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United States ex rel. Davis v. Hennepin County

United States District Court, D. Minnesota

February 13, 2019

United States of America ex rel. Leslie Davis and John D. Westley, Relators,
Hennepin County; Deborah Hedlund; Carol Molnau; Robert McFarlin; Dan Dorgan; Mark Rosenker; Steve Lilley; Ares Corporation; Wiss, Janey, Elstner Associates; Sandia National Labs, LLC, Defendants.

          Diana L. Longrie, Longrie Law Office, Maplewood, MN, for relators Leslie Davis and John D. Westley.

          Chad A. Blumenfield and Erica MacDonald, United States Attorney's Office, Minneapolis, MN, for plaintiff the United States of America.


          Eric C. Tostrud United States District Judge

         The False Claims Act (“FCA”) includes a provision allowing the Government to dismiss an action if the relators (1) have been notified and (2) have had “an opportunity for a hearing on the motion.” 31 U.S.C. § 3730(c)(2)(A). The Government seeks to exercise that prerogative here and has filed a motion to dismiss. Relators were notified of the motion and a hearing was held. Relators oppose dismissal on two grounds. First, Relators argue that the Government waived its right to dismiss when it declined to intervene in the action. Second, Relators argue that, to be granted, the Government's motion to dismiss must be supported by a valid government purpose and a rational relation between dismissal and accomplishment of the articulated purpose. The Government maintains that intervention is not a prerequisite to exercising its right to dismiss and that its right to dismiss is subject only to satisfying the notification and “opportunity for a hearing” requirements set forth in the plain text of 31 U.S.C. § 3730(c)(2)(A). In other words, the Government says that it need not show a valid purpose or rational basis to obtain dismissal. The law and practical considerations support the Government's position that it need not intervene in order to seek dismissal of an FCA case. On the separate question of what showing the Government must make, if any, to obtain dismissal, it does not matter which position is accepted. Though the law tilts in favor of the rule advanced by the Government, the Government here satisfies the test advocated by Relators. The Government's motion will be granted.


         This is Relators' third qui tam FCA case against Defendants, and their second in the District of Minnesota. See U.S. ex rel. Davis v. Hennepin Cty., No. 15-cv-2671 (RWP/CFB), 2016 WL 10747256 (D. Minn. July 8, 2016) (“Davis I”); U.S. ex rel. Davis v. Hennepin Cty., No. 5:17-cv-81 (GRJ/RH), 2017 WL 4475938 (N.D. Fla. May 23, 2017) (“Davis II”). In each case, the allegations have been essentially the same: “that the various named Defendants conspired to cover up and conceal the true causes of the Minnesota Interstate 35 West bridge collapse so that Hennepin County could make false claims and thereby improperly secure various types of federal funding for the bridge's reconstruction.” Davis I, 2016 WL 10747256, at *1; accord Davis II, 2017 WL 4475938, at *1; Compl. ¶ 16 [ECF No. 1].

         Some additional detail about Relators' allegations is appropriate, because part of the Government's rationale for dismissal-to the extent it must have one-is that the “factual sequence of events” suggested by Relators “appears unlikely.” Mem. in Supp. at 5 [ECF No. 12]. Relators allege that they have “specific information, ” which they do not divulge in their complaint, that “local governmental officials conspired to cover up and conceal the causes of the Interstate 35W bridge collapse so that false claims could be made by Hennepin County to obtain” some $250 million in “[f]ederal disaster relief, grants, congressional and other stimulus funding.” Compl. ¶¶ 16, 21. They further allege that Hennepin County “contaminated an active disaster scene” and that the head of the Minnesota Department of Transportation (“MNDOT”), defendant Molnau, “abused her authority and committed numerous illegal acts and quid pro quo political dealings to cover up the cause of the . . . bridge collapse so that false claims could be made.” Id. ¶¶ 18, 23. Relators are particularly concerned that false claims were made about “foreign materials and labor” used in the bridge reconstruction, in violation of the Buy American Act, and that this foreign steel created problems requiring additional government expenditures. Id. ¶¶ 29, 33.

         In all three of Relators' FCA cases, the Government has declined to intervene. Davis I, 2016 WL 10747256, at *1; Davis II, 2017 WL 4475938, at *1; Not. of Election to Decline Intervention [ECF No. 20]. Relators' two previous cases ultimately were dismissed without prejudice because of Relators' pro se status. See Davis I, 2016 WL 10747256, at *2 (“[C]ourts have uniformly held that non-lawyers may not litigate qui tam actions on behalf of the United States.” (citations omitted)); Davis II, 2017 WL 4475938, at *2 (“Relators are not permitted to bring this qui tam FCA case as pro se parties.”).

         Relators have secured legal representation in their current case. See Compl. ¶ 1. As a result, instead of filing another “suggestion of dismissal” on the grounds that Relators cannot proceed pro se, the Government has filed a motion to dismiss. ECF No. 10. Shortly after filing its motion to dismiss, the Government filed a notice of election to decline intervention. ECF No. 20. Since that time, the case has been unsealed and Relators have been ordered to serve their complaint upon the Defendants. ECF No. 21. Relators evidently have not yet done so. See Longrie Decl. ¶ 8 [ECF No. 24] (declaration of Relators' attorney, Diana Longrie, stating that “[Relators] have a meritorious FCA action and with the case now unsealed, we are ready to serve the Defendants and proceed with the case”); see also Docket (containing no summons returned executed). Accordingly, only Relators and the Government have appeared in the action and at oral argument on the motion to dismiss. See Min. Entry [ECF No. 33]; see also 31 U.S.C. § 3730(c)(2)(A) (making no mention of defendants' involvement in the hearing on the Government's motion to dismiss).


         The Government seeks dismissal pursuant to 31 U.S.C. § 3730(c)(2)(A). Mem. in Supp. at 1. Section 3730(c) of the FCA is entitled “Rights of the parties to qui tam actions, ” and subsection (c)(2)(A) provides: “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.”

         The Parties' disputes arise out of the potential ambiguities caused by § 3730(c)(2)(A)'s failure of expression: May the Government dismiss an action if it has declined to intervene? And is the Government's right to dismiss absolute, or conditioned upon satisfying some standard, such as rational basis? These are questions of statutory interpretation that are resolved as a matter of law. See Smythe v. City of Onamia, No. 12-cv-3149 (ADM/LIB), 2014 WL 4096966, at *4 (D. Minn. Aug. 19, 2014) (“Statutory interpretation is a matter of law, and the outcome in general does not rely on the facts of any one case.” (citing Wingert & Assocs., Inc. v. Paramount Apparel Int'l, Inc., 458 F.3d 740, 743 (8th Cir. 2006) (“We review questions of statutory interpretation de novo.”))). There is no binding Supreme Court or Eighth Circuit precedent on these issues, but the Parties have identified the leading cases: Sequoia Orange from the Ninth Circuit, and Swift from the D.C. Circuit. See Swift v. United States, 318 F.3d 250, 251 (D.C. Cir. 2003); U.S. ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139 (9th Cir. 1998).


         The first issue is whether the Government may dismiss a case in which it has declined to intervene. Put another way, must the Government intervene to obtain dismissal? Relators maintain that the “language, structure, and legislative history” of § 3730(c)(2)(A) “do not expressly or impliedly authorize the United States to outright dismiss a qui tam action they have not intervened in.” Mem. in Opp'n at 2-3 [ECF No. 22] (stating “[t]he United States gave up the driver's seat when they declined to intervene”). The Government's position is that the statutory dismissal provision “applies equally to intervened and declined claims, so that the United States may dismiss a claim after declining to intervene.” Mem. in Supp. at 2-3.

         On this threshold question, Sequoia Orange is not directly on point because the Government did intervene there before seeking dismissal. See 151 F.3d at 1141. Nonetheless, in dicta, the Ninth Circuit recognized that “[n]othing in § 3730(c)(2)(A) purports to limit the government's dismissal authority based upon the manner of intervention” and the statute “may permit the government to dismiss a qui tam action without actually intervening in the case at all.” Id. at 1145 (citing U.S. ex rel. Kelly v. Boeing Co., 9 F.3d 743, 753 n.10 (9th Cir. 1993)).

         Swift is more apposite, as that case involved a motion to dismiss that was filed “without purporting to intervene.” 318 F.3d at 251. The same is true of the present case, except that here, the Government also subsequently filed a notice confirming it did not intend to intervene. ECF No. 20. In Swift, the D.C. Circuit interpreted the FCA dismissal provision to contain no intervention requirement. 318 F.3d at 251 (“As is evident from the [statutory] quotation, the provision does not say that the government must intervene in order to seek dismissal.”). The court focused on how the only purpose of intervention is to “proceed with the action, ” 31 U.S.C. § 3730(b)(2), and “[e]nding the case by dismissing it is not proceeding with the action”-to “proceed” would mean “that the case will go ...

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