Toomer v. Terrapower, LLC et al
Filing
80
MEMORANDUM DECISION AND ORDER - Relators Motion for Permission to Petition for an Interlocutory Appeal (28 U.S.C. § 1292(b)) (Dkt. 75 ) is DENIED. Signed by Judge David C. Nye. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jd)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
THE UNITED STATES OF
AMERICA, ex rel. DOUGLAS V.
TOOMER,
Case No. 4:16-cv-00226-DCN
Plaintiff,
MEMORANDUM DECISION AND
ORDER
v.
TERRAPOWER, LLC; BATTELLE
ENERGY ALLIANCE, LLC;
Defendants.
I.
INTRODUCTION
Pending before the Court is Relator Douglas V. Toomer’s Motion for Permission to
Petition for an Interlocutory Appeal (28 U.S.C. § 1292(b)). Dkt. 75. Having reviewed the
record and briefs, the Court finds that the facts and legal arguments are adequately
presented. Accordingly, in the interest of avoiding further delay, and because the Court
finds that the decisional process would not be significantly aided by oral argument, the
Court will decide the motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(1)(B).
For the reasons set forth below, the Court DENIES Relator’s Motion.
II.
BACKGROUND
On June 6, 2016, Douglas Toomer, an individual, filed a complaint against
Defendants TerraPower, LLC (“TerraPower”) and Battelle Energy Alliance, LLC (“BEA”)
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(collectively “Defendants”) on behalf of the United States’ Government. He then filed an
Amended Complaint in February 2017, asserting eight claims: (1) presentation of false
claims in violation of the False Claims Act (“FCA”); (2) making or using false records or
statements in violation of the FCA; (3) failure to deliver possession of property in violation
of the FCA; (4) concealing or avoiding obligations to the Government in violation of the
FCA; (5) conspiring to commit violations of the FCA; (6) declaratory judgment; (7) unjust
enrichment/mistake of fact; and (8) unlawful employment retaliation.
The FCA does not permit a realtor to serve a complaint on the defendants until the
Government decides whether it wishes to intervene or to allow the relator who originally
filed the case to proceed with the litigation on the Government’s behalf. Thus, Toomer, as
the “relator” in the suit, originally only served the Complaint on the Government.
On November 11, 2017, the Government elected to move for dismissal, rather than
allow the litigation to proceed in its name. However, the Government did not formally
intervene in the case under 31 U.S.C. § 3730(c)(3) prior to moving for dismissal.
On October 10, 2018, the Court granted the Government’s motion to dismiss of all
of Toomer’s claims except for his unlawful employment retaliation claim. Dkt. 40.
On November 7, 2018, Toomer filed a motion for the Court to reconsider its October
10, 2018 order. Dkt. 52. On March 5, 2019, the Court denied his motion. Dkt. 70. The
Court treated Toomer’s motion to reconsider as a motion to alter or amend under Federal
Rule of Civil Procedure 59(e). There are four grounds upon which the Court could grant a
motion for reconsideration: “(1) the motion is necessary to correct manifest errors of fact
or law; (2) the moving party presents newly discovered evidence; (3) reconsideration is
MEMORANDUM DECISION AND ORDER - 2
necessary to prevent manifest injustice; or (4) there is an intervening change in the law.”
Dkt. 70, at 8 (internal quotation marks and citations omitted). As the Court found that
Toomer had not “provided any facts or arguments that warrant reconsideration” under that
standard, it denied Toomer’s motion. Dkt. 70, at 9.
Six month later, on September 12, 2019, Toomer filed the pending motion for
permission to petition for an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Toomer
seeks to appeal the Court’s October 10, 2018 Order dismissing seven of his claims and its
March 5, 2019 Order denying his motion to reconsider (collectively, “Orders”). Dkt. 75.
III.
STANDING
In Toomer’s reply, he raised for the first time the argument that Defendants lacked
standing to respond to his motion to file an interlocutory appeal. Citing to no caselaw, he
briefly stated that since “neither TerraPower nor BEA were parties to the Government’s
motion for dismissal, the defendants have no real standing to provide argument on this
issue.” Dkt. 79, at 4. Toomer grossly misunderstands the standing doctrine.
The role of the courts is “neither to issue advisory opinions nor to declare rights in
hypothetical cases, but to adjudicate live cases or controversies.” Maldonado v. Morales,
556 F.3d 1037, 1044 (9th Cir. 2009) (quoting Thomas v. Anchorage Equal Rights Comm’n,
220 F.3d 1134, 1138 (9th Cir. 2000) (en banc)). Courts, therefore, assess the parties’
standing before proceeding to the merits of their dispute. See Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992); D’Lil v. Best W. Encina Lodge & Suites, 538 F.3d 1031,
1035 (9th Cir. 2008). To establish Article III standing, a plaintiff must show that “it has
suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent,
MEMORANDUM DECISION AND ORDER - 3
not conjectural or hypothetical,” that “the injury is fairly traceable to the challenged action
of the defendant,” and that “it is likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision.” Sacks v. Office of Foreign Assets Control, 466
F.3d 764, 771 (9th Cir. 2006) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.
(TOC), Inc., 528 U.S. 167, 180–81 (2000)).
Defendants’ rights are concretely and actually affected by whether Toomer’s case
against them will be dismissed. The fact that they were not party to the Government’s
motion to dismiss does not change that. As Toomer himself made the Defendants party to
the case at large and the entire case concerns Defendants’ interests and liability, Defendants
have the right to provide argument on whether the Court should grant Toomer’s motion to
file an interlocutory appeal on the issue of whether Toomer’s claims against Defendants
were properly dismissed.1
IV.
LEGAL STANDARD
As a general rule, a party may seek review of a district court’s rulings only after the
entry of final judgment. In re Cement Antitrust Litig., 673 F.2d 1020, 1027 (9th Cir. 1982).
Interlocutory certification is a narrow exception to be applied sparingly and in “exceptional
circumstances.” Id. at 1026; see also James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067
n.6 (9th Cir. 2002) (“Section 1292(b) is a departure from the normal rule that only final
judgments are appealable, and therefore must be construed narrowly.”); Pac. Union
1
The idea that Defendants can participate here also finds support in Federal Rule of Civil Procedure 24,
which requires courts to allow anyone to intervene in a case who “claims an interest relating to the property
or transaction that is the subject of the action, and is so situated that disposing of the action may as a
practical matter impair or impede the movant’s ability to protect its interest, unless existing parties
adequately represent that interest.” Fed. R. Civ. P. 24(a)(1).
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Conference of Seventh–Day Adventists v. Marshall, 434 U.S. 1305, 1309 (1977) (“The
policy against piecemeal interlocutory review other than as provided for by statutorily
authorized appeals is a strong one.” (citations omitted)). “The decision to certify an order
for interlocutory appeal is committed to the sound discretion of the district court.”
Villarreal v. Caremark, LLC, 85 F. Supp. 3d 1063, 1067 (D. Ariz. 2015) (internal quotation
marks and citations omitted).
A district court may certify an order for immediate appeal where: (1) the order
involves a controlling question of law; (2) as to which there is a substantial ground for
difference of opinion; and (3) an immediate appeal from the order may materially advance
the ultimate termination of the litigation. 28 U.S.C. § 1292(b). The party pursuing the
interlocutory appeal bears the burden of demonstrating the certification requirements of
§ 1292(b) are met. Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). “Even when
all three statutory criteria are satisfied, district court judges have ‘unfettered discretion’ to
deny certification.” Schuler v. Battelle Energy All., LLC, No. 4:18-CV-00234-CWD, 2019
WL 5295461, at *2 (D. Idaho Oct. 18, 2019) (internal quotation marks and citations
omitted).
V.
DISCUSSION
Toomer contends that all three of the § 1292(b) requirements for interlocutory
certification are met in this case. The Government and the Defendants disagree, with the
Government arguing that none of the three statutory requirements are met and the
Defendants arguing the second and third requirements are not met. The Court shall examine
each of the statutory criteria in turn.
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1. Whether the Orders Involve a Controlling Question of Law
A petitioner must demonstrate the “resolution of the issue on appeal could
materially affect the outcome of litigation in the district court.” In re Cement Antitrust
Litigation, 673 F.2d 1020, 1026 (9th Cir. 1981). If so, the question is a “controlling issue
of law.” Id. Such questions typically involve fundamental determinations like who the
necessary proper parties are, whether jurisdiction is proper, or whether state or federal law
applies. Id. at 1026–27 (internal citation omitted).
Here, Toomer states the controlling issue of law is “whether it was an error for the
court to grant the Government’s motion to dismiss under 31 U.S.C. § 3730(c)(2)(A).”2 Dkt.
79, at 4. Toomer questions whether the Government has the right to act on a purported
internal policy3 that favors dismissing FCA cases that it declines to intervene in rather than
allowing the relator to proceed with the qui tam litigation pursuant to 31 U.S.C.
§ 3730(c)(3). The Court finds the Orders that Toomer seeks to appeal do concern a
controlling question of law. The resolution of whether the Court appropriately granted the
Government’s motion to dismiss the qui tam suit, rather than allow the Relator to proceed
with his FCA claims, does materially affect the outcome of the litigation as it determines
2
Under that provision:
The Government may dismiss the action notwithstanding the objections of the person
initiating the action if the person has been notified by the Government of the filing of the
motion and the court has provided the person with an opportunity for a hearing on the
motion.
31 U.S.C. § 3730(c)(2)(A).
3
The Government’s internal policy favoring dismissals of FCA claims under 31 USC § 3730(c)(2)(A) is
allegedly laid out in the DOJ’s manual under § 4-4.111 or in the “Granston Memo.” Dkt. 75-1, at 3.
MEMORANDUM DECISION AND ORDER - 6
what claims are being litigated.
2. Whether There Is Substantial Ground for Difference of Opinion
To determine if a “substantial ground for difference of opinion” exists under
§ 1292(b), courts must examine to what extent the controlling question of law is unclear.
Courts “traditionally will find that a substantial ground for difference of opinion exists
where ‘the circuits are in dispute on the question and the court of appeals of the circuit has
not spoken on the point, if complicated questions arise under foreign law, or if novel and
difficult questions of first impression are presented.’” Couch, 611 F.3d at 633 (quoting 3
Federal Procedure, Lawyers Edition § 3:212 (2010) (footnotes omitted)). However, a
substantial difference of opinion is not present “just because a court is the first to rule on a
particular question or just because counsel contends that one precedent rather than another
is controlling . . . .” Id. (internal quotation marks and citations omitted). Additionally,
neither advisory opinions nor a party’s “strong disagreement with the Court’s ruling [are]
sufficient for there to be a ‘substantial ground for difference.’” Id. (internal quotation marks
and citations omitted).
Here, Toomer argues there are substantial grounds for difference of opinion “not
truly based on any prior or clear precedent, but rather upon a newly enacted DOJ policy
which favors dismissing FCA claims rather than letting the relators proceed with the
claim.” Dkt. 79 at 5. The Court disagrees. The Ninth Circuit has already spoken on the
question of when a district court may grant the Government’s motion to dismiss a qui tam
suit under 31 U.S.C. § 3730(c)(2)(A). Additionally, the Court finds the Government’s
internal policy is more similar to an advisory opinion, rather than a conflicting legal
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precedent.
In U.S. ex rel., Sequoia Orange Co. v. Baird-Neece Packing Corp., the Ninth Circuit
“conclude[d] that 31 U.S.C. § 3730(c)(2)(A) permits the Government to dismiss a
meritorious qui tam action over a relator’s objections.” 151 F.3d 1139, 1147 (9th Cir.
1998). To obtain a dismissal of a qui tam action, the Government must (1) identify a valid
governmental purpose for the dismissal; and (2) demonstrate a rational relation between
dismissal and accomplishment of the purpose. Id. at 1145. “If the Government satisfies the
two-step test, the burden switches to the relator ‘to demonstrate that dismissal is fraudulent,
arbitrary and capricious, or illegal.’” Id. at 1143 (citation omitted). This conclusion
“reflects congressional intent that the qui tam statute create only a limited check on
prosecutorial discretion to ensure suits are not dropped without legitimate governmental
purpose.” Id. at 1145.
After reviewing the briefing, and holding a motion hearing on the Motion to
Dismiss, the Court ultimately concluded that “the Government has met its burden of
establishing (1) a valid government purpose for the dismissal; and (2) a rational relation
between dismissal and accomplishment of that purpose.” Dkt. 40, at 12. Furthermore, the
Court found that Toomer had not meet his burden to establish that the Government’s
“dismissal [was] fraudulent, arbitrary and capricious, or illegal.” Dkt. 40, at 13 (quoting
Sequoia Orange, 151 F.3d at 1143 (citation omitted)). Regardless of any internal policy
encouraging or dissuading the Government from generally moving to dismiss a qui tam
case rather than letting the realtor proceed with it, the Government met its necessary burden
under Ninth Circuit precedent in this case by offering four substantial rationales for
MEMORANDUM DECISION AND ORDER - 8
dismissal. It had legitimate governmental reasons to dismiss the qui tam case and the Court
must respect its discretion in doing so. See Sequoia Orange, 151 F.3d at 1143 (“[T]he
decision to dismiss has been likened to a matter within the government’s prosecutorial
discretion in enforcing federal laws.”)
Having concluded that the Government complied with binding Ninth Circuit
precedent in how it moved to dismiss the case, the Court finds that there is no substantial
ground for difference of opinion of whether the Court erred in dismissing the case pursuant
to 31 U.S.C. § 3730(c)(2)(A) because there are no cases directly conflicting with the
Court’s construction of the law.
3. Whether an Immediate Appeal of the Court’s Orders May Materially
Advance the Ultimate Termination of the Litigation
Even assuming there was a controlling question of law in which there is a substantial
ground for difference of opinion, the Court would still not grant Toomer’s motion. A
district court may permit a party to appeal when it believes that an “immediate appeal from
an order may materially advance the ultimate termination of the litigation.” 28 U.S.C. §
1292(b) (emphasis added). The material advancement requirement is met if an immediate
appeal decided in favor of the appellant would “avoid protracted and expensive litigation”
and end the lawsuit. See United States v. Woodbury, 263 F.2d 784, 787 (9th Cir. 1959)
(“Section 1292(b) was intended primarily as a means of expediting litigation by permitting
appellate consideration during the early stages of litigation of legal questions which, if
decided in favor of the appellant, would end the lawsuit.)); U.S. Rubber Co. v. Wright, 359
F.2d 784, 785 (9th Cir. 1966) (noting § 1282(b) is to be used “only in extraordinary cases
MEMORANDUM DECISION AND ORDER - 9
where decision of an interlocutory appeal might avoid protracted and expensive litigation,”
and holding a district court’s order granting interlocutory appeal was “improvidently
granted” upon finding the case at issue was “unexceptional”). Examples of such questions
which, if decided in favor of the appellant, would materially advance the ultimate
termination of the lawsuit “are those relating to jurisdiction or a statute of limitations which
the district court has decided in a manner which keeps the litigation alive but which, if
answered differently on appeal, would terminate the case.” Woodbury, 263 F.2d at 787.
“In applying these standards, the court must weigh the asserted need for the
proposed interlocutory appeal with the policy in the ordinary case of discouraging
piecemeal appeals.” Association of Irritated Residents v. Fred Schakel Dairy, 634 F. Supp.
2d 1081, 1087 (E.D. Cal. 2008) (quoting In re Heddendorf, 263 F.2d 887, 889 (1st Cir.
1959)). This does not mean that an interlocutory appeal must completely end the litigation.
See Woodbury, 263 F.2d at 787. Rather, an “interlocutory appeal must be likely to
materially speed the termination of the litigation.” Hansen v. Schubert, 459 F. Supp. 2d
973, 1000 (E.D. Cal. 2006). “This factor is linked to whether an issue of law is ‘controlling’
in that the court should consider the effect of a reversal by the court of appeals on the
management of the case.” Id.
The Court first notes that Toomer filed this motion over six months after his motion
to reconsider was denied on March 5, 2019. Here, Toomer’s own delay in seeking
permission to file an interlocutory appeal weighs against his argument of the potential
urgency of the matter; a six-month delay in filing the motion is not in line with the
“immediate appeal” requirement set out under § 1292(b).
MEMORANDUM DECISION AND ORDER - 10
However, disregarding the delay, the Court looks to the asserted need of the
proposed interlocutory appeal. Toomer argues that granting his motion would “speed up”
the resolution of the case because, otherwise, he will have to wait until his other claim is
resolved before pursuing the right to appeal. Dkt. 79 at 7. This is true in many federal cases,
but there is a “strong bias of § 1291 against piecemeal appeals[.]” Digital Equip. Corp. v.
Desktop Direct, Inc., 511 U.S. 863, 872 (1994); see In re Lorillard Tobacco Co., 370 F.3d
982, 988 (9th Cir. 2004) (noting that “applying a loose construction” of § 1292 only
‘encourages unsuccessful assertions of jurisdiction, wasting precious appellate resources,
burdening adverse parties, and perhaps diverting effort from expeditious continuation of
trial court proceedings.’” (quoting 16 Charles Alan Wright et al., Federal Practice and
Procedure § 3922.1, at 94 (1977)). Because the Court applied the controlling Ninth Circuit
law in dismissing his FCA claims, it finds Toomer’s case “unexceptional.” Furthermore, if
the immediate appeal was decided in favor of the Toomer, it would not “avoid protracted
and expensive litigation” and end the lawsuit. Rather, it would expand the scope of
discovery and result in protracted litigation.
Accordingly, the Court finds that immediate appeal would not materially advance
the termination of this litigation and that this case does not reach the “exceptional
circumstances” that Congress had in mind when it enacted 28 U.S.C. § 1292(b).
4. Whether the Relator Has the Right to Appeal Separate and Distinct
from its Grounds to Appeal Pursuant to 28 U.S.C. § 1292(b)
The Court notes that Toomer raised in his reply, for the first time, an argument that
he may have a right to appeal under a common-law collateral order doctrine, separate and
MEMORANDUM DECISION AND ORDER - 11
distinct from his right under § 1292(b). Dkt. 79 at 8. Toomer raised this argument too late
for the Government to respond to. The argument is based on different grounds than those
laid out in Toomer’s motion which, “pursuant to 28 U.S.C. § 1292(b),” moved the Court
to permit him to petition the Ninth Circuit for an interlocutory appeal of the Court’s Orders.
Dkt. 75, at 1 (emphasis added). The Court accordingly declines to analyze whether he has
a right to appeal under a common-law collateral order doctrine.
VI.
CONCLUSION
The Court finds Toomer has not been able to satisfy his burden of demonstrating
that all three statutory criteria requirements of § 1292(b) are met. Consequently, the Court
declines to certify an order for immediate appeal pursuant to 28 U.S.C. § 1292(b).
VII.
ORDER
It is HEREBY ORDERED:
1. Relator’s Motion for Permission to Petition for an Interlocutory Appeal (28
U.S.C. § 1292(b)) (Dkt. 75) is DENIED.
DATED: December 6, 2019
_________________________
David C. Nye
Chief U.S. District Court Judge
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