District Court holds post-declination amended qui tam complaint need not be filed under seal

by admin | April 27th, 2010

In an April 20, 2010, decision, S.D.Cal. District Judge Barry Moskowitz denied the motion of a qui tam defendant, a General Dynamics subsidiary, to dismiss a relator’s complaint after he filed an amended complaint. The relator believed that filing the amended complaint would moot the defendant’s motion to dismiss (which raised several arguments, including particularity under Fed. R. Civ. P. 9(b)).

The Court held that the relator had misunderstood the recently-amended Fed. R. Civ. P. 15(a)(1)(B), and that the defendants’ motion was not mooted by the filing of the amended complaint. Nevertheless, the Court interpreted the filing as a motion for leave to file the amended complaint, which the Court granted because of the liberal policy of favoring amendments.

Judge Moskowitz acknowledged that the False Claims Act could be interpreted to require that amended complaints be filed under seal and served on the United States, but in the case before him, he reasoned that the amended complaint stated the same claims that the government had already investigated and on which it had declined to intervene, just with more detail. Under these circumstances, the court reasoned that the FCA’s policy may not apply.

Taking the opportunity to review the defendant’s arguments in light of the amended complaint, the court noted that there was little caselaw on its claim that it was not liable under respondeat superior, and because it was not fully briefed, the defendant could raise it in a new motion directed to the amended complaint. As for its other arguments, however – that the relator failed to allege that the defendant made a claim to the government and that his complaint lacked sufficient particularity – the court reviewed the amended complaint and concluded that it satisfied the rules’ requirements.

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