Zoltan Barati v. State of Florida, Motorola, Inc. ( 2016 )

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
ZOLTAN BARATI, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D15-213
STATE OF FLORIDA,
MOTOROLA, INC., and
MORPHOTRAK, INC.,
Appellees.
________________________/
Opinion filed February 23, 2016.
An appeal from the Circuit Court for Leon County.
Angela C. Dempsey, Judge.
David W. Moyé, Moyé Law Firm, Tallahassee; Gary M. Farmer, Jr. and Gary M.
Farmer, Sr. of Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, PL,
Fort Lauderdale, for Appellant.
Pamela Jo Bondi, Attorney General, Russell S. Kent, Special Counsel, William E.
Foster, Assistant Attorney General, Tallahassee, for Appellee State of Florida.
THOMAS, J.
In this qui tam proceeding filed under the Florida False Claims Act (FCA),
we are presented with a question of first impression,1 to wit: Does the Attorney
1
This court previously rejected the Attorney General’s assertion in this case that
the circuit court lacked jurisdiction to consider Appellant’s motion to strike the
State’s Notice of Voluntary Dismissal. Without reaching the issue addressed here,
General possess the requisite legal authority to dismiss a pending qui tam action
notwithstanding her previous decision to decline to intervene in the action? The
Attorney General asserts that a qui tam action is strictly statutory in nature, the
State is the real party in interest, and the State possesses the substantive right to
dismiss this statutory cause of action at any time during the litigation. To hold
otherwise, the State argues, would violate organic law prohibiting either the
legislative or judicial branches from interfering in the exercise of prosecutorial
discretion by the executive branch to decide that dismissing a qui tam claim in
state court is properly within the public interest of the State of Florida.
Appellant (relator) argues that under the “public policies embedded in the
False Claims Act” and the legislative history of the Act, the relator who litigates a
qui tam action must be provided a court hearing to challenge the Attorney
General’s voluntary dismissal. To allow the Attorney General to dismiss any
qui tam action, regardless of prior participation by the State, and regardless of the
relator’s investment of resources in the litigation, would “severely undermine[]”
we denied the State’s Petition for Writ of Prohibition which sought to prohibit the
trial court from conducting a hearing on Appellant’s motion to strike. State v.
Barati, 150 So. 3d 810 (Fla. 1st DCA 2014) (Thomas, J., dissenting). We again
reject the State’s argument raised here that this court lacks jurisdiction to consider
this appeal as, on remand, the lower court’s order found that the State’s dismissal
divested it of jurisdiction to consider Appellant’s motion to strike. We agree with
Appellant that the lower court’s Order on Remand concluded judicial labor, and
that order is now reviewable here. Bennett’s Leasing, Inc. v. First St. Mortgage
Corp., 870 So. 2d 93, 96 (Fla. 1st DCA 2003) (“The basic rule is that a judgment
or order is final if it brings to a close all judicial labor in the lower tribunal.”).
2
the “False Claims Act’s role in combatting fraud against the government,”
according to the relator.
We hold that the Attorney General possesses the plenary authority to
unilaterally dismiss a qui tam action, regardless of the State’s decision to decline to
previously intervene in the litigation. We reach this conclusion based on four
reasons: First, based on our analysis of the plain language of the statute, we
conclude that the Legislature intended to confer this substantive authority to the
Attorney General; second, based on our review of the relevant case law
interpreting the very similar Federal False Claims Act, we find ample support for
our reasoning; third, based on Florida’s strict separation of powers mandated in
Florida’s organic law under Article II, section three, we reason that to interpret the
statute to allow a relator to challenge the Attorney General’s decision would place
the relevant statute in constitutional jeopardy; and fourth, and finally, we conclude
that the Attorney General’s constitutional authority under Article IV, section four
of the Florida Constitution, mandates that her office is accorded the unilateral
authority to dismiss a qui tam action, without challenge from a relator, absent any
allegation of fraud not present here. In fine, we hold that the authority of the
Attorney General to voluntarily dismiss the qui tam action is a substantive right
firmly grounded on statutory and state-constitutional principles.
3
Factual and Procedural Background
As described in State v. Barati, 150 So. 3d 810, 811-12 (Fla. 1st DCA 2014),
which did not reach the merits of the question presented here, the following history
is useful:
In September 2009, Barati filed a qui tam action against Motorola,
Inc., pursuant to the Florida False Claims Act, section 68.081 et seq.,
Florida Statutes. . . .
The Florida False Claims Act authorizes a private person or the State
to initiate a civil action against a person or company who knowingly
presents a false claim to the State for payment. The private citizen
who brings an action, i.e., the “relator,” sues on behalf of himself and
the State. Such an action is called a qui tam action from the Latin
phrase: “qui tam pro domino rege quam pro se ipso in hac parte
sequitur.” Black’s Law Dictionary translates the phrase as: “who as
well for the king as for himself sues in this matter.” . . .
After being served a copy of the qui tam complaint and relevant
materials, the State of Florida conducted an investigation, pursuant to
section 68.083(3), Florida Statutes. The State declined to join the qui
tam action, which Barati thereafter prosecuted for approximately three
and a half years. Without formally intervening in the cause, the
Attorney General, on behalf of the State, filed a notice of voluntary
dismissal of the action on July 18, 2013. The State asserted in its
notice that it had the unilateral right to dismiss the action on authority
of section 68.084(2) (a), notwithstanding any objections that Barati
may have.
Barati thereafter moved to strike the notice of voluntary dismissal
arguing inter alia that dismissal did not occur automatically, as the
State was suggesting.
Following our denial of the Attorney General’s petition for writ of
prohibition, the lower court ruled that the “Attorney General had the authority to
4
file a voluntary dismissal notwithstanding any objections of the Relator pursuant to
Section 68.084(2), Florida Statutes.” By our holding today, we affirm that ruling.
Analysis
1. The Plain Language of the Statute
Our standard of review here is de novo, as we address a pure question of
law. Myers v. State, 866 So. 2d 103, 104 (Fla. 1st DCA 2004).
As we are bound to interpret the statute as a whole, we provide the following
relevant text of the 2009 Florida False Claims Act, emphasizing provisions that
describe the State’s overarching legislative policy in authorizing qui tam actions:
68. 082 False Claims against the state; . . . liability.—
.....
(2) Any person who:
(a) Knowingly presents or causes to be presented . . . a false or
fraudulent for payment or approval;
....
(g) . . . . is liable to the state for a civil penalty . . . and for treble
the amount of damages the agency sustains because of the act or
omission of that person.
(3) The court may reduce the treble damages . . . in which case
the court shall award no less than 2 times the amount of damages
sustained by the agency because of the act of the person. . . .
68.083 Civil Actions for false claims.—
(1) The department [of Legal Affairs] may diligently investigate a
violation under s. 68.082. . . . [T]he department may bring a civil
action under the Florida False Claims Act against the person [who has
allegedly violated s. 68.082]. . . .
(2) A person may bring a civil action for a violation of s. 68.082
for the person and for the affected agency. Civil actions instituted
under this act shall be governed by the Florida Rules of Civil
Procedure and shall be brought in the name of the State of Florida.
5
Prior to the court unsealing the complaint under subsection (3), the
action may be voluntarily dismissed by the person bringing the action
only if the department gives written consent to the dismissal and
its reasons for such consent.
....
(7) When a person files an action . . . no person other than the
department on behalf of the state may intervene . . . under this
act . . . .
68.084 Rights of the parties in civil actions.—
(1) If the department, on behalf of the state, proceeds with the
action, it has the primary responsibility for prosecuting the action, and
is not bound by any act of the person bringing the action. The person
bringing the action has the right to continue as a party to the action,
subject to the limitations specified in subsection (2).
(2)(a) The department may voluntarily dismiss the action
notwithstanding the objections of the person initiating the
action.[2]
2
Effective June 30, 2013, the Florida FCA was amended. See Ch. 2013-104, Laws
of Fla. The Legislature added language to this subsection, which provides: “The
department may ‘at any point’ voluntarily dismiss the action notwithstanding the
objections of the person initiating the action.” § 68.084(2)(a), Fla. Stat. (2013)
(emphasis added). In addition, in defining the statute of limitations period for
qui tam claims, the Legislature amended the 2009 statute to define the limitations
term solely on the basis of the Attorney General’s knowledge of the facts giving
rise to the claims. § 68.089(1), Fla. Stat. (2013). The statute also only authorizes
the application of estoppel in qui tam suits brought by the Attorney General, not by
private relators. § 68.09(2), Fla. Stat. (2013). Furthermore, the 2013 Legislature
provided more control of qui tam actions to the Attorney General in other
significant provisions. The 2013 amendments require the court to dismiss an
action, “unless opposed by the department,” if the qui tam action is based on
information previously publicly disclosed. § 68.087(3), Fla. Stat. (2013). Thus,
the 2013 Legislature directed that qui tam actions cannot be based on publicly-
disclosed information, but in a significant exception, the statute now allows the
Attorney General to preclude dismissal by the court. No other party is given this
authority where the qui tam action is based on public information. This is further
evidence of the overarching and continuing legislative intent to vest almost
complete authority in the Attorney General to conduct and control qui tam
litigation, and these statutory amendments provide additional support to our
6
(b) Subject to s. 17.04, nothing in this act shall be construed to
limit the authority of the department or the qui tam plaintiff to
compromise a claim brought in a complaint filed under this act if the
court determines, after a hearing, that the proposed settlement is
fair, adequate, and reasonable under all the circumstances.
(c) Upon a showing by the department that unrestricted
participation during the course of the litigation by the person initiating
the action would interfere with or unduly delay the department's
prosecution of the case, or would be repetitious, irrelevant, or for
purposes of harassment, the court may, in its discretion, impose
limitations on the person's participation, including, but not limited to:
1. Limiting the number of witnesses the person may call;
2. Limiting the length of the testimony of the person's
witnesses;
3. Limiting the person's cross-examination of witnesses; or
4. Otherwise limiting the participation by the person in the
litigation.
(d) Upon a showing by the defendant that unrestricted
participation during the course of the litigation by the person
initiating the action would be for purposes of harassment or would
cause the defendant undue burden or unnecessary expense, the court
may limit the participation by the person in the litigation.
(3) If the department elects not to proceed with the action, the
person who initiated the action has the right to conduct the action.
If the Attorney General, as head of the department . . . so requests, it
shall be served, at the requesting department’s expense, with copies of
all pleadings and motions filed in the action and copies of all
deposition transcripts. When a person proceeds with the action, the
court, without limiting the rights of the person initiating the action,
may nevertheless permit the department to intervene and take
over the action on behalf of the state at a later date upon showing of
good cause.
(4) Whether or not the department proceeds with the action,
upon a showing by the department that certain actions of discovery
by the person initiating the action would interfere with an
investigation by the state government or the prosecution of a criminal
or civil matter arising out of the same facts, the court may stay such
conclusion that the Attorney General possesses the unfettered right of dismissal.
7
discovery for a period of not more than 60 days. Such a showing
shall be conducted in camera. The court may extend the 60-day period
upon a further showing in camera by the department that the criminal
or civil investigation or proceeding has been pursued with reasonable
diligence and any proposed discovery in the civil action will interfere
with an ongoing criminal or civil investigation or proceeding.
(5) The application of one civil remedy under this act does not
preclude the application of any other remedy, civil or criminal, under
this act or any other provision of law. Civil remedies under this act are
supplemental, not mutually exclusive. Any finding of fact or
conclusion of law made in such other proceeding that has become
final shall be conclusive on all parties to an action under this section.
As used in this subsection, the term “final” means not subject to
judicial review.
(6) The Department of Financial Services, or the department, may
intervene on its own behalf as a matter of right.
68.085. Awards to plaintiffs bringing action.—
(1) If the department proceeds and prevails in an action brought
by a person under this act, except as provided in subsection (2), the
court shall order the distribution to the person of at least 15 percent
but not more than 25 percent of the proceeds recovered under any
judgment obtained by the department in an action under s. 68.082 or
of the proceeds of any settlement of the claim, depending upon the
extent to which the person substantially contributed to the prosecution
of the action.
(2) If the department proceeds with an action which the court
finds to be based primarily on disclosures of specific information,
other than that provided by the person bringing the action, relating to
allegations or transactions in a criminal, civil, or administrative
hearing; a legislative, administrative, inspector general, or auditor
general report, hearing, audit, or investigation; or from the news
media, the court may award such sums as it considers appropriate, but
in no case more than 10 percent of the proceeds recovered under a
judgment or received in settlement of a claim under this act, taking
into account the significance of the information and the role of the
person bringing the action in advancing the case to litigation.
(3) If the department does not proceed with an action . . . the
person bringing the action or settling the claim shall receive an
amount which the court decides is reasonable for collecting the civil
8
penalty and damages. The amount shall be not less than 25 percent
and not more than 30 percent of the proceeds recovered under a
judgment rendered in an action under this act or in settlement of a
claim under this act.
....
68.087 Exemptions to Civil Actions.—
....
(3) No court shall have jurisdiction over an action brought under
this act based upon the public disclosure of allegations or transactions
in a criminal, civil, or administrative hearing; in a legislative,
administrative, inspector general, or Auditor General, Chief Financial
Officer, or Department of Financial Services report, hearing, audit, or
investigation; or from the news media, unless the action is brought by
the department, or unless the person bringing the action is an original
source of the information. For purposes of this subsection, the term
“original source” means an individual who has direct and independent
knowledge of the information on which the allegations are based and
has voluntarily provided the information to the department before
filing an action under this act based on the information.
(4) No court shall have jurisdiction over an action where the
person bringing the action under 68.083(2) is:
(a) Acting as an attorney for state government; or
(b) An employee or former employee of state government,
and the action is based, in whole or in part, upon information obtained
in the course or scope of government employment.
....
68.089 Limitation of actions; effect of intervention by
department.— A civil action under this act may not be brought:
(1) More than 6 years after the date on which the violation . . . is
committed; or
(2) More than 3 years after the date when facts material to the
right of action are known or reasonably should have been known by
the state official charged with responsibility to act in the
circumstances, but in no event more than 10 years after the date on
which the violation is committed, whichever occurs last.
68.09 Burden of proof.—In any action . . . the State of Florida or
the qui tam plaintiff shall be required to prove all essential elements of
9
the cause of action, including damages, by a preponderance of the
evidence.
68.091 Construction and severability of provisions.—
(1) This act shall be liberally construed to effectuate its remedial
and deterrent purposes.
(Emphasis added.)
From a careful analysis of the plain language of this statute, we can discern
the legislative scheme in toto. The first overarching statutory interpretation
principle applicable here is that all rights granted under the statute to parties other
than the Attorney General are strictly cabined by the limitations of the statute.
Most importantly for our analysis, there is no common-law right for a relator to file
a qui tam action:
Qui tam actions appear to have originated around the end of the 13th
century, when private individuals who had suffered injury began
bringing actions in the royal courts on both their own and the Crown's
behalf. See, e.g., Prior of Lewes v. De Holt (1300), reprinted in 48
Selden Society 198 (1931). Suit in this dual capacity was a device for
getting their private claims into the respected royal courts, which
generally entertained only matters involving the Crown's interests. See
Milsom, Trespass from Henry III to Edward III, Part III: More Special
Writs and Conclusions, 74 L.Q. Rev. 561, 585 (1958). Starting in the
14th century, as the royal courts began to extend jurisdiction to suits
involving wholly private wrongs, the common-law qui tam action
gradually fell into disuse, although it seems to have remained
technically available for several centuries. See 2 W. Hawkins, Pleas of
the Crown 369 (8th ed. 1824).
At about the same time, however, Parliament began enacting statutes
that explicitly provided for qui tam suits. These were of two types:
those that allowed injured parties to sue in vindication of their own
interests (as well as the Crown's), see, e.g., Statute Providing a
10
Remedy for Him Who Is Wrongfully Pursued in the Court of
Admiralty, 2 Hen. IV, ch. 11 (1400), and—more relevant here—those
that allowed informers to obtain a portion of the penalty as a bounty
for their information, even if they had not suffered an injury
themselves, see, e.g., Statute Prohibiting the Sale of Wares After the
Close of Fair, 5 Edw. III, ch. 5 (1331); see generally Common
Informers Act, 14 & 15 Geo. VI, ch. 39, sched. (1951) (listing
informer statutes). Most, though not all, of the informer statutes
expressly gave the informer a cause of action, typically by bill, plaint,
information, or action of debt. See, e.g., Bill for Leases of Hospitals,
Colleges, and Other Corporations, 33 Hen. VIII, ch. 27 (1541); Act to
Avoid Horse–Stealing, 31 Eliz. I, ch. 12, § 2 (1589); Act to Prevent
the Over–Charge of the People by Stewards of Court–Leets and
Court–Barons, 2 Jac. I, ch. 5 (1604).
For obvious reasons, the informer statutes were highly subject to
abuse, see M. Davies, The Enforcement of English Apprenticeship
58–61 (1956)—particularly those relating to obsolete offenses, see
generally 3 E. Coke, Institutes of the Laws of England 191 (4th ed.
1797) (informer prosecutions under obsolete statutes had been used to
“vex and entangle the subject”). Thus, many of the old enactments
were repealed, see Act for Continuing and Reviving of Divers Statutes
and Repeal of Divers Others, 21 Jac. I, ch. 28, § 11 (1623), and
statutes were passed deterring and penalizing vexatious informers,
limiting the locations in which informer suits could be brought, and
subjecting such suits to relatively short statutes of limitation, see Act
to Redress Disorders in Common Informers, 18 Eliz. I, ch. 5 (1576);
Act Concerning Informers, 31 Eliz. I, ch. 5 (1589); see generally
Davies, supra, at 63–76. Nevertheless, laws allowing qui tam suits by
informers continued to exist in England until 1951, when all of the
remaining ones were repealed. See Note, The History and
Development of Qui Tam, 1972 Wash. U.L.Q. 81, 88, and n.44 (citing
Common Informers Act, 14 & 15 Geo. VI, ch. 39 (1951)).
Qui tam actions appear to have been as prevalent in America as in
England, at least in the period immediately before and after the
framing of the Constitution. Although there is no evidence that the
Colonies allowed common-law qui tam actions (which, as we have
noted, were dying out in England by that time), they did pass several
informer statutes expressly authorizing qui tam suits. See, e.g., Act for
11
the Restraining and Punishing of Privateers and Pirates, 1st Assembly,
4th Sess. (N.Y. 1692), reprinted in 1 Colonial Laws of New York 279,
281 (1894) (allowing informers to sue for, and receive share of, fine
imposed upon officers who neglect their duty to pursue privateers and
pirates). Moreover, immediately after the framing, the First Congress
enacted a considerable number of informer statutes. Like their English
counterparts, some of them provided both a bounty and an express
cause of action; others provided a bounty only.
Vermont Agency of Nat. Res. v. U.S. ex rel. Stevens, 529 U.S. 765, 774-77 (2000)
(holding that qui tam relator had Article III standing and such actions were “cases
and controversies” based on the “nigh conclusive” history).
Other courts have also recognized that there “‘is presently no common-law
right to bring a qui tam action, which is strictly a creature of statute.’” Stalley ex
rel. U.S. v. Orlando Reg’l Healthcare System, Inc., 524 F.3d 1229, 1233 (11th Cir.
2008) (quoting Stalley v. Catholic Health Initiatives, 509 F.3d 517, 521 (8th Cir.
2007)).
We thus interpret the issue presented within this context: The Legislature is
the sole authority of all rights granted private relators to file and litigate qui tam
actions.
Another overarching principle also must guide our interpretation here,
however: The statute must be “liberally construed to effectuate its remedial and
deterrent purposes.” § 68.091, Fla. Stat. (2009). By this legislative directive, we
must interpret the statute in a manner that implements the plain meaning of the
law, while ensuring that any contextual boundaries honor the Legislature’s intent
12
to assure that false claims are vigorously pursued and that the courts do not unduly
interfere with the State’s statutory prerogatives to obtain restitution for its losses
and to punish those persons and entities which seek to wrongfully defraud the State
through double and triple recoveries. § 68.082, Fla. Stat. (2009). But this
statement of legislative intent cannot authorize this court to insert new language
into the statute not authorized by the Legislature. Holly v. Auld, 450 So. 2d 217,
219 (Fla. 1984). To “liberally construe” the plain language of the statute, in other
words, we must ensure that our interpretation does no harm to the overall
legislative scheme, which is to remedy wrongs committed against the State when
false claims are filed, but to do so in recognition of the Attorney General’s
extensive control of qui tam litigation and the courts’ responsibility to review
settlements of such claims, regardless of whether the Attorney General participates
in the action. § 68.084(2)(b), Fla. Stat. (2009). We find no cause to describe the
pertinent statutory language as ambiguous; thus, we cannot interpret the statute to
modify any substantive rights defined by the Legislature. Id.
The statute limits the relator’s rights, which are subject to the express
authority of the Attorney General to control and direct such litigation. §§ 68.083,
68.084, Fla. Stat. (2009). The Attorney General exercises the initial authority to
decide whether to file the action, either on the Attorney General’s own initiative or
after an investigation of a claim filed by the relator. The Attorney General retains
13
the discretionary authority to allow the relator to file the action, but if such is
allowed, the relator cannot voluntarily dismiss an action without the express
consent of the Attorney General. § 68.083, Fla. Stat. (2009). Thus, the Attorney
General controls the power of the relator to end the litigation.
Further demonstrating the deference to the Attorney General’s authority to
prosecute qui tam claims, the statute provides that no other party may intervene in
an action filed by a relator, except the Attorney General. § 68.083(7), Fla. Stat.
(2009).
Finally, the statute authorizes the court to allow the Attorney General to
intervene in a qui tam action after a relator has initiated the litigation, but only
upon a showing of “good cause” by the Attorney General. § 68.084(3), Fla. Stat.
(2009). This limitation to intervene is significant. But no such limitation is
imposed on the Attorney General to dismiss an intervenor’s action. § 68.084(2),
Fla. Stat. (2009). In addition, nowhere in the statute is the court authorized to
evaluate or deny the Attorney General’s decision to terminate qui tam litigation.
Thus, the Legislature has determined that when the Attorney General intervenes in
qui tam litigation, the Attorney General must present good cause to justify the
intervention. But the Attorney General’s decision to terminate the litigation is
unlimited by statute. Id.
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2. Case Law Interpreting the Federal False Claims Act
Federal case law interpreting the Federal FCA is persuasive here, as the
Florida Legislature patterned the State’s qui tam statute after the federal law, with
some notable and significant differences discussed below. See House of
Representatives Committee on Judiciary, “Bill Analysis and Economic Impact
Statement,” Feb. 22, 1994 (“HB 1184 creates Florida’s False Claims Act. The Act
is patterned after the Federal False Claims Act and authorizes the Attorney
General, the Comptroller or private individuals to bring actions on behalf of the
state or its agencies against individuals who have made false claims against the
state.”; “Effect of Proposed Changes: HB 1185 creates Florida’s False Claims Act.
The act is crafted after the Federal False Claims Act . . . .”). However, there are
substantive policy differences embodied in the federal and state laws, most
importantly, that under federal law, the relator is entitled to a hearing before the
government may dismiss an action in which it has declined to intervene. But the
Florida Legislature declined to provide such a procedure to the State qui tam
relator. Cf., § 68.084(2)(a) with 31 U.S.C. § 3730(c)(2)(a). Yet even under the
Federal FCA, which grants relators the right to a hearing, federal courts have
accorded broad authority to the United States to dismiss a federal qui tam action.
In Kellogg Brown & Root Services v. United States ex rel. Carter, 135 S. Ct.
1970 (2015), Justice Alito, writing for a unanimous United States Supreme Court,
15
described the statutory structure of the Federal False Claims Act as follows:
In a qui tam suit under the FCA, the relator files a complaint under
seal and serves the United States with a copy of the complaint and a
disclosure of all material evidence. § 3730(b)(2). After reviewing
these materials, the United States may “proceed with the action, in
which case the action shall be conducted by the Government,” or it
may “notify the court that it declines to take over the action, in which
case the person bringing the action shall have the right to conduct the
action.” § 3730(b)(4). Regardless of the option that the United
States selects, it retains the right at any time to dismiss the action
entirely, § 3730(c)(2)(A), or to settle the case, § 3730(c)(2)(B).
135 S. Ct. at 1973-74 (emphasis added).
In Ridenour v. Kaiser-Hill Company, LLC., 397 F.3d 925, 932 (10th Cir.
2005), the majority “decline[d] to construe the FCA as requiring intervention for
cause before dismissal because a plain reading of the statute would not require it,
canons of statutory construction do not support such a result, and in our view, such
a reading would render the FCA constitutionally infirm.” Applying statutory
construction principles, the court found that nothing in the language of the Federal
FCA suggests that the authority of the government to dismiss a qui tam action is
dependent upon prior intervention. Further, the Ridenour court noted that in Swift
v. United States, 318 F.3d 250, 251 (D.C. Cir. 2003), cert. denied, 539 U.S. 944(2003), the D.C. Circuit also held that the government need not first intervene in a
qui tam action before moving to dismiss and found that intervention was only
necessary if the government wished to “proceed with the action.” The court in
Ridenour found that its holding comported with constitutional concerns, noting the
16
FCA had been challenged several times on the basis that it violated the separation
of powers doctrine. 397 F.3d at 934. The court concluded that “to condition the
Government's right to move to dismiss an action in which it did not initially
intervene upon a requirement of late intervention tied to a showing of good cause
would place the FCA on constitutionally unsteady ground.” Id.The Fifth Circuit has also interpreted the Federal FCA in a manner that
would accord great deference to the United States to dismiss a qui tam action,
regardless of whether the government had intervened. Riley v. St. Luke’s
Episcopal Hosp., 252 F.3d 749 (5th Cir. 2001) (en banc). In Riley, the en banc
court reversed a panel decision which had held that the FCA violated the
separation of powers under the Take Care and Appointments Clauses of Article II
of the United States Constitution by entrusting to a private relator executive
powers belonging solely to the President. In reversing the panel’s decision, the
en banc majority opinion grounded its reasoning on the control the United States
retained over a relator’s litigation, including the power to dismiss the litigation:
In Searcy v. Phillips Electronics N. Am. Corp., et. al., 117 F. 3d 154(5th Cir. 1997), we held that the (federal False Claims Act) clearly
permits the government to veto settlements by a qui tam plaintiff even
when it remains passive in the litigation. We cited several ways in
which the government may assume control over qui tam litigation in
which it does not intervene under the FCA. . . . This Court also stated
that the government retains the unilateral power to dismiss an action
“notwithstanding the objections of the person.”
17
Id. at 753. It is significant that in its en banc decision, the Fifth Circuit addressed
the government’s power to dismiss the relator’s litigation, regardless of whether
the government had intervened, to uphold the FCA’s constitutionality against a
separation of powers challenge. As discussed below, Florida’s explicit and strict
separation of powers requires a similar analysis.
The Ninth Circuit Court of Appeals reached a similar conclusion in United
States ex rel. Kelly v. The Boeing Company, 9 F.3d 743 (9th Cir. 1993). In
rejecting an argument that the Federal FCA violated the separation of powers
doctrine embedded in the United States Constitution, which as noted below is not
as strict as the provision in the Florida Constitution, the Ninth Circuit stated that it
agreed with the holding in Juliano v. Federal Asset Disposition Association, 736
F. Supp. 348 (D.DC. 1990), aff’d, 959 F.2d 1101 (D.C. Cir. 1992), wherein the
district court “stated that in order to avoid serious constitutional questions . . . it
would interpret the Act’s provision that the ‘Government may dismiss the action
notwithstanding the objections’ of the relator to apply to actions in which the
government had not already intervened.” Kelly, 9 F.3d at 753 n.10 (quoting
Juliano, 736 F. Supp. at 351; emphasis added). The Ninth Circuit commended the
district court’s interpretation and noted that “we believe that the court’s
interpretation . . . is entirely appropriate and provides an illustration of the
meaningful control which the Executive Branch can exercise over qui tam
18
actions.” Id. These decisions provide further support for our holding that the
Attorney General may dismiss a qui tam action, regardless of whether she
intervenes before dismissing the action.
In our view, the overarching principle at issue in these cases and in the
instant case flows from one fundamental fact: The relator is only the assignee of
the government under both statutes, despite the federal law’s broader language
allowing the relator to demand a hearing where the government seeks to dismiss.
We find that the decision in United States ex rel. Eisenstein v. City of New
York, 556 U.S. 928, 932-33 (2009), does not compel a different result. In
Eisenstein, the Court was presented with the question of whether the United States
was a party to a qui tam action, when the government had declined to intervene;
the relator filed the notice of appeal 54 days after its claim was dismissed by the
district court, seeking to vicariously utilize the government’s statutory authority to
file a notice of appeal within 60 days. The relator asserted the government was a
“party” as defined by the applicable federal rules, notwithstanding the United
States’ decision declining to intervene. The United States Supreme Court rejected
the relator’s argument. Id. at 932-33.
We do not think Eisenstein compels a contrary holding in this case for two
reasons. First, that decision did not specifically address the question here:
Whether the United States, under the FCA, could indeed dismiss a relator’s qui tam
19
suit, notwithstanding the relator’s objections. Second, the relevant language in
Eisenstein that would support Appellant’s position here cannot be logically
reconciled with the Supreme Court’s later language in Kellogg Brown that
“regardless of the option” the United States pursues regarding intervention, “it
retains the right at any time to dismiss the action entirely.” Kellogg Brown, 135
S. Ct. at 1973-74.
Our view regarding the United States Supreme Court’s statements on the
government’s dismissal authority in qui tam litigation is consistent with other
federal courts interpreting Eisenstein. In United States ex rel. Schweizer v. Océ
N.V,, 677 F.3d 1228, 1233 (D.C. Cir. 2012), for example, an employee sued her
former employer under the FCA and retaliation provisions, but the government
moved to dismiss the qui tam claims after reaching a settlement agreement with the
employer. Id. at 1229. The district court granted the motion, over Schweizer’s
objection. Id. The opinion notes that the government declined to intervene in the
qui tam action, but “remained an active participant in settlement discussions.” Id.
at 1231. The employer and the government reached an agreement to dispose of the
qui tam counts without Schweizer’s further involvement. Id. at 1231-32. The
government filed its notice of intervention and corresponding motion to dismiss.
Id. Schweizer opposed the settlement and motion to dismiss, asserting that the
settlement understated the employer’s actions and could not satisfy the criteria
20
under section 3730(c)(2)(B) that allowed the government to “settle [a qui tam]
action . . . notwithstanding the objections of the person initiating the action if the
court determines, after a hearing, that the proposed settlement is fair, adequate, and
reasonable under all the circumstances.” § 3730(c)(2)(B).
The government had two responses, asserting first that the district court
could dismiss the two counts, over Schweizer’s objection, pursuant to section
3730(c)(2)(A) without reviewing the settlement, as it allowed the government to
dismiss over the objections of the relator if the relator has been notified and given
an opportunity for a hearing on the motion to dismiss. Id. at 1232.
In its analysis, the Court of Appeals stated in Schweizer:
As a preliminary matter, Schweizer claims the government may not
invoke § 3730(c)(2)(A) because it never properly intervened in the
case. She points out that the Act prescribes only two ways for the
government to intervene: during an initial sixty-day window (subject
to extension by the district court), § 3730(b)(4); or ‘at a later date
upon a showing of good cause,’ § 3730(c)(3). Because the
government declined to intervene during the initial sixty-day period,
and did not invoke subsection (c)(3) or show good cause in its later
filing, it never became a party to the suit. Thus, Schweizer concludes,
the government could not properly move for dismissal.
Schweizer's view of the Act's intervention provisions is not accurate.
Intervention is necessary “only if the government wishes to ‘proceed
with the action.’” Swift [v. United States, 318 F.3d 250, 251 (D.C. Cir.
2003)] (quoting 31 U.S.C. § 3730(b)(2) & (b)(4)(A)). Here, the
government did not seek to proceed with the qui tam portion of the
case; it sought to end it. It follows that the government did not have to
intervene before filing its motion. Swift, 318 F.3d at 251–52. Nothing
in United States ex rel. Eisenstein v. City of New York, 556 U.S. 928,
129 S.Ct. 2230, 173 L.Ed.2d 1255 (2009), which addressed the
21
government's party status for purposes of the Federal Rules of
Appellate Procedure, is to the contrary. Nor does it matter that the
government moved to dismiss outside the initial sixty-day intervention
period. See [United States ex rel. Hoyte v. Am. Nat'l Red Cross, 518
F.3d 61, 63-65 (D.C.Cir.2008)].
Id. at 1233.
3. The Status of the Attorney General in Qui Tam Actions
Under the Florida FCA, the Attorney General is the real party in interest
with the substantive authority to dismiss the action regardless of her prior
intervention the suit. This conclusion is based on the statutory provisions discussed
above. As the real party in interest, the Attorney General possesses the sole
substantive power of dismissal; the relator is and always remains an assignee of the
State’s substantive right to prosecute a qui tam action, albeit an assignee with some
procedural prerogatives strictly defined by positive law and in no manner arising
out of a common law or constitutional substantive ground.
The Attorney General’s authority to dismiss a relator’s suit under section
68.084(2)(a), Florida Statutes, is substantive:
Substantive law has been defined as that part of the law which
creates, defines and regulates rights, or that part of the law which
courts are to administer. It includes those rules and principles which
fix and declare the primary rights of individuals with respect towards
their persons and property. On the other hand, practice and procedure
“encompasses the course, form, manner, means, method, mode, order,
process or steps by which a party enforces substantive rights or
obtains redress for their invasion. ‘Practice and procedure’ may be
described as the machinery of the judicial process as opposed to the
22
product thereof.” It is the method of conducting litigation involving
rights and corresponding defenses.
Abdool v. Bondi, 141 So. 3d 529, 538-40 (Fla. 2014) (emphasis in original)
(quoting Massey v. David, 979 So. 2d 931, 936-37 (Fla. 2008)).
Here, the dismissal provision is a substantive law, because it defines and
creates the property right to maintain a qui tam action. See Adhin v. First Horizon
Home Loans, 44 So. 3d 1245 (Fla. 5th DCA 2010). In Adhin, the Fifth District
held that a statute requiring holders of unrecorded property interests to intervene
within 20 days after the recording of a lis pendens was constitutional, because the
statute primarily affected substantive property rights, not procedural rights,
essentially creating a “nonclaim” statute and a statute of repose; thus, the statute
directly created or eliminated property rights. Here, the qui tam statute clearly
creates, defines and limits substantive rights possessed by the State to maintain a
qui tam suit in which damages may be obtained. Thus, the State’s authority to
terminate the action is substantive.
To the extent the Florida Rules of Civil Procedure might conflict with
section 68.084(2)(a) regarding the party status of the Attorney General, the Rules
of Civil Procedure must yield, as only the Florida Legislature can define
substantive law under Florida’s strict separation of powers requirement. Art. II,
§ 3, Fla. Const.; Abdool, 141 So. 3d at 538.
23
Before addressing the other constitutional principles relevant here, we note
that federal courts have also acknowledged that to interpret the Federal FCA in a
manner to impede the Executive Branch’s control over the litigation would place
that statute on unsteady constitutional terra firma. In Ridenour, the court noted
that, in United States ex rel. Stone v. Rockwell International Corp., 282 F.3d 787(10th Cir. 2002), it had previously reserved the question of whether the qui tam
provision would pass constitutional muster if the government was denied
intervention for cause, as the government in Stone had successfully intervened,
showing good cause. Ridenour, 397 F.3d at 934. The Ridenour court, analyzing
its prior opinion in Stone, noted that Stone cited favorably to decisions from other
circuits that had found the Federal FCA as “constitutionally sound as long as it is
interpreted as vesting in the Executive Branch sufficient control over qui tam
actions so there is no violation of its duty to enforce the laws of the land.” Id.The Ridenour majority, however, did not rule on the constitutionality of the
issue by construing the statute in such a way that the constitutionality question
could be avoided, and noted that if the government’s right to dismiss when it
intervened at a later date was tied to a showing of good cause, such an
interpretation would place the FCA on “constitutionally unsteady ground.” Id.Significantly, the majority opinion in Ridenour rejected the dissenting opinion’s
24
view that the government would be required to intervene on a showing of “good
cause,” before it could be allowed to dismiss the action.
4. Interpreting the Florida False Claims Act
Consistent With Article II, Section Three and
Article IV, Section Four of the Florida Constitution
The Florida Constitution imposes a strict, explicit and textual separation of
powers requirement on all three branches of state government:
Branches of government.—The powers of the state government
shall be divided into legislative, executive and judicial branches. No
person belonging to one branch shall exercise any powers
appertaining to either of the other branches unless expressly provided
herein.
Art. II, § 3, Fla. Const. (emphasis added). It would be hard to compose a more
demanding requirement in organic law than this, which not only requires an
explicit separation of the legislative, judicial and executive powers, but specifies
that no one governmental official is to exercise “any” power “appertaining to either
of the other branches.” By comparison, the United States Supreme Court has
described the separation of powers federal constitutional doctrine in less
comprehensive terms, stating that “the Constitution by no means contemplates total
separation” of the three branches of government. Buckley v. Valeo, 424 U.S. 1(1976).
In contrast, the Florida Supreme Court has recognized and held that
Florida’s superior organic law imposes a more vigorous separation of powers
25
constitutional requirement than does the federal constitution. B.H. v. State, 645
So. 2d 987 (Fla. 1994). This principle becomes even more significant in
considering that federal courts have recognized that even under the United States
Constitution, there exist separation-of-power concerns where a qui tam plaintiff’s
assertions may jeopardize the government’s exercise of its executive powers.
In B.H., the Florida Supreme Court addressed a statute that purported to
authorize an administrative agency to define the elements of the crime of escape
committed by a juvenile offender. The Court stated the following regarding the
State’s more stringent separation of powers requirement:
We now turn to Florida law on the same question [of the
nondelegation doctrine]. Any discussion must begin by noting several
special features of the state Constitution, which we are required to
honor under the doctrine of primacy notwithstanding less stringent
federal law. Traylor v. State, 596 So. 2d 957 (Fla. 1992). . . .
The prohibition contained in the second sentence of Article II, section
3 of the Florida Constitution could not be plainer, as our cases clearly
have held. This Court has stated repeatedly and without exception
that Florida’s Constitution absolutely requires a ‘strict’
separation of powers. Cases on this point are numerous . . . .
...
Moreover, unlike the apparent federal approach, Florida has not relied
on implied powers, arguments of experience or necessity, or any
penumbral theory in gauging the contours of the separation of powers
. . . given to different branches of government. What the
Constitution’s plain language says on this subject is what the courts
of Florida enforce. If a statute purports to give one branch powers
textually assigned to another by the Constitution, then that statute is
unconstitutional.
26
645 So. 2d at 991-92 (emphasis added). It is in this context that we must resolve
the issue sub judice.
To answer the question of how the statute comports with the separation of
powers, we must turn to the powers at issue. Florida’s organic law entrusts in the
article defining the “Executive,” the designation of the Attorney General as the
state’s “chief legal officer.” Art. IV, § 4(b), Fla. Const. In addition, the Attorney
General serves as one of three members of the Cabinet. Art. IV, § 4(a), Fla. Const.
The Attorney General is one of three officers of the Executive who serves, with the
Governor as chair, on the State Board of Administration. Art. IV, § 4(d), Fla.
Const. Thus, in the plain, textual organic law, the Attorney General possesses the
State’s executive authority to serve as the State’s chief legal officer.
In addition, under general law, the Attorney General “[s]hall appear in and
attend to, in behalf of the state, all suits or prosecutions, civil or criminal or in
equity, in which the state may be a party, or in anywise interested, in the Supreme
Court and district courts of appeal of this state [and shall] appear and attend to such
suits or prosecutions in any other of the courts of this state . . . .” § 16.01(4) & (5),
Fla. Stat.
The organic and statutory law are not the only sources of authority of the
Attorney General; the common law provides the Attorney General the authority to
intervene in matters of “compelling public interest,” as recognized by the Florida
27
Supreme Court in State ex rel. Shevin v. Yarborough, 257 So. 2d 891, 893-94 (Fla.
1972), when it noted that “[t]he Attorney General inherited many powers and
duties from the King’s Counsellor at Common Law,” while acknowledging that
this common-law authority is subject to legislative definitions of the “outer
perimeter” of the Attorney General’s authority. Here, the Legislature has
specifically authorized the Attorney General to control the contours of qui tam
litigation, subject to the authority of the judicial branch to approve settlements, but
not to disapprove the Attorney General’s decision to dismiss such suits.
In Bondi v. Tucker, 93 So. 3d 1106 (Fla. 1st DCA 2012), a case not
involving the qui tam statute, this court held that unless the Attorney General
intervened in a civil action below, she could not appeal that final decision. But
those are not the facts here. Here, the Attorney General exercised her authority
under the plain language of the qui tam statute to terminate qui tam litigation in the
circuit court. Litigation of a qui tam suit is, by its very definition under Florida
law, an action “brought in the name of the state.” In Bondi, this court recognized
the Attorney General’s broad authority to act on matters involving the State’s legal
interests: “We recognize that the ‘office of the Attorney-General is a public trust
. . . [and that s]he has been endowed with a large discretion . . . in . . . matters of
public concern,’ State v. Gleason, 12 Fla. 190 (Fla. 1868), and acknowledge and
affirm the Attorney General’s ‘discretion to litigate, or intervene in, legal matters
28
deemed by him [or her] to involve the public interest . . . and [that] his [or her]
standing . . . can not be challenged or adjudicated.’” Id. at 1109 (quoting Shevin,
257 So. 2d at 895).
Conducting and terminating legal actions brought in the name of and for the
benefit of the State is the sine qua non of the State’s chief legal officer.
§ 68.083(2), Fla. Stat. (2009) (“Civil actions instituted under this act shall be
governed by the Florida Rules of Civil Procedure and shall be brought in the
name of the State of Florida.” (emphasis added)). A State’s chief legal officer
without the authority to conduct the State’s litigation would be no legal officer at
all.
In addition to this logical fact, the Attorney General of Florida is invested
with several powers of the Executive Branch; thus, she is far more than only the
State’s chief legal officer. See Thompson v. Wainwright, 714 F.2d 1495, 1500-
1501 (11th Cir. 1983):
By Florida judicial decisions, the grant of specific state powers
to the attorney general does not deprive [her] of the powers belonging
to [her] under the common law, which include prosecuting ‘all actions
necessary for the protection and defense of the property and revenue
of the state. . .’ State ex rel. Landis v. S.H. Kress & Co., 115 Fla. 189,
155 So. 823, 827 (1934). Also, “it is [her] duty, in the absence of
express legislative restrictions to the contrary, to exercise all such
power and authority as public interests may require from time to
time.” Id. Moreover, in Florida the office of attorney general is in
many respects judicial in character, and [she] is clothed with
considerable discretion. Id. 155 So. at 828.
29
The attorney general’s authority runs beyond responsibility to
the government qua government. [She] is responsible to the
people. . . . “The Attorney General is the principal law officer of the
state.” Id. 126 So. at 377.
We conclude that under these powers granted by the Florida
common law, statutes and case law, the state’s attorney general had
the authority to expressly waive exhaustion of state remedies so that
all claims could be presented and decided in one federal proceeding.
Florida law gives the attorney general authority to waive exhaustion
whether exhaustion, as we hold, promotes the interests of the state as
sovereign or, as some other courts have held, promotes only the
interests of state courts. . . . We hold that, as far as state law is
concerned, the attorney general had authority to speak for the interests
of state courts and judges as well as the other instrumentalities of
Florida state sovereignty. We believe that if the Florida courts were
presented with these same questions they would reach the same
conclusions.
(Emphasis added.)
Thus, we hold that under the relevant and plain language of the Florida FCA,
the constitutional authority of the executive branch vested in the Attorney General
of the State of Florida to act as the State’s chief legal officer, and the very nature of
a qui tam suit, the statute is correctly interpreted to authorize the Attorney General
to dismiss a relator’s qui tam action, regardless of whether the Attorney General
has previously intervened in the action.
Conclusion
The voluntary dismissal by the Attorney General in this case was not subject
to challenge by Appellant. Thus, the trial court’s decision terminating proceedings
in this matter was correct; the court properly ruled that it was divested of
30
jurisdiction when the Attorney General dismissed the action, properly recognizing
that the Attorney General “had the authority to file a voluntary dismissal
notwithstanding any objections of the Relator pursuant to Section 68.084(2),
Florida Statutes.”
AFFIRMED.
ROBERTS, C.J., and RAY, J., CONCUR.
31