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November 20, 2015

20 November 2015

On Remand, Carter District Court Ruling Raises More First-to-File Questions

As we reported previously, earlier this year the Supreme Court held in Kellogg Brown & Root Services, Inc. et al. v. U.S. ex rel. Carter that the FCA’s first-to-file bar ceases to apply once a first-filed suit is dismissed.   Notwithstanding that ruling, which ostensibly favored the relator, the district court on remand recently dismissed the case, again on first-to-file grounds.  On remand, Carter argued that because the first-filed case that had preceded the filing of his case had since been dismissed, the Supreme Court’s decision suggested that the first-to-file bar no longer applied and therefore his case should not have been dismissed.  The district court, however, disagreed with Carter’s interpretation of the Supreme Court opinion that “an existing case may proceed to trial automatically when a first-filed suit is dismissed.”  Pointing to the U.S. District Court for the District of Columbia’s opinion in United States ex rel. Shea v. Verizon Communications, Inc., which stated that “Plaintiffs, other than the Government, may not file FCA actions while a related action is pending,” the district court held that because there was a first-filed case pending at the time that Carter filed his case, the first-to-file bar applied.  In other words, the filing of Carter’s case was per se improper because a case was already pending when Carter filed his suit.  The fact that the first-filed case was later dismissed would not, the district court concluded, operate to save from dismissal a case that was barred by the first-to-file bar at the time it was filed.

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