UNITED STATES оf America EX REL. Donald LITTLE and Kurosh Motaghed, Plaintiffs-Appellees, v. TRIUMPH GEAR SYSTEMS, INC., Defendant-Appellant.
No. 16-4152
United States Court of Appeals, Tenth Circuit.
September 18, 2017
870 F.3d 1242
Edward A. McConwell, McConwell Law Offices, Mission, Kansas (Donald E. Little, Austin, Texas, with him on the brief), for Plaintiffs-Appellees.
MORITZ, Circuit Judge.
This appeal arises from the efforts of several whistleblowers to navigate the procedural minefield of the False Claims Act (FCA). See
Defendant Triumph Gear Systems, Inc. (Triumph) moved to dismiss Little and Motaghed‘s claims. Triumph argued that their claims are barred by the FCA‘s first-to-file rule, which prohibits new relators from intervening in a pending FCA action. See
I
Triumph is a government contractor that manufactures aerospace gear systems. Blyn worked as an independent contractor for Triumph, and he alleges that he witnessed instances of fraud on the United States by Triumph. In October 2012, Blyn filed a sealed complaint in the district court claiming that Triumph violated the FCA. The complaint named Blyn and three John Does as relators. And the complaint identified Little as Blyn‘s counsel of record, but not as a relator.
In July 2013, Blyn vanished from the action. Little filed an amended complaint that made no mention of Blyn or the John Does, either in the caption or elsewhere. Inexplicably, in several instances, Little seems to have simply substitutеd his name for Blyn‘s without regard for the resulting incongruities. For example, Paragraph 24 of the complaint alleges that “[o]n September 6, 2006, Relator Joseph Blyn went down to heat treat and verified in person that the inspection requirements for gear inspection” were “not being carried out.” App. 22. Paragraph 24 of the amended complaint makes an identical allegation, but substitutes attorney Little for Blyn.2 And while the docket sheet indicates that the original complaint was “filed by Joe Blyn,” the amended complаint was “filed by Donald Little [and] Kurosh Motaghed.” App. 4. Oddly, none of the amended complaint‘s substantive allegations pertain to Motaghed, despite his status as a putative relator.
After the United States declined to intervene, the district court unsealed the amended complaint. Little and Motaghed amended the complaint twice more, and Triumph moved to dismiss the third amended complaint on multiple grounds. As relevant to this appeal, Triumph argued that the district court lacked jurisdiction over Little and Motaghed‘s clаims under the FCA‘s first-to-file rule. Under that rule, when a relator brings a qui tam action under the FCA, “no person other than the [g]overnment may [1] intervene
The district court disagreed. Relying on our decision in United States ex rel. Precision Company v. Koch Industries, Inc., 31 F.3d 1015 (10th Cir. 1994), the district court reasoned that
The district court certified for interlocutory appeal its order denying Triumph‘s motion to dismiss. We granted Triumph‘s petition for permission to file this interlocutory appeal.
After the appeal was docketed, Little and Motaghed filed a motion in this court to amend the third amended complaint. Their proposed fourth amended complaint would add Blyn as a рlaintiff.
II
Triumph argues on appeal that the district court lacked jurisdiction over Little and Motaghed‘s claims. Because Triumph‘s argument presents questions of subject matter jurisdiction and statutory interpretation, our review is de novo. Niemi v. Lasshofer, 770 F.3d 1331, 1344 (10th Cir. 2014); Precision, 31 F.3d at 1017.
The FCA permits a qui tam plaintiff to “bring a civil action ... for the [plaintiff] and for the United States [g]overnment.”
The rule provides that when a qui tam plaintiff brings an action under the FCA, “no person other than the [g]overnment may [1] intervene or [2] bring a related action based on the facts underlying the pending action.”
The success of this argument turns on the meaning of the word “intervene” in
Rigidly applying that definition here would make for an easy resolution. Before the amended complaint was filed, Little and Motaghed weren‘t parties. After its filing, they were. Thus, under Eisenstein‘s definition, they intervened—and the first-to-file rule would bar their claims. See Grynberg, 390 F.3d at 1278. But we aren‘t writing on a blank slate; our analysis must account for this court‘s decision in Precision, 31 F.3d 1015. There, we held that two new relators didn‘t “intervene” in violation of
We conclude that Precision isn‘t controlling hеre. There, a corporate entity named Precision brought a qui tam action against defendant Koch Industries. After the district court ruled that Precision wasn‘t the “original source” of the allegations set forth in the complaint,4 Precision amended its complaint to add two individual relators. Id. at 1016. The new relators were Precision‘s sole stockholders. Id. The district court dismissed the amended complaint, reasoning in part that the new relators intervened in violation of
We reversed, explaining that
the focal point for proper analysis is the wоrd “intervene” contained in
§ 3730(b)(5) . Is that word to be interpreted in its narrow, [Rule 24] plain legal meaning, or should it be granted greater breadth, as defendants suggest, to include any form of joinder? Our judgment tells us the statute implies intervention of the types set forth inRule 24(b)(2) , and the addition of parties does not constitute intervention.
Id.; see id. at 1019 (reversing dismissal).5 And because the new relators in Precision entered the action through a Rule 15 addition—and not a Rule 24 intervention—we concluded that they didn‘t “intervene” as
But Little and Motаghed can‘t rely on Precision‘s narrow exception to the first-to-file rule, because they didn‘t enter this action through a Rule 15 addition.8 Rule 15 provides that “[a] party may amend its pleading once as a matter of course within ... 21 days after serving it.”
Yet amend it they did. The docket sheet indicates that the amended complaint was “filed by Donald Little [and] Kurosh Motaghed.” App, 4. The original complaint, by contrast, was “filed by Joe Blyn.” Id. Nothing in the amended comрlaint indicates that Blyn filed it—or that he was even aware of it. His name appears nowhere in it. In fact, the complaint‘s Blyn-specific allegations morph into allegations about Little in the amended complaint. And Blyn didn‘t file a notice to the court or a motion of any kind. He simply disappeared from the action.
On appeal, Blyn submits a declaration accompanying Little and Motaghed‘s motion to amend the third amended complaint. In that declaration, Blyn asserts that he amended the complaint to allow Little and Motaghed to proceed as named
It‘s unclear what procedural mechanism Little and Motaghed emplоyed to enter the action. But it wasn‘t a Rule 15 addition—or an addition of any kind. Nor could it have been, because Little and Motaghed weren‘t parties and thus had no power to amend the complaint. That distinguishes this case from Precision, where the existing plaintiff added the new relators. See Precision, 31 F.3d at 1018 (“Precision filed an amended complaint which simply added William Koch and William Presley as plaintiffs.“). And because Little and Motaghed didn‘t tread Precision‘s narrow pathway for would-be relators, they intervened in violation of the first-to-filе rule.
Our conclusion that the first-to-file rule bars their claims would seemingly require us to reverse the district court‘s order denying Triumph‘s motion to dismiss.
First, Little and Motaghed seek to rely on the caption and text of the original complaint, which referred generally to John Doe plaintiffs. Little and Motaghed argue, as they did below, that they “started as John Doe plaintiffs and, with Blyn, amended the Complaint to reveal their identities while the case was under seal.” Aplee. Br. 5. Because they were already parties, Little and Motaghed contend, they didn‘t intervene by filing the amended comрlaint. They merely “reveal[ed] their identities.” Id.
But even assuming that Little and Motaghed were, in fact, two of the John Does—an assumption Triumph disputes—that fact wouldn‘t protect their claims from the first-to-file rule. The Federal Rules of Civil Procedure “make no provision for suits by persons using fictitious names or for anonymous plaintiffs.” Nat‘l Commodity & Barter Ass‘n, Nat‘l Commodity Exch. v. Gibbs, 886 F.2d 1240, 1245 (10th Cir. 1989) (per curiam); see
Little and Motaghed neither sought nor received the district court‘s permission to appear anonymously. Thus, even assuming they were two of the three John Does, the original complaint failed to “commence[]” the action “with respect to them.” Nat‘l Commodity & Barter Ass‘n, 886 F.2d at 1245. And any subsequent commencement with respect to them that might have been achieved when they filed the amended complaint was an intervention barred by the first-to-file rule. See
Next, Little and Motaghed argue that Rule 17 authorized them to belatedly substitute themselves into the action. Specifically, they cite
court[s] may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action. After ratification, joinder, or substitution, the action proceeds as if it had been originally commenced by the real party in interest.
We decline to affirm on this basis. First, Little and Motaghed waived this argument by failing to raise it in their opening brief. See United States v. Ibarra-Diaz, 805 F.3d 908, 933 (10th Cir. 2015). Second, even if we were inclined to address this late-blooming argument, we would reject it on the merits. Rule 17 prevents a district court from “dismissing an action for failure to name the real party in interest” without first giving that party leave to substitute into the action. Esposito v. United States, 368 F.3d 1271, 1274 (10th Cir. 2004). For example, if a wrongful death suit is filed in the decedent‘s name, but the action should have been filed by the decedent‘s spouse, Rule 17 permits the spouse to substitute for the decedent. See id. at 1274-75, 78. But here, no one contends that Blyn—the original plaintiff—wasn‘t a real party in interest. And Triumph didn‘t move to dismiss on that basis. Accordingly, we can‘t retroactively construe Little and Motaghed‘s substitution as an attempt to avoid dismissal for “failure to name the real party in interest“—the only situation to which Rule 17 applies.
Next, Little and Motaghed contend that their claims can‘t be dismissed without consent of the United States Attorney General. They base this argument on
Here, Blyn didn‘t seek to voluntarily dismiss his complaint. Nevertheless, Little and Motaghed suggest that the amended complaint functioned as a de facto voluntary dismissal by divesting the district
Finally, Little and Motaghed argue that the first-to-file rule isn‘t jurisdictional but, instead, is a non-jurisdictional rule that “bears only on whether a qui tam plaintiff has properly stated a claim.” Aplee. Br. 15 (emphasis omitted) (quoting United States ex rel. Heath v. AT & T, Inc., 791 F.3d 112, 121 (2015)). And based on thаt assertion, Little and Motaghed contend that the order the district court certified for appeal “does not involve a controlling issue of law ... as required by
Little and Motaghed aсknowledge our previous holding that the first-to-file rule is jurisdictional. Grynberg, 390 F.3d at 1278 (holding that first-to-file rule “is a jurisdictional limit on the courts’ power to hear certain duplicative qui tam suits“). But they contend that Grynberg was superseded by the Supreme Court‘s intervening decision in Gonzalez v. Thaler, which clarified the distinction between jurisdictional rules and claim-processing rules. 565 U.S. 134, 141-42, 132 S.Ct. 641, 181 L.Ed.2d 619 (2012).
But even assuming that Gonzalez invalidated our previous ruling in Grynberg—a question we don‘t reach—we reject Little and Motaghed‘s assertion that the district court‘s certified order doesn‘t involve a controlling question of law. If the first-to-file rule were non-jurisdictional, Little and Motaghed‘s violation of the rule would nevertheless afford a basis for dismissal. See Heath, 791 F.3d at 119 (“Even if the district court wrongly characterized its dismissal as jurisdictional, we could sustain that judgment for failure to state a claim under
We therefore reject Little and Motaghed‘s four arguments against dismissing their claims.
III
After this appeal was docketed, Little and Motаghed filed a motion in this court to amend the third amended complaint. Their proposed amendment would rename Blyn as a plaintiff. Little and Motaghed note that their motion isn‘t a concession that the district court lacked jurisdiction over their claims. But they assert that if we conclude the first-to-file rule bars their claims—as we do—then adding Blyn back into the action would correct this purported jurisdictional defect.
As authority for their proposed amendment, Little and Motaghed cite
Little and Motaghed acknowledge this limitation of
But as Triumph notes, the amended complaint—not the original complaint—is the starting point for the jurisdictional determination. See Rockwell Int‘l Corp. v. United States, 549 U.S. 457, 473-74, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007) (“[W]hen a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction.“). It‘s thus irrelevant whether the district court had jurisdiction over Blyn‘s claim in the original complaint. Even assuming the district court lacked jurisdiction over Little and Motaghed‘s claims in the amended complaint,
We thus deny Little and Motaghed‘s motion to amend the third amended complaint. And because our denial doesn‘t rely on Blyn‘s declaration in support of the motion, we deny as moot Triumph‘s motion to strike the declaration.
***
Little and Motaghed intervened in this action when they filed the amended complaint. That intervention was barred by the FCA‘s first-to-file rule. Accordingly, we reverse the district court‘s order denying Triumph‘s motion to dismiss.
