UNITED STATES OF AMERICA, Plаintiff-Appellee, - v. - L-3 COMMUNICATIONS EOTECH, INC., L-3 COMMUNICATIONS CORPORATION, PAUL MANGANO, Defendants. MILTON DaSILVA, Movant-Appellant.
Docket No. 17-0621
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
August Term, 2017 (Argued: January 18, 2018 Decided: April 4, 2019)
Before: KATZMANN, Chief Judge, KEARSE and POOLER, Circuit Judges.
* The Clerk of Court is directed to amend the official caption to conform with the above.
Appeal from an order of the United States District Court for the Southern District of New York, Richard J. Sullivan, then-District Judge, denying nonparty-movant‘s motion for a declaration that he is entitled to a share of the $25.6 million received by the United States in the settlement of its action against the defendants under the False Claims Act (“FCA“),
Affirmed.
JOSEPH N. CORDARO, Assistant United States Attorney, New York, New York (Joon H. Kim, Acting United States Attorney for the Southern District of New York, Christopher Connolly, Assistant United States Attorney, New York, New York, on the brief), for Plaintiff-Appellee.
DANIEL W. WEININGER, Southfield, Michigan, (Keith L. Altman, Excolo Law, Southfield, Michigan, on the brief), for Movant-Appellant.
Movant Milton DaSilva appeals from an order of the United States District Court for the Southern District of New York, Richard J. Sullivan, then-District Judge, denying his motion for a declaration that, under the False Claims Act (or “FCA“),
I. BACKGROUND
The False Claims Act, the most relevant provisions of which are set out in greater detail in Part II below,
establishes a scheme that permits either the Attorney General,
§ 3730(a) , or a private party,§ 3730(b) , to initiate a civil action alleging fraud on the Government. A private enforcement action under the FCA is called a qui tam actiоn, with the private party referred to as the “relator.” . . . . When a relator initiates such an action, the United States is given 60 days to review the claim and decide whether it will “elect to intervene and proceed with the action,”§§ 3730(b)(2) ,(b)(4) . . . .If the United States intervenes, the relator has “the right to continue as a
party to the action,” but the United States acquires the “primary responsibility for prosecuting the action.” § 3730(c)(1) . If the United States declines to intervene, the relator retains “the right to conduct the action.”§ 3730(c)(3) .
United States ex rel. Eisenstein v. City of New York, 556 U.S. 928, 932 (2009); see also Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 768 n.1 (2000) (“’Qui tam is short for the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, which means ‘who pursues this action on our Lord the King‘s behalf as well as his own.‘“).
To incentivize private persons to uncover, report, and prosecute FCA claims for the benefit of the United States, see, e.g., United States ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 23 (2d Cir. 2016); United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2d Cir. 1990), the FCA provides that if a qui tam action is successful, the relator will generally be entitled to receive a portion of the amount recovered from the defendants, see
The record as to the events leading to this appeal shows the following.
A. Events Surrounding DaSilva‘s 2014 Qui Tam Action
DaSilva was employed at EOTech as a quality control engineer from mid-May to late June 2013. On August 13, 2013, through attorneys then representing him in anticipation of filing a qui tam action against EOTech, DaSilva submitted to the United States Attorney‘s Office for the Southern District of New York information alleging EOTech‘s manufacture and knowing sale to the government of defective holographic firearm sights, in violation of the FCA.
On August 22, 2013, DaSilva was convicted in a Michigan state court of criminal conduct that both sides agree was unrelated to the alleged FCA violations by EOTech. DaSilva was scheduled to be sentenced on September 25, 2013; however, he did not appear for sentencing, having fled to Brazil.
Beginning in mid-January 2014, Solomon M. Radner, a Michigan attorney representing DaSilva in his criminal proceeding, had ongoing communications with an Assistant United States Attorney (“AUSA“) with regard to DaSilva‘s allegations against EOTech. Radner disclosed DaSilva‘s fugitive status to the AUSA, who “responded that she had to first seek permission from her supervisors before speaking to DaSilva because of his fugitive status.” (Affidavit of Solomon M. Radner dated April 14, 2016 (“Radner Aff.“), ¶ 9.) After the AUSA received such permission, Radner sent DaSilva‘s materials to the AUSA, and facilitated, inter alia, telephone conferences between or among DaSilva, the AUSA, and other government officials.
In April 2014, DaSilva filed a qui tam complaint--under seal and in camera, as required by
DaSilva‘s qui tam action was assignеd to District Judge Alison Nathan. On July 8, 2014, the court issued an order stating principally as follows:
[T]he Government represents (among other things) that relator plaintiff Milton DaSilva is currently wanted by Michigan authorities after fleeing to Brazil prior to sentencing for certain crimes he was convicted of in 2013. The Government indicates that counsel for Mr. DaSilva have stated their intention to withdraw and voluntarily dismiss this action if Mr. DaSilva did not surrender by June 23, 2014.
Given that that date has now passed, counsel for Mr. DaSilva are hereby instructed to submit a status letter by July 18, 2014 indicating whether Mr. DaSilva remains a fugitive and, if so, whether and when they plan to withdraw and dismiss this action. If counsel do not submit a letter by July 18, the Court will dismiss this case.
District Court Order dated July 8, 2014 (“July 2014 Order“) (emphasis added).
Following entry of this order, both DaSilva‘s qui tam counsel and the government made submissions to the district court. DaSilva‘s attorneys requested that the Court not dismiss this case on the basis of DaSilva‘s fugitive status despite their earlier representation to the Government that they would voluntarily withdraw the complaint if DaSilva did not surrender to Michigan authorities by June 23, 2014.
District Court Order dаted August 14, 2014 (“August 2014 Order“). The government responded and reiterated its concern as to the propriety of having the rights of the United States represented by a fugitive. It had cited to DaSilva‘s attorneys a Michigan bar governance principle that stated, “[a] lawyer may not aid or abet a client who has chosen independently to become a fugitive from justice. The lawyer may not represent the client in collateral or unrelated matters while the lawyer knows the client remains a fugitive,” Mich. Ethics Op. RI-160 (Apr. 14, 1993) (“Mich. Ethics Op. RI-160” or “Michigan Ethics Opinion“) (emphasis added). The government indicated to the court “that it would move to dismiss if qui tam counsel refused to dismiss their complaint voluntarily.” August 2014 Order.
The court ordered that, “[s]ince qui tam counsel have neither withdrawn their complaint nor indicated that DaSilva has surrendered, . . . the Government may move to dismiss the complaint by August 31, 2014.” Id. Before the government could so move, however, DaSilva‘s qui tam counsel made a motion on August 19, 2014, “request[ing] that th[e] action be voluntarily dismissed without prejudice . . . . pursuant to
DaSilva‘s attorneys represented that the government had stated it would inform the court of its consent to the voluntary dismissal, and the government promptly so notified the court. On September 3, the court granted DaSilva‘s request:
In light of Relator Milton DaSilva‘s request on August 19, 2014 that this action be voluntarily dismissed, and the United States‘s consent to voluntary dismissal on August 20, 2014, this case is dismissed without prejudice. The case shall remain under seal.
There were no further qui tam proceedings by DaSilva.
B. The Government‘s FCA Action
More than 14 months after DaSilva‘s voluntary dismissal, the government on November 24, 2015, commenced its own False Claims Act lawsuit pursuant to
On April 14, 2016, DaSilva filed--in the present action, i.e., the government‘s
The government opposed the motion, disputing, inter alia, DaSilva‘s interpretation of
The government cited authorities stating that an action that was voluntarily dismissed without prejudice is treated as never having been brought, and it denied that any undue pressure had been applied to cause DaSilva to dismiss the 2014 qui tam action. Given that such an action is brought in the name of the United States, to remedy wrongs to the United States, DaSilva‘s fugitive status--undisclosed in his qui tam complaint, which called him a resident of Michigan--caused the government concern for whether its interests would be represented properly, and warranted “inquir[y as to] whether the applicable rules of professional responsibility permitted counsel to represent DaSilva in his qui tam action” (id. at 16). The government stated that DaSilva‘s motion had not described--and could not point to--any impropriety on the part of the government in raising its concerns.
C. The District Court‘s Denial of DaSilva‘s Motion for a Share
In an opinion dated February 3, 2017, reported at 232 F.Supp.3d 583, the district court denied DaSilva‘s motion to be declared eligible to share in the government‘s recovery from EOTech. The court stated that although the FCA “generally
By beginning with the phrase “[n]otwithstanding subsection (b),” Section 3730(c)(5) makes clear that the “alternate remedy” described in that section is an “alternate” to the government‘s options listed in Section 3730(b). Specifically, Section 3730(c)(5) governs the relator‘s rights when the government “elect[s] to pursue its claim through any alternate remedy,”
31 U.S.C. § 3730(c)(5) --that is, an “alternate” to the remedies set forth in Section 3730(b)(4), which are limited to (a) intervening and “proceed[ing] with the [qui tam] action” or (b) “declin[ing] to take over the action” and providing the relator with “the right to conduct the action,”31 U.S.C. § 3730(b)(4) . The implication of this framework is clear: when there is no qui tam action for the government to “take over,” the government‘s filing of its own action is not an “alternate” to taking over (or not taking over) a qui tam action.
232 F.Supp.3d at 587 (emphases ours).
The court noted that the effect of a voluntary dismissal without prejudice, such as DaSilva‘s, is to
”le[ave] the situation as if the action never had been filed,” 9 Charles Alan Wright & Arthur R. Miller et al., Federal Practice and Procedure § 2367 (3d ed. 2016), and ”render[] the proceedings a nullity,” 8 Moore‘s Federal Practice § 41.40[9][b] (2016).
232 F.Supp.3d at 588 (emphases ours). Thus,
[f]ramed in terms of the instant action, a dismissed qui tam suit does not present the government with the choice between acting under subsection (b)(4) or pursuing an “alternate remedy” authorized by subsection (c)(5). Accordingly, the government‘s commencement and settlement of this action was not an “alternate remedy” to DaSilva‘s qui tam action because DaSilva had dismissed his action.
Id. at 587 (emphasis ours). The court concluded that DaSilva‘s decision to voluntarily dismiss his qui tam action in 2014 precludes him from clambering back on board for a share of the government‘s proceeds as though he had never dismissed his own action. To hold otherwise would contradict the plain language of Section 37[30](c)(5) and provide DaSilva with a windfall to which he is not entitled under the statute.
Id. at 589 (emphases added).
II. DISCUSSION
On appeal, DaSilva contends principally that the district court‘s interpretation of
We review for clear error findings of fact as to such questions as whether DaSilva‘s attorneys were subjected to
Preliminarily, we note that the record is opaque as to the authorization for DaSilva‘s ability to seek relief in the present action. DaSilva rеferred to a need to “reopen[]” the case (DaSilva Eligibility Motion at 16-17 (citing
A. DaSilva‘s Unsupported Claim of Coercion
We deal first with DaSilva‘s contention that the dismissal of his 2014 qui tam action was improperly coerced, since well established legal principles and the clarity of the record make its lack of merit obvious.
1. Voluntary Dismissal Principles
[a] first dismissal either by notice or stipulation under Federal Rule 41(a)(1)(A) is without prejudice to the commencement of another action, unless otherwise stated in the notice or stipulation itself.
9 Wright & Miller, Federal Practice and Procedure § 2367, at 549 (3d ed. 2017) (“Wright & Miller“).
In the context of a qui tam action, this general
As to the usual effect of a
This long established principle has been recognized by this Circuit and most others. See, e.g., A.B. Dick Co. v. Marr, 197 F.2d 498, 502 (2d Cir. 1952) (“voluntary dismissal of a suit leaves the situation so far as procedures therein are concerned the same as though the suit had never been brought“), cert. denied, 344 U.S. 878 (1952); Bomer v. Ribicoff, 304 F.2d 427, 428 (6th Cir. 1962) (dismissal of an action without prejudice leaves the situation the same as if the suit had never been brought); In re Piper Aircraft Distribution System Antitrust Litigation, 551 F.2d 213, 219 (8th Cir. 1977) (same); Beck v. Caterpillar, Inc., 50 F.3d 405, 407 (7th Cir. 1995) (same); EEOC v. W.H. Braum, Inc., 347 F.3d 1192, 1201 (10th Cir. 2003) (same); In re Matthews, 395 F.3d 477, 480 (4th Cir. 2005) (same); Harvey Specialty & Supply, Inc. v. Anson Flowline Equipment, Inc., 434 F.3d 320, 324 (5th Cir. 2005) (same); City of South Pasadena v. Mineta, 284 F.3d 1154, 1157 (9th Cir. 2002) (same; “any future lawsuit based on the same claim [is] an entirely new lawsuit” (internal quotation marks omitted)); Sandstrom v. ChemLawn Corp., 904 F.2d 83, 86 (1st Cir. 1990) (same; “the page is once again pristine“).
As discussed further in Part II.B.2.c. below, this principle is applicable to a voluntarily dismissed qui tam action. See Webster v. United States, 217 F.3d 843 (4th Cir. 2000) (table), 2000 WL 962249 (July 12, 2000) (”Webster“). Citing, inter alia, contemporaneous editions of Wright & Miller and Moore‘s Federal Practice, the Webster court noted that “[a] voluntary dismissal without prejudice leaves the situation as if the action never had been filed” (internal quotation marks omitted) and “renders the proceedings a nullity” (internal quotation marks omittеd). Id. at *2. The court ruled that “Webster c[ould ]not assert the rights of an original qui tam plaintiff . . . because she abandoned those rights when she voluntarily dismissed her [prior qui tam] suit.” Id.
2. The Record
In seeking to avoid this normal consequence of a voluntary dismissal, DaSilva argues that the district court should not have found his dismissal voluntary because he presented evidence that it was instead the result of impermissible coercion by the government (see DaSilva brief on appeal at 23-27). The record does not support this contention.
Before Judge Sullivan in the district court, the qui tam attorneys argued that DaSilva had dismissed his qui tam action “only after intense pressure from the government” (DaSilva Eligibility Motion at 1). In support of this assertion, they stated as follows, citing portions of the Radner affidavit:
AUSA Nawaday claimed [DaSilva‘s] counsel was in violation of ethical duties by representing [DaSilva] because he was a fugitive. [Radner Aff.] ¶ 28. [DaSilva‘s] counsel was left with the belief that if [DaSilva‘s] complaint were not dismissed, bar grievances would be filed against [DaSilva‘s] counsel. Id. ¶ 31. Subsequently, under immense pressure from AUSA Nawaday, [DaSilva] dismissed his case with the consent of the Govеrnment and without prejudice because of the alleged difficulties in prosecuting the case while
Mr. DaSilva remained out of the country avoiding unrelated criminal matters in Michigan. Id. ¶ 33.
(DaSilva Eligibility Motion at 4.) The record citations in that argument support only the proposition that Radner, in paragraph 31 of his affidavit, stated that “[b]ased upon the communications with the New York U.S. Attorney‘s office it was my belief that if [DaSilva] did not dismiss his action, bar grievances would be filed against [DaSilva‘s] counsel” (Radner Aff. ¶ 31). Radner‘s paragraph 33--the only record item cited in support of DaSilva‘s claim of “immense pressure“--stated in full as follows:
Counsel for DaSilva voluntarily dismissed the action on August 19, 2014, and the United States consented to such voluntary dismissal on August 20, 2014. This case was then dismissed without prejudice on September 3, 2014.
(Radner Aff. ¶ 33 (emphases added).)
The other paragraph of Radner‘s affidavit that was cited in the Eligibility Motion‘s claim of immense and intense pressure stated as follows:
On April 25, 2014, DaSilva‘s qui tam complaint was filed.
On April 28, 2014, AUSA Nawaday stated in an email to [DaSilva‘s] Counsel “Please let us know if you are available at 2 pm tomorrow to discuss the complaint with my colleague . . . and me. Among other things, we would like to hear your position as to why you chose to list Mr. DaSilva is listed [sic] as a resident of Michigan in paragraph 17 and why representation of a fugitive in a new civil matter, to assert claims on behalf of the United States, complies with the applicable rules of professional conduct. Thanks.” (Radner Aff. ¶ 28.)
Nothing other than paragraphs 28, 31, and 33 of the Radner affidavit was cited to support DaSilva‘s claim of coercion.
In reality, the record forecloses any conclusion other than that the dismissal was voluntary. DaSilva‘s attorneys did not contend that the government had misquoted the Michigan bar governance principle that provided that, as to “a client who has chosen independently to become a fugitive from justice,” a “lawyer may not represent the client in collateral or unrelated matters while the lawyer knows the client remains a fugitive,” Mich. Ethics Op. RI-160. And we have seen no indication in the record that DaSilva‘s attorneys suggested to Judge Nathan that the government lacked a legitimate concern about the propriety of (a) having the United States represented by a fugitive who, in the words of his own attorneys, “remained out of the country avoiding the unrelated criminal matters in Michigan” (DaSilva Eligibility Motion at 4), and (b) having the government represented by his attorneys who were thus apparently willing to proceed in violation of express ethical constraints.
Although DaSilva on appeal complains that the government referred only to the “syllabus” of the Michigan Ethics Opinion (or “Opinion“), and states that “[a] closer reading of the [O]pinion‘s text would have revealed a more nuanced picture” (DaSilva brief on appeal at 25), the record does not indicate that his counsel proffered a “nuanced” reading to either Judge Nathan or Judge Sullivan. Nor is it clear to us from our own reading of the complete text of the Michigan Ethics Opinion that there is any reasonable basis for deeming the prohibition summarized in the syllabus inapplicable to DaSilva‘s attorneys. The text described a client who was on probation, who had removed his physical restraints and become a fugitive, and who had asked his lawyer to assist him in asserting claims for the recovery of money and property. The Opinion‘s conclusion was reported
Nor did DaSilva‘s attorneys suggest that there was any error in Judge Nathan‘s factual understanding that “counsel for Mr. DaSilva ha[d] stated [to the government] their intention to withdraw and voluntarily dismiss this action if Mr. DaSilva did not surrender by June 23, 2014,” July 2014 Order (emphasis added); see also August 2014 Order (“qui tam counsel” had made a “representation to the Government that they would voluntarily withdraw the complaint if DaSilva did not surrender” (emphasis added)). And when the August 2014 Order stated, in light of the facts that DaSilva had not returned and qui tam counsel had not withdrаwn the complaint, that the government could move for dismissal, DaSilva‘s qui tam counsel quickly filed a motion-- having been assured that the government would consent-- “request[ing] that th[e] action be voluntarily dismissed without prejudice . . . . pursuant to
DaSilva‘s
The record thus provides no basis for a finding that DaSilva had in effect been coerced to abandon his qui tam action. Indeed, Radner‘s affidavit, after stating that “Counsel for DaSilva voluntarily dismissed the action,” went on to say that “[n]othing in any of the orders prevented or precluded counsel for DaSilva to re-file this claim,” and that in fact counsel had
planned on refiling this action whether or not DaSilva returned. However, for simplicity‘s sake, we were waiting for him to return.
(Radner Aff. ¶¶ 33, 34.)
In sum, the record cannot support the claim that DaSilva was unfairly pressured to dismiss his qui tam action. The district court properly found that the action was voluntarily dismissed. Given that the legal effect of such a dismissal is that it is as if the action had never been filed, and given that DaSilva never filed a new action, the district court correctly ruled that there was no qui tam action pending when, more than 14 months later, the United States filed its own action against EOTech.
B. DaSilva‘s Claim for a Share of the Proceeds from the Government‘s FCA Action Against EOTech
As indicated at the outset of the Background section of this opinion, an action under the
1. Shares of the Proceeds for the Qui Tam Relator
(1) If the Government proceeds with an action brought by a person under subsection (b), such person shall . . . [genеrally] receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action. . . . Any payment to a person under the [above] sentence . . . shall be made from the proceeds. . . .
(2) If the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement and shall be paid out of such proceeds. . . .
In sum, as most relevant here, under paragraph (1) of subsection (d), when the government has intervened in (and thus takes over) the qui tam action brought under “subsection (b),” the relator will generally be entitled to a share of between 15% and 25% of what the government receives in the action or in settlement of the claim. Under paragraph (2) of subsection (d), when the government has not proceeded under ”this section” (emphasis added)--i.e., it has neither intervened in the
2. The Government‘s Pursuit of an “Alternate Remedy”
Under paragraphs (1) and (2) of
(A) The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the
court has provided the person with an opportunity for a hearing on the motion. (B) The Government may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. . . .
(C) Upon a showing by the Government that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the Government‘s prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person‘s participation, such as--
- limiting the number of witnesses the person may call;
- limiting the length of the testimony of such witnesses;
- limiting the person‘s cross-examination of witnesses; or
- otherwise limiting the participation by the person in the litigation. . . .
Paragraph (3) of
Paragraph (5) of
(5) Notwithstanding subsection (b), thе Government may elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty. If any such alternate remedy is pursued in another proceeding, the person initiating the action shall have the same rights in such proceeding as such person would have had if the action had continued under this section. Any finding of fact or conclusion of law made in such other proceeding that has become final shall be conclusive on all parties to an action under this section. For purposes of the preceding sentence, a finding or conclusion is final if it has been finally determined on appeal to the appropriate court of the United States, if all time for filing such an appeal with respect to the finding or conclusion has expired, or if the finding or conclusion is not subject to judicial review.
Several of our Sister Circuits have dealt with cases concerning the meaning of
In Babalola, medical assistants who had practiced medicine in Nigeria (“the Assistants“) sent an anonymous letter to the government in 2007 alleging, in detail, that the defendants had submitted numerous fraudulent Medicare and Medicaid claims. The government‘s investigation of these allegations (which included contacting the theretofore anonymous Assistants to inquire whether they had any knowledge about the allegations) resulted in the defendants’ indictment in July 2009, their guilty pleas in April 2010, and their sentences in February 2011 which included orders to pay more than $43 million in restitution. See 746 F.3d at 159. In November 2011, while the defendants’ appeals from their sentences were pending (the restitution ordered was later reduced to some $37.6 million), the Assistants filed their
Examining the first sentence of
this first sentence means that, notwithstanding that a private person has filed a qui tam suit, the Government may elect to pursue an alternate remedy to the qui tam suit. . . .
The word “alternate,” as used in this context, is defined as “a choice between two or among more than two objects or courses.” Webster‘s Third New International Dictionary (1993) at p. 63. We agree with the district court‘s reasoning that for a remedy to be “alternate” to the qui tam proceeding, there must have been two proceedings from which to choose. Accordingly, we hold that the qui tam proceeding must have been in existence at the time of the Government‘s election of the alternate remedy.
Babalola, 746 F.3d at 161-62 (emphases ours).
In Webster, the plaintiff had initiated a qui tam action but had later voluntarily--with the government‘s consent--dismissed the action without prejudice, believing that the defendants would be impecuniated by criminal proceedings. The government subsequently brought a civil action under
After applying
That provision allows the government “to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty.” If the government elects an alternate remedy, “the person initiating the action shall have the same rights in such proceeding as such person would have had if the action had continued under this section.” 31 U.S.C. § 3730(c)(5). Webster maintains that the government‘s FCA suit is an alternate remedy . . . . [W]e disagree.
Section 3730(c)(5) ”does not confer any rights on would-be intervenors.” LaCorte, 185 F.3d at 191. Rather, it “simply preserves the rights of the original qui tam plaintiffs when the government resorts to an alternate remedy in place of the original action.” Id. Webster cannot assert the rights of an original qui tam plaintiff, however, because she abandoned those rights when she voluntarily dismissed her [qui tam] suit . . . .
Webster, 2000 WL 962249, at *2 (emphases ours).
The court also rejected Webster‘s contention that her voluntary dismissal should be disregarded, i.e., “that she should have the same rights” in the government‘s suit “that she would have had in her own, had she not dismissed it,” stating that
[r]equiring a qui tam plaintiff to make some effort to prosecute her suit in order to participate in any ultimate recovery results in neither unfairness nor the frustration of congressional policy. By barring private persons from intervening in pending FCA actions or from bringing related suits,
section 3730(b) creates a race to the courthouse: the winner of that race is the only person allowed to participate in the government‘s recovery, thus providing incentive to promptly report fraud. Once the race is won, however, the winner is not free simply to claim the prize and go home. As we and numerous other courts have observed, ”[t]he history of the FCA qui tam provisions demonstrates repeated congressional efforts to walk a fine line between encouraging whistle-blowing and discouraging оpportunistic behavior.” United States ex rel. Springfield Terminal Ry. v. Quinn, 14 F.3d 645, 651 (D.C. Cir. 1994). . . . As the government points out, Webster‘s reading of the statute would allow a private party to file a qui tam false claims suit with no intention of pursuing it, dismiss the suit without prejudice, and then, when the government chose to investigate and prosecute its own claim, clamber back on board. The careful balance struck by Congress would be thrown awry if individuals could stockpile potential qui tam claims while waiting for more diligent plaintiffs to bring the case in earnest.
Webster, 2000 WL 962249, at *3 (emphases added).
While Babalola and Webster dealt directly with whether the “alternate remedy” provision is applicable when there is no qui tam action pending, the courts in Barajas and Bledsoe were focused more on whether the applicability of
All of these opinions found
Although
[1] Notwithstanding subsection (b), the Government may elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty. [2] If any such alternate remedy is pursued in another proceeding, the person initiating the action shall have the same rights in such proceeding as such person would have had if the action had continued under this section. [3] Any finding of fact or conclusion of law made in such other proceeding that has become final shall be conclusive on all parties to an action under this section.
a. “Notwithstanding subsection (b)”
The very first clause of
Thus, we interpret the “[n]otwithstanding” clause as meaning that what follows it is to be given effect regardless of any actions taken in accordance with subsection (b). If our focus were on actions of the government, we would thus interpret this initial clause to mean notwithstanding which of the options presented by subsection (b) was adopted by the government, which include opting to intervene and declining to intervene, see
b. “alternate”
Still focusing on
Giving effect to common meanings of “alternate” and “available,” and to the presence of other language implying choices between existing options, all introduced by the phrase “[n]otwithstanding subsection (b)” which deals with qui tam actions, we agree with the district court that
c. “any alternate remedy”
Regardless, however, of whether “any alternate remedy” may include a criminal prosecution, we think it clear from other
In addition, other
In sum, while there may be some question as to the precise intended scope of the phrase “any alternate remedy,” we think it clear from the
d. “this section” in § 3730(c)(5)‘s Second Sentence vs “this section” in § 3730(c)(5)‘s Third Sentence
The third sentence of
As this third sentence speaks in terms of ”an action under this section” (emphasis added) and does not, like the second sentence, use the more restrictive phrases “the action” and initiated by “the person,” we interpret “this section” in the third sentence to refer to the whole of
e. “if the action had continued under this section”
Finally, the second sentence of
First, while some unadorned variations of the word “continued,” such as “continuance” and “discontinuance,” are legal terms of art, see, e.g., Black‘s Law Dictionary 387 (10th ed. 2014) (defining “continuance” as, inter alia, “[t]he adjournment or postponement of a trial or other proceeding to a future date“); id. at 563 (defining “discontinuance” as, inter alia, “[t]he termination of a lawsuit by the plaintiff“), the word “continued” itself is not defined in that dictionary. Nor, in
Second, we view any interpretation of “if the action had continued” to imply that the qui tam action had in fact been terminated as foreclosed by the third sentence of
* * *
In sum, we conclude that
DaSilva argues that this interpretation will allow the government unfairly to intervene in qui tam actions, have those actions dismissed, and then bring its own action, thereby depriving the qui tam relators of any right to share in the proceeds gained by the government. The
But the record before us presents neither the unfairness hypothesized by DaSilva nor a settlement or dismissal over a relator‘s objections. DaSilva‘s qui tam action was voluntarily dismissed on motion of his attorneys in light of the Michigan Ethics Opinion prohibiting an attorney from representing in collateral matters a client the lawyer knows remains a fugitive. That voluntary dismissal made DaSilva‘s action a nullity and left him with no vestige of qui tam relator status. As there was no existing qui tam action because DaSilva voluntarily dismissed his action,
CONCLUSION
We have considered all of DaSilva‘s arguments on this appeal and have found them to be without merit. The district court‘s order denying his motion to share in the government‘s recovery is affirmed.