United States v. John Patrick Couch, M.D.
Opinion
When a private person brings a False Claims Act suit-known as a
qui tam
action-the government may choose to intervene and take over the action.
Even if the False Claims Act could be read to allow intervention, the statutes *1225 governing criminal forfeiture specifically bar it, with exceptions that do not apply here. We conclude that the criminal forfeiture statutes control, and we agree with the District Court's denial of Lori Carver's motion to intervene for that reason.
Our Circuit precedent does not permit us to affirm, however. On appeal of denial of a motion to intervene, our precedent provides for "provisional jurisdiction" to determine whether the District Court properly denied intervention.
EEOC v. E. Airlines, Inc.
,
I. FALSE CLAIMS ACT BACKGROUND
The False Claims Act imposes civil liability on any person who "knowingly presents ... a false or fraudulent claim for payment or approval" to the federal government.
The government has options other than intervention when a private person brings a
qui tam
action. The False Claims Act expressly allows the government to pursue remedies besides the
qui tam
action: "[T]he Government may elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty."
With this statutory background in mind, we turn to the facts of this case.
II. FACTUAL AND PROCEDURAL BACKGROUND
Lori Carver worked at Physicians Pain Specialists of Alabama, P.C., a pain management clinic in Mobile, Alabama. Two doctors, John Patrick Couch and Xiulu Ruan, ran the clinic. Ms. Carver discovered Dr. Couch and Dr. Ruan submitted fraudulent claims for payment to federal healthcare programs. She took this information to the U.S. Attorney's office, which encouraged her to bring a qui tam action against the clinic and doctors.
Ms. Carver brought the suggested qui tam action in 2013. See Dkt. No. 1, United States ex rel. Carver v. Physician Pain Specialists of Ala., P.C. , Case No. 1:13cv392-JB-N (S.D. Ala. Aug. 1, 2013). That case remains pending. See Dkt. No. 208, Carver , Case No. 1:13cv392-JB-N (setting pretrial conference for January 2019). She is litigating it herself, since the government chose not to intervene. Dkt. No. 24, Carver , Case No. 1:13cv392-JB-N
*1226
(notice of non-intervention);
see
The government did not disregard Ms. Carver's allegations, however. With Ms. Carver's information, the government began investigating Dr. Couch and Dr. Ruan. In April 2015, almost two years after Ms. Carver brought her qui tam action, the government criminally charged both doctors with conspiracy to distribute controlled substances and conspiracy to commit healthcare fraud. The charges in the indictment partially overlapped with the allegations in Ms. Carver's qui tam complaint.
After further investigation, the government issued a superseding indictment in October 2015 and a second superseding indictment in April 2016. The first superseding indictment added new defendants (who later pled guilty) and new charges: racketeering, Anti-Kickback Statute violations, wire fraud, and drug distribution offenses. The second superseding indictment further fleshed out the factual basis for the charges. The superseding indictments, like the first, also partially overlapped with the allegations in Ms. Carver's qui tam action. However, the indictments also included charges based on unlawful prescribing practices, which were not alleged in the initial qui tam complaint. All three indictments included forfeiture counts.
The criminal case went to trial, and the jury convicted Dr. Couch of all charges, and Dr. Ruan of all but one. The District Court promptly entered a preliminary forfeiture order.
Ms. Carver moved to intervene in the forfeiture proceedings, asserting a right to some of the forfeited assets. She primarily argued the alternate-remedy provision permits her to intervene to claim the share of the assets she would have been entitled to if the government had intervened in her
qui tam
action. In the alternative, she petitioned to assert an interest in the forfeited property under
The government argued Ms. Carver has no right to intervene under the alternate-remedy provision because her qui tam case remains pending-meaning she has not yet established a right to a relator's share. It further asserted the False Claims Act does not permit intervention in criminal cases.
The district court denied Ms. Carver's motion to intervene. It ruled that the alternate-remedy provision does not permit intervention in criminal cases. It also ruled Ms. Carver had no right to intervene under
III. STANDING
Before getting to the merits, we stop to address Ms. Carver's standing to intervene, which the government challenges. We are aware of the recent ruling of the Ninth Circuit that a
qui tam
plaintiff lacked standing to intervene in criminal forfeiture proceedings.
See
United States v. Van Dyck
,
Ms. Carver asserts a statutory procedural right-specifically, a right under the alternate-remedy provision to have her
*1227
relator's share adjudicated in the criminal forfeiture proceeding. A "person who has been accorded a procedural right [by statute]
to protect his concrete interests
can assert that right."
Lujan v. Defs. of Wildlife
,
We are not persuaded by the government's contention that Ms. Carver's property interest is so "speculative" as to deprive us of jurisdiction. It is true that no court has yet adjudicated whether she is entitled to a relator's share. Yet if this were enough to deprive us of jurisdiction, no person claiming a property interest would ever get into federal court. Federal courts resolve property disputes every day. Indeed, criminal forfeiture courts routinely "determine
whether
any third parties have an interest in the forfeited property."
United States v. Davenport
,
Finally, the general principle that private parties lack standing to intervene in criminal proceedings has no application here.
See
Linda R.S. v. Richard D.
,
Thus, we have jurisdiction to decide whether the alternate-remedy provision confers a procedural right on Ms. Carver to have her relator's share adjudicated in the forfeiture proceeding.
IV. INTERPRETING THE ALTERNATE-REMEDY PROVISION
That brings us to the merits of whether the alternate-remedy provision allows qui tam plaintiffs like Ms. Carver to intervene in criminal forfeiture proceedings. As relevant here, the alternate remedy provision reads:
[T]he Government may elect to pursue its claim through any alternate remedy available to the Government, including *1228 any administrative proceeding to determine a civil money penalty. If any such alternate remedy is pursued in another proceeding, the person initiating the [ qui tam ] action shall have the same rights in such proceeding as such person would have had if the [ qui tam ] action had continued under this section.
Whether a criminal fraud prosecution is an "alternate remedy" is an open question.
1
See
Van Dyck
,
Three criminal forfeiture statutes apply in this case, and each expressly bars third parties from intervening in forfeiture proceedings to claim an interest in property subject to forfeiture.
See
In contrast to the precision of the forfeiture statutes, the alternate-remedy provision does not expressly provide a right of intervention in an "alternate proceeding." Neither does it define "alternate remedy" to include criminal fraud prosecutions. The specific bar on intervention in the criminal forfeiture provisions controls our interpretation of the alternate-remedy provision's general terms here. That being the case, we need not pass on whether the alternate-remedy provision would entitle qui tam plaintiffs to intervene in other "alternate remedy" proceedings.
A final word. Our ruling will not disable Ms. Carver from getting her relator's share. The government assured us in its brief that a ruling against intervention "will not necessarily prevent a future recovery." It continued:
Where a defendant is found civilly liable for damages in a False Claims Act suit after being found criminally liable for the same fraud, the defendant may deduct restitution paid to the United States in the criminal proceedings as a credit against the False Claims Act damages award. In such circumstances, a qualified relator is entitled to a share of the full amount of the damages *1229 award, including restitution previously paid.
We understand this to mean a relator is entitled to a share of the forfeited property to the extent the
qui tam
defendant can deduct any forfeiture from the
qui tam
award. It appears the government gave the Ninth Circuit the same assurance in
Van Dyck
.
See
V. CONCLUSION
The District Court properly denied Ms. Carver's motion to intervene. Under this Circuit's "anomalous rule," our jurisdiction "evaporates" with this conclusion "because the proper denial of leave to intervene is not a final decision."
E. Airlines, Inc.
,
The question has divided federal District Courts.
Compare
United States v. Kurlander
,
Reference
- Full Case Name
- UNITED STATES of America, Plaintiff - Appellee, Lori L. Carver, Interested Party - Appellant, v. John Patrick COUCH, M.D., Xiulu Ruan, M.D., Defendants - Appellees.
- Cited By
- 6 cases
- Status
- Published