United States v. Medical Consultants, Inc.

170 F.R.D. 490, 37 Fed. R. Serv. 3d 903, 1997 U.S. Dist. LEXIS 2189, 1997 WL 82094
CourtDistrict Court, W.D. Oklahoma
DecidedFebruary 24, 1997
DocketNo. Civ-94-617-C
StatusPublished
Cited by10 cases

This text of 170 F.R.D. 490 (United States v. Medical Consultants, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Medical Consultants, Inc., 170 F.R.D. 490, 37 Fed. R. Serv. 3d 903, 1997 U.S. Dist. LEXIS 2189, 1997 WL 82094 (W.D. Okla. 1997).

Opinion

MEMORANDUM OPINION AND ORDER

CAUTHRON, District Judge.

This matter comes before the Court on the motions of defendants Medical Consultants d/b/a Emergency Physician’s Billing Services, Inc. (EPBS), J.D. McKean (McKean), and EmCare and defendants Spectrum Emergency Care (Spectrum), Synergon and Coordinated Health Services, Inc. (Coordinated) to dismiss the claims of the qui tam relator alleging those claims do not survive her death. In response, the personal representative of the relator’s estate has filed a motion for substitution of the personal representative as qui tam plaintiff in accordance with Fed.R.Civ.P. 25(a)(1). Defendants Spectrum, Synergon and Coordinated also seek dismissal of the government’s claims without prejudice for failure to timely serve its complaint on the defendants. Additional motions were filed by defendants Medicus and Coastal to dismiss the government’s First Amended Complaint as it fails to comply with Fed.R.Civ.P. 9(b). For the reasons more fully addressed below, the motions of the defendants are denied, and the motion of the personal representative for substitution is granted.

I. Background

On April 29, 1994, Theresa Semtner initiated this action by filing a complaint as qui tam plaintiff against defendants alleging violations of the False Claims Act (FCA or the Act) and conspiracy to violate the Act. After numerous delays, the government elected to intervene in the action on March 3, 1995, as allowed by 31 U.S.C. § 3730(b)(2), (4). Although the death of the relator on May 22, 1996, spurred a number of the defendants to file motions to dismiss similar to those presently before the Court, the government chose to file a First Amended Complaint on June II, 1996, adding additional claims for unjust enrichment and payment under mistake of fact, mooting this first round of motions. The defendants resubmitted their motions with some modifications following the filing of the amended complaint.

On August 15, 1996, a “Suggestion of Death on the Record” was filed by relator’s counsel confirming that Ms. Semtner died of complications from renal cell cancer on May 22, 1996. Shortly thereafter the representative filed a motion for substitution as relator which also served as the relator’s response to the motions to dismiss. The motion and accompanying affidavits represent that the relator’s sister, Kevin K.T. Trim, has been appointed by the District Court of Oklahoma County as the personal representative (representative) of the relator’s estate. These motions finally came at issue on December 5, 1996, when the representative filed her reply brief.

II. Discussion

The central issue raised by these motions is whether the qui tam relator’s action survives her death. Defendants also urge dismissal based upon the failure of the First Amended Complaint to plead fraud with particularity as to some of the defendants, and because the government’s service of the complaint was not timely.

[493]*493A. Survival

Federal Rule of Civil Procedure 25(a) provides that “[i]f a party dies and the claim is not thereby extinguished, the Court may order substitution of the proper parties.” The cause of action, therefore, must be one that survives the death of the party before the Court may order substitution. The parties have agreed upon a number of basic legal principles governing the survivor-ship of actions in federal court. For instance, although there is a small and unconvincing minority to the contrary,1 the parties concur that whether an action survives the death of the relator is a question of federal common law unless a statute directly addresses the issue. See Ex parte Schreiber, 110 U.S. 76, 3 S.Ct. 423, 28 L.Ed. 65 (1884); United States v. NEC Corp., 11 F.3d 136, 137 (11th Cir.1994); Smith v. Dep’t of Human Serv., 876 F.2d 832, 834 (10th Cir.1989); Murphy v. Household Fin. Corp., 560 F.2d 206, 208 (6th Cir.1977). Federal courts generally recognize that claims characterized as “penal” abate, while claims characterized as “remedial” survive.2 See Schreiber, 110 U.S. at 79-80, 3 S.Ct. at 423-24; Smith, 876 F.2d at 834-35. After reviewing the status of the qui tarn relator under the traditional survivorship tests, the Court concludes the relator and her claims do not fit within the definition of either penal or remedial, and therefore, the only rational characterization of the relator’s claim must be derived from the underlying claim of the government. As the parties do not contest the remedial nature of the government’s claim, the action does survive and the personal representative should be substituted in the stead of the decedent relator.

Defendants argue that the claims of the government and the relator should be examined independently, and such examination will show the relator’s claims are not remedial in nature. They contend that because a statute may be remedial as to one party or claim and penal as to another party or claim in the same action, it follows that the relator’s claims are distinct and should be analyzed separately. Although the Court agrees that a statute may be penal as to some parties or claims and remedial as to others, this does not compel the conclusion that such is always the case when multiple claims arise. The only citation offered by the defendants in support of this proposition is an opinion of the Court of Appeals for the Eleventh Circuit which merely states broadly that “a statute can be remedial as to one party, yet penal as to another.” NEC, 11 F.3d at 137 n. 1. That case is the only published opinion addressing the survivability of actions following the death of the qui tarn relator. However, the Eleventh Circuit in NEC never addressed how or why the relator’s claims are distinct from that of the government, and therefore [494]*494why a separate analysis should be conducted. A review of the relator’s role under the same traditional common law test adopted by the court of appeals in NEC and most federal circuits clearly shows that for purposes of survival, the claims are not distinct and the relator’s claims are merely derivative of those of the government.

To determine whether a statute is remedial or penal, the Court should look to the language of the statute and to its legislative history. Smith, 876 F.2d at 835. This review is conducted by most federal courts following the test created by Murphy v. Household Fin. Corp., 560 F.2d 206 (6th Cir.1977). Although the test has never been unquestionably adopted in this circuit, in Smith,

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Bluebook (online)
170 F.R.D. 490, 37 Fed. R. Serv. 3d 903, 1997 U.S. Dist. LEXIS 2189, 1997 WL 82094, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-medical-consultants-inc-okwd-1997.