464 F.Supp.3d 449
D. Mass.2020Background
- Millennium Laboratories settled FCA claims with the government for ~$227 million; 15% of that amount was set aside as a "relator’s share."
- Multiple qui tam relators filed against Millennium; the First Circuit held McGuire was the first-to-file and therefore entitled to the relator’s share.
- The government intervened in the action but did not pursue the Allstate Relators’ individual complaint.
- Allstate Insurance Company and Dr. Lawrence K. Spitz (the "Allstate Relators") entered a private agreement with McGuire to receive part of the relator’s share.
- The Allstate Relators sought recovery from Millennium of $320,785 in attorneys’ fees and $45,950 in costs under 31 U.S.C. § 3730(d); Millennium opposed.
- The district court denied the motion, concluding the Allstate Relators were not entitled to fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Settlement Agreement waived Millennium's defenses to fee claims | Allstate: Paragraph 12 waived Millennium's defenses except reasonableness | Millennium: Agreement preserved relators' right to seek fees but did not guarantee recovery | Court: Agreement preserves right to seek fees but does not entitle Allstate to recover |
| Whether Allstate qualifies as an "any such person" under 31 U.S.C. § 3730(d)(1) for attorneys' fees because it received proceeds via a private sharing agreement | Allstate: Private sharing with McGuire makes them recipients of proceeds and thus entitled to fees | Millennium: Only the relator who brought the § 3730(b) action that the government proceeded with (the first-to-file) may recover under § 3730(d)(1) | Court: Only the first-to-file (McGuire) qualifies; Allstate is not entitled to fees |
| Whether government proceeded with Allstate's complaint (entitlement under § 3730(d)) | Allstate: § 3730(d)(2) may apply despite government not pursuing their specific complaint | Millennium: Government did not proceed with Allstate's complaint; § 3730(d)(2) inapplicable | Court: Government did not proceed with Allstate's complaint; § 3730(d)(2) does not rescue their claim |
| Whether the requested fee amount is reasonable | Allstate: Requests specified fees and costs | Millennium: Amount is unreasonable; also disputes entitlement | Court: Did not reach reasonableness because Allstate lacks entitlement |
Key Cases Cited
- United States ex rel. McGuire v. Millennium Labs., Inc., 923 F.3d 240 (1st Cir. 2019) (only the first-to-file relator may claim the relator's share and satisfy § 3730(d)(1) recovery requirements)