United States v. Lori L. Carver

CourtCourt of Appeals for the Eleventh Circuit
DecidedJuly 31, 2023
Docket22-13608
StatusUnpublished

This text of United States v. Lori L. Carver (United States v. Lori L. Carver) 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. Lori L. Carver, (11th Cir. 2023).

Opinion

USCA11 Case: 22-13608 Document: 29-1 Date Filed: 07/31/2023 Page: 1 of 19

[DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

____________________

No. 22-13608 Non-Argument Calendar ____________________

UNITED STATES OF AMERICA, ex. rel. Lori L. Carver, Plaintiff-Appellee, LORI L. CARVER, Interested Party-Appellant, versus PHYSICIANS PAIN SPECIALISTS OF ALABAMA, P.C., et al.,

Defendants.

____________________ USCA11 Case: 22-13608 Document: 29-1 Date Filed: 07/31/2023 Page: 2 of 19

2 Opinion of the Court 22-13608

Appeal from the United States District Court for the Southern District of Alabama D.C. Docket No. 1:13-cv-00392-JB-N ____________________

Before ROSENBAUM, NEWSOM, and GRANT, Circuit Judges. PER CURIAM: Lori Carver filed a qui tam action seeking recovery on behalf of the United States under the False Claims Act (“FCA”), see 31 U.S.C. § 3730, for fraudulent claims paid by government healthcare programs that were submitted by her former employers. The gov- ernment initially declined to intervene in the case, leaving Carver in charge of prosecuting it. Several years later, though, the govern- ment changed its mind and moved to intervene for the purpose of exercising its right to unilaterally dismiss the FCA action under 31 U.S.C. § 3730(c)(2)(A). The government’s motion explained in de- tail why it had come to believe that the burdens of continued liti- gation outweighed its benefits. The district court granted that mo- tion, and Carver appeals. Because the government gave good grounds, amply supported by the record, for seeking dismissal of this action, the district court did not abuse its discretion by granting the government’s motion. We affirm. I. The False Claims Act The FCA imposes civil liability on any person who “know- ingly presents . . . a false or fraudulent claim for payment or ap- proval” to the federal government, among other things. 31 U.S.C. USCA11 Case: 22-13608 Document: 29-1 Date Filed: 07/31/2023 Page: 3 of 19

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§ 3729(a). The FCA is enforced through a public-private frame- work: the government may sue alleged violators on its own, id. § 3730(a); or a private person—called a “relator”—may sue “in the name of the [g]overnment,” which is known as a qui tam action. Id. § 3730(b)(1). Either way, the injury asserted is “exclusively to the [g]overnment.” United States ex rel. Polansky v. Exec. Health Res., Inc., 143 S. Ct. 1720, 1727 (2023). Nevertheless, “[i]f the action leads to a recovery, the relator may receive up to 30% of the total.” Id. (citing 31 U.S.C. § 3730(d)(1)–(2)). A relator is “no ordinary civil plaintiff” and is “subject to spe- cial restrictions.” Id. at 1727–28. Among them, the relator must file the complaint under seal, and the government then has 60 days—which can be extended for “good cause”—to “intervene and proceed with the action.” 31 U.S.C. § 3730(b)(2)–(3). “If the [g]overnment, during that so-called seal period, elects to intervene, the relator loses control,” and the government takes over. Po- lanksy, 143 S. Ct. at 1727–28 (citing 31 U.S.C. § 3730(b)(4)(A), (c)(1)). If that occurs, the government “may dismiss the action notwith- standing the objections” of the relator so long as the relator re- ceives notice and an opportunity for a hearing. 31 U.S.C. § 3730(c)(2)(A). But the relator “shall have the right to conduct the action” if the government opts not to intervene. Id. § 3730(b)(4), (c)(3). Even if the government declines to intervene during the seal period, though, “the relator is not home free.” Polanksy, 143 S. Ct. at 1728. USCA11 Case: 22-13608 Document: 29-1 Date Filed: 07/31/2023 Page: 4 of 19

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The court may “permit the [g]overnment to intervene at a later date upon a showing of good cause.” 31 U.S.C. § 3730(c)(3). II. Background A. Carver files a qui tam case and the government declines to intervene. From 2010 to 2013, Carver worked at Physician’s Pain Spe- cialists of Alabama, PC (the Clinic), a pain-management clinic in Mobile, Alabama. Two medical doctors, John Patrick Couch and Xiulu Ruan, owned and operated the Clinic. They also ran a phar- macy, C&R Pharmacy, LLC (the Pharmacy). As part of their pain- management practice, Couch and Ruan conducted urine drug screening through an arrangement with Castle Medical, LLC (Cas- tle). Carver discovered that Couch and Ruan had submitted fraudulent claims for payment to federal healthcare programs. She took this information to the U.S. Attorney’s office, which encour- aged her to bring a qui tam action. See United States v. Couch, 906 F.3d 1223, 1226–27 (11th Cir. 2018) (summarizing this history). Carver filed the suggested qui tam action in August 2013 and an amended pleading in August 2014. The government repeatedly requested and received extensions of the seal period to decide whether to intervene in the case. Finally, in October 2016, the gov- ernment filed a notice declining to intervene. Soon after, Carver filed her second amended complaint, after which the government again declined to intervene. The district court unsealed the plead- ings and some other filings and ordered the qui tam case to move forward. USCA11 Case: 22-13608 Document: 29-1 Date Filed: 07/31/2023 Page: 5 of 19

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B. The government prosecutes Couch and Ruan. Meanwhile, the government began investigating Couch and Ruan based in part on Carver’s information. Couch, 906 F.3d at 1226. In April 2015, it obtained an indictment charging both doc- tors with conspiracy to distribute controlled substances and con- spiracy to commit healthcare fraud. The charges partially over- lapped with the allegations in Carver’s qui tam complaint. The gov- ernment later obtained two superseding indictments, in October 2015 and April 2016, adding new defendants and new charges, in- cluding racketeering, Anti-Kickback Statute violations, wire fraud, and drug-distribution offenses. These later indictments “partially overlapped with the allegations in Ms. Carver’s qui tam action,” but “also included charges based on unlawful prescribing practices, which were not alleged in the initial qui tam complaint.” Id. The criminal case went to trial, and the jury convicted Couch of all charges, and Ruan of all but one. Couch and Ruan both appealed. Carver attempted to intervene in the criminal for- feiture proceedings, but the district court denied intervention, and we affirmed in October 2018. See Couch, 906 F.3d at 1228–29. Still, though, we observed that our ruling “will not disable Ms. Carver from getting her relator’s share,” accepting the government’s as- surances that a relator is entitled to a share of forfeited property “[w]here a defendant is found civilly liable for damages in a False Claim Act suit after being found criminally liable for the same fraud.” Id. at 1228–29. C. Carver focuses solely on Castle, which then drops out of the case. USCA11 Case: 22-13608 Document: 29-1 Date Filed: 07/31/2023 Page: 6 of 19

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United States v. Lori L. Carver, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-lori-l-carver-ca11-2023.