Court Opinion

ID: 4321683
Source: CourtListenerOpinion
Date Created: 2018-10-17 15:00:26.844569+00
Date Added: 2024-06-11T14:46:08.868310
License: Public Domain

Case: 17-13402   Date Filed: 10/17/2018    Page: 1 of 12

                                                                     [PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 17-13402
                      ________________________

                  D.C. Docket No. 1:15-cr-00088-CG-B-1

UNITED STATES OF AMERICA,

                                                            Plaintiff - Appellee,

LORI L. CARVER,

                                                    Interested Party - Appellant,

                                 versus

JOHN PATRICK COUCH, M.D.,
XIULU RUAN, M.D.,

                                                        Defendants - Appellees.
               Case: 17-13402       Date Filed: 10/17/2018      Page: 2 of 12

                              ________________________

                      Appeal from the United States District Court
                         for the Southern District of Alabama
                             ________________________

                                    (October 17, 2018)

Before WILLIAM PRYOR, MARTIN, and BALDOCK, ∗ Circuit Judges.

MARTIN, Circuit Judge:

       When a private person brings a False Claims Act suit—known as a qui tam

action—the government may choose to intervene and take over the action. 31

U.S.C. § 3730(b)(2). It may also choose to pursue “any alternate remedy

available.” Id. § 3730(c)(5). If it pursues an “alternate remedy,” the False Claims

Act gives the qui tam plaintiff the “same rights” in the “alternate” proceeding as

she would have had if the qui tam action “had continued.” Id. Presented here is

the question of whether this statute allows a qui tam plaintiff to intervene in

criminal forfeiture proceedings when the government chooses to prosecute fraud

rather than to intervene in the qui tam plaintiff’s action.

       Even if the False Claims Act could be read to allow intervention, the statutes

governing criminal forfeiture specifically bar it, with exceptions that do not apply

here. We conclude that the criminal forfeiture statutes control, and we agree with

the District Court’s denial of Lori Carver’s motion to intervene for that reason.

∗
 Honorable Bobby R. Baldock, Senior United States Circuit Judge for the Tenth Circuit, sitting
by designation.
                                               2
              Case: 17-13402      Date Filed: 10/17/2018   Page: 3 of 12

      Our Circuit precedent does not permit us to affirm, however. On appeal of

denial of a motion to intervene, our precedent provides for “provisional

jurisdiction” to determine whether the District Court properly denied intervention.

EEOC v. E. Airlines, Inc., 736 F.2d 635, 637 (11th Cir. 1984). If, as here, denial

was proper, “jurisdiction evaporates because the proper denial of leave to intervene

is not a final decision.” Id. For the reasons that follow, we will therefore dismiss

this appeal for lack of jurisdiction.

                  I.    FALSE CLAIMS ACT BACKGROUND

      The False Claims Act imposes civil liability on any person who “knowingly

presents . . . a false or fraudulent claim for payment or approval” to the federal

government. 31 U.S.C. § 3729(a). It allows the Attorney General to sue for

violations. Id. § 3730(a). A private person, called a relator, may bring a False

Claims Act action “in the name of the Government,” which is known as a qui tam

action. Id. § 3730(b)(1). The government may intervene to take over a qui tam

action from the relator, id. § 3730(b)(2), but the relator “shall have the right to

conduct the action” if the government opts not to intervene, id. § 3730(b)(4),

(c)(3). Most of the recovery in a qui tam action goes to the government, to remedy

the fraud. See id. § 3730(d). But whether the government intervenes or not, a

relator in a successful qui tam action is typically entitled to a share of the recovery.

Id. This incentivizes people to come forward from the private sector with evidence

                                           3
                 Case: 17-13402   Date Filed: 10/17/2018   Page: 4 of 12

of fraud perpetrated on the government. See United States ex rel. Williams v. NEC

Corp., 931 F.2d 1493, 1496–97 (11th Cir. 1991).

      The government has options other than intervention when a private person

brings a qui tam action. The False Claims Act expressly allows the government to

pursue remedies besides the qui tam action: “[T]he Government may elect to

pursue its claim through any alternate remedy available to the Government,

including any administrative proceeding to determine a civil money penalty.” 31

U.S.C. § 3730(c)(5). If the government opts for an “alternate remedy,” the False

Claims Act gives the relator “the same rights in such proceeding as such person

would have had if the action had continued under this section.” Id. We will call

this the alternate-remedy provision.

      With this statutory background in mind, we turn to the facts of this case.

           II.      FACTUAL AND PROCEDURAL BACKGROUND

      Lori Carver worked at Physicians Pain Specialists of Alabama, P.C., a pain

management clinic in Mobile, Alabama. Two doctors, John Patrick Couch and

Xiulu Ruan, ran the clinic. Ms. Carver discovered Dr. Couch and Dr. Ruan

submitted fraudulent claims for payment to federal healthcare programs. She took

this information to the U.S. Attorney’s office, which encouraged her to bring a qui

tam action against the clinic and doctors.

                                             4
              Case: 17-13402     Date Filed: 10/17/2018   Page: 5 of 12

      Ms. Carver brought the suggested qui tam action in 2013. See Dkt. No. 1,

United States ex rel. Carver v. Physician Pain Specialists of Ala., P.C., Case No.

1:13cv392-JB-N (S.D. Ala. Aug. 1, 2013). That case remains pending. See Dkt.

No. 208, Carver, Case No. 1:13cv392-JB-N (setting pretrial conference for January

2019). She is litigating it herself, since the government chose not to intervene.

Dkt. No. 24, Carver, Case No. 1:13cv392-JB-N (notice of non-intervention); see

31 U.S.C. § 3730(b), (c)(3).

      The government did not disregard Ms. Carver’s allegations, however. With

Ms. Carver’s information, the government began investigating Dr. Couch and Dr.

Ruan. In April 2015, almost two years after Ms. Carver brought her qui tam

action, the government criminally charged both doctors with conspiracy to

distribute controlled substances and conspiracy to commit healthcare fraud. The

charges in the indictment partially overlapped with the allegations in Ms. Carver’s

qui tam complaint.

      After further investigation, the government issued a superseding indictment

in October 2015 and a second superseding indictment in April 2016. The first

superseding indictment added new defendants (who later pled guilty) and new

charges: racketeering, Anti-Kickback Statute violations, wire fraud, and drug

distribution offenses. The second superseding indictment further fleshed out the

factual basis for the charges. The superseding indictments, like the first, also

                                          5
              Case: 17-13402      Date Filed: 10/17/2018    Page: 6 of 12

partially overlapped with the allegations in Ms. Carver’s qui tam action. However,

the indictments also included charges based on unlawful prescribing practices,

which were not alleged in the initial qui tam complaint. All three indictments

included forfeiture counts.

      The criminal case went to trial, and the jury convicted Dr. Couch of all

charges, and Dr. Ruan of all but one. The District Court promptly entered a

preliminary forfeiture order.

      Ms. Carver moved to intervene in the forfeiture proceedings, asserting a

right to some of the forfeited assets. She primarily argued the alternate-remedy

provision permits her to intervene to claim the share of the assets she would have

been entitled to if the government had intervened in her qui tam action. In the

alternative, she petitioned to assert an interest in the forfeited property under 21

U.S.C. § 853 and Federal Rule of Criminal Procedure 32.2. This statute and rule

permit a third party to assert an interest in criminally forfeited property if the third

party either had a legal interest in the property prior to the crime or is a bona fide

purchaser for value of the property. See 31 U.S.C. § 853(n); Fed. R. Crim. P. 32.2.

Ms. Carver has conceded she meets neither criterion.

      The government argued Ms. Carver has no right to intervene under the

alternate-remedy provision because her qui tam case remains pending—meaning

                                            6
              Case: 17-13402     Date Filed: 10/17/2018     Page: 7 of 12

she has not yet established a right to a relator’s share. It further asserted the False

Claims Act does not permit intervention in criminal cases.

      The district court denied Ms. Carver’s motion to intervene. It ruled that the

alternate-remedy provision does not permit intervention in criminal cases. It also

ruled Ms. Carver had no right to intervene under 21 U.S.C. § 853(n) and Rule 32.2.

This appeal followed.

                                  III.   STANDING

      Before getting to the merits, we stop to address Ms. Carver’s standing to

intervene, which the government challenges. We are aware of the recent ruling of

the Ninth Circuit that a qui tam plaintiff lacked standing to intervene in criminal

forfeiture proceedings. See United States v. Van Dyck, 866 F.3d 1130, 1133–34

(9th Cir. 2017). We do not join in the rationale of our sister Circuit. Rather, we

conclude Ms. Carver does have standing to assert that the alternate-remedy

provision gives her a right to intervene in criminal forfeiture proceedings so as to

claim an interest in the forfeited property.

      Ms. Carver asserts a statutory procedural right—specifically, a right under

the alternate-remedy provision to have her relator’s share adjudicated in the

criminal forfeiture proceeding. A “person who has been accorded a procedural

right [by statute] to protect his concrete interests can assert that right.” Lujan v.

Defs. of Wildlife, 504 U.S. 555, 572 n.7, 112 S. Ct. 2130, 2142 n.7 (1992)

                                           7
              Case: 17-13402      Date Filed: 10/17/2018    Page: 8 of 12

(emphasis added); see also Spokeo, Inc. v. Robbins, 578 U.S. __, 136 S. Ct. 1540,

1549–50 (2016) (discussing standing in context of statutory procedural rights).

Ms. Carver asserts an interest in property forfeited to the government. This Court

has said a party claiming an interest in such property has suffered a concrete injury.

See, e.g., Via Mat Int’l S. Am. Ltd. v. United States, 446 F.3d 1258, 1262–63 (11th

Cir. 2006). Ms. Carver reads the alternate-remedy provision to create a procedure

for her to protect this concrete interest. We have jurisdiction to decide whether her

reading is correct.

      We are not persuaded by the government’s contention that Ms. Carver’s

property interest is so “speculative” as to deprive us of jurisdiction. It is true that

no court has yet adjudicated whether she is entitled to a relator’s share. Yet if this

were enough to deprive us of jurisdiction, no person claiming a property interest

would ever get into federal court. Federal courts resolve property disputes every

day. Indeed, criminal forfeiture courts routinely “determine whether any third

parties have an interest in the forfeited property.” United States v. Davenport, 668
F.3d 1316, 1320 (11th Cir. 2012) (emphasis added). That is, courts adjudicate

third-party property interests, subject to the limitations set forth in the criminal

forfeiture statutes. We have never doubted that courts have jurisdiction to

adjudicate these interests, and this case raises no new doubts on the issue.

                                            8
              Case: 17-13402    Date Filed: 10/17/2018    Page: 9 of 12

      Finally, the general principle that private parties lack standing to intervene in

criminal proceedings has no application here. See Linda R.S. v. Richard D., 410
U.S. 614, 619, 93 S. Ct. 1146, 1149 (1973); United States v. Alcatel-Lucent

France, SA, 688 F.3d 1301, 1307 (11th Cir. 2012) (per curiam) (holding a third

party lacked standing to appeal a sentence). Linda R.S. concerned Texas’s

discriminatory application of a statute criminalizing the refusal to provide child

support, where Texas prosecuted only parents of legitimate children. 410 U.S. at

615, 93 S. Ct. at 1147. The mother of an illegitimate child sued to have her child’s

father prosecuted. Id. at 614–15, 93 S. Ct. at 1147. The Supreme Court held she

had no interest in the enforcement of Texas’s criminal laws and thus lacked

standing. Id. at 619, 1149. In Alcatel-Lucent, our Court held an alleged victim of

a crime had no standing to appeal a sentence that did not include a restitution

award. 688 F.3d at 1306–07. Ms. Caver’s case is distinguishable from Linda R.S.

and from Alcatel-Lucent. Ms. Carver’s motion to intervene in a forfeiture

proceeding to enforce an alleged property interest is materially different from an

attempt to compel a criminal prosecution or alter a sentence.

      Thus, we have jurisdiction to decide whether the alternate-remedy provision

confers a procedural right on Ms. Carver to have her relator’s share adjudicated in

the forfeiture proceeding.

                                          9
              Case: 17-13402       Date Filed: 10/17/2018      Page: 10 of 12

     IV.    INTERPRETING THE ALTERNATE-REMEDY PROVISION

       That brings us to the merits of whether the alternate-remedy provision

allows qui tam plaintiffs like Ms. Carver to intervene in criminal forfeiture

proceedings. As relevant here, the alternate remedy provision reads:

       [T]he Government may elect to pursue its claim through any alternate
       remedy available to the Government, including any administrative
       proceeding to determine a civil money penalty. If any such alternate
       remedy is pursued in another proceeding, the person initiating the [qui
       tam] action shall have the same rights in such proceeding as such
       person would have had if the [qui tam] action had continued under
       this section.

31 U.S.C. § 3730(c)(5).

       Whether a criminal fraud prosecution is an “alternate remedy” is an open

question. 1 See Van Dyck, 866 F.3d at 1135; see also United States ex rel. Babalola

v. Sharma, 746 F.3d 157, 160–63 (concluding a criminal fraud prosecution brought

before a qui tam action was not an alternate remedy). Insofar as Ms. Carver asks

us to read the alternate-remedy provision to allow her to intervene in the criminal

forfeiture proceedings, we will interpret the alternate-remedy provision by

reference to the “commonplace of statutory construction that the specific governs

the general.” NLRB v. SW Gen., Inc., 580 U.S. __, 137 S. Ct. 929, 941 (2017)

(quotation marks omitted); see also Morton v. Mancari, 417 U.S. 535, 550–51, 94

1
 The question has divided federal District Courts. Compare United States v. Kurlander, 24 F.
Supp. 3d 417, 424 (D.N.J. 2014), with United States v. Bisig, Case No. 100cv335JDTWTL,
2005 WL 3532554, at *2–6 (S.D. Ind. Dec. 21, 2005).
                                              10
             Case: 17-13402      Date Filed: 10/17/2018    Page: 11 of 12
S. Ct. 2474, 2483 (1974) (“When there is no clear intention otherwise, a specific

statute will not be controlled or nullified by a general one, regardless of priority of

enactment.”).

      Three criminal forfeiture statutes apply in this case, and each expressly bars

third parties from intervening in forfeiture proceedings to claim an interest in

property subject to forfeiture. See 18 U.S.C. § 982(b)(1) (incorporating forfeiture

procedures from 21 U.S.C. § 853); 18 U.S.C. § 1963(i); 21 U.S.C. § 853(k); see

also Van Dyck, 866 F.3d at 1133 (noting that 21 U.S.C. § 853 “imposes a general

bar on parties intervening in the criminal case”). Each of the three statutes has

exceptions to allow third parties to petition a court for the forfeited property if they

either had a legal right to the property before the defendant committed the offense

or are bona fide purchasers for value. See 18 U.S.C. § 1963(l); 21 U.S.C. § 853(n);

see also 18 U.S.C. § 982(b)(1) (incorporating forfeiture procedures from 21 U.S.C.

§ 853). But Ms. Carver has conceded neither of these exceptions applies to her.

These criminal forfeiture statutes speak to the precise issue raised in this appeal,

and they make plain that Ms. Carver has no right to intervene.

      In contrast to the precision of the forfeiture statutes, the alternate-remedy

provision does not expressly provide a right of intervention in an “alternate

proceeding.” Neither does it define “alternate remedy” to include criminal fraud

prosecutions. The specific bar on intervention in the criminal forfeiture provisions

                                           11
               Case: 17-13402    Date Filed: 10/17/2018   Page: 12 of 12

controls our interpretation of the alternate-remedy provision’s general terms here.

That being the case, we need not pass on whether the alternate-remedy provision

would entitle qui tam plaintiffs to intervene in other “alternate remedy”

proceedings.

      A final word. Our ruling will not disable Ms. Carver from getting her

relator’s share. The government assured us in its brief that a ruling against

intervention “will not necessarily prevent a future recovery.” It continued:

      Where a defendant is found civilly liable for damages in a False
      Claims Act suit after being found criminally liable for the same fraud,
      the defendant may deduct restitution paid to the United States in the
      criminal proceedings as a credit against the False Claims Act damages
      award. In such circumstances, a qualified relator is entitled to a share
      of the full amount of the damages award, including restitution
      previously paid.

We understand this to mean a relator is entitled to a share of the forfeited property

to the extent the qui tam defendant can deduct any forfeiture from the qui tam

award. It appears the government gave the Ninth Circuit the same assurance in

Van Dyck. See 866 F.3d at 1135 n.3. We expect the government will honor it.

                                V.    CONCLUSION

      The District Court properly denied Ms. Carver’s motion to intervene. Under

this Circuit’s “anomalous rule,” our jurisdiction “evaporates” with this conclusion

“because the proper denial of leave to intervene is not a final decision.” E. Airlines,

Inc., 736 F.2d at 637. We therefore DISMISS this appeal for lack of jurisdiction.

                                          12