Request Allegations, the Third Amended Complaint would not 

survive another motion to dismiss. See id. at 13-14.

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The Court agrees with the R&R. The Court previously granted only one opportunity to 

replead. See ECF No. [218] at 19. Further, the Court is not persuaded that an additional opportunity 

to amend the pleadings through a Third Amended Complaint would cure the deficiencies noted in 

the R&R. If Relator had additional details about Cartwright, J.K., and Able’s Waiver Requests, 

not obtained through discovery, Relator would have and should have included them in the SAC. 

The opportunity to plead additional allegations regarding other ports to establish a new theory of 

liability would be futile given that Relator has not and cannot allege the necessary predicate 

regarding Waiver Requests without relying on information it obtained through discovery. Since a

Third Amended Complaint would be futile, the Court need not address other issues raised in the 

Motion to Amend.

In sum, Magistrate Judge Otazo-Reyes’ R&R on this matter is well reasoned and correct, 

Relator’s arguments are unavailing, dismissal with prejudice is warranted, the Motion to Amend

must be denied, and a hearing on the Motion to Amend is not necessary.

b. Defendants’ Objection

The R&R states that the public disclosure bar does not apply in this case. See ECF No. 

[251] at 10. In Defendants’ Objection, Defendants argue that the public disclosure bar does apply.

See ECF No. [254]. Relator responds that the public disclosure bar does not apply. See ECF No. 

[258]. Given the Court’s determination above, the Court need not reach the issue of the public 

disclosure bar.

c. Government’s Statement

As a final note, the R&R states that the Court should dismiss the SAC with prejudice, 

subject to the Government’s written consent. See ECF No. [251] at 16. The Government’s 

Statement indicates that the Government takes no position on the Motion to Dismiss nor whether

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the R&R should be adopted, and that no further consent from the Government is required for the 

Court to adopt the R&R and dismiss the SAC with prejudice. See ECF No. [256] at 3. The 

Government requests, however, that the dismissal be without prejudice as to the Government. See 

id. at 3-5 (citing Williams v. Bell Helicopter Textron, Inc., 417 F.3d 450, 455-56 (5th Cir. 2005); 

United States ex rel. Saati v. Credico LLC, No. 1:20-cv-23904-AMC (S.D. Fla. Apr. 4, 2022), ECF 

No. [89]). The Court agrees that the dismissal should be without prejudice as to the Government.

IV. CONCLUSION

Upon a comprehensive review, the Court finds Magistrate Judge Otazo-Reyes’ R&R to be 

well reasoned and correct. The Court agrees with the analysis in the R&R and concludes that the

Motion to Dismiss should be granted. The Court also determines that the Motion to Amend should 

be denied.

Accordingly, it is ORDERED and ADJUDGED as follows:

1. The R&R, ECF No. [251], is ADOPTED.

2. The Motion to Dismiss, ECF No. [226], is GRANTED.

3. The SAC, ECF No. [222], is DISMISSED WITH PREJUDICE.

4. The dismissal of the above-styled case is WITHOUT PREJUDICE to the United 

States.

5. The Motion to Amend, ECF No. [259], is DENIED.

6. To the extent not otherwise disposed of, all pending motions are DENIED AS MOOT

and all deadlines are TERMINATED.

7. The Clerk of Court is directed to CLOSE this case.

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DONE AND ORDERED in Chambers at Miami, Florida, on September 8, 2022.

_________________________________

BETH BLOOM

UNITED STATES DISTRICT JUDGE

Copies to: 

Counsel of Record

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