United States v. Community Home ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, ex rel. 
JODY SHUTT,
Plaintiffs-Appellees, No. 07-56060
v. D.C. No.
COMMUNITY HOME AND HEALTH  CV-04-02075-
CARE SERVICES, INC., a California MMM
corporation; NIDA M. CAMPANILLA, OPINION
an individual,
Defendants-Appellants.

Appeal from the United States District Court
for the Central District of California
Margaret M. Morrow, District Judge, Presiding
Argued and Submitted
November 17, 2008—Pasadena, California
Filed December 16, 2008
Before: Myron H. Bright,* Stephen S. Trott, and
Michael Daly Hawkins, Circuit Judges.
Opinion by Judge Hawkins
*The Honorable Myron H. Bright, Senior United States Circuit Judge
for the Eighth Circuit, sitting by designation.
16505
UNITED STATES v. COMMUNITY HOME AND HEALTH 16507
COUNSEL
Jeffrey A. Clair (presented argument and authored brief),
United States Department of Justice, Washington, D.C., for
the plaintiffs-appellees.
Eric Olson (presented argument) and John M. Gantus
(authored brief), John M. Gantus & Associates, Glendale,
California, for the defendants-appellants.
OPINION
HAWKINS, Circuit Judge:
Facing a question of first impression, we conclude that an
order granting summary judgment is final and appealable
under 28 U.S.C. § 1291 even though the district court retained
16508 UNITED STATES v. COMMUNITY HOME AND HEALTH
jurisdiction over a pending claim by a qui tam relator for a
share of the award under the False Claims Act (“FCA”), 31
U.S.C. § 3730(d).1
FACTS
Relator Jody Shutt originated this FCA action against Nida
Campanilla (“Campanilla”), the sole owner and president of
Community Home and Health Care Services (“Community
Home”), an agency that provided nursing and home health
services and received at least $2.77 million in Medicare reim-
bursements from May 2003 to August 2004.
Subsequently, the United States pursued criminal charges
against Campanilla who entered a guilty plea to one count of
health care fraud, in violation of 18 U.S.C. § 1347. In the
agreement, she stipulated to making illegal payments to phy-
sicians, patients, and marketers, forging physician signatures
on Medicare forms documenting the medical necessity of
claimed services, submitting reimbursement claims to Medi-
care for home health services she knew were not medically
necessary, and submitting reimbursement claims for services
that were not performed as represented. Campanilla also
admitted that the scheme had caused Medicare a loss of at
least $608,558.49 and agreed to make full restitution of that
amount.
Several months later, the United States intervened in this
FCA suit against Campanilla and Community Home, raising
both FCA claims and separate common law claims and seek-
ing a civil penalty of $5,500 and treble damages. The district
court granted partial summary judgment to the government,
awarding a civil penalty of $5,500 and treble the damages
1
Although the Fifth Circuit appears to consider potential litigation over
the relator’s share to be “collateral” to the main action, it has addressed
the issue only in dicta. See United States v. United States ex rel. Thornton,
207 F.3d 769, 773 (5th Cir. 2000).
UNITED STATES v. COMMUNITY HOME AND HEALTH 16509
Campanilla had admitted in her plea agreement.2 The district
court dismissed the government’s remaining common law
claims without prejudice while retaining jurisdiction over the
relator’s claim for a share of the judgment pursuant to 31
U.S.C. § 3730(d).
DISCUSSION
[1] We have jurisdiction over appeals from all final deci-
sions of the United States district courts. 28 U.S.C. § 1291.
Although the parties do not dispute appellate jurisdiction, the
court must consider sua sponte whether an order is final and
thus appealable under 28 U.S.C. § 1291. See WMX Techs.,
Inc. v. Miller, 104 F.3d 1133, 1135 (9th Cir. 1997) (en banc).
A prevailing party’s decision to dismiss its remaining claims
without prejudice generally renders a partial grant of sum-
mary judgment final. United Nat’l Ins. Co. v. R & D Latex
Corp., 141 F.3d 916, 918 (9th Cir. 1998).
[2] In concluding that a relator’s pending claim against the
United States for a share in the judgment does not interfere
with the finality of the district court order, we are guided by
White v. New Hampshire Dep’t of Employment Sec., 455 U.S.
445 (1982). There the Supreme Court addressed a related
issue: whether a request for attorney’s fees raises legal issues
collateral to the main action prompting an inquiry separate
and apart from the decision on the merits. Id. at 451-52. Fol-
lowing White, we held that a district court retains the power
to award attorney’s fees after a notice of appeal from the deci-
sion on the merits has been filed, Masalosalo v. Stonewall Ins.
Co., 718 F.2d 955, 957 (9th Cir. 1983), and adopted the
“bright-line rule” that “all attorney’s fees requests are collat-
eral to the main action,” rendering a “judgment on the merits
. . . final and appealable even though a request for attorney’s
2
In a separate memorandum disposition, we deal with Campanilla’s
claims that the civil judgment violated constitutional guarantees against
double jeopardy and excessive fines.
16510 UNITED STATES v. COMMUNITY HOME AND HEALTH
fees is unresolved,” Int’l Assoc. of Bridge Local Union 75 v.
Madison Indus., Inc., 733 F.2d 656, 659 (9th Cir. 1984).
[3] Although relators’ claims for a percentage of FCA
awards are likely to be larger in amount than those of attor-
neys in some instances, those claims are similarly “collateral”
to the judgment on the merits. Congress’s decision to allow
qui tam relators a share of FCA awards is designed to encour-
age relators to initiate FCA suits and to compensate them for
their efforts. The determination of the relator’s share of an
FCA award, like the award of attorney’s fees, raises factual
issues “collateral to the main action” because it involves a
factual inquiry distinct from one addressing the merits.
[4] The criteria for determining the relator’s share, as set
out in the Department of Justice’s “Relator’s Share Guide-
lines” (“Guidelines”), generally are not relevant to the defen-
dant’s liability under the FCA. See Marc S. Raspanti & David
M. Laigaie, Current Practice and Procedure Under the
Whistleblower Provisions of the Federal False Claims Act, 71
Temp. L. Rev. 23, 53 (1998) (quoting the Guidelines). For
example, the Guidelines suggest considering the circum-
stances in which the relator reported the false claims, the
report’s effects, the extent of the relator’s relevant knowledge,
the level of assistance provided by the relator and the relator’s
counsel, and any substantial adverse impact on the relator of
filing the complaint. Id.[5] To be sure, the existence of a nationwide practice and
the potential safety issues involved may be relevant both to
the merits and to allocating the award. See id. However, these
determinations, along with other criteria noted in the Guide-
lines, including the size of the award and the scope of the
FCA proceeding, id., usually cannot be fully resolved until
after the merits of the FCA claim have been addressed. The
district court would therefore rarely have occasion to deter-
mine the relator’s share of an award prior to or even simulta-
neously with the merits of the underlying claim.
UNITED STATES v. COMMUNITY HOME AND HEALTH 16511
The important purpose of promoting efficient judicial
administration, Eisen v. Carlisle & Jacquelin, 417 U.S. 156,
170 (1974), is also better served by treating the relator’s claim
as collateral to the merits. Although such a rule creates some
risk of occasional “piecemeal” appeals, in many instances a
court of appeals ruling on the merits of a dispositive motion
might make an allocation of the award between the govern-
ment and the relator unnecessary or duplicative. For example,
where a district court incorrectly grants a plaintiff’s summary
judgment motion, an opportunity to review that judgment
avoids the need for the district court to determine the relator’s
share when the claims should have been dismissed or when an
ensuing trial would require a new allocation of the award to
reflect the relator’s participation.
CONCLUSION
[6] For these reasons, we hold a judgment on the merits of
an FCA claim is a separate, final, and appealable decision
even where the district court has retained jurisdiction over the
collateral issue of allocating the FCA award between the
United States and the relator. We therefore reach the merits
of this appeal and affirm the district court’s grant of summary
judgment for the reasons stated in an unpublished memoran-
dum disposition filed herewith.
AFFIRMED.