United States v. Sprint Communications, Inc.
855 F.3d 985
| 9th Cir. | 2017Background
- In 2009 John C. Prather filed a qui tam False Claims Act (FCA) suit accusing Sprint and others of overcharging government customers; the Government declined to intervene.
- The district court dismissed Prather’s qui tam suit in 2013 for lack of jurisdiction under the FCA’s pre-2010 public-disclosure/original-source rules; this Court affirmed in Prather I.
- While Prather’s appeal was pending, the Government filed its own FCA action against Sprint; Prather moved to intervene in that Government action as of right under Fed. R. Civ. P. 24(a)(2).
- Prather’s theory: the Government’s suit was an “alternate remedy” under 31 U.S.C. § 3730(c)(5), so he was entitled to the “same rights” (including a share of proceeds and the right to object to settlement) he would have had if the Government had intervened in his qui tam case.
- The district court denied intervention because Prather’s qui tam action had been dismissed for lack of jurisdiction, and after the denial the Government and Sprint settled and the case was dismissed.
- On appeal the Ninth Circuit held the appeal was not moot but affirmed: because Prather’s qui tam claims were jurisdictionally barred, he had no entitlement to a relator’s share and thus no significantly protectable interest to support intervention as of right.
Issues
| Issue | Prather's Argument | Government/Sprint's Argument | Held |
|---|---|---|---|
| Whether the appeal from denial of intervention is moot after settlement/dismissal | Settlement moots — no relief possible | Appeal not necessarily moot; relief (e.g., objection, share) might still be feasible | Not moot: reversal could afford effectual relief (court retains jurisdiction) |
| Whether Prather had a "significantly protectable interest" to intervene as of right under Rule 24(a)(2) | His interest equals the "same rights" under § 3730(c)(5) (share of proceeds, right to object) | No protectable interest because his underlying qui tam was jurisdictionally barred | No: Prather lacked a significantly protectable interest, so intervention as of right denied |
| Whether a relator whose qui tam is dismissed under the public-disclosure/original-source bar can receive a relator’s share if the Government proceeds (intervenes or brings its own action) | Yes: § 3730(d) could be read to allow a reward or share when Government pursues same claims | No: Rockwell and statute structure foreclose share for jurisdictionally barred relators | No: Rockwell controls — a jurisdictionally barred relator is not entitled to recovery under § 3730(d) |
| Whether the § 3730(c)(5) "alternate remedy" provision entitles a jurisdictionally barred relator to the "same rights" in a government action | § 3730(c)(5) gives him the same rights including monetary share and objection rights | The "same rights" follow only to the extent the relator would have had rights if his qui tam had continued; here he would have had none | § 3730(c)(5) does not help a relator who lacked entitlement in the original qui tam; no monetary award available |
Key Cases Cited
- Rockwell Int’l Corp. v. United States, 549 U.S. 457 (2007) (government intervention does not cure a relator’s lack of jurisdiction as an original source)
- Prather v. AT&T, 847 F.3d 1097 (9th Cir. 2017) (prior Ninth Circuit opinion affirming dismissal of Prather’s qui tam action)
- Southwest Ctr. for Biological Diversity v. Berg, 268 F.3d 810 (9th Cir. 2001) (four-part test for intervention as of right under Rule 24(a)(2))
- U.S. ex rel. Merena v. SmithKline Beecham Corp., 205 F.3d 97 (3d Cir. 2000) (discusses possibility of statutory bounty but recognizes limits when relator lacks jurisdiction)
- United States ex rel. Green v. Northrop Corp., 59 F.3d 953 (9th Cir. 1995) (relator’s recovery tied to contribution and significance of information; rationale for limiting awards to meaningful relators)
- United States ex rel. Newell v. City of St. Paul, 728 F.3d 791 (8th Cir. 2013) (relator with qui tam dismissed under public-disclosure bar not entitled to share of government settlement)