Citynet, LLC v. Frontier West Virginia, Inc., et al.
Filing
207
MEMORANDUM OPINION AND ORDER denying without prejudice the 184 MOTION to Intervene; granting the 191 MOTION for Leave to File Surreply. Signed by Senior Judge John T. Copenhaver, Jr. on 11/10/2021. (cc: counsel of record; any unrepresented parties) (lca)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
CITYNET, LLC, on behalf of
the United States of America,
Plaintiff/Relator,
v.
Civil Action No. 2:14-cv-15947
FRONTIER WEST VIRGINIA, INC.,
a West Virginia corporation;
KENNETH ARNDT, individually;
DANA WALDO, individually;
MARK MCKENZIE, individually;
JIMMY GIANATO, individually;
and GALE GIVEN, individually,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is the motion to intervene of the State of
West Virginia (“State”), filed November 8, 2019.
On May 7, 2014, plaintiff/relator Citynet, LLC
(“Citynet”) filed a qui tam action under the False Claims Act,
31 U.S.C. §§ 3729-3733, against defendants Frontier West
Virginia, Inc.; Kenneth Arndt; Dana Waldo; Mark McKenzie
(together, “Frontier”); Jimmy Gianato; and Gale Given.
ECF No. 1; see also First Am. Compl., ECF No. 30. 1
Compl.,
Generally,
Citynet alleges that the defendants defrauded the United States
Citynet also filed suit against Kelly Goes but voluntarily
dismissed her from the action. ECF No. 93.
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in connection with a $126,323,296 grant application and
subsequent use of the funds.
See First Am. Compl. ¶¶ 1-6.
Separately, the United States, through the Acquisition
and Grants Office of the National Oceanic and Atmospheric
Administration, initiated administrative proceedings related to
reimbursements for costs paid under the grant.
185-1 through -4.
See ECF Nos.
The proceedings found that two categories of
costs submitted by Frontier were improper, totaling $4,705,000
and $244,200.
See id.
The State, as recipient of the grant
funds which it disbursed to Frontier, paid those amounts to the
United States.
See id.
Now, the State seeks to intervene in this matter to
bring an equitable claim against the defendants to recover the
costs it paid, but apparently only to the extent any of the
defendants are ultimately found to have defrauded the United
States in violation of the False Claims Act.
See State Reply to
Frontier 3, ECF No. 189; State Reply to United States 2, ECF No.
190.
That is, the court understands that “the State takes no
position as to Citynet’s claims” and seeks only subrogation for
the amounts it has paid should any of the defendants be found
liable under the False Claims Act.
State Reply to Frontier 4.
The State explains that it has moved to intervene at this time
to ward off any arguments about untimeliness it may have faced
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had it moved to intervene after liability has been decided.
State Reply to United States 2-3.
None of the current parties appears to oppose the
State’s intervention, should the intervention be limited as the
court understands it.
See United States Surreply 1-2, ECF No.
191-1; 2 Citynet Resp. 1, ECF No. 188; Frontier Resp. 3-4, ECF No.
186.
However, Citynet objects insofar as the intervention would
interfere with its ability to prosecute its case and impair its
ability to fully recover fees should it prevail.
1.
Citynet Resp.
In addition, Frontier objects insofar as the precise nature
and grounds of the State’s requested relief is unclear.
See
Frontier Resp. 1-2; Frontier Resp. to United States Mot. for
Leave to File Surreply 1, ECF No. 192.
Specifically, Frontier
notes that it “cannot adequately respond to the State’s motion
to intervene” because the State has not filed a pleading setting
forth a claim, and because the State’s description in its briefs
of the nature of its claim is otherwise unclear.
3.
Frontier Resp.
Citynet’s response to the State’s motion also echoes
concerns about clarity.
See Citynet Resp. 1.
The United States moved for leave to file a surreply, and
attached the surreply to its motion. ECF Nos. 191, 191-1.
Frontier objected. ECF No. 192. The court grants the United
States’ motion.
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Rule 24 indeed requires a party to accompany a motion
to intervene with “a pleading that sets out the claim or defense
for which intervention is sought.”
Fed. R. Civ. P. 24(c).
This
court has observed that “a motion to intervene may be granted
despite the failure to provide a pleading, when the grounds for
the motion are otherwise clear.”
Murray Maple Eagle Coal, LLC
v. Brenemen, No. 2:19-cv-00433, 2019 WL 9828531, at *1 (S.D. W.
Va. July 11, 2019).
To be sure, there appears to be an understanding as to
the nature and extent of the State’s claim.
Frontier’s and
Citynet’s concerns, however, are enough to require the State to
refile its motion with the appropriate pleading.
The court
cannot grant the State’s motion while there are legitimate
arguments from the current parties that the State’s claims are
unclear, which hampers the parties’ ability substantively to
respond to the motion to intervene.
The court also finds that
requiring the State to refile the motion will not prejudice any
party or the State.
Accordingly, it is ORDERED that the United State’s
motion for leave to file surreply be, and hereby is, granted.
It is also ORDERED that the State’s motion to intervene be, and
hereby is, denied without prejudice.
If refiled, the court
directs the State to file a motion in compliance with Rule 24,
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which requires the motion to “state the grounds for intervention
and be accompanied by a pleading that sets out the claim or
defense for which intervention is sought.”
Fed. R. Civ. P.
24(c).
The Clerk is requested to transmit copies of this
memorandum opinion and order to all counsel of record and any
unrepresented parties.
ENTER: November 10, 2021
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