Florida District Court allows DOJ to intervene in qui tam after ending the seal period

by Ben Vernia | October 5th, 2011

On September 27, in U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., Middle District of Florida Judge Gregory A. Presnell issued an order granting the government’s motion to intervene in an ongoing qui tam suit.

Judge Presnell described requiring the government to make its intervention decision one year after the case was filed under seal. The government’s investigation was continuing, and DOJ declined to intervene, notifying the Court of its ongoing investigation and reserving its right under the Act to intervene later for “good cause.”

At the beginning of September, 2011, DOJ announced its intention to intervene. The relator concurred, but the defendants opposed the government’s motion.

In his decision, Judge Presnell noted that caselaw addressing the requirement is “scarce,” but that the District Court in Colorado in U.S. ex rel. Stone v. Rockwell Int’l Corp. had concluded that the “good cause” standard existed to protect the relator, whose share upon intervention drops from a range of 25-30% to one of 15-25%. But, Judge Presnell noted, the relator in the case before him concurred in the government’s motion.

He dismissed the defendants’ arguments against intervention:

The bulk of the Defendants’ response focuses on the merits, arguing that the Government has not produced evidence to support certain allegations made by the Relator. Even if true, this is not relevant. The question at this stage is whether the Government should be permitted to intervene, not whether it will ultimately prevail. The Defendants offer nothing to suggest that they (or the relator) would be unduly prejudiced by the Government’s intervention in this matter.

Judge Presnell permitted the government to intervene, but noted that the deadlines in the case remained unchanged.

Comment: More and more judges are limiting the government’s investigative period in qui tam suits. Although Judge Presnell described the caselaw on this issue as “scarce,” it is unlikely to remain so in the future, as more courts grapple with late interventions by the government.

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