United States v. Cellco Partnership
409 U.S. App. D.C. 189
| D.C. Cir. | 2014Background
- Shea, relator, brought Verizon I qui tam against Verizon in 2007 under FCA; U.S. intervened and settled in 2011 with Shea receiving nearly $20 million.
- Shea filed Verizon II on June 5, 2009, and amended it to a Second Amended Complaint in September 2012, mirroring Verizon I with broader scope.
- The district court dismissed Verizon II in 2012 for lack of subject-matter jurisdiction, applying FCA first-to-file bar 31 U.S.C. § 3730(b)(5).
- The district court found Verizon II barred because it alleged a fraud scheme the government already could investigate based on Verizon I.
- The court treated Verizon II as related to Verizon I, applying the first-to-file bar even though Shea had filed the earlier action as the relator.
- The appellate court ultimately affirmed dismissal, holding the first-to-file bar applies to the same relator and remains in effect even after the initial action ceases pending.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Verizon I and Verizon II related for first-to-file purposes? | Shea argues they are not related due to broader scope. | Verizon contends the actions are related because they allege the same scheme. | Yes, related under FCA. |
| Does the first-to-file bar apply to the same relator in a subsequent action? | Shea argues the bar cannot apply to him since he filed the first action. | Verizon argues the bar covers any related action by any relator. | Yes, applies to the same relator. |
| Does the first-to-file bar persist after the initial action is no longer pending? | Shea argues the bar terminates when the first action is no longer pending. | Verizon argues the bar operates in perpetuity. | Bar remains in effect even after initial action ceases pending. |
| Is dismissal with prejudice proper under the first-to-file bar? | Shea asserts dismissal should be without prejudice if the first action is not pending. | Verizon argues dismissal with prejudice is appropriate to enforce the bar. | Dismissal with prejudice upheld under first-to-file bar. |
Key Cases Cited
- United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214 (D.C. Cir. 2003) (relatedness based on same elements of fraud; government equipped to investigate)
- United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204 (D.C. Cir. 2011) (first-to-file bar; relatedness; pending action concept)
- United States ex rel. Carter v. Halliburton Co., 710 F.3d 171 (4th Cir. 2013) (pendency-based interpretation of first-to-file bar; related actions while pending)
- United States ex rel. Chovanec v. Apria Healthcare Grp., Inc., 606 F.3d 361 (7th Cir. 2010) (pendency requirement for first-to-file bar; related actions while pending)
- Natural Gas Royalties Qui Tam Litig., 566 F.3d 956 (10th Cir. 2009) (discussion of scope and purpose of first-to-file bar; nested with public-disclosure bar)