United States v. John Patrick Couch, M.D. , 906 F.3d 1223 ( 2018 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-13402
________________________
D.C. Docket No. 1:15-cr-00088-CG-B-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
LORI L. CARVER,
Interested Party - Appellant,
versus
JOHN PATRICK COUCH, M.D.,
XIULU RUAN, M.D.,
Defendants - Appellees.
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________________________
Appeal from the United States District Court
for the Southern District of Alabama
________________________
(October 17, 2018)
Before WILLIAM PRYOR, MARTIN, and BALDOCK, ∗ Circuit Judges.
MARTIN, Circuit Judge:
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. 31
U.S.C. § 3730(b)(2). It may also choose to pursue “any alternate remedy
available.” Id. § 3730(c)(5). If it pursues an “alternate remedy,” the False Claims
Act gives the qui tam plaintiff the “same rights” in the “alternate” proceeding as
she would have had if the qui tam action “had continued.” Id. Presented here is
the question of whether this statute allows a qui tam plaintiff to intervene in
criminal forfeiture proceedings when the government chooses to prosecute fraud
rather than to intervene in the qui tam plaintiff’s action.
Even if the False Claims Act could be read to allow intervention, the statutes
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.
∗
Honorable Bobby R. Baldock, Senior United States Circuit Judge for the Tenth Circuit, sitting
by designation.
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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., 736 F.2d 635, 637 (11th Cir. 1984). If, as here, denial
was proper, “jurisdiction evaporates because the proper denial of leave to intervene
is not a final decision.” Id. For the reasons that follow, we will therefore dismiss
this appeal for lack of jurisdiction.
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. 31 U.S.C. § 3729(a). It allows the Attorney General to sue for
violations. Id. § 3730(a). A private person, called a relator, may bring a False
Claims Act action “in the name of the Government,” which is known as a qui tam
action. Id. § 3730(b)(1). The government may intervene to take over a qui tam
action from the relator, id. § 3730(b)(2), but the relator “shall have the right to
conduct the action” if the government opts not to intervene, id. § 3730(b)(4),
(c)(3). Most of the recovery in a qui tam action goes to the government, to remedy
the fraud. See id. § 3730(d). But whether the government intervenes or not, a
relator in a successful qui tam action is typically entitled to a share of the recovery.
Id. This incentivizes people to come forward from the private sector with evidence
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of fraud perpetrated on the government. See United States ex rel. Williams v. NEC
Corp., 931 F.2d 1493, 1496–97 (11th Cir. 1991).
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.” 31
U.S.C. § 3730(c)(5). If the government opts for an “alternate remedy,” the False
Claims Act gives the relator “the same rights in such proceeding as such person
would have had if the action had continued under this section.” Id. We will call
this the alternate-remedy provision.
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.
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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 (notice of non-intervention); see
31 U.S.C. § 3730(b), (c)(3).
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
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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 21
U.S.C. § 853 and Federal Rule of Criminal Procedure 32.2. This statute and rule
permit a third party to assert an interest in criminally forfeited property if the third
party either had a legal interest in the property prior to the crime or is a bona fide
purchaser for value of the property. See 31 U.S.C. § 853(n); Fed. R. Crim. P. 32.2.
Ms. Carver has conceded she meets neither criterion.
The government argued Ms. Carver has no right to intervene under the
alternate-remedy provision because her qui tam case remains pending—meaning
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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 21 U.S.C. § 853(n) and Rule 32.2.
This appeal followed.
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, 866 F.3d 1130, 1133–34
(9th Cir. 2017). We do not join in the rationale of our sister Circuit. Rather, we
conclude Ms. Carver does have standing to assert that the alternate-remedy
provision gives her a right to intervene in criminal forfeiture proceedings so as to
claim an interest in the forfeited property.
Ms. Carver asserts a statutory procedural right—specifically, a right under
the alternate-remedy provision to have her 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, 504 U.S. 555, 572 n.7, 112 S. Ct. 2130, 2142 n.7 (1992)
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(emphasis added); see also Spokeo, Inc. v. Robbins, 578 U.S. __, 136 S. Ct. 1540,
1549–50 (2016) (discussing standing in context of statutory procedural rights).
Ms. Carver asserts an interest in property forfeited to the government. This Court
has said a party claiming an interest in such property has suffered a concrete injury.
See, e.g., Via Mat Int’l S. Am. Ltd. v. United States, 446 F.3d 1258, 1262–63 (11th
Cir. 2006). Ms. Carver reads the alternate-remedy provision to create a procedure
for her to protect this concrete interest. We have jurisdiction to decide whether her
reading is correct.
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, 668
F.3d 1316, 1320 (11th Cir. 2012) (emphasis added). That is, courts adjudicate
third-party property interests, subject to the limitations set forth in the criminal
forfeiture statutes. We have never doubted that courts have jurisdiction to
adjudicate these interests, and this case raises no new doubts on the issue.
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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., 410
U.S. 614, 619, 93 S. Ct. 1146, 1149 (1973); United States v. Alcatel-Lucent
France, SA, 688 F.3d 1301, 1307 (11th Cir. 2012) (per curiam) (holding a third
party lacked standing to appeal a sentence). Linda R.S. concerned Texas’s
discriminatory application of a statute criminalizing the refusal to provide child
support, where Texas prosecuted only parents of legitimate children. 410 U.S. at
615, 93 S. Ct. at 1147. The mother of an illegitimate child sued to have her child’s
father prosecuted. Id. at 614–15, 93 S. Ct. at 1147. The Supreme Court held she
had no interest in the enforcement of Texas’s criminal laws and thus lacked
standing. Id. at 619, 1149. In Alcatel-Lucent, our Court held an alleged victim of
a crime had no standing to appeal a sentence that did not include a restitution
award. 688 F.3d at 1306–07. Ms. Caver’s case is distinguishable from Linda R.S.
and from Alcatel-Lucent. Ms. Carver’s motion to intervene in a forfeiture
proceeding to enforce an alleged property interest is materially different from an
attempt to compel a criminal prosecution or alter a sentence.
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.
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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 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.
31 U.S.C. § 3730(c)(5).
Whether a criminal fraud prosecution is an “alternate remedy” is an open
question. 1 See Van Dyck, 866 F.3d at 1135; see also United States ex rel. Babalola
v. Sharma, 746 F.3d 157, 160–63 (concluding a criminal fraud prosecution brought
before a qui tam action was not an alternate remedy). Insofar as Ms. Carver asks
us to read the alternate-remedy provision to allow her to intervene in the criminal
forfeiture proceedings, we will interpret the alternate-remedy provision by
reference to the “commonplace of statutory construction that the specific governs
the general.” NLRB v. SW Gen., Inc., 580 U.S. __, 137 S. Ct. 929, 941 (2017)
(quotation marks omitted); see also Morton v. Mancari, 417 U.S. 535, 550–51, 94
1
The question has divided federal District Courts. Compare United States v. Kurlander, 24 F.
Supp. 3d 417, 424 (D.N.J. 2014), with United States v. Bisig, Case No. 100cv335JDTWTL,
2005 WL 3532554, at *2–6 (S.D. Ind. Dec. 21, 2005).
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S. Ct. 2474, 2483 (1974) (“When there is no clear intention otherwise, a specific
statute will not be controlled or nullified by a general one, regardless of priority of
enactment.”).
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 18 U.S.C. § 982(b)(1) (incorporating forfeiture
procedures from 21 U.S.C. § 853); 18 U.S.C. § 1963(i); 21 U.S.C. § 853(k); see
also Van Dyck, 866 F.3d at 1133 (noting that 21 U.S.C. § 853 “imposes a general
bar on parties intervening in the criminal case”). Each of the three statutes has
exceptions to allow third parties to petition a court for the forfeited property if they
either had a legal right to the property before the defendant committed the offense
or are bona fide purchasers for value. See 18 U.S.C. § 1963(l); 21 U.S.C. § 853(n);
see also 18 U.S.C. § 982(b)(1) (incorporating forfeiture procedures from 21 U.S.C.
§ 853). But Ms. Carver has conceded neither of these exceptions applies to her.
These criminal forfeiture statutes speak to the precise issue raised in this appeal,
and they make plain that Ms. Carver has no right to intervene.
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
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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 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 866 F.3d at 1135 n.3. We expect the government will honor it.
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., 736 F.2d at 637. We therefore DISMISS this appeal for lack of jurisdiction.
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