UNITED STATES of America and the States of North Carolina, California, Illinois EX REL. Scarlett LUTZ, Kayla Webster, Dr. Michael Mayes and Chris Riedel, Plaintiff, and BlueWave Healthcare Consultants, Inc.; Floyd Calhoun Dent, III; Robert Bradford Johnson, Defendants-Appellants, and Health Diagnostic Laboratory Inc.; Singulex Inc.; Laboratory Corporation of America Holdings; Philippe J. Goix, PhD; Berkeley Heartlab, Inc.; LaTonya Mallory; Quest Diagnostics, Incorporated, Defendants, v. UNITED STATES of America, Intervenor-Appellee, and Blue Eagle Farming, LLC; Eagle Ray Investments, LLC; Forse Investments, LLC; Christina M. Dent; Lakelin Pines, LLC; Trini “D” Island, LLC; War-Horse Properties, LLLP, Parties-in-Interest.
No. 16-1597, 16-1600, 16-1601
United States Court of Appeals, Fourth Circuit.
Argued: January 26, 2017. Decided: March 23, 2017.
851 F.3d 131
Blue Eagle Farming, LLC; Eagle Ray Investments, LLC; Forse Investments, LLC; Christina M. Dent; Lakelin Pines, LLC; Trini “D” Island, LLC; War-Horse Properties, LLLP, Parties-in-Interest.
United States of America and the States of North Carolina, California, Illinois ex rel. Scarlett Lutz, Kayla Webster, Dr. Michael Mayes and Chris Riedel, Plaintiff,
and
Blue Eagle Farming, LLC; Eagle Ray Investments, LLC; Forse Investments, LLC; War-Horse Properties, LLLP, Parties-in-Interest-Appellants,
v.
United States of America, Intervenor-Appellee,
and
BlueWave Healthcare Consultants, Inc.; Floyd Calhoun Dent, III; Robert Bradford Johnson; Health Diagnostic Laboratory Inc.; Singulex Inc.; Laboratory Corporation of America Holdings; Philippe J. Goix, PhD; Berkeley Heartlab, Inc.; LaTonya Mallory; Quest Diagnostics, Incorporated, Defendants,
and
Christina M. Dent; Lakelin Pines, LLC; Trini “D” Island, LLC, Parties-in-Interest.
and
Christina M. Dent; Lakelin Pines, LLC; Trini “D” Island, LLC, Parties-in-Interest-Appellants,
v.
United States of America, Intervenor-Appellee,
and
BlueWave Healthcare Consultants, Inc.; Floyd Calhoun Dent, III; Robert Bradford Johnson; Health Diagnostic Laboratory Inc.; Singulex Inc.; Laboratory Corporation of America Holdings; Philippe J. Goix, PhD; Berkeley Heartlab, Inc.; LaTonya Mallory; Quest Diagnostics, Incorporated, Defendants,
and
Blue Eagle Farming, LLC; Eagle Ray Investments, LLC; Forse Investments, LLC; War-Horse Properties, LLLP, Parties-in-Interest.
Before GREGORY, Chief Judge, and DUNCAN and FLOYD, Circuit Judges.
Dismissed by published opinion. Judge Duncan wrote the opinion, in which Chief Judge Gregory and Judge Floyd joined
DUNCAN, Circuit Judge:
Appellants challenge the district court‘s denial of their motions to quash writs of
I.
A.
In 2010, Floyd Calhoun Dent III (“Dent“) and Robert Bradford Johnson (“Johnson“) founded BlueWave Healthcare Consultants, Inc. (“BlueWave“), which served as the exclusive marketing agent for two blood test laboratories, Health Diagnostic Laboratories, Inc. (“HDL“) and Singulex. BlueWave operated pursuant to substantially similar sales agreements with both labs. Under the sales agreements, HDL and Singulex agreed to pay BlueWave a monthly base fee as well as commissions ranging between 13.8% and 24% of all lab revenue generated in BlueWave‘s sales territory.1 The labs would also pay a physician a “processing and handling fee” between $10 and $20 if the physician chose HDL or Singulex to process blood work. After performing the blood tests, the labs billed insurance companies----including federally funded insurance programs Medicare and TRICARE--for reimbursement.2
B.
In 2014, two relators filed a qui tam action against Johnson, Dent, and BlueWave (collectively, “BlueWave Defendants“), and the United States intervened in April 2015.3 The government alleged that BlueWave Defendants violated the Anti-Kickback Statute,
On February 5, 2016, the United States filed an application for prejudgment remedies under the Federal Debt Collection Procedures Act (“FDCPA“),
The district court found that the government sufficiently alleged that BlueWave Defendants were debtors under the FDCPA because a person automatically incurs a debt once the government pays a fraudulent claim. The district court also concluded that, although the Johnson and Dent entities “are not parties to the underlying litigation” or “debtors within the meaning of the FDCPA,” their property was subject to attachment. J.A. 1507, 1510. With regard to the Johnson entities, the district court determined that their properties were subject to attachment pursuant to
BlueWave Defendants, the Johnson entities, and the Dent entities (collectively, “Appellants“) each filed a motion to quash the writs. Following argument on May 5, 2016, the district court found that the government had satisfied the FDCPA‘s statutory requirements and denied the motion. Appellants noticed this appeal, asserting that the denial of the motion to quash is immediately appealable under the collateral order doctrine and
II.
Appellants assert various reasons why the government was not entitled to prejudgment writs of attachment and garnishment. We must first, however, consider the threshold issue of jurisdiction. United States v. Jefferson, 546 F.3d 300, 308 (4th Cir. 2008).
Article III courts are courts of limited jurisdiction, possessing only the authority granted by Congress and the Constitution. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Generally, a party may only appeal an order that is final, that is, nothing remains for the district court to do except execute the judgment. See
A second exception to finality is statutory.
Appellants assert that the order here is reviewable as either a collateral order or an injunction. We discuss each basis in turn.
A.
The collateral order doctrine is a limited exception to the requirement of finality reserved for the “small class” of rulings that meet three “stringent” conditions. Will v. Hallock, 546 U.S. 345, 349 (2006) (quoting Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994)). The order must “[1] conclusively determine the disputed question, [2] resolve an important issue separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment.” Id. (alteration in original) (quoting Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993)). An order must satisfy all three requirements for the collateral order doctrine to apply. Carefirst of Md., Inc. v. Carefirst Urgent Care, LLC (In re Carefirst of Md., Inc.), 305 F.3d 253, 258 (4th Cir. 2002).
Because the order here fails to resolve an important issue distinct from the merits, we focus our discussion on the second requirement, which has two prongs: (1) separability from the merits and (2) importance. The denial order here satisfies neither prong of the second requirement; therefore, it is not a collateral order.7
1.
First, the denial order is completely enmeshed with the merits of the qui tam action. Appellants’ principal argument is that the government‘s application did not satisfy the FDCPA‘s statutory requirements. The government here applied for prejudgment remedies under Subchapters B and D. Subchapter B governs prejudgment remedies generally and allows the government to seek prejudgment remedies if it shows “reasonable cause to believe that” a debtor “has or is about to assign, dispose, remove, conceal, ill treat, waste, or destroy property with the effect of hindering, delaying, or defrauding the United States.”
In order to decide whether the government is entitled to prejudgment remedies under the FDCPA, we must review the underlying merits of the FCA claims. In other words, the issues Appellants ask us to resolve today—whether the government sufficiently established (1) a probable validity of the debt, (2) the amount of the debt, (3) that Appellants have concealed or disposed of assets with the effect of defrauding the government, and (4) that the nonparty assets are subject to attachment—all turn on the viability of the government‘s underlying FCA litigation. Thus, whether BlueWave Defendants violated the FCA is a threshold inquiry for each of Appellants’ FDCPA challenges. Because we cannot review these issues apart from the merits, we cannot apply the collateral order doctrine to the instant appeal.
Appellants counter that our decision in Buckeye Union Insurance Co. v. Wilmoth (In re St. Paul A.M.E. Church Housing Corp.), 541 F.2d 463 (4th Cir. 1976) (per curiam), controls here. In Buckeye, a district court interpreted an indemnity agreement to require indemnitors to post a $1 million bond to protect an insurer during litigation. On appeal, the sole issue before this court was the proper interpretation of the indemnity contract, which did not involve the merits of the underlying litigation at all. We held in Buckeye that “[a]n order requiring or refusing to require the posting of security during the pendency of litigation is ‘collateral’ and is appealable under” Cohen. Id. at 464. Appellants argue that Buckeye controls because both the order here and the order in Buckeye concern prejudgment remedies. We disagree.
Buckeye is distinguishable and provides no help to Appellants. First, requiring a party to “pony up” and post security at the outset of litigation is not functionally equivalent to freezing existing assets. Second, unlike the present appeal, Buckeye typifies the kind of order that is collateral to the merits of an underlying action.8 We therefore conclude that the order here is not collateral because Appellants’ issues “in the main . . . will substantially overlap factual and legal issues of the underlying dispute.” Van Cauwenberghe v. Biard, 486 U.S. 517, 529 (1988).
2.
In addition to being separate from the merits, the second collateral order condition requires that the order involve an important interest. The order here does not. “Important” in the context of the collateral order doctrine means those interests that extend beyond the parties and implicate the broader public interest or a “particular value of a high order.” See Will, 546 U.S. at 352-53. As such, the Supreme Court has allowed immediate appeal of orders deny-
The order here fails to resolve an important issue distinct from the merits. Mindful of the Supreme Court‘s modern insistence that the scope of the collateral order doctrine remain limited, see Will, 546 U.S. at 350, we hold that the denial of a motion to quash a writ of attachment or garnishment is not a collateral order.
B.
Appellants alternatively argue that, even though the order was not styled as such, they can appeal it as an injunction under
To determine whether an order amounts to an injunction, we first look at the practical effect of the order rather than the label ascribed to it. United States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 502, 507 (4th Cir. 1999). Under the general definition, an injunction is a “court order commanding or preventing an action.” Black‘s Law Dictionary 904 (10th ed. 2014). Most court orders are injunctions at some level of generality, but Congress did not envision that every interlocutory order restraining a party‘s actions could be appealed under
1.
First, Appellants pointed to no “serious, perhaps irreparable consequence.” Id. The writs only encumber Appellants’ property. Contrary to Appellants’ unsupported assertions, they remain free to conduct business from or live on the properties.10 The
2.
The second requirement for an injunction—that an appellate court cannot effectively review the order after final judgment—also is not met here. “Effective review” means that an appellate court can provide the party with complete relief. The writs here will not permanently affect Appellants’ property rights unless the government prevails and BlueWave Defendants cannot satisfy the judgment. Until final judgment on the underlying litigation, there is no harm in preserving the status quo. Indeed, that is the purpose of a prejudgment remedy. Rahman, 198 F.3d at 496. Should BlueWave Defendants prevail on the qui tam action, the court will dissolve the writs. If the government prevails, Appellants can appeal the judgment and the writs at that time. Either way, Appellants can obtain complete relief after final judgment. Absent special circumstances not present here, an order that only freezes assets during litigation and does not require any additional activity does not fall within the class of interlocutory orders Congress intended to exclude from the final-judgment rule. Therefore, we hold that the district court‘s order denying the motion to quash is not an injunction.
III.
Piecemeal litigation is disfavored and permitted only in limited circumstances. Mitsubishi Intern. Corp. v. Cardinal Textile Sales, Inc., 14 F.3d 1507, 1516 (11th Cir. 1994). For the aforementioned reasons, we grant the government‘s motion and dismiss this appeal for lack of jurisdiction.
DISMISSED
DUNCAN
CIRCUIT JUDGE