United States v. Picetti ( 2019 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, No. 2:19-cv-0049 KJM AC 12 Petitioner, 13 v. ORDER 14 GEORGE PICETTI, III, M.D., 15 Respondent. 16 17 The matter was referred to a United States Magistrate Judge as provided by Local 18 Rule 302. ECF No. 13. 19 On April 29, 2019, the magistrate judge filed findings and recommendations, which were 20 served on all parties and which contained notice to all parties that any objections to the findings 21 and recommendations were to be filed within fourteen days. ECF No. 18. Respondent has filed 22 objections to the findings and recommendations. Obj., ECF No. 19. Petitioner filed a response to 23 the objections, Resp., ECF No. 20. 24 In accordance with the provisions of 28 U.S.C. § 636(b)(1)(C) and Local Rule 304, this 25 court has conducted a de novo review of this case. Having reviewed the file, the court finds the 26 findings and recommendations to be supported by the record and by proper analysis, for the 27 reasons explained below. 28 ///// 1 Objecting to the magistrate judge’s findings and recommendations, respondent argues new 2 evidence warrants this court’s declining the findings and recommendations because the evidence 3 reveals contradictory statements involving purported settlement discussions made in discussions 4 involving government counsel Mr. Terranova and counsel for third party Nexxt Spine, LLC, 5 Sanford Boxerman, in a related enforcement action filed in the Southern District of Indiana. Obj. 6 at 3. Respondent contends a newly discovered declaration from Mr. Boxerman, filed in the 7 Southern District of Indiana, creates a factual dispute as to whether the government made a 8 settlement demand of Nexxt Spine, a dispute requiring resolution by evidentiary hearing. Id. at 6. 9 If the court finds the government did indeed make a settlement demand of Nexxt Spine, 10 respondent argues, that demand necessarily provides grounds for liability under 31 U.S.C. § 3733 11 given the nexus between and among Dr. Picetti, Ms. Holland and Nexxt Spine, and once the 12 government acts on the basis of that liability, they are divested of jurisdiction under § 3733(a)(1). 13 Id. 14 Respondent’s argument lacks merit. For one, respondent concedes a factual determination 15 regarding the purported settlement demand is irrelevant should this court find the magistrate 16 judge correctly analyzed the government’s jurisdictional authority within the contours of 31 17 U.S.C. § 3733. Id. Secondly, respondent cites no authority supporting the proposition that 18 settlement negotiations with a third party, if true, constitute an affirmative commencement or 19 intervention divesting the government of its investigative power under § 3733(a)(1) thereafter. 20 Instead, respondent relies on the same authority presented to the magistrate judge and merely 21 recasts its prior arguments fully considered by the magistrate judge in her findings and 22 recommendations. Id. at 4–6 (citing EEOC v. Children’s Hosp. Med. Ctr. of N. Cal., 719 F.2d 23 1426, 1428 (9th Cir. 1983) (en banc), overruled on other grounds as recognized in Prudential 24 Ins. Co. of Am. v. Lai, 42 F.3d 1299 (9th Cir. 1994); United States v. Kernan Hospital, No. RDB- 25 11-2961, 2012 WL 5879133 (D. Md., Nov. 20, 2012)). 26 The magistrate judge applied the proper analysis and correctly found the government 27 acted within its authority when issuing Civil Investigative Demand 18-464. As petitioner 28 correctly notes, the Ninth Circuit applies a “plainly lacking jurisdictional standard” to agency 1 investigatory demands of various types, and absent evidence of clear jurisdictional overreach, 2 agency investigatory action is proper. Resp. at 2–3; see Consumer Fin. Prot. Bureau v. Great 3 Plains Lending, LLC, 846 F.3d 1049, 1051 n.2 (9th Cir.) (“[W]e have consistently applied this 4 [plainly lacking] standard in assessing an agency’s jurisdiction at the investigative stage.”), 5 cert. denied, 138 S. Ct. 555 (2017). Where an agency acts within its Congressionally delegated 6 authority, and purported factual determinations have no bearing on whether that authority has 7 been divested, an evidentiary hearing on the matter is unnecessary. 8 Accordingly, IT IS HEREBY ORDERED that: 9 1. The findings and recommendations filed April 29, 2019 are adopted in full; and 10 2. The Petition to Enforce Civil Investigative Demand, ECF No. 1, is GRANTED. 11 DATED: September 26, 2019. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28