11th Circuit upholds dismissal of Florida Whistleblower Act claim on grounds that qui tam judgment was res judicata

by Ben Vernia | October 14th, 2010

On October 13, in Shurick v. The Boeing Co., the Eleventh Circuit upheld the dismissal of a former Boeing employee’s retaliation suit – brought in state court under the Florida Whistleblower Act, but removed to federal court – on the grounds that a judgment against him in a concurrent federal qui tam suit was res judicata as to his state law claims. Although the matter had not formed the basis of the District Court’s dismissal of the action, the Court of Appeals requested briefing on it and based its ruling on that ground.

In doing so, the court rejected the plaintiff’s argument that his case differed from an earlier claim preclusion decision, Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235 (11th Cir. 1999). He had argued that the fact that his claims were based on state law, and were brought concurrently, distinguished his case from Rubbermaid, but the court brushed these arguments aside. The two suits shared the same nucleus of operative fact, the court reasoned, and could have been tried together without confusing the jury. Likewise, the court concluded that there was no reason why the plaintiff could not have brought the two claims together (because he had been fired fifteen months before filing either action).

Comment: The Eleventh Circuit’s opinion misses a critical distinction made by other circuits. In U.S. ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849 (7th Cir. 2009), the Seventh Circuit rejected the argument that a qui tam should be litigated along with a related employment action:

Second, qui tam litigation is subject to requirements that make combining it with a personal damages suit awkward. As we have mentioned, a qui tam proceeding begins in camera and cannot be served on the defendant until the United States has decided whether to intervene. A personal suit, by contrast, must be served on the defendant within 120 days. See Fed.R.Civ.P. 4(m). If the United States does intervene, it may settle or dismiss the action notwithstanding the relator’s objection, see § 3730(c)(2). Whether or not the United States intervenes, the relator can’t dismiss the suit without permission of the United States and the court, see § 3730(b)(1).

These conflicts were not obvious to the Eleventh Circuit, perhaps, because the qui tam was litigated to judgment before the district court turned to the motion to dismiss the employment action, but the problem must be viewed from the perspective of the relator having to decide whether to file one or two actions to cover both his or her own claims and those of the United States in which he or she is merely serving as a representative.
Although there’s no indication that the government filed a brief in this case, it certainly is a question affecting signficant government interests.

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