United States Ex Rel. Little v. Triumph Gear System, Inc.
2017 U.S. App. LEXIS 17997
| 10th Cir. | 2017Background
- In Oct. 2012 relator Joe Blyn filed a sealed qui tam complaint under the False Claims Act (FCA) naming himself and three John Does; Donald Little was listed as Blyn’s counsel, not a relator.
- In July 2013 an amended complaint was filed that omitted Blyn and the John Does and named Donald Little and Kurosh Motaghed as relators; the amended pleading sometimes substituted Little’s name into allegations originally about Blyn.
- The United States declined to intervene; the amended complaint was unsealed and later amended twice more. Triumph moved to dismiss, arguing the first-to-file rule (§ 3730(b)(5)) barred Little and Motaghed as intervening relators.
- The district court denied dismissal, relying on this circuit’s Precision decision to treat additions under Rule 15 as not constituting prohibited “intervention.” The court certified the order for interlocutory appeal under § 1292(b).
- On appeal the Tenth Circuit held Little and Motaghed did not enter via a proper Rule 15 addition (they were nonparties who filed the amended complaint), so they intervened in violation of the FCA’s first-to-file rule; the court reversed dismissal denial and denied leave to amend to cure jurisdictional defect.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Little and Motaghed “intervened” in violation of the FCA first-to-file rule (§ 3730(b)(5)) | Little/Motaghed claim they became parties via amendment and thus did not intervene; some argument they were John Does in original complaint | Triumph: they were nonparties who became relators by filing the amended complaint, triggering the first-to-file bar | Court: They intervened; the first-to-file rule bars their claims and district court lacked jurisdiction over them |
| Whether addition/substitution via Fed. R. Civ. P. 15 avoids § 3730(b)(5) | Little/Motaghed rely on Precision: additions under Rule 15 are not ‘‘intervention’’ for § 3730(b)(5) purposes | Triumph: Rule 15 amendments must be made by a party; nonparties cannot invoke Rule 15 to become relators | Court: Precision’s Rule 15 exception requires the original plaintiff to add parties. Here nonparties filed the amended complaint, so Rule 15 did not apply and Precision is inapplicable |
| Whether being unnamed John Does in the original sealed complaint made Little/Motaghed original parties | They assert they were two of the John Does and thus were parties from the start | Triumph: anonymous plaintiffs require court permission; absent permission the complaint does not commence as to them | Court: No permission to proceed anonymously was sought; anonymous John Does did not commence the action for them, so they were nonparties when they filed the amended complaint |
| Whether amendment/curing jurisdiction is permitted (Rule 17, § 1653, or require AG consent) | Little/Motaghed argue Rule 17 or § 1653 allow substitution/correction to cure jurisdictional defect; also claim § 3730(b)(1) AG-consent protection | Triumph: Rule 17 inapplicable because original plaintiff was real party; § 1653 cannot create jurisdiction by adding parties; AG-consent applies only to voluntary dismissals | Court: Waived some arguments; on merits Rule 17 and § 1653 do not authorize adding parties to create jurisdiction; § 3730(b)(1) consent rule does not prevent dismissal here. Motion to amend denied |
Key Cases Cited
- United States ex rel. Precision Co. v. Koch Indus., 31 F.3d 1015 (10th Cir. 1994) (held additions under Rule 15 by the original plaintiff did not constitute prohibited intervention under § 3730(b)(5))
- United States ex rel. Eisenstein v. City of New York, 556 U.S. 928 (2009) (defined “intervention” broadly as the method by which a nonparty becomes a party)
- United States ex rel. Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276 (10th Cir. 2004) (held the FCA first-to-file rule is a jurisdictional limit)
- Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989) (28 U.S.C. § 1653 cannot be used to add parties to create jurisdiction)
- Rockwell Int’l Corp. v. United States, 549 U.S. 457 (2007) (courts look to the amended complaint to determine jurisdiction when a plaintiff amends)
- Gonzalez v. Thaler, 565 U.S. 134 (2012) (clarified distinction between jurisdictional rules and claim-processing rules)
- Nat’l Commodity & Barter Ass’n v. Gibbs, 886 F.2d 1240 (10th Cir. 1989) (federal courts lack jurisdiction over unnamed parties who proceed anonymously absent court permission)