United States ex rel. Alexander Volkhoff, LLC v. Janssen Pharmaceutica N.V.

• Decision Date: 02 January 2020
• Docket Number: No. 18-55643,18-55643
• Citation: 945 F.3d 1237
• Parties: UNITED STATES EX REL. ALEXANDER VOLKHOFF, LLC, Plaintiff-Appellant, v. JANSSEN PHARMACEUTICA N.V.; Janssen Pharmaceuticals, Inc.; Janssen Research And Development, LLC; Johnson & Johnson; Ortho-McNeil, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

945 F.3d 1237

UNITED STATES EX REL. ALEXANDER VOLKHOFF, LLC, Plaintiff-Appellant,^*

v.JANSSEN PHARMACEUTICA N.V.; Janssen Pharmaceuticals, Inc.; Janssen Research And Development, LLC; Johnson & Johnson; Ortho-McNeil, Defendants-Appellees.

No. 18-55643

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 14, 2019 Pasadena, California

Filed January 2, 2020

C. Brooks Cutter (argued) and John R. Parker, Jr., Cutter Law P.C., Sacramento, California; Audra Ibarra, Law Office of Audra Ibarra, Palo Alto, California; Mychal Wilson, Law Offices of Mychal Wilson, Santa Monica, California; for Plaintiff-Appellant.

Michael A. Schwartz (argued) and Erin Colleran, Pepper Hamilton LLP, Philadelphia, Pennsylvania; Jeffrey M. Goldman, Pepper Hamilton LLP, Los Angeles, California; for Defendants-Appellees.

Before: FERDINAND F. FERNANDEZ, MILAN D. SMITH, JR., and ERIC D. MILLER, Circuit Judges.

M. SMITH, Circuit Judge:

Alexander Volkhoff, LLC (Volkhoff) appeals the district court’s dismissal of the qui tam complaint filed by relator Jane Doe pursuant to the False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733, and analogous state false claims laws.¹ However, Volkhoff was not a party to Jane Doe’s complaint. Moreover, it is not clear from Volkhoff’s notice of appeal (Notice), as required by Federal Rule of Appellate Procedure 3(c), that Jane Doe also sought to take an appeal. Because Volkhoff is a nonparty that cannot appeal, and Jane Doe was not properly named as an appellant, we dismiss this appeal for lack of appellate jurisdiction.

FACTUAL AND PROCEDURAL BACKGROUND

On September 16, 2016, shortly after its incorporation as a Delaware limited liability company, Volkhoff filed a qui tam complaint (the Original Complaint) in federal district court. The Original Complaint named Volkhoff as the relator and alleged violations of the FCA and various states’ false claims laws by Defendants Janssen Pharmaceutica N.V., Janssen Pharmaceuticals, Inc., Janssen Research & Development, LLC, Johnson & Johnson, and Ortho-McNeil (Defendants). In particular, the Original Complaint alleged that Defendants fraudulently and unlawfully marketed their medications. Neither the United States nor any state elected to intervene, allowing Volkhoff to proceed with the Original Complaint.²

Following Defendants’ motion to dismiss the Original Complaint, Volkhoff did not oppose the motion. Instead, Volkhoff’s counsel filed a First Amended Complaint (FAC). The FAC alleged the same claims as those Volkhoff alleged in the Original Complaint. The FAC, however, removed Volkhoff as the relator and named Jane Doe, an anonymous natural person, as the only relator.

The FAC did not mention Volkhoff or its relationship to Jane Doe. In filings before the district court and our court, Jane Doe and Volkhoff acknowledge that the replacement of Volkhoff by Jane Doe was a tactical decision aimed at avoiding the dismissal of the Original Complaint’s FCA employment retaliation claim. The change responded to Defendants’ first motion to dismiss, which argued that Volkhoff, as a limited liability company, lacked standing to assert an FCA retaliation claim.

Defendants moved to dismiss Jane Doe’s FAC. The district court dismissed the FAC on April 19, 2018. In relevant part, the district court dismissed Jane Doe’s FCA claims for lack of subject matter jurisdiction based on the so-called "first-to-file bar," which prevents private third parties from intervening in or filing similar FCA qui tam lawsuits after an initial relator has filed one. See 31 U.S.C. 3730(b)(5) ; United States ex rel. Lujan v. Hughes Aircraft Co. , 243 F.3d 1181, 1187 (9th Cir. 2001). In concluding that the first-to-file bar applied, the district court found that Jane Doe was not a party to the Original Complaint that Volkhoff had filed, and that she and Volkhoff were distinct legal persons. The district court dismissed Jane Doe’s FCA employment retaliation claim because she failed to demonstrate a need for proceeding anonymously. Finally, the court declined to exercise supplemental jurisdiction over Jane Doe’s remaining state law claims and dismissed those claims without prejudice.

Within thirty days of the dismissal, Volkhoff filed the Notice challenging the district court’s order. Fed. R. App. P. 4. The Notice names Volkhoff as the sole relator and plaintiff. It does not mention Jane Doe, nor refer to any other relator, plaintiff, or appellant. The "Representation Statement" filed concurrently with the Notice, and subsequent papers filed with this court, designate Volkhoff variously as the only relator, plaintiff, or appellant. On appeal, Volkhoff contends that Jane Doe is Volkhoff’s sole owner.

JURISDICTION AND STANDARD OF REVIEW

Generally, we have jurisdiction over appeals "from all final decisions of the district courts of the United States," 28 U.S.C. § 1291, such as the district court’s final decision dismissing Jane Doe’s FAC.

However, whether a nonparty has the ability to appeal is a jurisdictional question, see Cal. Dep’t of Toxic Substances Control v. Com. Realty Projects, Inc. , 309 F.3d 1113, 1121 (9th Cir. 2002), and a failure to comply with the filing and content requirements of the Federal Rules of Appellate Procedure may "present a jurisdictional bar to appeal." Le v. Astrue , 558 F.3d 1019, 1021, 1024 (9th Cir. 2009). As a result, our inquiry into whether this appeal is proper is jurisdictional. "We have jurisdiction to determine our own jurisdiction." Havensight Capital LLC v. Nike, Inc. , 891 F.3d 1167, 1171 (9th Cir. 2018) (quoting Agonafer v. Sessions , 859 F.3d 1198, 1202 (9th Cir. 2017) ). We review whether we have appellate jurisdiction de novo. Le , 558 F.3d at 1021 (citing Perez-Martin v. Ashcroft , 394 F.3d 752, 756 (9th Cir. 2005) ).

ANALYSIS

Volkhoff argues both that it and Jane Doe appealed the district court’s dismissal, and that, under either circumstance, the appeal is proper. However, Volkhoff and Jane Doe each face distinct jurisdictional problems that foreclose this appeal. First, Volkhoff’s appeal violates the general rule that only parties to a lawsuit may appeal it. Second, because Volkhoff’s Notice does not name Jane Doe or otherwise refer to her, Jane Doe’s purported appeal does not conform to Federal Rule of Appellate Procedure 3(c). We discuss each jurisdictional defect in turn.

I. Volkhoff’s Nonparty Appeal

Volkhoff claims that it may appeal the dismissal of Jane Doe’s FAC even though it was not a party to her lawsuit. "The rule that only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment, is well settled." Marino v. Ortiz , 484 U.S. 301, 304, 108 S.Ct. 586, 98 L.Ed.2d 629 (1988) (per curiam) (citing United States ex rel. Louisiana v. Jack , 244 U.S. 397, 402, 37 S.Ct. 605, 61 L.Ed. 1222 (1917) ; Fed. R. App. P. 3(c) ). This rule echoes the requirements of standing. See Raley v. Hyundai Motor Co., Ltd. , 642 F.3d 1271, 1274 (10th Cir. 2011) ("After all, it is usually only parties who are sufficiently aggrieved by a district court’s decision that they possess Article III and prudential standing to be able to pursue an appeal of it." (emphasis added) (citations omitted)). But while the rule is sometimes described as "standing to appeal," it is distinct from the requirements of constitutional standing. See United States v. Kovall , 857 F.3d 1060, 1068–69 (9th Cir. 2017) ; In re Proceedings Before Fed. Grand Jury , 643 F.2d 641, 642–643, 642 n.1 (9th Cir. 1981).

As required by this rule, we hear nonparties’ appeals only in "exceptional circumstances." S. Cal. Edison Co. v. Lynch , 307 F.3d 794, 804 (9th Cir. 2002) (quoting Citibank Int’l v. Collier-Traino, Inc. , 809 F.2d 1438, 1441 (9th Cir. 1987) ). "We have allowed such an appeal only when (1) the appellant, though not a party, participated in the district court proceedings, and (2) the equities of the case weigh in favor of hearing the appeal." Hilao v. Estate of Marcos , 393 F.3d 987, 992 (9th Cir. 2004) (citation and internal quotation marks omitted); see also United States v. Badger , 930 F.2d 754, 756 (9th Cir. 1991).

The cases in which we have applied this test illustrate the level and nature of participation in the district court proceedings that is required for a nonparty to be permitted to appeal. We have allowed nonparties to appeal when they were significantly involved in the district court proceedings—often because they were compelled to participate by one of the parties or the court. Commodity Futures Trading Comm’n v. Topworth Int’l, Ltd. , 205 F.3d 1107, 1113–14 (9th Cir. 1999), as amended (9th Cir. 2000) (nonparty "participated in the proceedings below to the full extent possible" and "participated for several years, rather than coming in at the end of the proceedings" (citation omitted)); Keith v. Volpe , 118 F.3d 1386, 1389–91 (9th Cir. 1997) (after objecting, nonparty responded to order to show cause filed by party, filed memorandum of points and authorities at court’s request, and participated in oral argument); S.E.C. v. Wencke , 783 F.2d 829, 834–35 (9th Cir. 1986) (nonparty appeared in the district court to contest the same issues it was asserting on appeal, the district court accepted nonparty’s briefs, and it allowed him to cross-examine witnesses). This requirement is in accordance with the Supreme Court’s admonition in Marino that "the better practice is for ... a nonparty to seek intervention for purposes of appeal." 484 U.S. at 304, 108 S.Ct. 586 ; see also Fed. R. Civ. P. 24.

In contrast, we have denied nonparties the right to appeal when they choose not to meaningfully involve themselves in the district court proceedings. In Citibank , we dismissed a nonparty’s appeal from a judgment when the nonparty "was well-apprised of the proceedings" but "chose not to intervene, join or make an appearance to contest jurisdiction [in district court], even though it had actual knowledge of the proceedings and their substance." 809 F.2d at 1441 ; ...