A1 Procurement, LLC. et al v. Thermcor, Inc. et al

Filing 145

MEMORANDUM ORDER - This matter comes before the court on the Defendants' Motion to Amend Order to Allow Interlocutory Appeal Pursuant to 28 US C. § 1292 (b), and corresponding Brief in Support, both filed on February 12, 2016. ECF Nos. [134 ], 135 . The Relator filed its Brief in Opposition on February 23, 2016. ECF No. 136 . Further before the court is the Relator's Motion to Lift Stay, and corresponding Brief in Support, filed on February 23, 2016. ECF Nos. 137 , 138 . The De fendants responded to the Motion to Lift Stay on March 10, 2016, ECF No. 140 , and the Relator filed a Reply on March 16, 2016. ECF No. 142 . For the reasons stated herein (see order for specifics), the Defendants' Motion to Amend Order is DEN IED, and the Relator's Motion to Lift Stay is GRANTED. The parties are ORDERED to contact the Calendar Clerk to set a new scheduling conference. Copies distributed to all parties as directed. Signed by Chief District Judge Rebecca Beach Smith on 3/24/2016. (cchr)

FILED

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
Norfolk Division

MAR 2 4

CLERK. U.S. DiS'RlCT COURT
NQR^O-K. VA

UNITED STATES OF AMERICA ex
rel. A1 PROCUREMENT, LLC,
Plaintiff-Relator,

ACTION NO;

2:15cvl5

V.

THERMCOR,

INC.,

et al•

Defendants.

MEMORANDUM ORDER

This matter comes before

the

court on the Defendants'

Motion to Amend Order to Allow Interlocutory Appeal Pursuant to

28 U S C. § 1292(b) ("Motion to Amend Order"}, and corresponding
Brief in Support, both filed on February 12, 2016. ECF Nos. 134,
135.

The

Relator

filed

its

Brief

in

Opposition

on

February 23, 2016. ECF No. 136.

Further before the court is the Relator's Motion to Lift

Stay,

and

corresponding

Brief

in

Support,

filed

on

February 23, 2016. ECF Nos. 137, 138. The Defendants responded
to the Motion to Lift Stay on March 10, 2016, ECF No. 140, and
the Relator filed a Reply on March 16, 2016. ECF No. 142. The

matter is ripe for review. For the reasons set forth herein, the

Defendants'

Motion

to

Amend

Order

is

DENIED,

and

the

Relator's

Motion to Lift Stay is GRANTED.^
MOTION TO AMEND ORDER TO ALLOW INTERLOCUTORY APPEAL

PURSUANT TO 28 U.S.C.
The

Defendants

filed

a

Motion

Jurisdiction or Failure to State a
No.

87.

By Order of August

7,

referred to Magistrate Judge

On November 18,
Recommendation
Dismiss.

ECF

Responses,
("Order"),

2015,

this

1292(B)

to

Dismiss

for

Claim on July 17,

2015,

the

Lawrence

R.

116.

court

Lack

of

2015.

EOF

Motion to Dismiss

was

Leonard.

ECF No.

the Magistrate Judge issued a

("R&R"),
No.

§

100.

Report and

which recommended denying the Motion to
After

issued

the

an

parties

Order

filed

on

Objections

January

15,

and

2016,

adopting in full the findings and recommendations set

forth in the R&R and denying the Motion to Dismiss. ECF No. 126.

The Defendants now seek to amend the Order adopting the R&R

to certify the Order for an interlocutory appeal.

Br.

Supp.

at

2. This request for certification is based on two objections to
the R&R filed by the Defendants -

whether the filing and service

requirements of the False Claims Act

^ On March 4,

2016,

("FCA")

are jurisdictional,

the Defendants filed a notice with the

court requesting that their Motion to Amend Order be set for a
hearing. ECF No. 139. The Relator filed a Notice of Opposition
on March 11, 2016. ECF No. 141. The court finds that a hearing
is unnecessary, as the facts and legal arguments are adequately
presented,
and
the
decisional
process
would not
be
aided
significantly by oral argument. See Fed. R. Civ. P. 78(b); E.D.
Va.

Loc.

Civ.

R.

7(J).

and whether
the

FCA.

A

there

was

a

public

disclosure,

under

the

of

Id.

district

court

may

certify

an

order

as

immediately

appealable if i t states in writing "that such order
a

terms

controlling

substantial
immediate

question

ground
appeal

ultimate

for

law

[2]

as

difference

of

the

from

termination

of

may

of

order

the

to

[1]

which

opinion

and

28

there

[3]

materially

litigation."

involves

that

advance

U.S.C.

is

an
the

§ 1292(b).

The district courts have "circumscribed authority to certify for

immediate

appeal

debatable."

(1995).

Swint

This

v.

Chambers

authority

requirements
F.2d 125,

interlocutory

are

127

orders
Cty.

"should

be

Comm'n,

used

"strictly construed."

(4th Cir.

1989).

deemed

pivotal

514

U.S.

sparingly,"

Myles

In this way,

and

35,

46

the

Laffitte,

v.

and

881

courts do not upset

the policy limiting appeals to final judgments without a showing
of

exceptional

circumstances.

404 F. Supp. 2d 907,
In

the

instant

908

Difelice

case,

the

§ 1292(b)

that

ground

substantial

U.S.

Airways,

Inc.,

(E.D. Va. 2005).

the three 28 U.S.C.
a

v.

Defendants

are

requirements,

for

difference

unable

to satisfy

as they fail to show
of

opinion

exists.

A

substantial ground for difference of opinion arises only if the
disagreement

on

merely parties.
WL 4789838,

at

controlling

law

Cooke-Bates v.
*2

(E.D.

Va.

exists

between

Bayer Corp.,

Nov.

16,

2010) .

No.

courts,

not

3:10cv261,

2010

Furthermore,

"just

any

simple

disagreement

certification."
arise

if

Id.

there

between

A substantial

is

a

"novel

courts

ground

and

will

for

not

merit

disagreement

difficult

issue

of

may

first

impression," or if there is a circuit split and the controlling
circuit has not commented on the conflicting issue.

the mere fact that an issue is one of first
there is a
Wyeth V.

the

WL

governing

703 F.

circuit

at

cases

*3

do

impression or that

2d 508,

not

require

527

(E.D.

three

Va.

a

July

district

(E.D.N.C.

2010).

courts

outside

district

finding

Suffolk City Sch. Bd.,

n.l

from

Supp.

in opinion among

See Cross v.

2838180,

"four

Inc.,

differences

grounds.

However,

lack of unanimity is not enough to meet this prong.

Sandoz,

Moreover,

Id.

14,

No.

of

2:llcv88,

2011

(finding

that

2011)

courts

substantial

outside

the

Circuit do not persuade this court that there is a

Fourth

substantial

ground for difference of opinion").
The

ground

Defendants

for

first

disagreement

argue

regarding

filing and service requirements
The

Fourth

Circuit

796

"[t]he

including

its

seal

violation

of

those

dismissal.'"

Id.

the

of

commented

Clark/Smoot/Russell,

procedural

that

is

a

substantial

question of

the

on

F.3d 424

there

FCA are

the

whether

the

jurisdictional.

issue

in

Smith

v.

{4th Cir.

2015),

stating that

requirements

of

the

False

Claims

provision,

'are

not

jurisdictional,

requirements

at 430

does

not

per

Act,
and

se

require

(quoting United States ex rel.

Lujan v.

Hughes Aircraft Co.,

67 F.3d 242,

245

{9th Cir. 1995)). However,

the Defendants assert that this statement is dicta. Br. Supp. at
5. The Defendants further argue that there is a circuit split on
the

issue.

case.

287,

Id.

In support,

United States ex rel.

299

(6th Cir.

in United States
794

the Defendants cite a

F.3d 457

6380992

2010),

{Oct. 20,

Rigsby v.

2015),

2015)

LHC Grp.,

Inc.,

623

F.3d

and a petition for writ of certiorari

ex rel.

{5th Cir.

Summers v.

Sixth Circuit

State

Farm Fire

petition for cert,

{No. 15-513),

which

& Cas.

filed,

writ

the

Co.,

2015

WL

Supreme

Court has not yet granted. See Br. Supp. at 5. The Sixth Circuit
case

the

involves a

other

FCA

seal breach,

procedural

but could be construed to apply to

requirements.

Notably,

however,

the

petition for writ of certiorari deals only and specifically with
seal breaches and not with the other FCA filing and procedural

requirements.

Moreover,

petition for

writ

albeit
standard

related,
for

a

of

a

disagreement with one circuit and a

certiorari

question
substantial

are

that

not

ground

deals with a

enough
for

to

different,

meet

difference

of

the

high

opinion,

especially when the Fourth Circuit has already commented on the
issue.^

^ Regardless of whether the language in Smith is dicta,
the Defendants argue,
difference of opinion.

there
is no
The Defendants

as

substantial ground for
do not cite any Fourth
Circuit case that finds that the filing and service requirements
are jurisdictional.

The

ground

Defendants

for

disclosure

opinion,
the

difference
occurred.

they cite

possibility

("SBA")

next

protests

footnote,

the

of

of

Br.

to

argue

that

opinion

Supp.

footnote

at

through a

Magistrate

6.

is

to

To

(9)

Small

public

Judge

as

nine

accessing

there

a

provided

the issue and rejected the Defendants'

public

difference

of

regarding

Administration

request.
a

a

the R&R,

Business

records

substantial

whether

show

of

a

lengthy

position,

Id.

In that

analysis

of

after finding a

public disclosure did not occur here based on the specific facts
of

the case.

R&R at

30 n.9.

the Defendants

is a

of Farmington,

166 F.3d 853

Seventh Circuit case.

grounds by Qlaser v.

(7th

Cir.

United

2009) ,

States

Conservation

Dist.,

(7th Cir.

United States v.

1999),

Wound Care Consultants,

that

ex

The only other support provided by

rel.

777

conflicts
Wilson

F.3d

v.

691

with

a

(4th

overruled on other
Inc.,

Fourth

Graham

Bank

Cty.

Cir.

570

F.3d 907

Circuit

case.

Soil

Water

2015),^

&

and

the

Defendants' analogy to complaints in a civil suit, which has not
been applied by the courts. Br. Supp. at 6. A single case from a
different circuit and the Defendants'

own theory are not enough

to show a substantial ground for difference of opinion.

^ In Wilson,
the
Fourth Circuit held that
a
public
disclosure under the FCA requires an act of disclosure outside
of the government, ill F.3d at 697. In contrast, the court in
Bank of Farmington held that disclosure of information to a
public official qualifies as an FCA public disclosure. 166 F.3d
at

861.

As

there

opinion,

the

is

no

court

substantial
will

requirements of 28 U.S.C.

only

ground
briefly

§ 1292(b),

for

difference

discuss

the

of

other

namely that the issue be a

controlling question of law and that an appeal would materially
advance

the

the ultimate

issues

that

are

although

require

a

termination of

controlling
the

issues

thorough

the case.

questions
involve

review

of

of

law,

legal

the

Regarding whether

the

court

questions,

record,

notes

they

also

particularly

the

question of whether a public disclosure occurred. See LaFleur v.
Dollar Tree

(E.D.

Va.

question

Stores,

May 20,
of

law,

Inc.,

No.

2014)
if

it

2;12cv363,

2014

(stating that
would

require

an
the

study the record extensively"). Further,
an

interlocutory appeal

termination

example,

of

as

the

the

would

issue

2121721,

is

at

not

appellate

a

*2

pure

court

"to

it is uncertain whether

"materially advance

litigation."

Defendants

WL

28

U.S.C.

recognize,

the

the ultimate

§ 1292(b).

public

For

disclosure

question does not affect all the contracts at issue, and thus, a
difference

of

opinion

on

that

issue

would

result

in

only

a

partial dismissal of the case. Br. Supp. at 7.
Accordingly,

for the above reasons,

the Defendants

fail

meet the requirements to certify the Order of January 15,
for interlocutory appeal.

to

2016,

MOTION TO LIFT

On September 1,

Stay of Proceedings.
parties

discussed

2015,

the parties

ECF No.

their

STAY

filed a

Joint Motion for

109. To support their request,

efforts

to

resolve

the

discovery disputes

and noted that two Motions were currently before the court.

Id.

at l."* The court granted the Motion for Stay of Proceedings on
September

stay

2,

be

lifted,

accordingly,

Supp.

2015.

at

as

ECF

No.

the

110.

two

The

Relator

Motions

have

now

been

requests

denied,

the

and,

the grounds for the stay are no longer present.

1.

The

Relator

also

asks

this

court

to

permit

Br.

the

parties to set a supplemental scheduling conference to reset the
deadlines in the original scheduling order,

ECF No.

67,

as these

deadlines have now expired due to the stay. See Br. Supp. at 1.

The

stay,

Defendants

argue

that

the

court

should

even if the court denies the Defendants'

Order,
Dismiss

because
for

Failure

Defendants

rely

App'x 132,

137

resolving

Rule

streamlines

"

Subject

The

the

the

two

Matter

on

Defendants
to

State

Levey v.

(3d Cir.

Claim."

were

Jurisdiction,

lift

the

Motion to Amend

file

a

Br.

0pp.

Inv.

Grp.,

Motion
at

3-6.

LLC,

590

to
The
F.

in which the court discussed how

motions

litigation

motions

a

"to

Browns tone

2014),

12(b)(6)

intend

not

before

process,

the

to

Motion

ECF

No.

beginning
argue

to

87,

that

Dismiss

and

discovery
discovery

for

the

Lack

of

Motion

to

Revoke the Pro Hac Vice Admission of Derrick Storms. ECF No. 83.
The court has since ruled on both of these Motions. ECF No. 126.
8

should remain stayed while another Motion to Dismiss is prepared
and

filed.

See

Defendants'

a

Br.

Supp.

at

3-4.

The

court

does

not

find

the

reliance on an unpublished Third Circuit case to be

persuasive argument for extending the stay through the filing

of a

future Motion in a

case that has been pending before this

court for over a year.

Further,

as this court has already ruled on the two Motions

referenced in the Joint Motion to Stay Proceedings,
denying the Motion to Amend Order,

and as it is

the purpose of the stay has

been satisfied and continuing the stay is unnecessary.
court finds that the stay should be lifted,
should set a

Thus,

the

and that the parties

new scheduling conference with the Calendar Clerk.

An Amended Scheduling Order will be entered to include dates for
resolving discovery disputes
well

An

as

to

set

Amended

a

new

date

Scheduling

and

for

Order

for

trial

does

appropriate dispositive motions,

any
and

not

further discovery,
the

incidents

preclude

during or at

the

as

thereto.

filing

of

the conclusion of

discovery.
CONCLUSION

For

the

reasons

stated

Amend Order is DENIED,
GRANTED.

The

parties

herein,

the

Defendants'

Motion

to

and the Relator's Motion to Lift Stay is

are

ORDERED

to

contact

the

Calendar Clerk

to

set

forward

a

new
a

scheduling

copy

of

this

conference.

The

Clerk

Memorandum

Order

to

is

counsel

parties.
IT IS SO ORDERED.

/s/

Rebecca Beach Smith
Chief Judge
REBECCA

CHIEF

March

,

2016

10

BEACH

JUDGE

DIRECTED

SMITH

for

to
all