Bluewave Healthcare v. United States
853 F.3d 131
4th Cir.2017Background
- In 2010 Dent and Johnson formed BlueWave, marketing labs HDL and Singulex; labs paid commissions and processing fees, and billed federal programs (Medicare/TRICARE).
- Relators filed a qui tam FCA/AKS suit; United States intervened in 2015, alleging illegal kickbacks and at least $298 million in liability.
- In Feb 2016 the government sought prejudgment remedies under the FDCPA: writs of attachment against real/personal property and writs of garnishment against two bank accounts (~$16.7M).
- The district court granted nearly all requested writs, including against nonparty entities connected to Dent and Johnson, finding probable validity of the debt and fraudulent transfers in some instances.
- Appellants (BlueWave, Dent/Johnson entities) moved to quash; the district court denied the motions and Appellants appealed immediately. The Fourth Circuit dismissed the appeal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of motion to quash is immediately appealable under the collateral order doctrine | Order is collateral to merits and satisfies Cohen elements; immediate review required to protect property | Denial is entangled with the merits and thus not collateral | Not collateral; denial is enmeshed with the merits and not appealable now |
| Whether the collateral-order separability prong is met (distinct from merits) | FDCPA prerequisites are procedural and separable from underlying FCA merits | FDCPA entitlement (probable validity, amount, fraudulent transfer, concealment) depends on FCA merits | Not separable; resolving writs requires adjudication of underlying FCA claims |
| Whether the collateral-order importance prong is met (high-order interest) | Freezing $16.7M is a substantial private interest warranting immediate review | Interest is private; courts routinely require waiting for final judgment absent exceptional public or constitutional interests | Not important in Cohen sense; private property interest alone insufficient for collateral exception |
| Whether the order is appealable as an injunction under 28 U.S.C. § 1292(a)(1) | Writs functionally prevent disposing of property and therefore are injunctive | Writs merely preserve the status quo until final judgment; no irreparable harm and effective review is possible after final judgment | Not an appealable injunction: no ‘‘serious, perhaps irreparable’’ harm and appellate review after final judgment is adequate |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (federal courts limited to jurisdiction granted by Constitution and Congress)
- Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (final-judgment rule and waiting for post-judgment appeal)
- Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (collateral order doctrine elements)
- Will v. Hallock, 546 U.S. 345 (stringent scope of collateral order doctrine)
- Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (collateral-order discussion)
- Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139 (collateral order criteria)
- Van Cauwenberghe v. Biard, 486 U.S. 517 (overlap with merits defeats collateral appeal)
- Carson v. American Brands, Inc., 450 U.S. 79 (§ 1292(a)(1) injunction-appeal standards)
- United States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 502 (4th Cir. 1999) (practical-effect test for injunction characterization)