Sunday, July 23, 2017

Court Refuses to Permit Government to File Statement of Interest or Amicus in Non-Intervened False Claims Act Cases

Counsel who regularly defend False Claims Act (FCA) cases often encounter “statements of interest” filed by the government in non-intervened FCA cases. Though not a party to the case since it has declined to intervene, the government files these advisory pleadings to argue its interpretation or position on some issue of the False Claims Act, frequently to the detriment of the defendant’s position.

For example, in US ex rel Nevyas v. Allergan, Inc., Dkt 66, Case No. 2:09-CV-432 (E.D. Pa), we see a typical example of a government statement of interest. In Allergan, the defendant moved to dismiss the relator’s second amended complaint in a non-intervened FCA case, and challenged the relator’s claim that it violated the Anti-Kickback Statute, 42 USC §1320a-7b(b) (AKS). Presumably, the relator’s response to the motion to dismiss was not adequate in the eyes of the government because the government filed its statement of interest to address “an argument” raised in the defendant’s motion to dismiss with which it disagreed. Claiming it “has a keen interest in the interpretation of [the FCA and the AKS],” the government submitted its statement of interest to “refute [Defendant’s] argument that the Court should narrowly construe the AKS.”
For its authority as a non-party to submit a brief, the government in Allergan relied on 28 USC § 517 and the fact that it “remains a real party in interest in this matter.” Section 517 does not reference statements of interest or filing briefs on behalf of the United States; rather, it only provides:

The Solicitor General, or any officer of the Department of Justice, may be sent by the Attorney General to any State or district in the United States to attend to the interests of the United States in a suit pending in a court of the United States, or in a court of a State, or to attend to any other interest of the United States.
As in Allergan, district courts rarely refuse the government permission to file statements of interest in FCA cases.
One court in the Middle District of Florida apparently has had enough of these statements of interest. In the last few months, the Court issued two orders refusing the government’s request to file statements of interest. The Court’s opinion in US ex rel Ruckh v. SalusRehabilitation, 2017 WL 1495862 (M.D. Fla. 4/26/2107) is most instructive. In that non-intervened case, after “years of discovery” the relator prevailed after a six week trial and obtained a “spectacular result.” After the defendants moved for judgment as a matter of law and the relator filed its opposition, the government sought to file a statement of interest. Calling it a “euphemism for an advocate’s brief,” the Court refused. It explained its reasons as follows:
·      Section 517 “says nothing” about a statement of interest in a qui tam or otherwise and “nothing about Section 517 supports an intent to create in the Solicitor General the right to appear and submit argument in any case in which the United States articulates a generic interest in the ‘development’ and the ‘correct application’ of the law.”
·  “The clarity with which Congress establishes elsewhere the right to participate in an action belies the assumption that Congress conceals in an organizational chapter the purported right to submit a ‘statement of interest’ and to intervene-in-fact without formally intervening in accord with the False Claims Act.”
·   The government’s request “fails to identify an interest inadequately protected by the relator.”
·        As to the government’s argument that it asserts a “specific interest in . . . the development of law applicable to complex FCA cases,” the Court noted that the government “presumedly maintains an enlivened interest in the development of all federal law, and little if anything, distinguishes this action from all the others . . . . .  Understanding a party’s interest in money requires no additional briefing.”
·     Section 517 appears “inapplicable” in an FCA case since the government declined to intervene.  Section 3730(c)(3) of the FCA “specifically limits the [government’s] participation” and . . . . . invoking Section 517 to proffer argument about the interpretation of the False Claims Act impermissibly circumvents the narrow role prescribed in Section 3730(c)(3).”
Relying on its decision in Ruckh, the Court rejected the government’s attempt to file a statement of interest in response to several of the defendants’ motion to dismiss arguments in another case: US ex rel McFarland v. Florida PharmacySolutions, Dkt 310, Case No.8:15-cv-178-T-23 (M.D. Fla.). The Court’s Order also rejected the government’s alternative argument that it be permitted to file an amicus curiae brief. Noting that the government remains the “remain party in interest” in a qui tam case, the Court denied the government’s request “[b]ecause a party may not gratuitously compound the papers by submitting an amicus curiae  brief.”
Hopefully, the Court’s opinions in Ruckh and McFarland will prompt other courts to more carefully consider whether additional briefing by the government in non-intervened cases is in fact warranted and necessary. 

A. Brian Albritton
July 23, 2017

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