United States v. John McAvoy

21 F.4th 1353
CourtCourt of Appeals for the Eleventh Circuit
DecidedDecember 30, 2021
Docket20-10604
StatusPublished

This text of 21 F.4th 1353 (United States v. John McAvoy) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. John McAvoy, 21 F.4th 1353 (11th Cir. 2021).

Opinion

USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 1 of 20

[PUBLISH]

In the

United States Court of Appeals For the Eleventh Circuit

____________________

No. 20-10604 ____________________

UNITED STATES OF AMERICA, Plaintiff-Appellee, MURRAY FARMER, JOHN P. MCAVOY, MARCO ZAVALA, Interested Parties-Appellants, versus THE REPUBLIC OF HONDURAS, (ROH), MOISES STARKMAN, former Minister of FHIS, CARLOS ROBERTO FLORES FACUSSE, former President of the Republic of Honduras, USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 2 of 20

2 Opinion of the Court 20-10604

Individually and in his official capacity, JUAN ORLANDO HERNANDEZ, current President of Honduras, individually and in his official capacity, GABRIELA NUNEZ DE REYES, et al., Secretary of State for Finance,

Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Alabama D.C. Docket No. 1:17-cv-00470-KD-N ____________________

Before ROSENBAUM, TJOFLAT, Circuit Judges, and MOODY,* District Judge. MOODY, District Judge: The False Claims Act (31 U.S.C. § 3729 et. seq.) allows a per- son, known as a Relator, to bring an action on behalf of the Gov- ernment to recover damages for making a false or fraudulent claim

* The Honorable James S. Moody, Jr., United States District Judge for the Mid- dle District of Florida, sitting by designation. USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 3 of 20

20-10604 Opinion of the Court 3

for payment from the United States (a qui tam action). The Gov- ernment, even after initially declining to intervene, may dismiss the suit over the Relator’s objection with notice and an opportunity for a hearing. This appeal raises two issues: (1) whether the Govern- ment must first formally intervene upon a showing of good cause prior to filing a motion to dismiss, and (2) what standard of review is the Court to use at the hearing.

Because we have previously determined that the Govern- ment does not have to formally intervene before filing a motion to settle a qui tam action, and because the reasoning is the same for dismissals, we hold that the Government does not have to formally intervene before moving to dismiss a qui tam case even though it had earlier declined to intervene. And while the statute requires that a proposed settlement be “fair, adequate, and reasonable,” the statute is silent as to any such requirement for dismissals. We therefore conclude that decisions to dismiss are within the province of the Executive Branch subject only to limits imposed by the Fed- eral Rules of Civil Procedure, a statute, or the Constitution.

Here, when the Relators filed their initial complaint, the United States declined to intervene. The Relators then filed an amended complaint adding additional defendants, some of which were Government employees in their individual and official capac- ities. The United States, upon further consideration, determined that the action should be dismissed. It then filed its motion to dis- miss without first filing a motion to intervene in the case. USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 4 of 20

4 Opinion of the Court 20-10604

Relators contended that the United States was not a party unless it first formally intervened “for good cause” under § 3730(3) and therefore had no standing to file a motion to dismiss. And, if the Court were to consider the Government’s motion, it should require the Government to show (1) a valid government purpose for the dismissal and (2) a rational relation between the dismissal and accomplishing that purpose. Then, if the Government were to satisfy this two-step test, the Relators acknowledged, to avoid dis- missal, they must then show that the motion was fraudulent, arbi- trary and capricious, or illegal. This is the framework adopted in the Ninth Circuit. See United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139, 1145 (9th Cir. 1998).

The District Court followed our earlier decision in United States v. Everglades College, Inc., 855 F.3d 1279 (11th Cir. 2019), and concluded that the United States was not required to move to intervene before filing a motion to dismiss. The Court entered judgment dismissing the case. The Relators appealed. We have jurisdiction under 28 U.S.C. § 1291.

The False Claims Act provides in pertinent part:

(c) Rights of the parties to qui tam actions. (1) If the Government proceeds with the action, it shall have the primary responsibility for prose- cuting the action, and shall not be bound by an action of the person bringing the action. Such person shall have the right to continue as a USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 5 of 20

20-10604 Opinion of the Court 5

party to the action, subject to the limitations set forth in paragraph (2).

(2)(A) The Government may dismiss the ac- tion notwithstanding the objections of the per- son 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 mo- tion.

(B) The Government may settle the action with the defendant notwithstanding the objec- tions of the person initiating the action if the court determines, after a hearing, that the pro- posed settlement is fair, adequate, and reason- able under all the circumstances. Upon show- ing good cause, such a hearing may be held in camera.

31 USCA § 3730(c)(1) and (2)(A) and (B). The statute is silent con- cerning whether the Government must formally intervene before filing a motion to dismiss and does not inform the court what standard the Government must meet to obtain a dismissal. Our USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 6 of 20

6 Opinion of the Court 20-10604

sister circuits vary in their approaches to these questions1 (but the ultimate results seem to be the same).

We have previously addressed this issue in the context of a motion by the Government to approve a settlement. The reason- ing applies as well to dismissals:

We hold that, in this case, the United States did not need to satisfy the good-cause intervention require- ment for qui tam actions under 31 U.S.C.§ 3730(c)(3) because that subsection applies only when the gov- ernment intervenes for the purpose of actually pro- ceeding with the litigation—not when it is stepping in only for the purpose of settling and ending the case. Because intervention was not required, we need not concern ourselves with whether the requirements of § 3730(c)(3), which addresses late intervention by the government for the purpose of continuing the litiga- tion, have been met.

A straightforward reading of the text supports this conclusion. First, subsection (b)(2) expressly links in- tervention to the government’s decision to “proceed

1For a review of the various positions taken on these issues, see United States ex rel. Health Choice All. LLC v. Eli Lilly & Co., No. 19-40906, 2021WL 2821116 (5th Cir. July 7, 2021); Polansky v. Exec. Health Res. Inc., No. 19-3810, 2021 WL 4999092 (3d Cir. Oct. 28, 2021). USCA11 Case: 20-10604 Date Filed: 12/30/2021 Page: 7 of 20

20-10604 Opinion of the Court 7

with the action.” § 3730(b)(2) (“The Government may elect to intervene and proceed with the ac- tion....” (emphasis added)).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Rizalyn Bautista v. Star Cruises
396 F.3d 1289 (Eleventh Circuit, 2005)
Bordenkircher v. Hayes
434 U.S. 357 (Supreme Court, 1978)
Wayte v. United States
470 U.S. 598 (Supreme Court, 1985)
Davis v. Michigan Department of the Treasury
489 U.S. 803 (Supreme Court, 1989)
Moskal v. United States
498 U.S. 103 (Supreme Court, 1990)
Robinson v. Shell Oil Co.
519 U.S. 337 (Supreme Court, 1997)
Securities and Exchange Commission v. George G. Levin
849 F.3d 995 (Eleventh Circuit, 2017)
USA v. Everglades College, Inc.
855 F.3d 1279 (Eleventh Circuit, 2017)
United States v. UCB, Inc.
970 F.3d 835 (Seventh Circuit, 2020)
Jesse Polansky v. Executive Health Resources Inc
17 F.4th 376 (Third Circuit, 2021)

Cite This Page — Counsel Stack

Bluebook (online)
21 F.4th 1353, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-john-mcavoy-ca11-2021.