U.S. ex rel. Drake v. NSI, Inc.
| Decision Date | 01 October 2010 |
| Docket Number | No. 3:94-cv-963 (WWE),3:94-cv-963 (WWE) |
| Citation | 736 F.Supp.2d 489 |
| Court | U.S. District Court — District of Connecticut |
| Parties | UNITED STATES of America ex rel. Walter M. DRAKE, Plaintiff, v. NSI, INC., f/k/a Norden Systems, Inc. and United Technologies Corporation, Defendants. |
David S. Golub, Jonathan M. Levine, Silver, Golub & Teitell, Gary Edward Phelan, Outten & Golden, Stamford, CT, Joseph Michael Lewis, Greenwich, CT,Alan M. Soloway, U.S. Attorney's Office, New Haven, CT, for Plaintiff.
Alan W. H. Gourley, Brian C. Elmer, Richard L. Beizer, Crowell & Moring, Washington, DC, James T. Cowdery, Thomas J. Murphy, Cowdery, Ecker & Murphy, Hartford, CT, for Defendants.
Relator Walter M. Drake has filed two motions. First, he moves for reconsideration on the Court's prior dismissal of his third claim for relief based on the former 31 U.S.C. § 3729(a)(7) & (2) against defendant United Technologies Corporation ("UTC") (Doc. # 204). Second, he seeks leave to amend his complaint to assert a claim for recovery against UTC pursuant to 31 U.S.C. § 3729(a)(1)(B) (Doc. # 203). For the reasons which follow, the motion for reconsideration will be granted. Upon reconsideration, the Court will permit relator Drake to assert a claim under the former 31 U.S.C. § 3729(a)(2), which has been recodified as 31 U.S.C. § 3729(a)(1)(B). The motion for leave to amend the complaint will be denied as moot.
The underlying factual allegations and the identities of the parties are set forth in the Court's September 20, 2007 ruling as well as its previous rulings. Therefore, the Court will not repeat them here.
Relator Walter M. Drake commenced this qui tam action with the filing of a complaint under seal on June 14, 1994 (Doc. # 1). His claims were made under the False Claims Act, 31 U.S.C. §§ 3729 et seq. ("FCA"). On June 2, 1997, the United States declined to intervene (Doc. # 27), and the Court ordered the complaint unsealed and served upon defendants (Doc. # 28). On July 7, 1997, Drake filed an amended complaint (Doc. # 29) which was then served upon defendants.
On September 15, 1997, defendants moved pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6) to dismiss the first amended complaint (Doc. # 40). Instead of filing an opposition to the motion, Drake filed a second amended complaint on December 17, 1997 (Doc. # 53). In this complaint, Drake asserted claims under (I) FCA § 3729(a)(1) & (2) against Norden; (ii) FCA § 3729(a)(7) & (2) against Norden; (iii) FCA § 3729(a)(7) & (2) against UTC; and (iv) FCA § 3729(a)(3) for conspiracy against Norden and UTC.
Defendants moved to dismiss the second amended complaint on January 27, 1998 (Doc. # 62). On the same day, Drake moved for partial summary judgment (Doc. # 64). Defendants opposed Drake's motion and cross-moved for partial summary judgment (Doc. # 90). Drake asserts that prior to the Court issuing an opinion on the motion to dismiss, the parties conducted voluminous discovery.
On August 24, 2000, the Court dismissed Drake's claim against defendant UTC under FCA § 3729(a)(2) with prejudice on the grounds that any false statements in UTC's Disclosure Statements and Present Responsibility Agreement ("PRA") reports were not "necessary antecedents to a claim for payment, and because the contracts did not certify that costs billed were allowable, alleged falsity contained in these documentsis not actionable under FCA § 3729(a)(2)." 1 The Court also dismissed Drake's "reverse false claim" under FCA § 3729(a)(7) against UTC with prejudice because there were no fixed or existing obligations to the government. Finally, the Court dismissed without prejudice Drake's conspiracy claim against both defendants. The Court permitted Drake sixty days to file an amended complaint; Drake did not do so.
On July 25, 2001, the Court issued a ruling on the parties' cross-motions for partial summary judgment, granting defendants' motion and denying Drake's motion (Doc. # 119).2
On January 31, 2002, the Court issued a notice stating that "[u]nless satisfactory explanation of why [this case] should not be dismissed is submitted to the Court within twenty (20) days of the date of this notice, it will be dismissed" (Doc. # 120).3 On February 19, 2002, Drake filed a third amended complaint (Doc. # 122). Defendants then moved to strike the third amended complaint and to dismiss the case for failure to prosecute under Federal Rule of Civil Procedure 41(b). Finding that Drake had failed to properly prosecute his case, the Court dismissed the case with prejudice on February 19, 2003. The Court noted that:
Drake subsequently moved for reconsideration under Rules 59(e) and 60(b); the Court denied Drake's motion on June 17, 2003, 2003 WL 23319386 (Doc. # 154).
Drake appealed. On appeal, the Second Circuit Court of Appeals disagreed "that the circumstances were sufficiently egregious or that Drake's actions were so contumacious as to warrant dismissal of his entire complaint." United States ex rel. Drake v. Norden Sys., 375 F.3d 248, 251 (2d Cir.2004). The Court of Appeals, however, affirmed the dismissal of those claims that had previously been dismissed without prejudice, but reversed the dismissal of all claims that had not previously been dismissed at any stage. As a result, only Norden remained a defendant in the case, and Drake's claims under FCA § 3729(a)(3) against both defendants and under FCA § 3729(a)(7) against UTC were dismissed.
On February 10, 2005, the Court issued an order granting defendants' request that Drake file an amended complaint within sixty days following the close of certain limited discovery (Doc. # 165). Drake filed a fourth amended complaint on October 6, 2005 (Doc. # 167); defendants fileda motion to dismiss based on Drake's failure to comply with the Court's February 10 order. Specifically, defendants pointed to Drake's inclusion of allegations that had been previously dismissed and new allegations and theories of liability. The Court, on September 20, 2007, granted the motion to dismiss (Doc. # 184) for failure to prosecute pursuant to Rule 41(b). See Ruling on Defendant's Rule 41(b) Motion to Dismiss for Failure to Comply with the Court's February 10, 2005 Order and Relator's Motion for an Evidentiary Hearing, 2007 WL 2782525, 2007 U.S. Dist. LEXIS 69994 (D.Conn. Sept. 20, 2007).
The Court of Appeals subsequently reversed the Court's dismissal, finding the sanction of dismissal to be overly harsh in this matter. See Drake v. Norden Sys., 320 Fed.Appx. 1 (2d Cir.2009). By its ruling, the Court of Appeals reinstated Drake's fourth amended complaint.
Drake's instant motions are addressed to the Court's ruling of August 24, 2000. Specifically, Drake requests that the Court reconsider its ruling dismissing count three which alleged that UTC violated FCA § 3729(a)(7) & (2) of the FCA in light of Congress's passage of the Fraud Enforcement and Recovery Act of 2009 ("FERA"), P.L. 111-21, § 4(a), 123 Stat. 1621 (May 20, 2009). Alternatively, Drake seeks leave to amend his complaint to assert a new claim under the revised sections of the FCA.
A motion for reconsideration may be based solely upon "matters or controlling decisions which counsel believes the Court overlooked in the initial decision or order." Local R. Civ. P. 7(c)(1). An intervening change in controlling law is one ground that would justify granting a motion for reconsideration. Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992). The movant's burden is made weighty to avoid "wasteful repetition of arguments already briefed, considered and decided." Weissman v. Fruchtman, 124 F.R.D. 559, 560 (S.D.N.Y.1989).
Whether Drake's claim under FCA § 3729(a)(7) & (2) can be revived depends on the resolution of two questions. First, is Drake permitted to seek reconsideration of a ruling entered ten years ago in light of Congress's passage of a new statute? Second, do the provisions of FERA apply to this action in which the alleged conduct occurred more than fifteen years ago?
As a threshold matter, the Court must determine whether it has the power to reinstate Drake's claims that were originally asserted under FCA § 3729(a)(7) & (2).
Drake's motion is made under Federal Rule of Civil Procedure 54(b), which permits the court to revise an order that adjudicates fewer than all the claims at issue at any time before entry of judgment.4 As the Court of Appeals has stated with regard to Rule 54(b) and the "law of the case" doctrine:
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