United States of America, ex rel Carolina Marion v. Heald College, LLC et al

Filing 92

ORDER GRANTING MOTION TO DISMISS SECOND AMENDED COMPLAINT by Magistrate Judge Paul Singh Grewal granting 86 (psglc2, COURT STAFF) (Filed on 9/30/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION
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United States District Court
For the Northern District of California

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UNITED STATES OF AMERICA, ex rel.
CAROLINA MARION,

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Plaintiff,

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v.
HEALD COLLEGE, LLC, et. al.,

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Defendants.

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Case No. 5:12-cv-02067-PSG
ORDER GRANTING MOTION TO
DISMISS SECOND AMENDED
COMPLAINT
(Re: Docket No. 86)

Acting on behalf of the United States, Plaintiff Carolina Marion brought this suit under the

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False Claims Act against Defendants Heald College, LLC, Corinthian Colleges, Inc. and four
Heald administrators—Eeva Deshon, Barbara Gordon, Terry Rawls and Karen Rose (the
“Individual Defendants”). 1 The court dismissed Marion’s First Amended Complaint because its
allegations were not materially different from those in prior suits. 2 In response, Marion amended
her complaint to add a new relator—Christi Hays, the relator from one of these earlier suits. 3

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See Docket No. 82 at ¶¶ 11-25.

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See Docket No. 81.

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See Docket No. 82.

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Case No. 5:12-cv-02067-PSG
ORDER GRANTING MOTION TO DISMISS SECOND AMENDED COMPLAINT

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Once again, the Individual Defendants move to dismiss. Once again, the court GRANTS

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the Individual Defendants’ motion. It does so for the same reason: the unavoidable plain language

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of the Act’s first-to-file rule. 4

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“When a person brings an action under [the False Claims Act], no person other than the

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Government may intervene or bring a related action based on the facts underlying the pending

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action.” 5 This rule creates a jurisdictional bar on successive related complaints under the Act. 6

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“[T]he facts underlying the later-filed compliant need not be ‘identical’ to those underlying the

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earlier-filed complaint for the later complaint to be barred.” 7 All that is required is that the two

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complaints share “the same material elements of fraud.” 8

United States District Court
For the Northern District of California

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In granting the previous motion to dismiss, the court noted that Hays’ case was pending,

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along with several others, 9 even though by then they already had been stayed due to Corinthian’s

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bankruptcy. Applying the above standard, the court held that Marion’s previous complaint did not

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allege any material facts that were not alleged in the earlier cases. 10 Specifically, Marion’s

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allegations of enrollment fraud were not materially different from Hays’ allegations of attendance

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fraud. 11

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See 31 U.S.C. § 3730(b)(5).

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Id.

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See United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1130 (9th Cir.
2015) (en banc) (citing United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1186-87
(9th Cir. 2001)).
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Id. (quoting Lujan, 243 F.3d at 1183).

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Lujan, 243 F.3d at 1189.

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See Docket No. 81 at 3-4.

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See id. at 5.

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See id. at 5-8. Marion and Hays urge the court to “reconsider” this finding in light of Hartpence.
Docket No. 88 at 6-7. This request is procedurally improper under Civ. L.R. 7-9. It is also
unwarranted on the merits. Hartpence was issued before the court’s previous order, and it did not
change the law governing the first-to-file rule. See Hartpence, 792 F.3d at 1131 (citing Lujan
extensively to explain the first-to-file rule and reversing a district court’s application of that rule).

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Case No. 5:12-cv-02067-PSG
ORDER GRANTING MOTION TO DISMISS SECOND AMENDED COMPLAINT