United States ex rel. Griffith v. Conn
| Decision Date | 09 September 2016 |
| Docket Number | Civil No. 11-157-ART |
| Parties | UNITED STATES OF AMERICA ex rel. JENNIFER L. GRIFFITH and SARAH CARVER, Plaintiffs, v. ERIC C. CONN, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Kentucky |
Patience is a virtue but it has its limits. Nearly a half-decade ago, Jennifer Griffith and Sarah Carver filed this suit. The government took its time to decide whether to get involved, but ultimately chose to watch from the bench. Last year, things changed. The government brought a criminal case against the defendants and then moved to intervene in this one. It appears, however, that the government has only stepped onto the court to grab the ball, hold it, and delay the game. The government now moves to stay this case. So does Conn. Thus, the Court must determine, first, whether the Court can stay the case, and second, whether it should.
This story has been told many times. Griffith and Carver allege that Eric Conn, a social security attorney and local celebrity, and David Daugherty, an administrative law judge, conspired to defraud the government. R. 2. The scheme was simple: Conn would bring social security cases on behalf of people seeking disability benefits, Daugherty would assign those cases to himself, and Daugherty would grant the benefits irrespective of the merits. Id. ¶¶ 30-35. Conn would then submit claims to the Social Security Administration (SSA) to collect attorney's fees for bringing those cases. Id. at 2. Those submissions, according to the plaintiffs, violated the False Claims Act ("FCA"). Id. at 21-22.
For good reason, those who submit false claims to the government are liable to it. See 31 U.S.C. § 3729(a)(1). But the government does not always choose to prosecute such fraud. When the government abstains, individual citizens can take its place in a so-called "qui tam action." Id. § 3730(b). If successful, a qui tam plaintiff (called "the relator") can collect up to $10,000 (per claim) for the government, and take home up to thirty percent of the judgment for herself. Id. §§ 3730(a), (d).
But qui tam litigation is not simple. Instead of serving her complaint on the defendant—like normal—the relator serves the government. Id. § 3730(b)(2). The government then gets sixty days to investigate the case and decide whether to intervene. Id. While the government decides (and the relator waits), the case remains under seal. Id. The government, of course, rarely makes a decision within sixty days. So the FCA allows for extensions, id. § 3730(b)(3), which the Court granted to the government four times in this case. See R. 6; R. 8; R. 10; R. 13. If the government ultimately decides not to intervene, the relator may serve the complaint on the defendant. 31 U.S.C. § 3730(c)(3). The case then proceeds as usual. But, the government is never quite out of the picture. Rather, it sticks around, like the 800-pound gorilla in the room—ready to intervene at any time—as long as it has good cause. See § 3730(b)(3).
When the government intervenes, it takes control of the litigation. Id. § 3730(c)(2). Although the relator stays involved, under certain circumstances the government can try to limit her participation. One such circumstance is relevant here: The government may move to stay "certain actions of [a relator's] discovery" for sixty days—if those acts would interfere with a different government investigation "arising out of the same facts." Id. § 3730(c)(4).
The government has already put to good use the FCA's tools for slowing down this case. After taking 429 days to investigate the relators' complaint, the government chose not to intervene. See R. 2 (complaint filed October 11, 2011); R. 14 (). So the relators moved forward. Two months later, however, the government tried to put the case on hold by requesting a stay. R. 17. But the Court denied that request because the FCA did not allow it. R. 18. The government rode the bench for the next three years. This year, however, the government changed its mind and moved to intervene in the case, a motion the Court granted. R. 223; R. 252. But now that the government has finally left the bench and grabbed the ball, it wishes to call a timeout yet again.
Why the delay? As is common for false claims suits, the government is simultaneously prosecuting Conn and Daugherty in a criminal case. And that case is just getting started. In April 2016, federal agents arrested Conn and Daugherty, and a grand jury indicted them. See United States v. Conn, No. 5:16-cv-00022-DCR-REW, D.E. 18, 27 (E.D. Ky.). The government—and Conn—believe that litigating both cases at the same time would be harmful. Thus, they each move to stay this case until the criminal case ends.1 R. 265; R. 266. But the relators—still awaiting trial after five years—oppose the stay. R. 268.
Courts have the power to control their own dockets. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); see also Link v. Wabash R. Co., 370 U.S. 626, 630-31 (1962). Within that general power, courts have an inherent, specific power to stay the proceedings before them. Landis, 299 U.S. at 254. But because that power comes from the courts themselves—rather than from any rule or statute—the power is potentially limitless. Thus, courts must exercise that power with "caution." Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991). Further, courts remain bound by their duty to "administer" litigation in a "just, speedy, and inexpensive manner." See Fed. R. Civ. P. 1.
Along with Rule 1's implicit limit, Congress can expressly limit courts' inherent power. See Diez v. Bouldin, 136 S. Ct. 1885, 1892 (2016) (); see also United States v. Williams, 790 F.3d 1059, 1070 (10th Cir. 2015) (). And when Congress does so, courts must respect that limitation. See Diez, 136 S. Ct. at 1892.
The relators argue that Congress has expressly limited the Court's inherent power here. R. 255 at 2-3. In their view, the FCA's stay provision strips the Court of its inherent power to stay a case. Id. That provision allows the Court to stay relator discovery for sixty days, if the government can show that such discovery will interfere with another related investigation. 31 U.S.C. § 3730(c)(4). Thus, the Court must first determine whether, and to what extent, the provision limits the inherent stay power.
Both the government and Conn concede that their request to stay the entire case does not fall under Section 3730(c)(4). Not discouraged, they each argue that the Court may still grant the stay. In Conn's view, the stay provision does not mention—and therefore does not restrict—a defendant's right to request a stay. R. 266-1. In the government's view, the provision only addresses stays of "certain acts of discovery," so it does not speak to—and therefore does not preclude—a stay of the entire case. R. 265. Thus, both parties believe the Court retains its inherent power to grant the requested stay.
Congress can expressly limit the inherent stay power. The Court must therefore determine whether Congress has done so here. When enacting statutes, Congress is presumed to be aware of existing law. See Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct 736, 742 (2014). So, Courts require Congress to clearly express any intent to change an established common law or equitable principle, such as the inherent stay power. See Link, 370 U.S. at 630; see also Antonin Scalia & Bryan Garner, Reading Law: The Interpretation of Legal Texts 318 (2012) ("[S]tatutes will not be interpreted as changing the common law unless they effect the change with clarity."). Thus, absent a clear expression, the Court will not assume that Congress has abrogated the inherent stay power. Link, 370 U.S. at 631.
The FCA makes no such clear expression. True, the FCA says that the Court "may" grant a stay of "certain acts of discovery" by the relator, if those acts will interfere with a related matter. 31 U.S.C. § 3730(c)(4). It does not say, however, that the Court may grant a stay only in that one circumstance. The language is permissive, not mandatory. As discussed above, Congress presumably knew of the Court's inherent stay power when it wrote the FCA. And the Court cannot read into the text of the statute a limit that Congress has not put there.
Further, the scope of the FCA shows that Congress did not intend to wholly displace the inherent stay power. When a statute addresses one specific exercise of an inherent power, courts do not assume that Congress intended to eliminate the entirety of that power. See Chambers, 501 U.S. at 49. Rather, they assume Congress was speaking to just one part of the whole. For example, when Usain Bolt's coach tells him to "run a fast first ten meters," that does not mean that Bolt can—or should—stop before running the rest of the race. That means that Usain should run the first ten meters quickly, and apply the other skills he has learned to finish the race. Like Bolt, courts can use their inherent power to confront situations that a statutory provision does not address. See, e.g., id. (); Link, 370 U.S. at 630-32 ().
Here, the FCA's stay provision does not completely eliminate the inherent stay power because it addresses only one specific type of stay. The provision is much narrower than the inherent stay power because it imposes several requirements that the inherent power does not. See 31 U.S.C. § 3730(c)(4). The provision restricts the who (government), what (relator discovery), when ...
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