Week Seven

Week of February 13, 2017 through February 17, 2017

United States ex rel. Brianna Michaels and Amy Whitesides v. United States (King 2/14/2017): The Fourth Circuit found that the Attorney General of the United States possesses an absolute veto power over voluntary settlements in FCA qui tam actions. The court further held that the statistical sampling question that it was presented did not constitute a question of law that was subject to interlocutory review under 28 U.S.C. § 1292(b). The court affirmed the United States District Court for the District of South Carolina at Rock Hill (Anderson, Jr.) as to the unreviewable veto ruling and dismissed the relators’ appeal of the statistical sampling ruling. Full Opinion

Richard Crouse v. Town of Moncks Corner (Wilkinson 2/15/2017): The Fourth Circuit held that respondent Police Chief Caldwell was entitled to qualified immunity against appellant’s § 1983 First Amendment retaliation claims, brought after their forced resignations. The court affirmed the judgment of the United States District Court for the District of South Carolina at Charleston (Houck). Full Opinion

Michael Willner v. James Dimon (Diaz 2/16/2017): The Fourth Circuit held that the district court lacked subject matter jurisdiction to hear certain counts of the appellants pro se foreclosure complaint against respondents because appellants did not first submit the claims underlying those counts to administrative review. The Fourth Circuit held that the other relevant counts failed to state a claim upon which relief could be granted. The court affirmed the judgment of the United States District Court for the Eastern District of Virginia at Alexandria (Trenga). Full Opinion

James Hamilton v. William L. Pallozzi; Brian E. Frosh (Floyd 2/17/2017): The Fourth Circuit held that appellant could not state a claim for an as-applied Second Amendment challenge to Maryland’s regulatory scheme for handguns and long guns because he is a state law felon, has not received a pardon, and the basis for his conviction has not been declared unconstitutional or otherwise unlawful. The court affirmed the judgment of the United States District Court for the District of Maryland at Baltimore (Bredar). Full Opinion

Virginia Uranium, Inc. v. John Warren (Diaz 2/17/2017):  The Fourth Circuit held that federal law did not preempt state regulation of conventional uranium mining, in this case the Commonwealth of Virginia’s ban on conventional uranium mining; therefore, appellants failed to state a claim upon which relief can be granted. The court affirmed the judgment of the United States District Court for the Western District of Virginia at Danville (Kiser) dismissing appellant’s complaint. Full Opinion

 

Highlight Case:

United States of America ex rel. Brianna Michaels and Amy Whitesides v. United States of America, No. 15-2145

Decided: February 14, 2017

The Fourth Circuit found that the Attorney General of the United States possesses an absolute veto power over voluntary settlements in False Claims Act (“FCA”) qui tam actions. The court further held that the statistical sampling question that it was presented did not constitute a question of law that was subject to interlocutory review under 28 U.S.C. § 1292(b). The court affirmed the United States District Court for the District of South Carolina (Anderson, Jr.) as to the unreviewable veto ruling and dismissed the relators’ appeal of the statistical sampling ruling.

Relators Brianna Michaels and Amy Whitesides (together “Appellants”) are former employees of Agape Senior Community, Inc. (“Agape”), one of twenty-four defendants included in this qui tam action under the FCA. Appellants allege that Agape fraudulently billed Medicare and other federal health care programs for services to thousands of patients that either were never provided or were provided to patients ineligible to receive them. Appellants attempted to use statistical sampling to establish liability and damages, but the district court determined that using this evidence to prove their case would be improper. The district court further rejected a voluntary settlement between Appellants and Agape because the Attorney General of the United States objected to it, concluding that the Government possessed an unreviewable veto authority over the action’s proposed settlement.

First, as to the unreviewable veto ruling, the Fourth Circuit found that the Attorney General of the United States possesses an absolute veto power over voluntary settlements in FCA qui tam actions. The court relied on the specific language of 31 U.S.C. § 3730(b)(1) which states that a qui tam action “may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.” The court went on to recognize that this result was consistent with the statutory scheme of the FCA, where the United States is the real party in interest in any FCA suit even if the Government declines to intervene. Because the district court came to the same result, the Fourth Circuit affirmed its unreviewable veto ruling.

Second, as to the statistical sampling ruling, the Fourth Circuit found that there was no question of law subject to review. Under 28 U.S.C. § 1292(b), an order being reviewed must involve “a controlling question of law as to which there is substantial ground for difference of opinion.” § 1292(b) review is not appropriate where, for example, the question presented turns on whether there is a genuine issue of fact or whether the district court properly applied settled law to the facts of evidence of a particular case. The Appellant’s appeal raised a question of whether the district court may, in its discretion, allow the Appellants to use statistical sampling to prove their case. The Fourth Circuit found that under these circumstances, the statistical sampling ruling by the district court did not present a question of law that was subject to interlocutory review under § 1292(b).

Accordingly, the Fourth Circuit affirmed the district court’s ruling as to the unreviewable veto ruling and dismissed the Appellant’s appeal of the statistical sampling ruling.

Full Opinion

Michael W. Rabb

 

Additional Outside Reactions:

National Law Review Article

Lexology Article

McKnights Article

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