United States of America, Ex Rel., Walter M. Drake v. Norden Systems, Inc., and United Technologies CorporationUnited States of America, Ex Rel., Walter M. Drake v. Norden Systems, Inc., and United Technologies Corporation
This аppeal arises from the involuntary dismissal of plaintiff Walter M. Drake’s (plaintiff or relator) civil action against a government defense contractor, defendant Norden Systems, Inc., now known as NSI, Inc. (Norden), and its corporate parent, defendant United Technologies Corporation (United Technologies). Drake, a Nor-den accountant, brought his action on behalf of the United States alleging that the defendants had made false claims for payment and otherwise defrauded the government in violation of the Falsе Claims Act,
When Drake missed' — by 17 months — a court-imposed deadline for amending his complaint, the United States District Court for the District of Connecticut (Burns, J.) dismissed the action for failure to prosecute. Drake appeals the judgment of dismissal, entered February 21, 2003, as well as the order on which it was based and a subsequent order denying his motion to be relieved from the judgment.
We do not doubt a district judge’s authority to dismiss actions based on a plaintiffs failure to prosecute. Such authority is of ancient origin. Dismissal for want of prosecution could be imposed under the English common law if a plaintiff “suffered] three terms to elapse without moving forward in the cause.” 3 William Blackstone,
Commentaries
*451 (Univ. Chicago Press 1979) (1768). Today the district court’s authority is expressly recognized in
While we agree with the district court that Drake’s 17-month delay was inexcusably long, we do not agree that the circumstances were sufficiently egregious or that Drake’s actions were so contumacious as to warrant dismissal of his entire complaint. Thus, we hold it was an abuse of the district court’s discretion to dismiss plaintiffs complaint.
BACKGROUND
A. The False Claims Act
The False Claims Act (Act) imposes civil liability on “[a]ny person” who
(1) knowingly presents, or causes to be presented, to an оfficer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;
(7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government ....
The Act contains a so-called
qui tam
provision, which empowers private persons — called relators — to sue false claimants on behalf of the government.
See
A relator commences a false claim action by filing the complaint under seal and giving the government an opportunity to intervene. See'
B- Drake’s Complaint
Plaintiff commenced his
qui tam
action on June 14, 1994 • alleging that he had uncovered a number of False Claims Act violations committed by defendants. He filed the complaint under seal in accordance with the above procedures. The government investigated the matter for three years and, finally, on June 2, 1997, declined to intervene. ■ The complaint was
He based his claims on billing and accounting practices that he uncovered as supervisor of facilities accounting in Nor-den’s finance department. Plaintiffs claims are divided into four counts' — two against Norden alone, one against United Technologies alone, and one against Nor-den and United Technologies together.
Count 1
asserts Norden violated
Count 2
asserts Norden violated
Count k
asserts Norden and United Technologies conspired, in violation of
C. District Court’s August 2Jp, 2000 Ruling
On January 27, 1998 defendants moved to dismiss the second amended complaint for failure to state a claim on which relief could be granted and for failure to plead fraud with sufficient specificity. Before the district court ruled on this motion, however, it stayed the ease for six months in order to await a Supreme Court ruling in another case deciding whether False Claims Act relators have standing. Once the Supreme Court answered that question in the affirmative,
see Vt. Agency of Natural Res.,
With respect to the claims against Nor-den in Counts 1 and 2, the court granted the motion in part and denied it in part. It held that only the progress bills constituted claims for the purpose of subsection (a)(1), and that only the progress bills and certificates of indirect cost rates constituted records or statements for the purposes of subsections (a)(2) and (a)(7). To the extent that the
It also held that Drake’s allegations of Norden’s improper research and development charges were insufficiently specific to support his causes of action. To the extent that Drake’s
The trial court dismissed entirely Drake’s Count 3 claim against- United Technologies for violations of
In sum, the district court disposed Of the numerous allegations in plaintiffs complaint in three different ways, as follows: (1) It dismissed' with
prejudice
the
By dismissing some of Drake’s claims without prejudice, the court left open the possibility that plaintiff could replead them with greater specificity. At the end of its decision, the district court wrote: “Relator shall file within 60 days a final amended complaint to conform the pleadings to this ruling within the confines of
D. Events Leading to Involuntary Dismissal
For some reason, Drake did not file this final amended complaint within 60 days. According to Drake’s brief on appeal, this was an inexcusable mistake on the part of Drake’s then-counsel of which Drake was unaware.
On July 25, 2001 — nine months after the 60-day deadline — the district court ruled on motions for partial summary judgment that the parties had previously filed. It denied Drake’s motion, but granted defendants’ motion. Defendants had attacked Drake’s
On January 31, 2002 the district court’s clerk sent notice to Drake that there had been no action taken in the case for six months, and that the case was therefore subject to dismissal under the court’s local rules of procedure unless Drake submitted a satisfactory explanation for his delay within 20 days. Drake’s counsel responded within 20 days by filing a third amended complaint and еxplaining that the delay had been caused by the complexity of the claims, the large amount of discovery and motions, and scheduling conflicts.
Defendants then moved to strike the third amended complaint and dismiss the case for failure to prosecute under
DISCUSSION
We review a dismissal for failure to prosecute under the abuse of discretion standard.
See Minnette v. Time Warner,
We have in fact fashioned guiding rules that limit a trial court’s discretion in this context,
see Peart v. City of New York,
A. Duration
The first factor to be examined breaks down into two parts: (1) whether the failures to prosecute were thоse of the plaintiff, and (2) whether these failures were of significant duration. See Martens,
Drake effectively concedes that there was no excuse for his counsel's delay, but he emphasizes that it was nonetheless his counsel rather than he himself who was at fault. This apportionment of blame between counsel and client, however, is best considered when we get to the fifth factor-efficacy of lesser sanctions. See Dodson v. Runyon,
We also agree that plaintiffs 17-month delay was significant. Indeed, this length of time is comparable to, if not longer than, delays that have supported dismissals in other cases. See Chira v. Lockheed Aircraft Corp.,
B. Notice
The notice factor, in contrast, cuts against dismissal. The question we must answer here is whether Drake received notice "that further delays would result in dismissal." E.g., Martens,
The only actual notice Drake received was the court clerk's warning that the case would be dismissed unless Drake submitted a satisfactory explanation for his delay within 20 days. Relator responded by submitting not only an ex~ilanation, but also the final amended complaint within that time. Nonetheless, his case was dismissed. While the district court questioned, in a footnote, whether the final amended complaint fully complied with the August 24, 2000 ruling, it did not base its decision on plaintiffs past delay, or on any defects in his final amended complaint.
This was not, then, notice that Drake's case would be dismissed if there was ft~r-ther delay. Rather, this was notice that relator's case would be dismissed as a result of the past delay. Apparently the only thing plaintiff could have done differently to save his case after receiving the notice would have been to provide a better explanation for the past delay. Simply ending the delay by filing the final amended complaint obviously was not enough.
Defendants argue that, regardless of the clerk's warning, Drake was on notice that he was risking dismissal through delay based on one of the District of Connecticut's Local Rules of Civil Procedure. During the period in question, Local Rule 16(a) read as follows
In civil actions in which no action has been taken by the parties for six (6) months or in which deadlines established by the Court pursuant to Rule 11 appear not to have been met, the Clerk shall give notice of proposed dismissal to counsel of record. If such notice has been given and no action has been taken in the action in the meantime and no satisfactory explanation is submitted to the Court within twenty (20) days thereafter, the Clerk shall enter an order of dismissal. Any such order entered by the Clerk under this Rule may be suspended, altered, or rescinded by the Court for cause shown.
D. Conn. Local R. Civ. P. 16(a) (West 2002) (subsequently recodified to Local
Far from placing Drakе on notice that his case was subject to dismissal due to further delay, this rule suggested that plaintiff would receive notice from the clerk prior to any dismissal. Moreover, it suggested that once he received such notice, dismissal would occur only if he both (a) failed to take “action in the meantime” and (b) failed to submit a “satisfactory explanation.”
Defendants point to language in
Shannon
indicating that a local rule of procedure may serve as notice that delay leads to dismissal.
See
Defendants also argue that Drake’s counsel was aware of his delay in amending the complaint based on various correspondence between the parties and the passing reference to this delay in the district court’s July 25, 2001 summary judgment opinion. None of this рut relator or his counsel on notice that the case would be dismissed if he continued to delay. In a March 2, 2001 letter to Drake’s counsel, for instance, Norden’s counsel simply noted his view that, having “reread [the district court’s] August 24, 2000 order,” and noticed the final sentence (regarding the amendment deadline), it was his view that Drake had failed to comply and should therefore obtain leave to amend the complaint before attempting to prepare a joint scheduling order. Clearly the notice factor does not favоr dismissal.
C. Prejudice
The next factor we examine is whether defendants are “likely to be prejudiced by further delay.”
E.g., Martens,
Prejudice may be presumed as a matter of law in certain cases, but the issue turns on the degree to which the delаy was lengthy and inexcusable.
See Lyell,
Even if we were to presume prejudice, it would be a rebuttable presumption.
See LeSane v. Hall’s Sec. Analyst, Inc.,
Plaintiffs second amended complaint contained claims that survived the August 24, 2000 and July É5, 2001 rulings and claims that were dismissed without prejudice (as well as claims that were dismissed with prejudice). With respect to the claims that survived the rulings, defendants were on notice of the charges against them. Defendants were therefore in a good position to preserve evidence and prepare their defense to these claims despite the delay in the essentially technical task of amending the complaint. With respect to the claims that were dismissed without prejudice, on the other hand, defendants were clearly in a much more difficult position. The reason these claims were dismissed was that they were insufficiently specific. Until these claims were repleaded, defendants were therefore in the dark as to the exact contours of the charges against them and so they would have had a much harder time preparing their defense. Consequently, while we do not disturb the district court’s general finding of prejudice, we. do conclude that there was much less prejudice with respect the claims that survived the August 24, 2000 ruling than there was with respect .to those that did not.
D. Balance Betiueen Calendar Congestion and Opportunity to Be Heard
The fourth factor we consider is the balance between district court calendar congestion and the plaintiffs right to an opportunity to be heard.
See, e.g., Martens,
E. Consideration of Lesser Sanctions
Finally, we must consider whether lesser sanctions would have been sufficient to remedy any prejudice resulting from plaintiffs delay. See, e.g., id. The trial court briefly considered the possibility of imposing a fine instead of dismissing the case outright. It rejected this option, however, because it found that a fine would not adequately address the prejudice defendants had suffered. As with the district court’s finding of prejudice, we cannot say that this was clearly erroneous. Yet, we must observe that the level of prejudice was not the same with respect to all of plaintiffs claims. The district court did not explain why a lesser sanction would have been insufficient to deal with plaintiffs delay in repleading those claims that survived the August 24, 2000 ruling and of which defendants were clearly on notice.
Looking at all of the above factors as well as the record as a whole, we are convinced that the district court abused its discretion in dismissing Drake’s entire complaint. The circumstances of this case simply do not rise tо the level needed to justify outright dismissal. While 17 months is unquestionably a lengthy delay, we are dealing with a case that had already been delayed by three years while the government contemplated intervention, and then another six months while the court awaited a Supreme Court ruling. Further, during the first nine months of plaintiffs delay, the parties were waiting for the court to rule on a pending summary judgment motion. More importantly, this is not a case in which the plaintiff “deliberately proceeded] in dilatory fashion,”
Link,
Defendants argue that dismissal was justified with respect to all of the claims because the government was the real party in interest in this case and so plaintiff was not himself entitled to a day in court. We find this argument specious. Congress has granted private parties the right to bring certain claims on behalf of the government.
See
We do think the court was within its discretion to strike from the final amended complaint those claims that Drake had never pleaded with sufficient specificity to begin with. As discussed above, we agree that defendants were significantly prejudiced by the delay in those claims because they were not given adequate notice of what those claims were. But we cannot uphold the district court’s decision to dismiss the entire complaint.
CONCLUSION
In its August 24, 2000 and July 25, 2001 rulings, the district court held that Counts 1 and 2 stated viable claims to the extent that they relied on Norden’s progress bills and certificates of indirect cost rates and dealt with charges for property tax and the depreciation costs of assets that did not exist, had been sold off, or were unrelated to government contracts. Drаke has already adequately pleaded 'those claims and he should have been allowed to proceed with them. We therefore reverse the district court’s decision in part, and remand so that plaintiff can do so. However, we affirm the district court’s order insofar as it struck from Drake’s final amended complaint those claims that he had never pleaded with sufficient specificity. We remand with instructions to the district court that it proceed in conformity with this opinion.
Affirmed in part, reversed in part, and remanded.
Notes
. We note that while False Claims Act suits "may be dismissed only if the ... Attorney General give[s] written consent,”