Source: http://openjurist.org/207/f3d/335/united-states-of-america-john-doyle-iii-md
Timestamp: 2013-05-25 19:21:10
Document Index: 379780014

Matched Legal Cases: ['§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 232', '§3730', '§ 3730']

31 U.S.C. § 3730(b)(1) (emphasis added). We review the district court's construction of this language de novo. See Vergos v. Gregg's Enterprises, Inc., 159 F.3d 989, 990 (6th Cir. 1998). The starting point in astatutory interpretation case is the language of the statute itself. See Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 210 (1979); Vergos, 159 F.3d at 990. In construing federal statutes, we presume that the ordinary meaning of the words chosen by Congress accurately express its legislative intent. See Mills Music, Inc. v. Snyder, 469 U.S. 153, 164 (1985). Thus, "if the words of the statute are unambiguous, the judicial inquiry is at an end, and the plain meaning of the text must be enforced." Hudson v. Reno, 130 F.3d 1193, 1199 (6th Cir. 1997). Our inquiry into legislative meaning is additionally aided by contemporaneous legislative history and the statutory context of the pertinent language. See Walton v. Hammonds, 192 F.3d 590, 594 (6th Cir. 1999).
While the interpretation of the "consent " requirement's breadth presents an issue of first impression in this Court, two of our sister circuits have directly confronted this issue.4 In Killingsworth v. Northrop Corp., the Ninth Circuit held that the "consent" provision is not absolute, but applies only when the United States is contemplating its initial intervention decision. 25 F.3d 715, 722 (9th Cir. 1994). The Ninth Circuit held that when the Attorney General declines to intervene, the relator no longer needs her consent to settle, and the government is restricted to challenging the settlement for "good cause" under § 3730(c)(3). See id. at 722-23. Analyzing the legislative history of the FCA and relevant amendments, the Killingsworth court found that Congress intended "to place full responsibility for False Claims Act litigation on private parties." Id. at 722. The Ninth Circuit concluded that this intent is "fundamentally inconsistent" with "the asserted 'absolute' right of the government to block a settlement and force a private party to continue litigation." Id. The court further noted that the statute provides that the government "proceed[s]" with the action when it decides to intervene, yet the relator "conduct[s]" the action when the government does not intervene. Id.; see 31 U.S.C. § 3730(b)(2) & (c)(3). The court construed this framework to require that, absent intervention for "good cause" under § 3730(c)(3), the relator's right to "conduct" an action necessarily included the right to settle, and the government essentially forfeited any veto authority when it decided not to "proceed" with the action itself. Id. at 722-23.
We now join the Fifth Circuit in rejecting the Ninth Circuit's analysis, and hold that a relator may not seek voluntary dismissal of any qui tam action without the Attorney General's consent. Section 3730(b)(1) unqualifiedly provides that a qui tam action "may be dismissed only if the court and Attorney General give written consent." This language clearly does not limit the consent provision to the sixty-day intervention period. If Congress wanted to limit the consent requirement to the period before the United States makes its initial intervention decision, we presume that it knew the words to do so. See Bates v. United States, 118 S.Ct. 285, 290 (1997) ("[W]e ordinarily resist reading words or elementsinto a statute that do not appear on its face."); Keene Corp. v. United States, 508 U.S. 200, 208 (1993) (providing that courts have a "duty to refrain from reading a phrase into the statute when Congress has left it out").
Moreover, we find that the clear import of this language is strengthened by the FCA's purpose, structure and legislative history. Congress' manifest desire to ensure that the government retains significant authority to influence the outcome of qui tam actions - even when it decides not to intervene - is entirely consistent with the nature of qui tam litigation. The FCA's qui tam provision is
Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 949 (1997) (internal quotations and citation omitted). Because the scope of fraud against the government is much broader than the government's ability to detect it, the qui tam provisions allow the government to uncover fraud that it would not otherwise be able to discern. See United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 650-51 (D.C. Cir. 1994). Pursuant to this goal, the FCA provides private actors with a variety of incentives to bring qui tam actions, and significant influence over the ensuing development of qui tam suits - including "the right to conduct the action" when the government decides not to intervene. See 31 U.S.C. § 3730(c)(3) (providing right to "conduct the action" when government declines intervention); 31 U.S.C. § 3730(d) (providing that, even when the government does intervene, the relator remains a party to the action and is guaranteed at least fifteen percent of any recovery); 31 U.S.C. § 3730(c)(2)(B) (providing that the relator retains the right to challenge any settlements reached by the government as either unfair, inadequate, or unreasonable); see also Killingsworth, 25 F.3d at 720 ("The statutory scheme of the False Claims Act provides protection for the rights of both the relator and the government.").
However, given that private opportunism and public good do not always overlap, see Searcy, 117 F.3d at 160; see also United States ex re. Rabushka v. Crane Co., 40 F.3d 1509, 1519 (8th Cir. 1994) (Magill, J., dissenting) (noting that the qui tam provisions "set[] a rogue to catch a rogue") (citation omitted), and that the harms redressed by the FCA belong to the government, see United States ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148, 1154 (2d Cir. 1993), the FCA provides a number of mechanisms to ensure that the government retains significant authority to regulate qui tam litigation. See Milam, 961 F.2d at 49 (noting that the government maintains "extensive power" to control the course of qui tam litigation). For example, not only does the government retain absolute authority to intervene and "proceed" with an action during the sixty days after the complaint was filed, it can intervene for "good cause" at any time in the litigation. See 31 U.S.C. § 3730(c)(3). Moreover, even when the government does not intervene, it nevertheless receives at least seventy percent of any recovery. Id. at § 3730(d)(1)-(2).
In our view, the power to veto a privately negotiated settlement of public claims is a critical aspect of the government's ability to protect the public interest in qui tam litigation. The FCA is not designed to serve the parochial interests of relators, but to vindicate civic interests in avoiding fraud against public monies. See United States v. Northrop Corp., 59 F.3d 953, 968 (9th Cir. 1995) ("[T]he private right of recovery created by the qui tam provisions of the FCA exists not to compensatethe qui tam relator, but the United States. The relator's right to recovery exists solely as a mechanism for deterring fraud and returning funds to the federal treasury."); see also United States ex rel. Taxpayers Against Fraud v. General Elec. Co., 41 F.3d 1032, 1041 (6th Cir. 1994) (stating that the FCA's qui tam provisions "have been crafted with particular care to maintain the primacy of the Executive Branch in prosecuting false-claims actions, even when the relator has initiated the process"). Without the power to consent to a proposed settlement of an FCA action, the public interest would be largely beholden to the private relator, who - absent "good cause" government intervention - would retain sole authority to broadly bargain away government claims.
Searcy, 117 F.3d at 160. The potential for such profiteering is exacerbated when, as here, a relator couples FCA claims with personal claims. In these circumstances, a relator can avoid the FCA's recovery division requirements by allocating settlement monies to the personal claims. Relators can thereby use the bait of broad claim preclusion to secure large settlements, while steering any monetary recovery to the personal action. See Searcy, 117 F.3d at 160 (noting that in Killingsworth litigation, relator settled an FCA claim for $1.5 million, but settled a personal wrongful termination claim for $2.7 million, illustrates manipulation of qui tam suit). See also Christopher C. Frieden, Comment, Protecting the Government's Interests: Qui Tam Actions Under the False Claims Act and the Government's Right to Veto Settlements of Those Actions, 47 Emory L.J. 1041, 1071 (1998) (noting the use of "sweetheart settlements" to avoid the seventy percent allocation). Indeed, in this case, the Doyles received no monetary recovery on the FCA claim, but Dr. Doyle did manage a $150,000 personal recovery on the defamation claim. While we make no particular conclusions of the propriety of the defamation settlement in this case, we merely note that the potential for abuse exists and veto authority is essential to ensuring the public interest is vindicated. Accordingly, we conclude that the policies served by the veto power are entirely consistent with the conclusion compelled by § 3730(b)(1)'s plain meaning: that a relator may not settle any qui tam action without the Attorney General's consent.
This holding is also consistent with other portions of § 3730, including the relator's right to "conduct" a qui tam suit when the government decides not to intervene. Nothing in the statute suggests that the right to "conduct" an action provides the relator with unilateral and ultimate settling authority. Moreover, as the Searcy court noted, "[a] relator has 'conducted' an action if he devises strategy, executes discovery, and argues the case in court, even if the government frustrates his settlement efforts." 117 F.3d at 160. Nor does the right to "conduct" the action annul the government's status as the real-party-in-interest in qui tam litigation. See Milam, 961 F.2d at 50 ("[T]he United States is the real-party-in-interest in any False Claims Act suit, even where it permits a qui tam relator to pursue the action on its behalf."); United States ex rel. Hyatt v. NorthropCorp., 91 F.3d 1211, 1217 n. 8 (9th Cir. 1996) (holding that relators "sue on behalf of the government as agents of the government, which is always the real-party-in-interest"); Searcy, 117 F.3d at 156 ("[T]he United States is a real party in interest even if it does not control the False Claims Act suit."); United States ex rel. Rodgers v. Arkansas, 154 F.3d 865, 868 (8th Cir. 1998) (noting that the United States is always the real-party-in-interest in qui tam litigation). The government's status as the real-party-in-interest renders a relator's unilateral attempt to settle akin to impermissibly bargaining away the rights of a third party. See, e.g., Evans v. Jeff D., 475 U.S. 717, 726 (1986) ("[T]he power to approve or reject a settlement negotiated by the parties... does not authorize the court to require the parties to accept a settlement to which they have not agreed.").
In terms of statutory context and structure, we note that the consent language appears immediately after the provisos stipulating that a relator acts "for [himself] and for the United States Government," and that "[t]he action shall be brought in the name of the Government." See 31 U.S.C. § 3730(b)(1). These requirements are indispensable to the qui tam framework, as relators have Article III standing to bring FCA actions only because they act on the government's behalf5. The location of the consent provision immediately after the command that the action be brought in the government's name suggests that it is an important component of the government's ability to regulate qui tam actions.
Moreover, there is no specific indication that any of the amendments to the FCA were intended to limit the "consent" requirement to the sixty-day intervention period. It is true, as the Killingsworth courtnoted, that the 1986 amendments were designed "to encourage more private enforcement" of the Act by "increas[ing] incentives, financial and otherwise, for private individuals to bring suits on behalf of the Government." See S. Rep. No. 99-345, at 23-24 (1996), reprinted in 1986 U.S.C.C.A.N. 5266, 5288-89; see also Killingsworth, 25 F.3d at 721. The 1986 amendments also indicate that the provision allowing government intervention for "good cause" after the initial sixty-day period expands on the "limited opportunity for government involvement" in qui tam actions. Id. at 5266, 5291-92. The Killingsworth court relied on this legislative history in concluding that Congress intended "to place full responsibility for False Claims Act litigation on private parties" and that an absolute right to veto settlement agreements was inconsistent with this intention. Killingsworth, 25 F.3d at 722.
However, simply because Congress intended to provide more incentives to private parties to bring qui tam actions does not signal that it intended to strip away the government's power to consent to settlements made in its name. The right of the United States to veto a settlement purportedly made on its behalf is entirely consistent with an intention to foster qui tam litigation. By providing financial incentives and limiting the opportunity for the government to completely take over a qui tam action after the initial sixty-day period, the 1986 amendments certainly "encouraged more private enforcement" of the Act. Indeed, nowhere in the legislative history relied upon by the Killingsworth court, or anywhere else in the 1986 amendments, does Congress evince an intention to limit the § 3730(b)(1) "consent" provision to the sixty-day period. Without such a clearly expressed purpose, we cannot amend the plain language of a statute. See St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 788 (1981) ("[I]ndefinite congressional expressions cannot negate plain statutory language and cannot work a repeal or amendment by implication."); Morton v. Mancari, 417 U.S. 535, 550 (1974) ("In the absence of some affirmative showing of an intention to repeal, the only permissible justification for a repeal by implication is when the earlier and later statutes are irreconcilable.").6
To the extent any separation of powers issues exist, they are not abated by limiting the consent provision to the sixty day period. If the consent provision impermissibly infringes upon Article III jurisdiction, the constitutional harm is not curedby limiting the infraction to sixty days. In any event, Appellees' contentions are without merit. Our conclusion might be different if we construed the consent requirement to apply to involuntary dismissals. However, a number of federal courts have held that the § 3730(b)(1) "consent" provision applies "only where the plaintiff seeks voluntary dismissal... and not where the court orders dismissal." Minotti, 895 F.2d at 103-04; see In re Schimmels, 127 F.3d 875, 883 n. 16 (9th Cir. 1997); Milam, 961 F.2d at 49. This construction is consistent with congressional intent. Prior to the enactment of the current "dismissal" language, the FCA provided that the action could not be "withdrawn or discontinued" without the government's consent. See 31 U.S.C. § 232(b) (1976); Id. at 103; see also United States ex rel. Laughlin v. Eicher, 56 F.Supp. 972, 973 (D. D.C. 1944) (holding that predecessor to current consent provision "only refers to voluntary dismissals"). As the Minotti court noted, this language was changed to reflect modern terminology and usage, and was not designed to affect a substantive change in the statute's meaning. See 895 F.2d at 103-04. In the voluntary dismissal context, there are no jurisdictional problems as the consent provision simply requires that the relator receives the permission of the government, on whose behalf the relator acts, before she can voluntarily dismiss a qui tam action. Thus, the relator's obligation to receive the Attorney General's consent is a precondition that must be satisfied before a voluntary dismissal motion is properly presented to the court.
"'Qui tam' is an abbreviation for the Latin phrase 'qui tam pro domino rege Guam pro si ipso in hae parte seqintur,' which means 'who sues on behalf of the King as well as for himself.'" United States ex rel. Branhan v. Mercy Health System of Southwest Ohio, No. 98-3127, 1999 WL 618018, at *4 n.5 (6th Cir. Aug. 5, 1999) (unpublished opinion) (citing Black's Law Dictionary 1251 (6th ed. 1990)).
The Second Complaint was apparently served on the government and Appellees simultaneously, and therefore was not filed under seal so as to trigger the 60-day intervention period. See Gov't Br. at 7; J.A. at 13. Nevertheless, the Doyles met with the government in March, 1998 to discuss the "upcoding" charges, and the government chose not to act. J.A. at 261-262. Appellees appear to argue that there was no need to file the amended complaint under seal, as the §3730(b)(2) intervention procedure - allowing the government to intervene as a matter of right - applies only after the filing of the original complaint. Appellees contend that thereafter the government is limited to intervening for "good cause" under § 3730(c)(3), and that it could have done so as new allegations would certainly constitute "good cause." See UTC Br. at 11 n. 8. In any event, we do not reach this issue because the government does not raise this purported lack of notice as a basis for reversal or for rejecting the settlement.
On appeal, none of the parties raise the threshold issue of whether the Doyles have standing to bring an action under the FCA. Even if no party raises the propriety of a plaintiff's standing, we "are under an independent obligation to examine [our] own jurisdiction, and standing 'is perhaps the most important of [the jurisdictional] doctrines.'" FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 230-31 (1990) (quoting Allen v. Wright, 468 U.S. 737, 750 (1984)). Because the United States is the real-party-in-interest in FCA litigation, and relators are statutorily empowered to act on the United States' behalf, relators invoke the standing of the United States to bring qui tam actions. See United States ex rel. Barajas v. Northrop Corp., 147 F.3d 905, 910 (9th Cir. 1998); United States ex rel. Berge v. Board of Trustees of the Univ. of Ala., 104 F.3d 1453, 1457-58 (4th Cir. 1997); United States ex rel. Hall v. Tribal Dev. Corp., 49 F.3d 1208, 1213 (7th Cir. 1995); Kriendler & Kriendler, 985 F.2d at 1154. See also Vermont Agency of Natural Resources v. United States ex rel. Stevens, 120 S.Ct.523 (1999) (mem.) (ordering parties in qui tam appeal to brief whether relators have Article III standing to bring FCA actions). In the instant case, the United States clearly has standing to challenge Defendants' alleged attempt to illegally appropriate federal funds. Therefore, as relators - the statutorily designated agents of the government - the Doyles also have standing to vindicate the harms committed against the government.
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