315 F.R.D. 56
E.D. Va.2016Background
- Relator Benjamin Carter sought leave to amend a False Claims Act (FCA) complaint after remand from the Fourth Circuit and the Supreme Court; the court previously denied leave as futile based on the FCA’s first-to-file bar.
- Defendants moved to dismiss, arguing the first-to-file bar, statute of limitations, and FCA’s ten-year statute of repose would preclude amendment or refiling.
- Relator sought reconsideration, relying on the First Circuit’s decision in United States ex rel. Gadbois v. PharMerica and arguing the amended complaint would avoid the first-to-file bar.
- The court found Gadbois non-controlling and, even if considered, unpersuasive given Fourth Circuit precedent, statutory text, and concerns about statutes of limitations/repose.
- The court clarified its earlier opinion: amendment is futile because the first-to-file bar still applies; however, it analyzed and rejected defendants’ alternative arguments that prejudice, the statute of limitations, or the statute of repose independently barred amendment.
- Result: motion for reconsideration denied; dismissal without prejudice stands, but the Court held that absent the first-to-file bar, Relator could amend (relation back permitted as to limitations and repose issues addressed).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gadbois is an intervening change in controlling law justifying reconsideration | Gadbois permits supplementation/avoidance of first-to-file bar; thus amendment should be allowed | Gadbois is non-controlling and does not override Fourth Circuit precedent or statutory text | Gadbois is not controlling; reconsideration denied on that ground |
| Whether the first-to-file bar precludes amendment | Kellogg’s holding and subsequent developments mean amendment can clear the bar | First-to-file bar (31 U.S.C. § 3730(b)(5)) still applies based on timing of the original action | First-to-file bar continues to render amendment futile; dismissal affirmed |
| Whether prejudice from delay justifies denying leave to amend | Relator argued clarifying amendment promotes finality and would not unfairly prejudice defendants | Defendants argued delay and case age cause prejudice | Court found no undue prejudice: amendments track original allegations and defendants had notice |
| Whether statutes of limitations or the FCA ten-year statute of repose bar amendment (and whether Rule 15(c) relation back applies) | Relation back under Rule 15(c) preserves claims; relation back can apply to repose; equitable tolling unresolved | Relation back cannot circumvent a statute of repose; repose is substantive and cannot be altered by Rule 15(c) | Court held relation back may apply; neither limitations nor repose independently rendered amendment futile; Rule 15(c) can relate back to avoid repose in this case |
Key Cases Cited
- Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, 135 S. Ct. 1970 (2015) (Supreme Court decision reshaping first-to-file analysis)
- United States ex rel. Carter v. Halliburton, 710 F.3d 171 (4th Cir. 2013) (Fourth Circuit discussion of first-to-file bar and timing)
- Mayfield v. NASCAR, Inc., 674 F.3d 369 (4th Cir. 2012) (Rule 59(e) reconsideration is extraordinary)
- Laber v. Harvey, 438 F.3d 404 (4th Cir. 2006) (liberal rule permitting leave to amend; Foman factors)
- Foman v. Davis, 371 U.S. 178 (1962) (standard for denying leave to amend: bad faith, prejudice, futility)
- Police & Fire Retirement Sys. of City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013) (discusses relation back and potential limits regarding statutes of repose)