US ex rel. Max Bennett v. Biotronik, Inc.

Filing

FILED OPINION (EUGENE E. SILER, RICHARD C. TALLMAN and CARLOS T. BEA) Appellee Biotronik s motion under Federal Rule of Appellate Procedure 27 that this Court take judicial notice of the federal district court dockets in U.S. ex rel. Doe v. Biotronik, Inc., No. 2:09-CV-03617-KJM-EFB (E.D. Cal. Terminated June 6, 2014) ( Sant ) and U.S. ex rel. Bennett v. Biotronik, Inc., No. 2:10-CV-01273-KJM-EFB (E.D. Cal. Terminated May 28, 2014) ( Bennett I ) is GRANTED. AFFIRMED. Judge: EES Dissenting, Judge: CTB Authoring. FILED AND ENTERED JUDGMENT. [10674067]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA
No. 16-15919
et al. EX REL. MAX BENNETT,
Plaintiff-Appellant,
D.C. No.
v.
2:14-cv-02407-KJM-EFB
BIOTRONIK, INC.,
Defendant-Appellee.

OPINION

Appeal from the United States District Court
for the Eastern District of California
Kimberly Mueller, District Judge, Presiding
Argued and Submitted September 12, 2017
San Francisco, California
Filed December 1, 2017
Before: Richard C. Tallman and Carlos T. Bea,
Circuit Judges, and Eugene E. Siler, * Senior Circuit Judge.
Opinion by Judge Bea;
Dissent by Judge Siler

The Honorable Eugene E. Siler, Senior United States Circuit Judge
for the Sixth Circuit, sitting by designation.
*

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UNITED STATES EX REL. BENNETT V. BIOTRONIK
SUMMARY **
False Claims Act

The panel affirmed the district court’s dismissal of a qui
tam suit brought under the False Claims Act.
The panel held that the suit was precluded by the
government-action bar, 31 U.S.C. § 3730(e)(3), which
prohibits a relator from bringing a qui tam suit based upon
allegations or transactions that are the subject of a civil suit
in which the government “is already a party.” The
government had intervened in a prior qui tam suit against the
same defendant and had entered into a settlement agreement.
The panel held that, despite the use of the present tense in
§ 3730(e)(3), the government-action bar applies even when
the government is no longer an active participant in an
ongoing qui tam lawsuit. The panel further held that the
government-action bar included claims that the government
did not settle and that were dismissed without prejudice in
the prior suit.
Dissenting, Judge Siler wrote that the government-action
bar does not preclude a relator who is an original source from
proceeding on claims that were not resolved before the
government was dismissed as a party in a prior suit.

This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
**

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UNITED STATES EX REL. BENNETT V. BIOTRONIK

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COUNSEL
Jeremy L. Friedman (argued), Oakland, California, for
Plaintiff-Appellant.
Megan Jeschke (argued) and Christopher Myers, Holland &
Knight LLP, Tysons, Virginia; Cheryl A. Feeley, Holland &
Knight LLP, Washington, D.C.; Vince Farhat, Holland &
Knight LLP, Los Angeles, California; for DefendantAppellee.
Edward Himmelfarb (argued) and Michael S. Raab,
Attorneys, Appellate Staff; Phillip A. Talbert, United States
Attorney; Civil Division, United States Department of
Justice, Washington, D.C.; for Amicus Curiae United States
of America.

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UNITED STATES EX REL. BENNETT V. BIOTRONIK
OPINION

BEA, Circuit Judge:
I.
Where an individual has information regarding a fraud
perpetrated on the Federal Government, the False Claims
Act (FCA), 31 U.S.C. § 3729 et seq., empowers that
person—called a “relator”—to bring a suit on the Federal
Government’s behalf. 1 These are called qui tam 2 suits, and
have been described as the “primary tool for combatting
fraud against the federal government.” U.S. ex rel. Kelly v.
Boeing Co., 9 F.3d 743 (9th Cir. 1993). 3
But the right to bring qui tam suits is not absolute.
First, there are restrictions to allow the Government to
determine whether the relator’s claims are worthy enough to
engage federal resources. The qui tam complaint is sealed
initially for sixty days. § 3730(b)(2). The Government is
The False Claims Act has a long history: a version of it has existed
since the height of the Civil War in 1863, when President Lincoln asked
Congress to pass a law to help combat fraud by defense contractors. See
Sean Hamer, Lincoln’s Law: Constitutional and Policy Issues Posed by
the Qui Tam Provisions of the False Claims Act, Kan. J.L. & Pub. Pol’y
(Winter 1997).
1

2
“Qui tam” is an abbreviation of the Latin phrase “qui tam pro
domino rege quam pro se ipso in hac parte sequitur,” meaning “[he] who
sues in this matter for the king as well as for himself.”

States have developed analog False Claims Acts as well to combat
fraud against the individual States. See, e.g., Indiana False Claims and
Whistleblower Protection Act, Ind. Code Ann. § 5-11-5.5-1, et seq.
3

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required to investigate, § 3730(a), but, if unable to complete
its investigation within sixty days, can seek to extend the seal
period. § 3730(b)(3). After it completes the investigation,
the Government must notify the court if it will proceed with
the action. This is referred to as “intervening.”
§ 3730(b)(4)(A). If the Government declines to intervene,
the relator may proceed. § 3730(b)(4)(B). If the Government
does intervene, the Government will control the action. It
may prosecute the action, settle it, or dismiss it.4
Second, even if the Government does not intervene and
take over the action, the FCA still does not allow every
relator to bring a suit, but rather contains a series of “bars”
to such suit. Section 3730(d)(3) prohibits a suit by a relator
convicted of criminal conduct arising from his role in the
fraud against the government. Another bar, § 3730(b)(5)—
the “first-to-file bar”—prohibits suits from relators when
another relator’s qui tam action regarding the same conduct
is pending. A third bar, § 3730(e)(4)(A)—the “publicdisclosure bar”—prohibits a relator from bringing a suit
based upon information which has been publicly disclosed
in a different proceeding. Finally there is § 3730(e)(3)—the
“government-action bar”—which prohibits a relator from
bringing a qui tam suit “based upon allegations or
transactions which are the subject of a civil suit…in which
the Government is already a party.”

4
The Government’s dismissal of the action may be over the
objection of the relator as long as the court gives the relator an
opportunity for a hearing. § 3730(c)(2)(A). The Government’s
settlement of the action may be over the objection of the relator so long
as the court gives the relator a hearing and the court determines the
settlement is fair. § 3730(c)(2)(B).

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UNITED STATES EX REL. BENNETT V. BIOTRONIK

In a matter of first impression, we are asked to determine
the reach of the government-action bar.
II.
On December 31, 2009, Brian Sant filed an FCA qui tam
action against Biotronik, a medical device supplier.
Sant alleged that Biotronik engaged in a series of
wrongful acts including, among other things, (1) the
promotion of unapproved and unnecessary medical devices,
(2) bribes to physicians in the form of paid, but useless,
speaking engagements, (3) the creation of “advisory boards”
meant to funnel illegal payments to physicians, and (4) the
payment of bribes to physicians in the form of sports tickets,
gift cards, Broadway plays, extravagant dinners and travel,
and opera tickets. Sant also asserted (5) that Biotronik used
sham clinical studies to provide kick-backs for physicians
who prescribed its pacemakers and implantable cardiac
defibrillators. The “quid” of these benefits to physicians was
alleged to procure the “quo” of physicians’ use or
endorsement of Biotronik’s medical devices.
The United States investigated Sant’s charges for nearly
four years. Finally, on May 14, 2014, the United States
intervened in Sant’s case and informed the court that it had
reached a settlement agreement with Biotronik and Sant on
claims related to certain “covered conduct.” This conduct
included Biotronik’s payment for doctors’ meals at
expensive restaurants and to doctors for membership on a
physician advisory board for which proper documentation
about specific work performed was not maintained, all in
return for the doctors’ use of Biotronik devices. The
“covered conduct” did not include any of the other
allegations, and therefore did not include the alleged sham
clinical studies. The case was dismissed in June 2014 with

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prejudice with respect to Sant. With respect to the United
States, the case was dismissed with prejudice as to the
“covered conduct,” and without prejudice with respect to
any other conduct.
On March 31, 2010, three months after Sant’s complaint
was filed, and more than three years before Sant’s case was
dismissed, Bennett filed a qui tam complaint in Nevada
federal district court that substantially mirrored the
complaint filed earlier by Sant. Bennett worked at Biotronik
from 2004 until 2010 as a product manager, business
development manager, district sales manager, and regional
sales manager before being terminated. Upon an ex parte
motion by the United States, the Nevada district court
transferred Bennett’s case to the Eastern District of
California because it overlapped significantly with the
complaint filed by Sant. The United States did not intervene
in Bennett’s first complaint, and on April 30, 2014,
Bennett’s case was dismissed without prejudice upon
Bennett’s request. 5
On October 14, 2014, Bennett filed the qui tam
complaint at issue in this appeal on behalf of the United
States. The action also included twenty-eight state-law
claims based upon certain state-law versions of the FCA, and
a claim on behalf of the District of Columbia based upon the
District of Columbia Procurement Act, D.C. Code § 2308.13, et seq. In this second complaint, Bennett provided
5
Appellee Biotronik’s motion under Federal Rule of Appellate
Procedure 27 that this Court take judicial notice of the federal district
court dockets in U.S. ex rel. Doe v. Biotronik, Inc., No. 2:09-CV-03617KJM-EFB (E.D. Cal. Terminated June 6, 2014) (“Sant”) and U.S. ex rel.
Bennett v. Biotronik, Inc., No. 2:10-CV-01273-KJM-EFB (E.D. Cal.
Terminated May 28, 2014) (“Bennett I”) is GRANTED.

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further detail about the “uncovered conduct” described in the
Sant v. Biotronik complaint, including the alleged sham
clinical studies, but otherwise did not allege new claims
against Biotronik. The United States and California both
declined to intervene in Bennett’s case.
California
consented to dismissal of the claims brought on behalf of
plaintiff state governments and the District of Columbia.
Biotronik filed a motion to dismiss in October 2015. The
district court granted the motion on the basis of 31 U.S.C.
§ 3730(e)(3), which provides that “[i]n no event may a
person bring an action under [the FCA] which is based upon
allegations or transactions which are the subject of a civil
suit or an administrative civil money penalty proceeding in
which the Government is already a party.” 6 The district
court noted that there was no question that Bennett raised
substantially the same allegations as those alleged by Sant in
the settled and dismissed case Sant v. Biotronik, and
determined that, because the Government is a party to Sant
v. Biotronik, Bennett’s case—based as it is upon the same
“allegations [and] transactions” as Sant—is barred. Bennett
nevertheless made two arguments: (1) that the statutory
6
The motion to dismiss advanced six arguments: (1) Bennett’s
claims are barred by Sant v. Biotronik and Bennett’s first complaint as a
matter of claim preclusion; (2) Bennett’s claims in this case are
duplicative of his claims in his earlier case and should be dismissed as
an abuse of judicial process; (3) Bennett’s claims are barred by the
government-action bar; (4) another FCA exclusion, the “original source”
rule, also bars Bennett’s complaint; (5) Bennett does not plead fraud with
specificity, as required by Federal Rule of Civil Procedure 9(b); and
(6) many of Bennett’s allegations are barred by the applicable statutes of
limitations. The district court did not consider each of the arguments put
forth by Biotronik in its opinion. Rather, its focus was solely on whether
the government-action bar applied. None of Biotronik’s other arguments
were raised by the parties on appeal, and thus are waived. Greenwood v.
FAA, 28 F.3d 971, 977 (9th Cir. 1994).

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language of § 3730(e)(3), which is written in the present
tense, should not prohibit a subsequent suit, as “Sant v.
Biotronik is no longer pending,” thus meaning that the
Government no longer “is” a party to it; and (2) that the
Government had intervened in part, but not all, of Sant v.
Biotronik, as “the Sant v. Biotronik case was dismissed
without prejudice to allow the Government to pursue claims
related to sham clinical studies.” The district court ruled
against both of Bennett’s arguments.
The district court made two rulings regarding Bennett’s
argument that the use of the present tense in § 3730(e)(3)
destroys the government-action bar in cases no longer
pending. First, the district court ruled that, because Congress
did not include the word “pending” in § 3730(e)(3)—as it
does in § 3730(b)(5) (“When a person brings an action under
this subsection, no person other than the Government may
intervene or bring a related action based on the facts
underlying the pending action”) (emphasis added)—
Congress did not express an intention to limit the prohibition
contained in § 3730(e)(3) exclusively to pending cases. The
district court also ruled that Bennett’s interpretation of the
statute would clash with the “widely recognized purpose of
§ 3730(e)(3): discouraging follow-on lawsuits that provide
the government with little or no benefit.”
In addition to its findings regarding § 3730(e)(3)’s
statutory purpose, the district court gave two reasons for its
ruling against Bennett’s argument that the Government had
intervened in part, but not in all, of the earlier case. First,
the district court ruled that § 3730(e)(3) does not require a
claim-by-claim analysis, but refers merely to “civil suit[s]”
and “administrative civil money penalty proceeding[s]”
when describing the proceedings which are subject to the
government-action bar. Second, the court ruled that the

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Supreme Court’s decision in Eisenstein v. City of N.Y.,
556 U.S. 928 (2009) implied that no claim-by-claim analysis
should take place when deciding whether the Government is
a party to a suit, but rather demonstrated that when the
United States intervenes in a given case, it becomes “a party
to the ‘lawsuit,’ the ‘action,’ the ‘case,’ or the ‘litigation,’
and not merely to an allegation or charge.” (internal citations
omitted).
This appeal followed.
III.
The district court’s legal conclusions are reviewed de
novo. United States v. Forrester, 512 F.3d 500, 506 (9th Cir.
2008). Thus, the district court’s construction or
interpretation of a statute is reviewed de novo. United States
v. Rivera, 527 F.3d 891, 908 (9th Cir. 2008).
IV.
A.
Both common sense and statutory language demonstrate
that the Government remains a “party” even after the
cessation of its enforcement action. We therefore hold that
the government-action bar applies even when the
Government is no longer an active participant in an ongoing
qui tam lawsuit. The result is neither impractical nor
impermissible, but rather the most sensible reading of the
FCA.
Section 3730(e)(3) states as follows:
In no event may a person bring an action
under subsection (b) which is based upon

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allegations or transactions which are the
subject of a civil suit or an administrative
civil money penalty proceeding in which the
Government is already a party.
Bennett reads this language to mean that while “Congress
plainly created a bar to qui tam actions when a Government
action over the same allegations or transactions is currently
ongoing, [n]othing in the text suggests a lingering ban on
subsequent qui tam actions[.]” Appellant’s Opening Brief
(App. Br.) at 12. In other words, Bennett argues that once an
action in which the Government is a party has concluded, the
government-action bar would no longer prohibit subsequent
suits based on the same allegations as those contained in the
concluded case. Bennett would have our analysis hinge on
what the definition of the word “is” is, and urges us to rule
that the Government no longer “is” a party to cases which
are not ongoing. Toward that end, Bennett cites numerous
cases from the Supreme Court and the Ninth Circuit which
relied on the tense of verbs to determine a statute’s temporal
reach. 7
But Bennett is incorrect. The case hinges not on the
definition of the word “is,” but rather on the definition of the
phrase “is already a party.” Our legal system instructs that a
party remains a party even after litigation ends. Federal Rule
of Civil Procedure Rule 60 provides one example. Under
Rule 60, a party may move for relief from a final judgment,
7
See App. Br. at 13–16. (citing Gwaltney of Smithfield v.
Chesapeake Bay Foundation, 484 U.S. 49, 64 (1987); Carr v. United
States, 560 U.S. 438, 448 (2010); Guidiville Band of Pomo Indians v.
NGV Gaming, 531 F.3d 767, 774–75 (9th Cir. 2008); United States v.
Marsh, 829 F.3d 705, 708–10 (D.C. Cir. 2016); Dole Food Co. v.
Patrickson, 538 U.S. 468, 473 (2003)).

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order, or proceeding. Further, the Rule instructs that a
motion under Rule 60 “does not affect the judgment’s
finality or suspend its operation.” Fed. R. Civ. P. 60(c).
Parties, therefore, retain rights which arise from their party
status, even after a judgment is final. Under Bennett’s
interpretation of the phrase “is already a party,” an individual
who brings a Rule 60 motion had ceased to be a “party” to
the litigation when the final judgment was entered, but
perhaps became a party again at the moment he brought the
Rule 60 motion. The opposite conclusion comports more
with the reality of litigation: a person remains a party to his
suit, even after the suit’s conclusion. 8
Statutory context only buttresses this interpretation.
Under § 3730(e)(4), which immediately follows
8
Bennett urges that his argument is buttressed by Ninth Circuit and
Supreme Court precedent indicating that the present tense of the verb “to
be” should be dispositive. But none of the cases he cites applies here, as
each involved a situation where the relevant individual’s status was
clearly past or present, but not contextually indicated as perpetual. For
example, in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc.,
484 U.S. 49 (1987), the Supreme Court considered whether the Clean
Water Act, which allows citizen suits to be brought against any person
“alleged to be in violation” of the Act, allowed for plaintiff’s citizen suit
based on defendant’s wholly past violations. The Court, reversing the
Fourth Circuit’s refusal to dismiss for lack for subject matter jurisdiction,
considered the phrase “alleged to be in violation,” and found it
unambiguous that the present tense controlled, and that citizen suits
could not be brought for wholly past violations. But the situation in
Gwaltney is not equivalent to that described in the case at bar. In
Gwaltney, there was no dispute that the plain meaning of a party which
is “alleged to be in violation” is a party which is currently “violating” –
it is an absurd construction to find that a person “is violating” if the
violation had occurred some time ago, but is no longer taking place. By
contrast, a party still “is” a party to a lawsuit even after the suit has
concluded, because he is still subject to rulings in the case. See Fed. R.
Civ. P. 60.

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§ 3730(e)(3), it is clear that the Government remains a
“party” to an action after the action has concluded. That
section—commonly referred to as the “public knowledge
bar”—states as follows:
(A) The court shall dismiss an action or claim
under this section, unless opposed by the
Government, if substantially the same
allegations or transactions as alleged in the
action or claim were publicly disclosed (i) in
a Federal criminal, civil, or administrative
hearing in which the Government or its agent
is a party.
Through the phrase “were publicly disclosed,”
§ 3730(e)(4) describes when a prior disclosure of certain
“allegations or transactions” would prohibit a subsequent
FCA suit. Implicit with the use of the past tense is the fact
that those “transactions”—including legal cases—have
already taken place. Nevertheless, the statute utilizes the
present tense to describe the Government’s relationship to
those prior transactions: by the terms of the statute, the
“allegations…were publicly disclosed” in transactions in
which “the Government or its agent is a party.” It is
unreasonable to read the term “is already a party” from
§ 3730(e)(3) in isolation and to rule that, when applying
§ 3730(e)(3), the Government ceases to be a party as soon as
an action is no longer pending, but nevertheless to
determine, when applying § 3730(e)(4), that the
Government “is a party” to cases which have concluded.
Rather, we presume that the phrase “is a party” has
consistent meaning, and that once a party to an action, the
Government remains a party to that action, regardless of the
action’s conclusion. See A. Scalia & B. Garner, Reading
Law: The Interpretation of Legal Texts 172 (2012) (“The

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presumption of consistent usage applies also when different
sections of an act or code are at issue.”).
Bennett argues that this interpretation of the statute
ignores the work done by the word “already,” as the word
“already” bespeaks the present tense on its own. Bennett
states in his reply brief that “[w]hatever it might have
intended in § 3730(e)(4), [Congress] could not have thought
that a past, concluded action is a case where the government
is already a party. Whatever one might think of the lasting
legacy of Marbury v. Madison, one would not say—in
normal language usage—that Secretary Madison is already
a party to that case.” Reply Brief at 7.
Bennett is quite right. In “normal language usage,” we
would not say that James Madison is already a party to
Marbury v. Madison, because James Madison is dead. The
Government, however, never dies.
Bennett’s interpretation would be the radical one, as a
party maintains rights in civil actions which actions can no
longer be described as “pending” or “ongoing.” The
Government cannot be ejected from its status as a party to
concluded lawsuits solely due to the subtle addition of the
word “already.”
Further, within the FCA itself, the statutory language
tells us when the lawsuit being described is a “pending”
lawsuit. Section 3730(b)(5) of the FCA describes
governmental intervention, and states that “no person other
than the Government may intervene or bring a related action
based on the facts underlying the pending action.” Congress
could have utilized the term “pending” to express the
intention for § 3730(e)(3) to lose effect once the prior action
was dismissed.

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Neither would the district court’s interpretation of
§ 3730(e)(3) be unworkable or incongruous. Bennett argues
that the district court’s interpretation of § 3730(e)(3) would
make § 3730(e)(3) “a mere subset of the public disclosure
bar [§ 3730(e)(4)]” because “[a]ny filed Government action
based on the same underlying facts would surely result in the
public disclosure.” Accordingly, Bennett argues that if the
district court’s interpretation were applied, “the only
legislative purpose for enacting § 3730(e)(3) would be to bar
actions also barred under § 3730(e)(4), but without an
exception for original sources.” App. Br. at 39. 9

9

Section 3730(e)(4) states as follows:
(4)(A) The court shall dismiss an action or claim under
this section, unless opposed by the Government, if
substantially the same allegations or transactions as
alleged in the action or claim were publicly
disclosed—
(i) in a Federal criminal, civil, or administrative
hearing in which the Government or its agent is a
party;
(ii) in a congressional, Government Accountability
Office, or other Federal report, hearing, audit, or
investigation; or
(iii) from the news media, unless the action is
brought by the Attorney General or the person
bringing the action is an original source of the
information.
(B) For purposes of this paragraph, “original source”
means an individual who either (i) prior to a public
disclosure under subsection (e)(4)(a), has voluntarily
disclosed to the Government the information on which

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But Bennett overstates the nature and significance of the
statutory overlap. Section 3730(e)(4) describes numerous
possible situations which would not be covered under
§ 3730(e)(3). For example, § 3730(e)(4) bars suits brought
by non-original sources in which the information that forms
the basis for a qui tam action was publicly disclosed in the
news media, or in a congressional report. Section 3730(e)(3),
by contrast, is directed not towards situations of public
disclosure, but rather prohibits suits based on information
contained in actions in which the Government is a party,
regardless whether the relator served as an original source.
The possible overlap takes place between § 3730(e)(3) and
§ 3730(e)(4)(A)(i), the latter of which prohibits lawsuits
based on information “publicly disclosed in a
Federal…hearing in which the Government or its agent is a
party.”
There are numerous occasions in which a federal
proceeding, or the disclosure which takes place within it,
will not be public. For example, we have concluded that
disclosures made in discovery in the course of a civil case,
but which have not been filed with the district court, are not
“public” for the purposes of the public-disclosure bar. See
U.S. ex rel. Schumer v. Hughes Aircraft Co., 63 F.3d 1512,
1520 (9th Cir. 1995), vacated on other grounds, 520 U.S.
939 (1997). Further, there are a number of federal
proceedings which are not necessarily public including, for
allegations or transactions in a claim are based, or
(2) who has knowledge that is independent of and
materially adds to the publicly disclosed allegations or
transactions, and who has voluntarily provided the
information to the Government before filing an action
under this section.
31 U.S.C.A. § 3730.

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example, hearings before the Consumer Product Safety
Commission relating to trade secrets. See 15 U.S.C.
§ 2055(a).
Undeniably, there will be numerous relators who are
barred both by the government action bar, § 3730(e)(3), and
the public disclosure bar, § 3730(e)(4)(A)(i). But the overlap
is not absolute, and we have rejected attempts to construe
statutory language in an overly narrow manner to avoid such
partial overlap. As we explained in United States v. Carona,
660 F.3d 360, 369 (9th Cir. 2011):
It should not be surprising that statutes are not
necessarily written so that one and only one
statute can apply at a time. To the contrary,
statutes often contain overlapping provisions.
The term “belt and suspenders” is sometimes
used to describe the common tendency of
lawyers to use redundant terms to make sure
that every possibility is covered. That some
wear a belt and suspenders does not prove the
inadequacy of either to hold up the pants, but
only the cautious nature of the person
wearing the pants...Because neither of the
statutes, as interpreted and applied by the
government and the district court, is entirely
subsumed within the other, the two statutes
so interpreted coexist in harmony.
(internal citations and quotations omitted). The same can be
said with respect to the overlap Bennett identifies. The
statutes do not entirely overlap, and their redundancy does
not persuade this court to read the statutory language in an
overly narrow manner.

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As a result, we find that for purposes of § 3730(e)(3) the
Government “is a party” to lawsuits which have concluded.
B.
Bennett argues that even if § 3730(e)(3) bars relators
whose allegations are similar to those raised in concluded
lawsuits in which the Government is a party, the
Government in Sant declined party status with respect to the
claims which it did not settle. As a result, argues Bennett,
§ 3730(e)(3) does not apply to Bennett’s claims regarding
the sham clinical studies, which the Government did not
settle, and which were dismissed without prejudice.
The problem with Bennett’s argument is that it relies on
an unsupportable interpretation of “party status.” There is
nothing in the FCA which indicates that, upon joining and
settling a lawsuit, the government becomes a party to the suit
with respect only to those claims which it settles, but is not
a party to the suit with respect to those claims which it does
not settle. Section 3730(b)(2) describes the process of the
Government’s intervention in a qui tam action. It states that
“[t]he Government may elect to intervene and proceed with
the action within 60 days after it receives both the complaint
and the material evidence and information.” The statute
does not state that the Government may intervene in part of
the action or as to certain counts or certain claims for relief.
Neither does it state that the Government declines party
status in those claims it chooses not to prosecute or settle. As
the district court found, “Bennett’s argument would divide
Sant v. Biotronik into two ‘suits’ or ‘proceedings’
artificially: the action in which the United States intervened
and the action in which it did not intervene.” But nothing in
the statute allows for such division. Indeed, the case which
the Government settled had a single case number, docket,
and caption. A person’s status as a “party” does not hinge

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on the outcome of each of the claims of the lawsuit to which
he becomes a party.
Further, the Supreme Court recently ruled that party
status is conferred on the Government when it has “exercised
its right to intervene in the case.” Eisenstein v. City of New
York, 556 U.S. 928, 931 (2009). In Eisenstein, five nonresident city employees filed a qui tam action. The
government investigated but declined to intervene. The
district court dismissed the case. After fifty-four days,
plaintiffs filed a notice of appeal. While the appeal was
pending, the Second Circuit sua sponte asked the parties to
brief the issue whether notice of appeal had been timely
filed. The Federal Rules of Appellate Procedure 4(a)(1)(A)–
(B) and 28 U.S.C. §§ 2107 (a)–(b) generally require for a
notice of appeal to be filed within 30 days of the entry of
judgment, but when the “United States or an officer or
agency thereof is a party,” that time may be extended to
60 days. As a result, the question in Eisenstein was whether
the Government, when it had declined to intervene but asked
to be kept abreast of the case in the form of receipt of
pleadings, was a “party” for purposes of the FCA. The
Second Circuit ruled that the Government becomes a “party”
when the Government elects to intervene and so, when the
Government had declined to intervene, the Government had
not become a party in the action—the notice of appeal was
therefore required to have been filed within thirty days. The
Supreme Court affirmed. The Court in Eisenstein did not call
for a claim-by-claim analysis, or otherwise indicate that
party-status is contingent on anything other than whether it
“intervenes in accordance with the procedures established by
federal law.” Eisenstein, 556 U.S. at 933 (2009). The
Government intervened in Sant. It was therefore a party to
it, unsettled claims and all.

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Bennett attempts to rescue his argument through a
reference to the Supreme Court case, Rockwell Int’l Corp. v.
United States, 549 U.S. 457 (2007). In that case, plaintiff
could be said to have been an “original source” for purposes
of § 3730(e)(4)(A) with respect to some of his claims, but
not with respect to many of his other claims. The Court
found that “[s]ection 3730(e)(4) does not permit jurisdiction
in gross just because a relator is an original source with
respect to some claim.” Rather, such would be “claim
smuggling,” and the Court ruled that “the plaintiff’s decision
to join all of his or her claims in a single lawsuit should not
rescue claims that would have been doomed by section (e)(4)
if they had been asserted in a separate action. And likewise,
this joinder should not result in the dismissal of claims that
would have otherwise survived.” Rockwell, 549 U.S. at 476.
Bennett argues that “[a]pplying this rationale, it would clash
with statutory context to interpret § 3730(e)(3) to prevent
Bennett from bringing his qui tam action on some claims
because the Government joined Sant on other claims in the
same suit.” Bennett further describes a ruling against him as
“smuggl[ing] those claims into dismissal because Sant chose
to join them with the intervened claims in a single action.”
Bennett here conflates the Government’s decision to
settle certain, but not all, of its claims, with the “original
source” question described by the Court in Rockwell. The
question before this court is not whether some, but not all, of
the claims in a case Bennett joined pass muster as presented
by Bennett as an original source. The question is whether
the statute’s clear language would prohibit Bennett from
bringing the case at all, given the fact that the Government
was made aware of the claims it ultimately chose not to
settle. The existence of multiple claims—some of which the
Government settles—has no bearing on the Government’s
relationship to the entire action. As described above, the

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Government becomes a “party” to the suit as a whole when
it intervenes. It does not become a “party” to a particular
claim or number of claims.
V.
The Government remains a party to suits even after those
suits have been settled, and the Government cannot be said
“partially” to have intervened in Sant’s lawsuit. Bennett’s
suit is barred by 31 U.S.C. § 3730(e)(3).
AFFIRMED.

SILER, Circuit Judge, dissenting:
I respectfully dissent for the reasons stated herein. When
this case was argued, attorneys for the parties admitted that
there was no controlling case either from the Supreme Court
or from this court. I am most impressed by the position of
the amicus, the United States of America, in interpreting the
statute, the False Claims Act (FCA), 31 U.S.C. § 3729 et
seq., and in particular the “government-action rule”
described in § 3730(e)(3). As the majority opinion recites,
the language from that statute precludes “a person [from
bringing] an action under [the FCA] which is based upon
allegations or transactions which are the subject of a civil
suit or an administrative civil money penalty proceeding in
which the Government is already a party.”
In this case, the Sant claim against Biotronik was settled
and the district court dismissed the case with prejudice as to
the United States with respect to the covered conduct
described in the settlement agreement, but otherwise without
prejudice with respect to the United States. A few months

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after the United States had settled the Sant case and after
Bennett had voluntarily dismissed his first qui tam action,
Bennett filed the present action for “uncovered conduct,”
including the alleged sham clinical studies, but not including
conduct in the settlement with the United States. As the
United States suggests, when it intervenes in a qui tam case
on only some, but not all, of the claims in a case, it may
choose to settle certain claims and not settle others, allowing
the court to dismiss the case without prejudice to the
government on the declined claims. Thus, it is possible that
the government could later pursue the declined claims if
further investigation suggests that action.
The district court and the majority in this case suggest
that because the word “pending” does not appear in
§ 3730(e)(3), as it does in § 3730(b)(5), then even after the
case has been dismissed, the United States would continue
to be a party. However, I believe that when § 3730(e)(3)
suggests that no person may “bring an action under
subsection (b) which is based upon allegations or
transactions which are the subject of a civil suit or an
administrative civil money penalty proceeding in which the
Government is already a party” (emphasis added), the statute
refers to the present tense. Although the majority feels that
the government is always a party in the case, even after the
action has been dismissed, I do not think that it is a party in
the full sense of the word. Admittedly, the government may
bring a motion post judgment under Federal Rule of Civil
Procedure 60 and other similar rules, but the case is over
except for certain motions which may be made under Rule
60 or otherwise.
When the False Claims Act was amended in 1986,
Congress sought to discourage parasitic actions and to “walk
a fine line between encouraging whistle blowing and

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discouraging opportunistic behavior.” United States ex rel.
Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 651
(D.C. Cir. 1994). With that objective, courts “should
proceed with caution before applying the statutory bar of
§ 3730(e)(3) in ambiguous circumstances.” United States ex
rel. S. Prawer & Co. v. Fleet Bank of Maine, 24 F.3d 320,
328 (1st Cir. 1994). The government’s position is that there
is no reason to read the government-action bar to preclude a
relator who is an original source, not parasitic, from
proceeding on claims that were not resolved before the
government was dismissed as a party.
There are other possible procedures which might
preclude recovery by Bennett against Biotronik in the district
court. In its motion to dismiss the complaint, Biotronik
raised several other issues, including preclusion, which the
district court could consider if this matter is remanded.
Under that principle, Bennett cannot reassert claims that
were settled in Sant’s qui tam suit or already settled by the
government.
The United States suggests that the interpretation of
§ 3730(e)(3) by the district court would tend to discourage
relators from bringing forward evidence of fraud after the
government has settled a case, because the relator may
realize that the government was not aware of certain frauds
until the settlement agreement was made public. I agree. In
sum, I would find that the district court’s interpretation of
§ 3730(e)(3) was erroneous, and remand the matter to the
district court for further proceedings, including the other
grounds to dismiss previously raised by Biotronik but not the
subject of this appeal.