United States v. Sprint Communications, Inc. , 855 F.3d 985 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 14-17434
Plaintiff-Appellee,
D.C. No.
JOHN C. PRATHER, 3:14-cv-00962-CRB
Applicant-in-Intervention-
Appellant,
OPINION
v.
SPRINT COMMUNICATIONS, INC.,
FKA Sprint Nextel Corporation;
SPRINT PCS,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted September 14, 2016
San Francisco, California
Filed April 28, 2017
Before: Ronald M. Gould and Marsha S. Berzon, Circuit
Judges, and William K. Sessions III,* District Judge.
Opinion by Judge Berzon
*
The Honorable William K. Sessions III, United States District Judge
for the District of Vermont, sitting by designation.
2 PRATHER V. SPRINT
SUMMARY**
False Claims Act / Intervention
The panel affirmed the district court’s order denying John
Prather’s Fed. R. Civ. P. 24(a)(2) motion to intervene as of
right in a False Claims Act suit brought by the United States
against Sprint Communications, Inc.
In 2009, Prather filed a qui tam False Claims Act action
(“Prather I”) against Sprint and other telecommunications
companies; the government elected not to intervene. The
district court concluded that Prather could not show he was an
“original source” of publicly disclosed information regarding
the telecommunications companies’ allegedly fraudulent
activities, and dismissed Prather’s qui tam suit for lack of
jurisdiction. While Prather’s appeal in Prather I was
pending, the government filed its own False Claims Act suit
against Sprint, and Prather moved to intervene.
The panel held that Prather’s appeal was not moot.
Specifically, the panel held that the parties’ settlement and
dismissal of a case after the denial of a motion to intervene
did not as a rule moot a putative-intervenor’s appeal. The
panel concluded that reversing the district court’s order could
afford Prather a possible avenue to some remedy, and
therefore, the case was not moot.
On the merits, the panel held that Prather did not have a
significantly protectable interest in the government’s False
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PRATHER V. SPRINT 3
Claims Act action against Sprint. The panel further held that
Prather’s prior filing of a related, but jurisdictionally barred,
qui tam action did not entitle him to any award under the
False Claims Act. The panel concluded that Prather was not
entitled to intervene as of right in the government’s False
Claims Act action against Sprint.
COUNSEL
John G. Balestriere (argued) and Jillian L. McNeil, Belstriere
Fariello, New York, New York, for Applicant-in-
Intervention-Appellant.
Kimberly Friday (argued) and Steven J. Saltiel, Assistant
United States Attorneys; Alex G. Tse, Chief, Civil Division;
United States Attorney’s Office, San Francisco, California,
for Plaintiff-Appellee.
Edward C. Barnidge (argued) and Benjamin M. Stoll,
Williams & Connolly LLP, Washington, D.C.; David F.
Taylor, Perkins Coie LLP, Seattle, Washington; for
Defendants-Appellees.
4 PRATHER V. SPRINT
OPINION
BERZON, Circuit Judge:
John C. Prather sought to intervene as of right in a False
Claims Act (“FCA”) suit brought by the United States
(“Government”) against Sprint Communications, Inc.
(“Sprint”). Whether Prather had the significantly protectable
interest required to support his motion to intervene depends
on whether he would have been entitled to any recovery if the
Government had intervened in his 2009 qui tam FCA action.
See Fed. R. Civ. P. 24(a)(2); Prather v. AT&T, 847 F.3d 1097
(9th Cir. 2017) (“Prather I”). We conclude that Government
intervention in Prather’s qui tam action could not have
secured him any right to a share of the proceeds from that
action and therefore affirm the district court’s order.
BACKGROUND
In 2009, Prather filed a qui tam FCA action against Sprint
and four other telecommunications companies, alleging that
the companies were defrauding federal and state governments
by overcharging them for electronic surveillance services.
The Government elected not to intervene in Prather’s qui tam
action. In November 2013, the district court concluded that
Prather could not show he was an “original source” of
publicly disclosed information regarding the
telecommunications companies’ allegedly fraudulent
activities and dismissed Prather’s qui tam suit for lack of
jurisdiction. We recently affirmed the district court’s
dismissal of Prather’s qui tam action. Prather I, 847 F.3d at
1108.
PRATHER V. SPRINT 5
While Prather’s appeal of Prather I was pending, the
Government filed its own FCA suit against Sprint. That
action was transferred to the same district judge who had
dismissed Prather’s case. Prather moved to intervene in the
Government’s FCA action, maintaining that (1) the
Government was pursuing an “alternate remedy” to Prather’s
qui tam action by filing its own FCA action instead of
intervening in his earlier FCA suit; (2) under the FCA, he had
the “same rights” in the Government’s “alternate remedy”
proceeding as he would have had in his qui tam action; and
(3) he therefore had a right to a share of the proceeds from
any award or settlement in this litigation. See 31 U.S.C.
§ 3730(c)(5) (2006).1
The district court denied Prather’s motion to intervene on
the basis of its dismissal of Prather’s qui tam action. Because
Prather could not bring a successful qui tam action on related
1
Section 3730(c)(5) provides, in relevant part:
[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 action shall have the same rights in
such proceeding as such person would have had if the
action had continued under this section.
31 U.S.C. § 3730(c)(5) (2006). Henceforth all citations to this section of
the FCA, 31 U.S.C. § 3730, reference the version in effect prior to the
effective date of the 2010 amendments to the statute, which significantly
changed the public disclosure and “original source” provisions under
which Prather’s 2009 qui tam action was dismissed. In particular, the 2010
amendments eliminated the designation of the public disclosure provision
as jurisdictional. Prather I, 847 F.3d at 1102–03.
6 PRATHER V. SPRINT
claims, the district court concluded, he had no standing to
intervene in the Government’s action. Prather timely appealed
the district court’s order.
DISCUSSION
Under the FCA, private individuals with information
about fraud against the Government may bring qui tam
actions on behalf of the United States. The Government may
elect to (1) intervene in such an action and take over its
prosecution, 31 U.S.C. § 3730(b)(2); (2) “pursue its claim
through any alternate remedy available to the Government,”
instead, id. § 3730(c)(5); or (3) decide not to take any action,
allowing the private individual, known as the “relator,” to
pursue the claim to completion, id. § 3730(c)(3). In any of
those scenarios, the relator who brought the qui tam action
generally has a right to a share of any proceeds from the
action. Id. § 3730(d). If the Government pursues an alternate
remedy, the relator “shall have the same rights in such
proceeding as [he] would have had if” the Government had
intervened in the qui tam action. Id. § 3730(c)(5).
Prather asserts that the Government’s own action against
Sprint is an “alternate remedy” pursued in lieu of intervention
in his earlier qui tam action. He maintains that he is therefore
entitled to the same share of the Government’s proceeds
resulting from this action against Sprint as he would have
obtained if his qui tam action had gone forward. See id. On
that basis, he contends, he was entitled to intervene as of
right. See Sw. Ctr. for Biological Diversity v. Berg, 268 F.3d
810, 817 (9th Cir. 2001) (“Southwest Center”) (setting out the
four-prong test for Federal Rule of Civil Procedure Rule
24(a) intervention as of right).
PRATHER V. SPRINT 7
After the district court’s denial of Prather’s motion to
intervene, the Government and Sprint reached a settlement,
and the district court accordingly dismissed the case. Before
turning to the merits of Prather’s appeal, we consider whether
this appeal is now moot.
I
The parties have not raised the mootness issue.
Nonetheless we address the issue sua sponte, because, if
“events change such that the appellate court can no longer
grant ‘any effectual relief whatever to the prevailing party,’
any resulting opinion would be merely advisory,” and the
court would lack subject matter jurisdiction. Shell Offshore
Inc. v. Greenpeace, Inc., 815 F.3d 623, 628 (9th Cir. 2016)
(quoting City of Erie v. Pap’s A.M., 529 U.S. 277, 287
(2000)). Here, we consider the effect of the settlement and
voluntary dismissal of the case in which Prather sought to
intervene.
In some situations, the entry of final judgment in a case
moots a putative-intervenor’s appeal from the denial of his
motion to intervene. West Coast Seafood Processors Ass’n v.
NRDC, 643 F.3d 701 (9th Cir. 2011), for example, held that
this court could not grant the appellant “any ‘effective relief’
by allowing it to intervene” “in a case that the district court
ha[d] since decided, through [an] Order on Remedy and the
subsequent final judgment, from which neither party ha[d]
appealed.” Id. at 704. In other circumstances, however, an
intervention controversy can remain live even after final
judgment is entered in the underlying case. DBSI/TRI IV Ltd.
Partnership v. United States, 465 F.3d 1031 (9th Cir. 2006),
for instance, concluded that the appeal in that case was not
moot, “because, if it were concluded on appeal that the
8 PRATHER V. SPRINT
district court had erred in denying the intervention motion,
and that the applicant was indeed entitled to intervene in the
litigation, then the applicant would have standing to appeal
the district court’s judgment.” Id. at 1037 (quoting Canatella
v. California, 404 F.3d 1106, 1109 n.1 (9th Cir. 2005)).
Outside of the special putative class action context, we
have not specifically addressed whether the original parties’
settlement after the denial of an intervention motion
invariably moots the appeal of that denial. Cf. Alaska v.
Suburban Propane Gas Corp., 123 F.3d 1317, 1320 (9th Cir.
1997) (discussing the special intervention standard for
motions to intervene to appeal denial of class certification).
But at least three other circuits have considered the question,
and all have held that the dismissal of an underlying case
following settlement does not necessarily render moot a
putative-intervenor’s appeal. See CVLR Performance Horses,
Inc. v. Wynne, 792 F.3d 469, 475–76 (4th Cir. 2015)
(settlement in civil RICO action); Purcell v. Bank Atl. Fin.
Corp., 85 F.3d 1508, 1511 n.3 (11th Cir. 1996) (class action
settlement); FDIC v. Jennings, 816 F.2d 1488, 1491 (10th
Cir. 1987) (settlement between agency and private persons).
Most recently, after considering DBSI and West Coast
Seafood along with more directly relevant cases from several
other circuits, the Fourth Circuit concluded:
We find more persuasive the reasoning of
those courts holding that dismissal of the
underlying action does not automatically moot
a preexisting appeal of the denial of a motion
to intervene. This is so because in many cases,
the resolution of an action between the
original parties is not determinative of the
defendant’s liability with respect to other
PRATHER V. SPRINT 9
potential plaintiffs. In these circumstances,
when the motion to intervene is made while
the controversy is live and the subsequent
disposition of the case does not provide the
relief sought by the would-be intervenors (for
example, money damages, as Appellants seek
here), we can provide an effective remedy on
appeal and therefore have jurisdiction.
CVLR Performance Horses, 792 F.3d at 475.
We agree with the Fourth Circuit, for the reasons it gave,
that the parties’ settlement and dismissal of a case after the
denial of a motion to intervene does not as a rule moot a
putative-intervenor’s appeal. We note that to hold otherwise
“might well provide incentives for settlement that would run
contrary to the interests of justice.” Id. at 474–75 (quoting
FDIC, 816 F.2d at 1491).
Our question, then, is whether in the particular
circumstances here, the settlement and dismissal of the
underlying action “make[] it impossible for the court to grant
‘any effectual relief whatever’” to the putative intervenor
even if we were to determine that the district court erred in
denying his intervention. Church of Scientology of Cal. v.
United States, 506 U.S. 9, 12 (1992) (quoting Mills v. Green,
159 U.S. 651, 653 (1895)). Our conclusion is that reversing
the district court’s order could afford Prather a possible
avenue to some remedy, so the case is not moot.
Although we do not yet consider the merits, the FCA
guides our preliminary consideration of whether Prather
might have anything left to gain from this court deciding his
intervention appeal. Prather moved to intervene in the
10 PRATHER V. SPRINT
Government’s action against Sprint so he could be afforded
the “same rights” he would have received had the
Government instead intervened in his qui tam FCA action.
See 31 U.S.C. § 3730(c)(5). The “same rights” afforded under
the statute would include a right to the same share of the
proceeds as in the disposition of a qui tam FCA action. See id.
§ 3730(d). The settlement agreement between the
Government and Sprint did not provide Prather with any such
relief. Additionally, the “same rights” afforded in an alternate
remedy proceeding would include the relator’s right to object
to the Government’s direct settlement of an action with a
defendant. See id. § 3730(c)(2)(B). Upon a relator’s
objection, the district court would need to determine, “after
a hearing, that the proposed settlement is fair, adequate, and
reasonable under all the circumstances.” Id.
If we were to conclude Prather had a right to intervene in
the Government’s FCA action, he might be able to object to
the settlement or otherwise seek his share of the proceeds
from the Government. As it thus does not appear impossible
for Prather to receive “any effectual relief whatever” if we
determine that the district court erred in denying his motion
to intervene as of right, Church of Scientology of Cal.,
506 U.S. at 12, we conclude that the Government’s settlement
agreement with Sprint and the dismissal of the underlying
action do not moot this appeal. We therefore turn to the
merits.
II
A
To intervene as of right under Federal Rule of Civil
Procedure 24(a)(2), an applicant must satisfy a four-part test:
PRATHER V. SPRINT 11
(1) the application for intervention must be
timely; (2) the applicant must have a
‘significantly protectable’ interest relating to
the property or transaction that is the subject
of the action; (3) the applicant must be so
situated that the disposition of the action may,
as a practical matter, impair or impede the
applicant’s ability to protect that interest; and
(4) the applicant’s interest must not be
adequately represented by the existing parties
in the lawsuit.
Southwest Center, 268 F.3d at 817 (quoting Nw. Forest Res.
Council v. Glickman, 82 F.3d 825, 836 (9th Cir. 1996)). In
denying Prather’s motion to intervene, the district court held
that Prather did not “have standing to intervene,” because “he
cannot bring a successful qui tam action.” On appeal, the
parties contest only whether Prather met the second prong of
the intervention standard, an issue we review de novo. See
United States ex rel. McGough v. Covington Techs. Co.,
967 F.2d 1391, 1393–94 (9th Cir. 1992).
An applicant seeking intervention is held to have “a
‘significant protectable interest’ in an action if (1) [the
applicant] asserts an interest that is protected under some law,
and (2) there is a ‘relationship’ between [the applicant’s]
legally protected interest and the plaintiff’s claims.” Donnelly
v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998) (quoting Nw.
Forest Res. Council, 82 F.3d at 837). The district court based
its denial of Prather’s motion to intervene here on its earlier
dismissal of Prather’s qui tam action. As Prather was not able
to bring a qui tam action, the district court concluded, he had
no rights to protect by intervening here. See Prather v. AT &
12 PRATHER V. SPRINT
T, Inc., 996 F. Supp. 2d 861, 871 (N.D. Cal. 2013), aff’d,
847 F.3d at 1108.
Prather contends, however, that the district court failed to
consider the import of the Government’s decision not to
intervene in his qui tam case. According to Prather, he had a
significant protectable interest, and his motion to intervene as
of right therefore should have been granted, because his
interest in this case is (1) the same as his interest would have
been if the Government had intervened in his qui tam action;
(2) protected under FCA § 3730(c)(5) and 3730(d); and
(3) related to the Government’s claims for recovery in this
action. We cannot agree.
Section 3730(c)(5) protects Prather’s rights only to the
extent his rights would have been protected had the
Government intervened in his qui tam action. As it turns out,
if the Government had intervened in that action, Prather
would not have been entitled to any recovery. He therefore
lacks a significantly protectable interest in this case, the
Government’s separate action against Sprint.
B
Prather’s contention that he would have been entitled to
a relator’s share had the Government intervened in his qui
tam action is foreclosed by a key Supreme Court case
interpreting the FCA, Rockwell International Corp. v. United
States, 549 U.S. 457 (2007). Where a qui tam action is
brought on the basis of publicly disclosed information, the
pre-2010 FCA mandated “a clear and explicit withdrawal of
jurisdiction” if the action is not brought by the Government
or an “original source.” Id. at 468 (emphasis omitted).
Rockwell held that a non-original-source relator’s
PRATHER V. SPRINT 13
jurisdictional defect is not cured by the Government’s
intervention. Id. at 476–78.
In Rockwell, the Government intervened in the relator’s
qui tam action; the court entered judgment for the
Government and the relator. Id. at 464–66. The defendant
then filed a post-verdict motion to dismiss the relator’s claims
on the grounds that (1) the relator was not an original source
of the publicly disclosed information on which liability was
based, and (2) the court therefore lacked jurisdiction to enter
judgment in favor of the relator. Id. at 466. The relator and
the Government maintained that the Government’s
intervention provided an independent basis of jurisdiction,
and “any inquiry into [the relator]’s original-source status . . .
was unnecessary because the government had intervened,
making this an ‘action brought by the Attorney General.’” Id.
at 477. The Court squarely rejected the argument, holding
that “[a]n action brought by a private person does not become
one brought by the Government just because the Government
intervenes and elects to ‘proceed with the action.’” Id.
Prather’s argument that he is entitled to some FCA
recovery (and thus to intervene here) largely repeats the
rejected argument in Rockwell. Under Rockwell, had the
Government intervened in Prather’s qui tam action, Prather’s
case still would have been dismissed under the former public
disclosure bar. At that point, “once [Prather] ha[d] been
determined to lack the jurisdictional prerequisites for suit,”
the FCA action would have “become[] an action brought by
the Attorney General.” See id. at 478. Prather, that is, could
not have continued to pursue his qui tam action against Sprint
even if the Government had intervened, although the
Government could have gone forward on its own behalf.
14 PRATHER V. SPRINT
But the precise issue here is not whether Prather could
have continued as a relator in the suit. Instead, it is whether
he would have been entitled to any recovery if the
Government had intervened and, after his relator claim was
dismissed, continued the suit on its own behalf. As the Third
Circuit noted in U.S. ex rel. Merena v. SmithKline Beecham
Corp., 205 F.3d 97 (3d Cir. 2000), “[i]t would not necessarily
follow that [dismissed] relators could not be awarded a share
of the . . . proceeds” from a successful Government-
prosecuted FCA action, because “Congress may enact a
statute providing for the payment of a reward or bounty to a
non-party who assists the government’s enforcement efforts.”
Id. at 103. Merena is correct, of course, that Congress could
have provided for a reward in these circumstances. But it did
not, as several considerations confirm.
First, Rockwell’s holding “that the District Court lacked
jurisdiction to enter judgment in favor of [the jurisdictionally
barred relator],” essentially forecloses Prather’s argument that
such a reward or bounty is available to him under the statute.
549 U.S. at 479. In setting aside entirely the monetary
judgment entered in favor of the relator while preserving the
Government’s judgment, Rockwell necessarily indicated that
a jurisdictionally barred relator is not entitled to any recovery
under § 3730. Id. at 478–79.
Second, review of the language and structure of § 3730
supports this conclusion. A relator is entitled to share in the
proceeds from an FCA action only if (1) the Government
chooses not to intervene and the relator proceeds as the
plaintiff on his own, 31 U.S.C. § 3730(d)(2), or (2) “the
Government proceeds with an action brought by a [private]
person,” id. § 3730(d)(1) (emphasis added). Just the latter
provision is relevant here, as Prather argues it is the
PRATHER V. SPRINT 15
Government’s intervention that would have entitled him to a
share of the award.
But, as Rockwell made clear, once a relator is determined
to lack the jurisdictional prerequisites to bring a qui tam FCA
action, the case “becomes an action brought by the Attorney
General.” 549 U.S. at 478 (emphasis added). Rockwell
contrasted that transformative effect of the dismissal of a
relator’s suit under the public disclosure bar with the statute’s
other provisions—citing, in particular, the relator’s award
provisions of § 3730(d)—that apply to “actions brought by a
relator where the government intervenes but does not oust the
relator.” Id. at 477–78. If the Government takes over a case
after a jurisdictionally barred relator is dismissed, the relator
cannot collect an award under § 3730(d)(1), because that
provision becomes inapplicable. In other words, once the
action “brought by a [private] person” under § 3730(b) is
dismissed for lack of subject matter jurisdiction, the hook for
the relator’s award provision, § 3730(d)(1), no longer exists.
Third, as we explained in United States ex rel. Green v.
Northrop Corp., 59 F.3d 953 (9th Cir. 1995), “[t]he right to
recovery clearly exists primarily to give relators incentives to
bring claims . . . [and] the extent of the recovery is tied to the
importance of the relator’s participation in the action and the
relevance of the information brought forward.” Id. at 963–64
(footnote omitted). For instance, when the Government
intervenes in a case, the statute generally mandates that the
court award 15 to 25 percent of the proceeds to the relator,
“depending upon the extent to which the person substantially
contributed to the prosecution of the action.” 31 U.S.C.
§ 3730(d)(1). The statute prescribes a smaller recovery
bracket—zero to ten percent of the proceeds from an
action—for relators who bring cases primarily based on
16 PRATHER V. SPRINT
information that had already been publicly disclosed by
someone other than the relator. Id. § 3730(d)(1). Again, in
determining the exact size of an award within that smallest
bracket, courts are instructed to “tak[e] into account the
significance of the information and the role of the person
bringing the action in advancing the case to litigation.”2 Id.
These prescriptions regarding the size of a relator’s
recovery play an important role, alongside the public
disclosure bar, in advancing the dual purposes of the 1986
FCA amendments: (1) “to encourage private individuals who
are aware of fraud being perpetrated against the Government
to bring such information forward,” H.R. Rep. No. 99-660, at
23 (1986); and (2) “to discourage parasitic suits brought by
individuals with no information of their own to contribute to
the suit,” United States ex rel. Zaretsky v. Johnson Controls,
Inc., 457 F.3d 1009, 1017 (9th Cir. 2006) (internal quotation
marks and citation omitted), abrogated on other grounds by
United States. ex rel. Hartpence v. Kinetic Concepts, Inc.,
792 F.3d 1121, 1127–29 (9th Cir. 2015) (en banc). Allowing
non-original-sources to recover under § 3730(d)(1) would not
encourage actual sources of information about fraud to come
forward, but instead encourage “parasitic” suits by
“opportunistic plaintiffs who have no significant information
to contribute,” apart from information gleaned from others’
2
If the relator prosecutes the action alone after the Government
decides not to intervene, the statute prescribes a larger relator’s share of
25 to 30 percent of the proceeds. Id. § 3730(d)(2). The bulk of the
proceeds still goes to the Government, which is the real party in interest
in all FCA actions, whether or not it intervenes. U.S. ex rel. Killingsworth
v. Northrop Corp., 25 F.3d 715, 720 (9th Cir. 1994).
PRATHER V. SPRINT 17
public disclosures.3 See Graham Cty. Soil & Water Conserv.
Dist. v. United States ex rel. Wilson, 559 U.S. 280, 294
(2010) (quoting United States ex rel. Springfield Terminal Ry.
Co. v. Quinn, 14 F.3d 645, 649 (D.C. Cir. 1994)). Where the
purpose of encouraging individuals with knowledge of
possible fraud against the federal government is not served,
“the relator should not be so rewarded.” United States ex rel.
Biddle v. Bd. of Trs. of Leland Stanford, Jr. Univ., 161 F.3d
533, 539 (9th Cir. 1998).
We conclude that the statute’s qui tam recovery
provisions in § 3730(d) do not apply to relators
jurisdictionally barred under § 3730(e)(4).
C
That the Government has pursued and secured a remedy
against Sprint in this separate litigation does not alter our
analysis or strengthen Prather’s claim to a monetary award.
And that is so, contrary to Prather’s submission, even if the
Government’s remedy was based on the same allegations
Prather made in his qui tam suit or arose out of an
investigation prompted by Prather’s initial qui tam action.
3
Prather’s argument that the first-to-file rule, 31 U.S.C. § 3730(b)(5),
and similar procedural hurdles would sufficiently protect from rampant
filing of FCA actions by non-original-sources is meritless. Reasoning that
an opposite holding would “permit opportunistic plaintiffs with no inside
information to displace actual insiders with knowledge of the fraud,” we
have held that, “in a public disclosure case, the first-to-file rule of
§ 3730(b)(5) bars only subsequent complaints filed after a complaint that
fulfills the jurisdictional prerequisites of § 3730(e)(4).” United States ex
rel. Campbell v. Redding Med. Ctr., 421 F.3d 817, 824–25 (9th Cir. 2005).
Our reasoning in Campbell applies here, as well.
18 PRATHER V. SPRINT
To recap: The FCA protects rights to relief for both the
Government and a proper relator, but the Government is
always the real party in interest. See Killingsworth, 25 F.3d
at 720. Even if a relator files a qui tam action on behalf of the
Government under § 3730(b), “the 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 chooses to pursue a remedy through some
other proceeding, the FCA mandates that the relator be
afforded “the same rights in such proceeding as [he] would
have had if the action had continued under [§ 3730, the
FCA’s civil action provisions].” Id.
The alternate remedy provisions have no application here.
Prather cannot obtain a monetary award due to the
Government’s pursuit of an “alternate remedy” to a
proceeding in which he could not possibly have obtained any
remedy.
An Eighth Circuit case addressing a similar situation,
United States ex rel. Newell v. City of St. Paul, 728 F.3d 791
(8th Cir. 2013), is informative. As in Prather’s qui tam action,
the Government declined to intervene in Newell’s FCA
action, and the relator’s action was dismissed on the basis of
the public disclosure bar. Id. at 795. Newell appealed the
district court’s dismissal order, arguing that the Government
had used his qui tam action as a bargaining chip in a
settlement agreement in an unrelated, non-FCA case. Id. at
798. Newell contended that the Government’s “settlement,
unlike a discretionary decision not to intervene in a qui tam
action, enabled the government to obtain an ‘alternate
remedy’ that entitle[d] him to a share of the settlement
proceeds under § 3730(c)(5) of the FCA.” Id. The Eighth
 PRATHER V. SPRINT 19
Circuit disagreed, ruling that “even if the . . . [Government’s
settlement was] an ‘alternate remedy,’ Newell would not be
entitled to a share of that remedy because his FCA claims
were subject to dismissal under the public disclosure bar.” Id.
at 799.
As in Newell, the Government’s FCA action and its
settlement with Sprint do not alter the district court’s prior
determination, which we affirmed, Prather I, 847 F.3d at
1108, that Prather was jurisdictionally barred from bringing
his 2009 qui tam action. Although the asserted connection
between Newell’s qui tam action and the Government’s
settlement with the defendant on an unrelated matter was
more attenuated than the asserted connection here, the precise
relationship between the Government’s action against Sprint
and Prather’s qui tam action is of no moment.
Here is why: Assuming that the Government brought this
action against Sprint on the same grounds upon which Prather
had brought his qui tam action, as Prather alleges,4 Prather’s
failure to meet the original source requirement is still
preclusive of any judgment in his favor. Because of that
failure, dismissal of Prather’s claim for monetary recovery
was mandatory. That is, Prather’s suit could not have
continued as a § 3730(b) qui tam action regardless of the
Government’s actions in that case or in this litigation. See
Rockwell, 549 U.S. at 477. Rather, like the relator in
Rockwell, Prather’s private action would have been dismissed
even if the Government had intervened in it, and the case
4
“Courts are to take all well-pleaded, nonconclusory allegations in
the motion to intervene, the proposed complaint or answer in intervention,
and declarations supporting the motion as true absent sham, frivolity or
other objections.” Southwest Center, 268 F.3d at 820.
20 PRATHER V. SPRINT
would have continued as a § 3730(a) action—an FCA action
“brought by the Attorney General” alone. See id. at 478. In
such a posture, Prather, like Newell, would have had no right
to recovery, and so cannot recover here under the “alternate
remedy” provision of the statute. The equivalent of no right
to recovery (in the original action) is no right to recovery (in
this action).
In sum, Prather cannot obtain a monetary bounty under
the FCA on his jurisdictionally barred claims, whether in the
action he brought as a qui tam plaintiff, via the “same rights”
provision of § 3730(c)(5), or, as he attempts to do here, by
joining a related FCA action brought by the Government after
the dismissal of his qui tam action.
CONCLUSION
The appeal of the district court’s denial of Prather’s
motion to intervene is not moot. On the merits, however,
Prather did not have a significantly protectable interest in the
Government’s FCA action against Sprint. His prior filing of
a related, but jurisdictionally barred, qui tam action did not
entitle him to any award under the FCA. We therefore
conclude that Prather was not entitled to intervene as of right
in the Government’s FCA action against Sprint.
AFFIRMED.