United States ex rel. Burr v. Blue Cross & Blue Shield of Florida, Inc.

153 F.R.D. 172, 28 Fed. R. Serv. 3d 1205, 1994 U.S. Dist. LEXIS 10913, 1994 WL 48528
CourtDistrict Court, M.D. Florida
DecidedJanuary 12, 1994
DocketNo. 91-134-Civ-J-16
StatusPublished
Cited by2 cases

This text of 153 F.R.D. 172 (United States ex rel. Burr v. Blue Cross & Blue Shield of Florida, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Burr v. Blue Cross & Blue Shield of Florida, Inc., 153 F.R.D. 172, 28 Fed. R. Serv. 3d 1205, 1994 U.S. Dist. LEXIS 10913, 1994 WL 48528 (M.D. Fla. 1994).

Opinion

ORDER

SNYDER, United States Magistrate Judge.

This cause is before the Court on Herbert Cooper’s Motion for Intervention (Doc. # 68), filed on August 19,1993. All current parties to this action oppose the Motion for Intervention. See Relator’s Opposition to Motion for Intervention (Doc. # 74), filed on September 1, 1993; United States’ Citation of Authority in Opposition to Motion of Herbert Cooper to Intervene (Doc. #75), filed on September 7, 1993 (hereinafter United States’ Opposition); Blue Cross and Blue Shield of Florida, Inc.’s Brief in Opposition to Herbert Cooper’s Motion for Intervention (Doc. #76), filed on September 7, 1993. A hearing was held on the Motion for Intervention on January 5, 1994.

Background

On February 19, 1991, Relator Theresa Burr filed suit under the qui tam provisions of the False Claims Act, 31 U.S.C. § 3729 et seq. (hereinafter FCA), alleging, in part, that the Defendant, Blue Cross and Blue Shield of Florida, Inc. (hereinafter BCBSF), in its capacity as Florida carrier for the Medicare Part B Program under title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., submitted false claims to the United States Department of Health and Human Services in violation of the FCA. The United States elected to intervene in the action pursuant to 31 U.S.C. § 3730(b)(4)(A) in April 1992, the Complaint was unsealed and served on the Defendant shortly thereafter, and on July 10, 1992, the United States filed its Amended Complaint for Money Damages and Civil Penalties Under the False Claims Act, 31 U.S.C. §§ 3729-33, and Common Law (Doc. # 10) (hereinafter Amended Complaint).

On December 16, 1992, the Court stayed civil discovery in the action indefinitely, and directed the United States to file a status report every sixty days, in camera, detailing the progress of parallel criminal proceedings. While the stay was in effect, a criminal investigation was conducted into the circumstances from which the civil action arose. Simultaneously therewith, attorneys with the United States Department of Justice, Civil Division, conducted an independent investigation with which Defendant BCBSF cooperated. During the pendency of the investigations, BCBSF produced hundreds of thousands of documents and years of computer history data. At the conclusion of the civil investigation,1 a Settlement Agreement was reached between the United States and BCBSF.

In pertinent part, the Settlement Agreement releases BCBSF from all liability to the United States under the FCA, various other statutes, and various common law causes of action, arising out of its participation in the Medicare Part B Program as the Florida Medicare Carrier, and more specifically out of the transactions or occurrences alleged in the Complaint or the Amended Complaint dating from December 1, 1986, through July [174]*1749, 1992. In consideration of this release and upon the dismissal with prejudice of this action, BCBSF agrees to pay to the United States the sum of $10,000,000. In accordance with the Settlement Agreement, the United States’ Motion to Dismiss (Doc. # 66) was filed on August 5, 1993. Two weeks later, the instant Motion to Intervene was filed.

In his motion, Mr. Cooper states that he brought suit against BCBSF under the qui torn provisions of the FCA on August 17, 1990, alleging it violated the FCA in its capacity as the Florida Medicare Part B carrier and in its capacity as administrator of private employer group health plans. His claims, however, focused on actions BCBSF allegedly took in violation of its contractual and statutory duties to process certain Medicare and private insurance claims in such a way that the private insurance policies paid on a “primary” basis, and Medicare paid only on a less expensive “secondary” basis. In other words, private insurance policies were to cover the bulk of the cost of certain claims, and Medicare would pay the amount still owing after private insurance coverage was exhausted. According to Mr. Cooper’s Complaint, BCBSF fraudulently manipulated its procedures, both as a Medicare carrier and as an administrator of private insurance plans, so that Medicare paid on a primary basis, and private insurance companies, including BCBSF, paid only on a secondary basis. For convenience, these alleged violations shall hereinafter be referred to as secondary payor violations.

Allegations similar to those made by Mr. Cooper are also made in the Amended Complaint in this case. See id., ¶ 23 & ¶ 28. However, the Amended Complaint is not limited to secondary payor violations, but alleges other violations of the FCA as well, among other things. The Settlement Agreement would release BCBSF from liability for all such violations of the FCA, including the secondary payor violations, committed by BCBSF in its capacity as Medicare Part B carrier for the state of Florida. Hence, the Settlement Agreement, if approved,2 would render moot Mr. Cooper’s suit to the extent he seeks to hold BCBSF liable for secondary payor violations committed in that capacity. Accordingly, he seeks to intervene in this case to protect what he perceives to be his superior claim to the share of the settlement allotted to the qui tam plaintiff pursuant to 31 U.S.C. § 3730(d).

Should Mr. Cooper be Permitted to Intervene?

Mr. Cooper’s Motion to Intervene raises a conundrum. He claims that because he filed suit first, this lawsuit, to the extent it alleges secondary payor violations, is in violation of 31 U.S.C. § 3730(b)(5), which provides “[w]hen a person brings an action under this subsection, no person other than the Government may ... bring a related action based on the facts underlying the pending action.” However, this section also provides that “no person other than the Government may intervene” in an action brought under the FCA. Because § 3730(b)(5) on its face admits of no exceptions to this rule, the Court could permit the intervention only by reading into this subsection an exception for situations like the instant one. See 31 U.S.C. § 3730(c)(5) (stating the Government may elect to pursue any alternative remedy to the one outlined in § 3730(b), provided that the person initiating the § 3730(b) action “shall have the same rights in such proceeding as such person would have had if the action had continued under this section.”).

Even if Mr. Cooper could escape the bar to intervention contained in § 3730(b)(5), there remains the question of whether his motion satisfies the requirements of Rule 24, Federal Rules of Civil Procedure. In that regard, he seeks to intervene as a matter of right pursuant to Rule 24(a)(2), and, in the alternative, he seeks permission to intervene pursuant to Rule 24(b)(2).

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153 F.R.D. 172, 28 Fed. R. Serv. 3d 1205, 1994 U.S. Dist. LEXIS 10913, 1994 WL 48528, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-burr-v-blue-cross-blue-shield-of-florida-inc-flmd-1994.