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Court of Appeal:
‘Stay’ Existed Where Any Action on Complaint Was Barred
Opinion Says Judge Duffy-Lewis Erred in Dismissing Qui Tam Suit for Failure to Bring It to Trial Within Five Years
Because She Did Not Take Into Account Period When Pleading Was Sealed While Government Investigated
By a MetNews Staff Writer
The Court of Appeal for this district yesterday ordered reinternment of a qui tam case on behalf of the State of California against an Encino chiropractor and others alleging medical insurance fraud, holding that a Los Angeles Superior Court judge erred in dismissing the action based on a failure to bring it to trial within five years because she failed to take into account the 962 days during which the plaintiff was precluded from proceeding.
Anna Maria Christina Sills brought the action under the California False Claims Act (“CFCA”) and the California Insurance Frauds Prevention Act (“IFPA”). Under both acts, the complaint is sealed until the government decides whether to intervene, and the plaintiff is precluded from taking any action.
That, Justice Gregory Weingart of Div. One wrote, constitutes a stay.
Code of Civil Procedure §583.340 provides that “[i]n computing the time within which an action must be brought to trial pursuant to this article, there shall be excluded the time during which any of the following conditions existed,” with ¶(b) specifying: Prosecution or trial of the action was stayed or enjoined.”
The opinion reverses Judge Maureen Duffy-Lewis’s dismissal of the case. She held that that the time during which the complaint was “under seal does not stay the matter nor provide any other reason to extend” the five-year period.
Weingart’s Opinion
Explaining the reversal, Weingart said:
“[W]e conclude that prosecution of the qui tarn action was ‘stayed’ as that term is used in section 583.340(b) because the CFCA and IFPA barred Sills from making use of any of the procedures and tools typically available to a civil litigant while the case was under seal for purposes of the government’s intervention decision….The prohibitions in the CFCA and IFPA on any prosecutive action during the sealing period were automatic, non-discretionary, and unconditional. Under both the CFCA and the IFPA, the complaint could not be served on any defendant during the seal period.”
He continued:
The matter was required to be maintained under seal and in camera, meaning Sills could not conduct any discovery. During the court-supervised sealing period, the government investigated Sills’s allegations; that investigation (similar to the type of pre-fixing investigation the government undertakes in a non-qui tarn case) is distinct from the prosecution of the civil action, which did not commence until after the appropriate prosecuting authority decided whether to intervene. Furthermore, because the defendants could not be served and thus did not file pleadings in response to the complaint, there could be no resolution of legal challenges to the complaint, such as demurrers. Any litigation activity that typically occurs after discovery and challenges to the pleadings, such as a motion for summary judgment and trial, also could not occur while the action was under seal. Defendants do not identify any step in the litigation that Sills could have taken while the case was under seal for purposes of the government’s intervention decision, nor can we.”
Defendants’ Argument
The defendants—Bahar Gharib-Danesh being the one whose name appears in the caption—argued:
“There is no exclusion for the mere sealing of a complaint.”
Weingart responded:
“But what is at issue here is not the mere sealing of a complaint without more, because the sealing provisions of the CFCA and the IFPA also prevent any litigation activity by the qui tam plaintiff until the government makes its intervention decision and the complaint is then unsealed. Defendants provide no authority suggesting that a seal which results in such a complete stay of the action does not trigger the tolling period.”
The defendants also asserted that Sills should have asked the court to issue a stay while the complaint was under seal. Weingart said:
“But section 583.340(b) does not require that prosecution of the action be ‘stayed’ by a court order.”
He noted that a stay can exist by operation of law, and remarked that “it would have been an idle act to seek a court order imposing the very same stay the CFCA and IFPA already required at that stage of the proceedings.”
Sills Blamed
The statutorily prescribed period for sealing is 60 days, but the government—the attorney general with respect to claims under the CFCA and the insurance commissioner and the local district attorney as to causes of action under the IFPA—asked for more time to investigate, and Sills did not oppose all of the requests. Weingart pointed out in a footnote that delay cannot be ascribed to Sills because “when Sills did oppose or not accede in such requests, the government sought and obtained the requested extension anyway.”
Duffy-Lewis did recognize that the stays ordered during criminal proceedings in federal court and in Orange Superior Court and a stay ordered during the pandemic.
The case was filed on July 13, 2012, in Sacramento Superior Court and transferred here at the request of the defendants. A judgment of dismissal was entered March 8, 2021.
The case is State ex rel. Sills v. Gharib-Danesh, 2023 S.O.S. 681.
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