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United States ex rel. Millin v. Krause

United States District Court, D. South Dakota, Northern Division

May 15, 2018

UNITED STATES OF AMERICA, ex rel. DR. JOHN A. MILLIN; and DR. JOHN A. MILLIN, individually, Relator,
v.
LARRY F. KRAUSE, an individual; and KRAUSE-ALLBEE TRUCKING, INC., a South Dakota Corporation, Defendants.

          ORDER

          CHARLES B. KORNMANN, United States District Judge

         BACKGROUND

         On May 4, 2018, defendants filed a motion requesting this Court amend its prior order on the defendants' motion to dismiss to certify two questions of law undecided in the Eighth Circuit: (1) whether, the False Claims Act is subject to a six- or ten-year statute of limitations where the government declines to join a claim brought by a private party and (2) whether the intracorporate conspiracy doctrine applies to bar conspiracy claims brought under the False Claims Act. Relator opposes any such certification.

         DECISION

         I. Standard for Interlocutory Appeal Certification

         Pursuant to 28 U.S.C. § 1292(b), when a district court issues an order "involv[ing] a controlling question of law as to which there is substantial ground for difference of opinion" and determines that "an immediate appeal from the order may materially advance the ultimate termination of the litigation, " an appeal may be taken from such order. Three criteria for certification are required: "the district court must be of the opinion that (1) the order involves a controlling question of law; (2) there is substantial ground for difference of opinion; and (3) certification will materially advance the ultimate termination of the litigation." White v. Nix, 43 F.3d 374, 377 (8th Cir. 1994) (internal citations omitted). While § 1292(b) provides an avenue for interlocutory appeals, "[p]ermission to allow interlocutory appeals should ... be granted sparingly and with discrimination" as "most often such appeals result in additional burdens on both the court and the litigants." Union Ctv, Iowa v. Piper Jaffrav & Co,, Inc., 525 F.3d 643, 646 (8th Cir. 2008) (per curiam). It has "long been the policy of the courts to discourage piece-meal appeals." Id. (internal citations omitted). Further, § 1292(b) should be invoked "only in extraordinary cases where decision of an interlocutory appeal might avoid protracted and expensive litigation"; it was not "intended merely to provide review of difficult rulings in hard cases." Id. (internal citations omitted). When requesting certification, the movant "bears the heavy burden of demonstrating that the case is an exceptional one in which immediate appeal is warranted." White. 43 F.3d at 376.

         II. Defendants do not meet the requirements for certification under 1292(b)

         Evaluating the three criteria for certification, this Court finds that defendants have not met their burden of demonstrating that the case warrants interlocutory appeal.

         1. Controlling Question of Law:

         A controlling question of law "must raise some question of law which governs at least a claim, if not the whole case or defense." 4 Am. Jur. 2d Appellate Review § 120 (2018). The question "need not be dispositive of the lawsuit in order to be regarded as controlling." Id. A case must be sufficiently ripe to warrant certification, so that certification does not result in "advisory opinions rendered on hypotheses" which evaporate "in the light of full factual development"; as such, denial of certification is appropriate where the factual basis of the claim is not sufficiently developed. Paschall v. Kansas City Star Co., 605 F.2d 403, 406 (8th Cir. 1979) (internal citations omitted). The questions defendants seek to certify represent possible controlling questions of law governing both the conspiracy claim and claims that antedate the six-year statute of limitations period. However, the factual record is not sufficiently developed so that certification would not amount to a request for an advisory opinion.

         2. Substantial Difference of Opinion:

         As matters of first impression in the Eighth Circuit, on which other circuits disagree, it is certain that a substantial difference of opinion could arise with regard to both the limitations period and applicability of the intracorporate conspiracy doctrine to the False Claims Act. U.S. ex rel. Millin v. Krause, 2018 WL 1885672 (D.S.D. 2018): see also White, 43 F.3d at 378. However, the differences of opinion are not simply questions of law, but also questions of fact, which I will later discuss. See, e.g., McCardle v. Mitchell School Dist., 2005 WL 1532597, * 1 (D.S.D. 2005). The Court agrees with defendants that a substantial difference of opinion exists with regard to at least one question which defendants seek to certify.

         3. Materially Advance Outcome of Case:

         An interlocutory appeal pursuant to § 1292(b) must materially advance the ultimate termination of litigation. When litigation "will be conducted in substantially the same manner regardless of [appellate] decision, the appeal cannot be said to materially advance the ultimate termination of the litigation." White, 43 F.3d at 378. Defendants have not met their burden of establishing that an interlocutory appeal satisfies this criterion. Regardless of how the Eighth Circuit would decide the questions that defendants seek to certify, a jury trial on substantially the same issues regarding defendants' false claims must still transpire. Conducting discovery and trial as to farm operating plans and ...


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