Metropolitan News-Enterprise


Friday, February 5, 2010


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Panel: Intervening Ruling Mandated ‘Inequitable’ Dismissal


By SHERRI M. OKAMOTO, Staff Writer


The Ninth U.S. Circuit Court of Appeals yesterday threw out a notice of appeal in a qui tam action, finding it untimely while acknowledging that it had been filed in accordance with circuit precedent.

Judge Susan P. Graber said it was “a serious understatement to call this result ‘inequitable,’ ” since the plaintiffs had reasonably relied on then-existing circuit precedent in filing their notice of appeal, but concluded that an intervening Supreme Court decision ruling which shorted the allowable time for filing required dismissal.

Plaintiffs, a group of animal welfare advocates, filed a qui tam action under the False Claims Act against a scientist who had applied for, and received, funding from the National Institutes of Health to research brain cancer using beagles. The FCA allows private citizens who have personal knowledge of fraud by a federal contractor to sue on the government’s behalf and keep a percentage of the recovery.

Misleading Statements

The advocates alleged that the scientist had made false and misleading statements in his grant application by failing to disclose data showing a high rate of failure in preliminary trials, exaggerating the extent of his success with the research, stating a goal for the project that he did not believe could actually be accomplished, and misrepresenting another researcher’s involvement with the project.

The government declined to intervene in the suit, which also named the Barrow Neurological Institute, St. Joseph’s Hospital and Medical Center, Catholic Healthcare West Arizona, and Catholic Healthcare West as defendants.

On Aug. 14, 2007, U.S. District Judge Frederick J. Martone of the District of Arizona granted summary judgment in favor of the defendants, based on his determination that plaintiffs had failed to produce evidence that the complained-of statements were objectively false.

The plaintiffs filed a notice of appeal 51 days later, on Oct. 4, 2007.

At that time, United States ex rel. Haycock v. Hughes Aircraft Co., (1996) 98 F.3d 1100—which provided that the United States was a “party” to a qui tam action, even if it declined to intervene, for purposes of Federal Rule of Appellate Procedure 4(a)(1)—was still good law.

Rule 4(a)(1) allows a 60-day period within which to take an appeal if “the United States or its officer or agency is a party,” otherwise a 30-day limit applies.

Pending Appeal

While plaintiffs’ appeal was pending, the Supreme Court issued a decision in United States ex rel. Eisenstein v. City of New York (2009) 129 S. Ct. 2230, which held that the United States is not a party to a qui tam action under the FCA in which it declines to intervene, so plaintiffs in such cases have only 30 days to appeal.

The high court acknowledged that its decision would have “harsh consequences” for some plaintiffs and “unfairly punish those who relied on the holdings of courts adopting the 60-day limit in cases in which the United States was not a party,” but expressly refused to limit its decision to prospective application.

Graber opined that “[t]hose harsh consequences are now concretely before us,” as Eisenstein overruled Haycock, and under Eisenstein, plaintiffs’ appeal was untimely when filed.

Although Eisenstein did not “foreclose the theoretical possibility that other parts of the Federal Rules of Appellate Procedure could provide an avenue of relief,” Graber concluded that none was available here.

“We cannot extend the time to file a motion for an extension, waive the requirement of a timely motion, construe Plaintiffs’ notice of appeal as such a motion, or grant such a motion—timely or not,” she said, adding that the filing requirements for a notice of appeal are jurisdictional rules, and so the unique circumstances doctrine could not apply.

Judges Betty B. Fletcher and William C. Canby  Jr. joined Graber in her opinion.

The case is United States v. Catholic Healthcare West, 07-16857.


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