United States v. US Ex Rel. Gwen Thrower ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-16408
Appellant,
D.C. No.
v. 3:16-cv-02120-
EMC
UNITED STATES EX REL. GWEN
THROWER,
Plaintiff-Appellee, OPINION
v.
ACADEMY MORTGAGE
CORPORATION,
Defendant.
Appeal from the United States District Court
for the Northern District of California
Edward M. Chen, District Judge, Presiding
Argued and Submitted November 14, 2019
San Francisco, California
Filed August 4, 2020
2 UNITED STATES V. UNITED STATES EX REL. THROWER
Before: Kim McLane Wardlaw, William A. Fletcher,
and Richard Linn, * Circuit Judges.
Opinion by Judge Wardlaw
SUMMARY **
False Claims Act / Collateral Order Doctrine
The panel dismissed for lack of jurisdiction an appeal
from the district court’s order denying a government motion
to dismiss a False Claims Act case.
The government declined to intervene in the case and
then sought dismissal under 31 U.S.C. § 3730(c)(2)(A),
which allows the United States to move to dismiss an FCA
action notwithstanding the objections of the relator who
brought the action. The district court denied the motion to
dismiss both because the government failed to meet its
burden of demonstrating a valid governmental purpose
related to the dismissal and because it failed to fully
investigate the allegations of the amended complaint.
The panel held that the district court’s order was not an
immediately appealable collateral order. The panel
concluded that this jurisdictional question was not decided
by the Supreme Court in United States ex rel. Eisenstein v.
*
The Honorable Richard Linn, United States Circuit Judge for the
U.S. Court of Appeals for the Federal Circuit, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. UNITED STATES EX REL. THROWER 3
City of N.Y., 556 U.S. 928 (2009). The panel held that the
collateral order doctrine did not apply because the district
court’s order did not resolve important questions separate
from the merits. The panel concluded that the interests
implicated by an erroneous denial of a government motion
to dismiss an FCA case in which it has not intervened were
insufficiently important to justify an immediate appeal.
COUNSEL
Melissa N. Patterson (argued), Michael S. Raab, and Charles
W. Scarborough, Appellate Staff; David L. Anderson,
United States Attorney; Joseph H. Hunt, Assistant Attorney
General; Civil Division, United States Department of
Justice, Washington, D.C.; for Plaintiff-Appellant.
J. Nelson Thomas (argued), Thomas & Solomon LLP,
Rochester, New York; Sanford J. Rosen and Van
Swearingen, Rosen Bien Galvan & Grunfeld LLP, San
Francisco, California; for Plaintiff-Appellee.
Jeffrey S. Bucholtz, Anne M. Voigts, and Bethany L. Rupert,
King & Spalding LLP, Washington, D.C.; Steven P.
Lehotsky and Michael B. Schon, United States Chamber
Litigation Center, Washington, D.C.; for Amicus Curiae
Chamber of Commerce of the United States of America.
Claire M. Sylvia, Phillips & Cohen LLP, San Francisco,
California; Jacklyn N. DeMar, Taxpayers Against Fraud
Education Fund, Washington, D.C.; Jennifer M. Verkamp,
Morgan Verkamp LLP, Cincinnati, Ohio; for Amicus Curiae
Taxpayers Against Fraud Education Fund.
4 UNITED STATES V. UNITED STATES EX REL. THROWER
OPINION
WARDLAW, Circuit Judge:
The False Claims Act (FCA) allows any person with
knowledge that false or fraudulent claims for payment have
been submitted to the federal government to bring a qui tam
suit 1 on behalf of the United States against the perpetrator.
If successful, the individual initiating the suit, known as the
“relator,” keeps a percentage of any recovery, with the
remainder going to the Government. Each year, suits
initiated by private relators return billions of dollars to the
public fisc. 2
When a qui tam suit is filed, the Government may choose
to intervene and prosecute the case itself. 31 U.S.C.
§ 3730(b)(4)(A). If it declines to intervene, the relator has
“the right to conduct the action.” Id. § 3730(b)(4)(B). Here,
the Government notified the district court that it declined to
intervene in a qui tam suit filed by relator Gwen Thrower. It
then filed a motion seeking dismissal of the action under
§ 3730(c)(2)(A) of the FCA. The district court denied the
motion both because the Government failed to meet its
burden of demonstrating a valid governmental purpose
1
“[T]he phrase qui tam means an action under a statute that allows
a private person to sue for a penalty, part of which the government or
some specified public institution will receive.” United States ex rel.
Kelly v. Serco, Inc., 846 F.3d 325, 330 n.4 (9th Cir. 2017) (internal
alterations and quotation marks omitted).
2
In Fiscal Year 2019, FCA suits initiated by private relators
recovered more than $2.2 billion, including almost $300 million in cases
in which the Government declined to intervene. U.S. Dep’t of Justice,
Fraud Statistics – Overview: October 1, 1986 – September 30, 2019
(2020), https://tinyurl.com/vvbvx5h.
UNITED STATES V. UNITED STATES EX REL. THROWER 5
related to the dismissal and because it failed to fully
investigate the allegations of the amended complaint.
The Government filed an immediate appeal, asserting
appellate jurisdiction under the collateral order doctrine. We
are thus presented with a question of first impression in the
federal courts: is a district court order denying a
Government motion to dismiss an FCA case under
§ 3730(c)(2)(A) an immediately appealable collateral order?
We conclude that such orders fall outside the collateral order
doctrine’s narrow scope and dismiss the appeal for lack of
jurisdiction.
I.
Academy Mortgage Corporation (Academy) is a
mortgage lender that participates in residential mortgage
insurance programs run by the Federal Housing
Administration (FHA). These government programs insure
lenders against losses incurred on certain qualifying
mortgages. While the insurance programs are designed to
encourage the extension of credit to low income borrowers,
they are also a boon to lenders, who earn income from the
mortgages without bearing the risk of loss in the event of
default. Because the Government is financially responsible
if borrowers default on their loans, both borrowers and loans
must meet certain eligibility criteria to qualify for FHA
insurance. Participating lenders must certify that the
mortgages they originate comply with these requirements.
Gwen Thrower works for Academy as an underwriter.
She filed this FCA suit, detailing a scheme through which
Academy certified loans for FHA insurance even though
they failed to meet the Government’s requirements. Some
of the insured loans were subsequently defaulted upon,
resulting in financial losses that the Government was
6 UNITED STATES V. UNITED STATES EX REL. THROWER
required to cover. Thrower alleged that the Government
would not have insured the loans had it known about
Academy’s lending practices, so Academy’s false
certifications of compliance with government requirements
amounted to false claims within the meaning of the FCA.
The Government declined to exercise its statutory right
to intervene and prosecute the case itself and so notified the
court. Under the FCA, Thrower then had the right to conduct
the action herself. Id. § 3730(b)(4)(B). But instead of
permitting her to do so, the Government moved to dismiss
under 31 U.S.C. § 3730(c)(2)(A), which allows the United
States to move to dismiss an FCA 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.” The Government
argued that if the case proceeded, it would be “burdened by
discovery requests” that would “tax many of the same
resources being used in other litigation and investigations.”
It asserted a “right to undertake a cost-benefit analysis and
to conclude it is not in the public interest to spend further
time and resources on [Thrower’s] litigation of this matter.”
Whether a motion to dismiss under § 3730(c)(2)(A)
should be granted is governed by a two-step test. United
States ex rel. Sequoia Orange Co. v. Baird-Neece Packing
Corp., 151 F.3d 1139, 1145 (9th Cir. 1998). The
Government bears the initial burden of identifying a “valid
governmental purpose” and showing a “rational relation
between dismissal and accomplishment of the purpose.” Id.
If the Government makes this showing, the burden shifts to
the relator “to demonstrate that dismissal is fraudulent,
arbitrary and capricious, or illegal.” Id.
UNITED STATES V. UNITED STATES EX REL. THROWER 7
Applying the Sequoia Orange test, the district court
concluded that the Government’s asserted cost-benefit
justification fell short at both steps of the analysis.
Specifically, the court determined that the Government
could not have meaningfully assessed the potential recovery
from the suit—i.e., the benefit side of the cost-benefit
analysis—because it had not sufficiently investigated
Thrower’s claims, including by failing to investigate the
detailed allegations of wrongdoing Thrower had added when
she amended her original complaint. The district court
therefore denied the Government’s motion to dismiss.
The Government immediately appealed, invoking
appellate jurisdiction under the collateral order doctrine. 3
II.
We have jurisdiction to determine our jurisdiction,
which includes authority to decide whether the district
court’s denial of the motion to dismiss under
§ 3730(c)(2)(A) is immediately appealable under the
collateral order doctrine. Metabolic Research, Inc. v.
Ferrell, 693 F.3d 795, 798 (9th Cir. 2012).
III.
A.
Under 28 U.S.C. § 1291, the courts of appeals have
jurisdiction over “appeals from all final decisions of the
district courts.” This statute is most often invoked as the
basis for appellate jurisdiction over quintessential “final
3
A motions panel of our court stayed further district court
proceedings pending the resolution of this appeal.
8 UNITED STATES V. UNITED STATES EX REL. THROWER
decisions,” such as final judgments. But it also encompasses
“a small set of prejudgment orders that are ‘collateral to’ the
merits of an action and ‘too important’ to be denied
immediate review.” Mohawk Indus., Inc. v. Carpenter,
558 U.S. 100, 103 (2009) (quoting Cohen v. Beneficial
Indus. Loan Corp., 337 U.S. 541, 546 (1949)). This has
become known as the “collateral order doctrine.”
To fall within the limited scope of the collateral order
doctrine, a district court order must satisfy three
requirements first described by the Supreme Court in Cohen:
it must (1) be “conclusive” on the issue at hand, (2) “resolve
important questions separate from the merits,” and (3) be
“effectively unreviewable” after final judgment. Id. at 106;
see Cohen, 337 U.S. at 545–46. These conditions are
“stringent,” Digital Equip. Corp. v. Desktop Direct, Inc.,
511 U.S. 863, 868 (1994), and efforts to expand the scope of
the collateral order doctrine have been repeatedly rebuffed,
Will v. Hallock, 546 U.S. 345, 350 (2006).
Stringent application of the final judgment rule avoids
encroachment on the “special role” that district judges play
as initial arbiters of “the many questions of law and fact that
occur in the course of a trial.” Firestone Tire & Rubber Co.
v. Risjord, 449 U.S. 368, 374 (1981). As the Supreme Court
has explained, “[i]mplicit in § 1291 is Congress’ judgment
that the district judge has primary responsibility to police the
prejudgment tactics of litigants, and that the district judge
can better exercise that responsibility if the appellate courts
do not repeatedly intervene to second-guess prejudgment
rulings.” Richardson-Merrell, Inc. v. Koller, 472 U.S. 424,
436 (1985). The final judgment rule also furthers the strong
interest in judicial efficiency and the avoidance of piecemeal
appellate proceedings. Mohawk Indus., 558 U.S. at 106.
Under a more relaxed standard, “cases could be interrupted
UNITED STATES V. UNITED STATES EX REL. THROWER 9
and trials postponed indefinitely as enterprising appellants
bounced matters between the district and appellate courts.”
SolarCity Corp. v. Salt River Project Agric. Improvement &
Power Dist., 859 F.3d 720, 723 (9th Cir. 2017) (citing Bank
of Columbia v. Sweeny, 26 U.S. (1 Pet.) 567, 569 (1828)).
B.
The Government first contends that the Supreme Court
has already held that the denial of a government motion to
dismiss a qui tam suit over the relator’s objection is an
appealable collateral order. See United States ex rel.
Eisenstein v. City of New York, 556 U.S. 928 (2009). But
that question was not before the Court in Eisenstein; nor was
it even addressed. The question in Eisenstein was whether
the Government is a “party” to a qui tam action under the
FCA when it has declined to intervene. See id. at 930–31.
The Supreme Court unanimously answered: “No.”
In Eisenstein, the Government declined to intervene in a
qui tam action filed by Eisenstein, and the defendants
successfully moved to dismiss. Id. at 930. Eisenstein filed
his notice of appeal within the 60-day period of Federal Rule
of Appellate Procedure 4(a)(1)(B), which is the time limit
applicable when the United States or its officer or agency is
a party, rather than within the 30-day period that applies to
everyone else. Id. The Court stated that the question
presented was “whether the 30-day time limit to file a notice
of appeal in Federal Rule of Appellate Procedure 4(a)(1)(A)
or the 60-day time limit in Rule 4(a)(1)(B) applies when the
United States declines to formally intervene in a qui tam
action brought under the False Claims Act.” Id. at 929.
After considering the plain meaning of the word “party” and
its prior precedent, which instructed that a litigant becomes
a party only through intervention, the Court held that
“[a]lthough the United States is aware of and minimally
10 UNITED STATES V. UNITED STATES EX REL. THROWER
involved in every FCA action . . . it is not a ‘party’ . . . for
purposes of the appellate filing deadline unless it has
exercised its right to intervene in the case.” Id. at 932–34.
In Footnote 2 of the Eisenstein opinion, the Court noted
that its holding “d[id] not mean that the United States must
intervene before it can appeal any order of the court in an
FCA action.” Id. at 931 n.2 (emphasis added). And it gave
some examples of situations in which “the Government is a
party for purposes of appealing the specific order at issue
even though it is not a party for purposes of the final
judgment and Federal Rule of Appellate Procedure
4(a)(1)(B).” Id.
The Court explained that the Government may appeal
“the dismissal of an FCA action over its objection,” citing to
FCA § 3730(b)(1), which prohibits the dismissal of an FCA
case without the Attorney General’s written consent. Id. It
also pointed out that a denial of a Government motion to
intervene under FCA § 3730(c)(3) would be immediately
appealable, id., as denials of motions to intervene of right
generally are, see, e.g., Citizens for Balanced Use v. Mont.
Wilderness Ass’n, 647 F.3d 893, 896 (9th Cir. 2011). These
examples of when non-parties may appeal from a specific
order meet the Cohen requirements for appealability of a
collateral order, thus giving the appellate court jurisdiction
to entertain them. See Robert Ito Farm, Inc. v. County of
Maui, 842 F.3d 681, 687–88 (9th Cir. 2016) (explaining that
the collateral order doctrine is the source of the right to
immediately appeal the denial of a motion to intervene).
In no place in Footnote 2 or elsewhere in Eisenstein did
the Court indicate that the denial of a Government motion to
dismiss an FCA action that the relator has a statutory right to
prosecute, where the Government declined to intervene as a
party, is an appealable order under Cohen. And, unlike in
UNITED STATES V. UNITED STATES EX REL. THROWER 11
Eisenstein, whether or not the United States is a party is not
the focus of our analysis here. Rather, the question is
whether the district court’s order satisfies the collateral order
doctrine requirements and is thus a “final decision” within
the meaning of 28 U.S.C. § 1291. We disagree with the
Government’s assertion that there is “no basis for
distinguishing the appealability of an order rejecting the
United States’ objection to dismissal under Section
3730(b)(1) and an order rejecting the United States’ request
for such dismissal under Section 3730(c)(2)(A).” The
former order ends the action and is therefore prototypically
“final,” 4 while the latter order allows the case to continue,
and the motion can be renewed as circumstances change. 5
In sum, Footnote 2 of Eisenstein stands for the narrow
proposition that even when the Government is not a party to
an FCA action because it has not intervened, there are some
orders that determine important rights with sufficient finality
that the Government may appeal them under the collateral
order doctrine. It says nothing about whether orders denying
4
The Government hypothesizes that in cases where FCA claims are
joined in a single action with other claims, an order dismissing the FCA
claims over the Government’s objection would not necessarily end the
case. In those circumstances, it contends, Footnote 2 of Eisenstein
allows the Government to take an immediate appeal even before the
remaining claims are resolved in a final judgment. But we do not believe
Footnote 2 was directed toward this unusual scenario. Footnote 2 of
Eisenstein says that under the collateral order doctrine, “the United
States may appeal . . . the dismissal of an FCA action over its objection.”
556 U.S. at 931 n.2 (emphasis added). We assume that by using the word
“action” instead of “claim,” the Court meant to refer to an order that
ended the entire case.
5
This is particularly true in this case because the district court
rejected the Government’s motion to dismiss for lack of a meaningful
cost-benefit analysis, in which the Government might still engage.
12 UNITED STATES V. UNITED STATES EX REL. THROWER
a Government motion to dismiss under § 3730(c)(2)(A)
satisfy the collateral order doctrine requirements. We now
turn to that question.
C.
The small class of district court decisions immediately
appealable under the collateral order doctrine includes only
orders that are conclusive, that resolve important questions
separate from the merits, and that are effectively
unreviewable after final judgment. Mohawk Indus.,
558 U.S. at 106. Here, whether the order resolved important
questions separate from the merits is dispositive.
1.
Explicit in the second requirement of the collateral order
test, the question of importance is also implicated by the
third Cohen condition—effective unreviewability—because
whether an order is effectively unreviewable “cannot be
answered without a judgment about the value of the interests
that would be lost through rigorous application of a final
judgment requirement.” Digital Equip., 511 U.S. at 878–79.
Whether a particular category of district court orders is
“important” enough to merit immediate appellate
consideration turns on “whether delaying review . . . ‘would
imperil a substantial public interest’ or ‘some particular
value of a high order.’” Mohawk Indus., 558 U.S. at 107
(quoting Will, 546 U.S. at 352–53). Even orders implicating
rights that are generally considered “important” in the
abstract have been found to fall outside the collateral order
doctrine’s scope. See, e.g., id. at 114 (order finding a waiver
of attorney-client privilege); Flanagan v. United States,
465 U.S. 259, 262–63 (1984) (order disqualifying a criminal
defendant’s chosen counsel); see also Mohawk Indus.,
558 U.S. at 117 (Thomas, J., concurring) (explaining that the
UNITED STATES V. UNITED STATES EX REL. THROWER 13
Supreme Court has narrowed the scope of the collateral
order doctrine “principally by raising the bar on what types
of interests are ‘important enough’ to justify collateral order
appeals”).
In determining whether a district court order is
immediately appealable, we do not focus on the exigencies
presented by any individual case. Mohawk Indus., 558 U.S.
at 107. Instead, “the issue of appealability under § 1291 is
to be determined for the entire category to which a claim
belongs, without regard to the chance that the litigation at
hand might be speeded, or a particular injustice averted by a
prompt appellate court decision.” Digital Equip., 511 U.S.
at 868 (internal citation, quotation marks, and alteration
omitted). The mere fact that a class of orders may never be
subject to appellate review after final judgment is not, on its
own, sufficient to justify an immediate appeal. Cf. id. at 878
(emphasizing that a collateral order appeal is available only
if the right implicated is important).
2.
The interests implicated by orders denying a
Government motion to dismiss under § 3730(c)(2)(A) of the
FCA are not sufficiently important to justify expanding the
collateral order doctrine’s narrow scope, at least in cases
where the Government has not exercised its right to
intervene.
In support of its motion to dismiss, the Government cited
the likelihood that it would face burdensome discovery
requests if the litigation proceeded. We have previously
acknowledged that the Government may legitimately
consider the avoidance of litigation costs as a basis for
moving to dismiss an FCA case. Sequoia Orange, 151 F.3d
at 1146. But the mere fact that an erroneous denial of a
14 UNITED STATES V. UNITED STATES EX REL. THROWER
§ 3730(c)(2)(A) motion could lead to unnecessary
government expenditures does not render the denial order
immediately appealable. The Supreme Court has made clear
that an interest in “abbreviating litigation troublesome to
Government employees” is not important enough to justify
a collateral order appeal. Will, 546 U.S. at 353. Otherwise,
the valuable interests served by the final judgment rule
“would fade out whenever the Government or an official lost
an early round that could have stopped the fight.” Id. at 354.
The Government argues that motions to dismiss under
§ 3730(c)(2)(A) “further[] interests similar to the doctrine of
qualified immunity” in that they exist to protect the
Government from “the burdens associated with the litigation
itself.” Without an immediate appeal, the Government
contends, its interest in avoiding litigation burdens would be
lost forever.
This is not the first time a litigant has sought to analogize
its interests to those served by the doctrine of qualified
immunity to support an immediate appeal. 6 See Will,
546 U.S. at 350–51; Digital Equip., 511 U.S. at 871;
SolarCity, 859 F.3d at 725. But we are mindful of the
Supreme Court’s instruction that “claims of a ‘right not to be
tried’” must be viewed “with skepticism, if not a jaundiced
eye.” Digital Equip., 511 U.S. at 873. After all, with a
“lawyer’s temptation to generalize,” Will, 546 U.S. at 350,
almost any right that could be vindicated through a motion
to dismiss could be characterized as providing immunity
from further proceedings. Digital Equip., 511 U.S. at 873.
6
Denials of qualified immunity may be immediately appealed under
the collateral order doctrine to the extent they turn on questions of law.
Mitchell v. Forsyth, 472 U.S. 511, 530 (1985).
UNITED STATES V. UNITED STATES EX REL. THROWER 15
Even accepting that one purpose of § 3730(c)(2)(A) is to
provide the Government with a mechanism for dismissing
financially burdensome cases, that is not enough to treat the
provision as tantamount to a grant of immunity. The
Government’s interest in cost avoidance is simply not a
“value of a high order” on par with those the collateral order
doctrine has been held to protect. Will, 546 U.S. at 352–54;
see, e.g., P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy,
Inc., 506 U.S. 139, 146 (1993) (allowing immediate appeal
of the denial of Eleventh Amendment immunity to protect
the “dignitary interests” of states); Nixon v. Fitzgerald,
457 U.S. 731, 743 (1982) (allowing immediate appeal of the
denial of absolute presidential immunity to protect “essential
Presidential prerogatives under the separation of powers”);
Abney v. United States, 431 U.S. 651, 661 (1977) (allowing
an immediate appeal to protect the Double Jeopardy
Clause’s guarantee that an individual “will not be forced . . .
to endure the personal strain, public embarrassment, and
expense of a criminal trial more than once for the same
offense”).
The Government argues that cases like Will are
inapposite because they addressed a defendant’s ability to
appeal the denial of a motion to dismiss, whereas in FCA
cases, the United States should be viewed as akin to a
plaintiff seeking to voluntarily dismiss its own case. 7 But
Eisenstein makes clear that the United States is not a party,
and therefore not a plaintiff, when it has declined to exercise
its right to intervene. 556 U.S. at 933 (“[I]ntervention is the
requisite method for a nonparty to become a party to a
7
Federal Rule of Civil Procedure 41(a)(1)(A)(i) provides that a
plaintiff may voluntarily dismiss a case without a court order if it files a
notice of dismissal before the opposing party serves an answer or a
motion for summary judgment.
16 UNITED STATES V. UNITED STATES EX REL. THROWER
lawsuit.”). Instead, the Government is more akin to a third-
party assignor, albeit one that retains some statutory rights
to participate in the proceedings. Vt. Agency of Nat. Res. v.
United States ex rel. Stevens, 529 U.S. 765, 773 (2000)
(“The FCA can reasonably be regarded as effecting a partial
assignment of the Government’s damages claim.”); see also
31 U.S.C. § 3730(c)(3)–(4) (detailing rights retained by the
Government when it declines to intervene). 8
As a third party, the Government and its agencies are
subject to the same discovery obligations as other non-
parties under Federal Rule of Civil Procedure 45, including
the obligation to respond to subpoenas for documents and
testimony. Exxon Shipping Co. v. U.S. Dep’t of Interior,
34 F.3d 774, 779 (9th Cir. 1994); see also Yousuf v.
Samantar, 451 F.3d 248, 256–57 (D.C. Cir. 2006); John T.
Boese, Civil False Claims and Qui Tam Actions § 5.07 (4th
ed. 2011) (explaining the use of Rule 45 subpoenas to obtain
discovery from government agencies in FCA cases). When
third-party discovery obligations become onerous, Rule 45
allows the subject of a subpoena to file a motion to quash on
grounds of undue burden. Fed. R. Civ. P. 45(d)(3)(A)(iv).
We have previously identified this procedural mechanism as
a means by which the Government can vindicate its “serious
and legitimate” interest in ensuring “that its employee
resources [are] not . . . commandeered into service by private
litigants to the detriment of the smooth functioning of
government operations.” Exxon Shipping, 34 F.3d at 779.
8
These include the right to be served with pleadings and receive
copies of deposition transcripts, the right to seek a stay of discovery if it
“would interfere with the Government’s investigation or prosecution of
a criminal or civil matter arising out of the same facts,” and the right to
intervene at a later date upon a showing of good cause. 31 U.S.C.
§ 3730(c)(3)–(4).
UNITED STATES V. UNITED STATES EX REL. THROWER 17
Yet notwithstanding the important interest in ensuring
that non-parties are not subjected to burdensome discovery
requests, orders denying a motion to quash a Rule 45
subpoena generally cannot be immediately appealed under
the collateral order doctrine. Perry v. Schwarzenegger,
602 F.3d 976, 979 (9th Cir. 2010) (per curiam) (citing In re
Subpoena Served on Cal. Pub. Utils. Comm’n, 813 F.2d
1473, 1476 (9th Cir. 1987)). Instead, a non-party can obtain
appellate review only by ignoring the subpoena, accepting
the consequences of being held in contempt, and appealing
the ensuing contempt citation. 9 Cal. Pub. Utils. Comm’n,
813 F.2d at 1476; see also Mohawk Indus., 558 U.S. at 111–
12 (explaining that noncompliance and contempt is a means
by which an individual subject to a discovery order can
obtain appellate review). It would be incongruous to hold,
as we are asked to here, that the Government’s interest in
dismissing the case to avoid the possibility of future onerous
discovery requests is important enough to merit an
immediate appeal, when third parties actually faced with
burdensome subpoenas have no such right.
Inherent in the final judgment rule is the possibility that
some cases will proceed further than they should have,
resulting in increased costs for parties and non-parties alike.
But a mere interest in avoiding these costs has never been
enough to justify an immediate appeal, even when they will
9
We have recognized limited exceptions to this rule “when a
subpoena is issued by a district court in favor of a nonparty in connection
with a case pending in a district court of another circuit,” Cal. Pub. Utils.
Comm’n, 813 F.2d at 1476, or when the subject of the subpoena is a
“disinterested third-party custodian of privileged documents” who
“would most likely produce the documents rather than submit to a
contempt citation,” United States v. Krane, 625 F.3d 568, 572 (9th Cir.
2010) (quoting United States v. Griffin, 440 F.3d 1138, 1143 (9th Cir.
2006)); see Perlman v. United States, 247 U.S. 7 (1918).
18 UNITED STATES V. UNITED STATES EX REL. THROWER
be borne by the Government, and consequently, the
taxpayers. Will, 546 U.S. at 353–54. While we have
recognized that the Government may move to dismiss under
§ 3730(c)(2)(A) when an FCA case will impose an undue
burden on the taxpayers or impose “enormous internal staff
costs,” Sequoia Orange, 151 F.3d at 1146, this interest in
government efficiency is not a “value of a high order” that
may be vindicated through collateral order review, Will,
546 U.S. at 352–53.
3.
In its reply brief, the Government recharacterizes its
interest as one of protecting “fundamental Executive Branch
prerogatives”—namely its “wide latitude to determine
which enforcement actions will proceed in the United States’
name to remedy the United States’ injuries.” We do not
question the validity of this interest, but it is hardly at its apex
here. Through the qui tam provisions of the FCA, Congress
has assigned some enforcement responsibility to private
relators, Stevens, 529 U.S. at 773, and that partial assignment
has “to some degree diminish[ed] Executive Branch control
over the initiation and prosecution of [FCA cases],” United
States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 754–55 (9th
Cir. 1993).
Our decisions addressing the motion to dismiss
procedures of § 3730(c)(2)(A) make clear that the
Government’s interests in this area are qualified. In Kelly,
we held that the FCA does not offend the principle of
separation of powers even though it requires the Government
to obtain judicial approval before dismissing an FCA suit.
Id. at 754 n.12, 756. We expanded on this holding in
Sequoia Orange, where we explicitly recognized that
§ 3730(c)(2)(A) creates a “check,” albeit a limited one, on
the Government’s prosecutorial discretion. 151 F.3d
UNITED STATES V. UNITED STATES EX REL. THROWER 19
at 1144–45. By requiring the Government to make an
adequate showing to justify dismissal, Sequoia Orange
implicitly contemplated that in some circumstances, an FCA
case may proceed even over the Government’s objection. Id.
at 1145.
Because the FCA’s broad intervention rights are a
primary means by which the Executive Branch can exercise
control over a given case, id. at 1144, the Government’s
interests are particularly attenuated where, as here, it has
declined to intervene. In FCA cases initiated by a private
relator, the Government has an unfettered right to intervene
within 60 days after service of the complaint and all material
evidence the relator possesses, with extensions of the period
for intervention available for good cause. 31 U.S.C.
§ 3730(b)(2)–(3). And, even if the Government initially
declines to intervene, it may intervene later upon a showing
of good cause, id. § 3730(c)(3), at which point it enjoys the
same rights as if it had intervened from the outset, Sequoia
Orange, 151 F.3d at 1145.
When the Government intervenes, “it shall have the
primary responsibility for prosecuting the action, and shall
not be bound by an act of the [relator].” 31 U.S.C.
§ 3730(c)(1). While the relator may remain a party to the
case, id., the Government, with the district court’s approval,
may impose significant limitations on the relator’s
participation, id. § 3730(c)(2)(C). In short, intervention by
the Government “reduce[s] substantially the relator’s role.”
United States v. Northrop Corp., 59 F.3d 953, 964 (9th Cir.
1995).
By contrast, when the Government declines to intervene,
the relator “shall have the right to conduct the action.”
31 U.S.C. § 3730(b)(4)(B); see United States ex rel.
Killingsworth v. Northrop Corp., 25 F.3d 715, 722 (9th Cir.
20 UNITED STATES V. UNITED STATES EX REL. THROWER
1994) (noting Congress’ intent “to place full responsibility
for False Claims Act litigation on private parties, absent
early intervention by the government or later intervention for
good cause”); see also H.R. Rep. 99-660, at 22 (1986)
(reflecting that Congress intended the 1986 amendments to
the FCA to restore incentives for qui tam suits). As a
practical matter, the Government need not do anything
beyond respond to discovery requests like any other third
party, Fed. R. Civ. P. 45, provide its views if the relator seeks
to dismiss the case, 31 U.S.C. § 3730(b)(1), and wait to see
if the suit succeeds, in which case the Government receives
the bulk of any recovery, id. § 3730(d)(2). Thus, by denying
the motion to dismiss here, the district court in no way forced
the Government to actively prosecute an action against its
will. 10
For all the separation-of-powers discussion, we cannot
escape the conclusion that the Government’s true interest in
dismissing this case is what it has repeatedly maintained
throughout this litigation: avoiding burdensome discovery
expenses in a case the Government does not think will
ultimately be worth the cost. While this may be a legitimate
reason for moving to dismiss, Sequoia Orange, 151 F.3d
at 1146, it is not an interest important enough to merit
expanding the narrow scope of the collateral order doctrine,
Will, 546 U.S. at 350.
D.
We are not swayed by the Government’s argument that
refusing to allow an immediate appeal will render orders
10
We do not decide whether the Government may immediately
appeal the denial of a motion to dismiss in a case in which it has
intervened.
UNITED STATES V. UNITED STATES EX REL. THROWER 21
denying a motion to dismiss under § 3730(c)(2)(A)
effectively unreviewable.
First, any concerns in this area are substantially
diminished by the extraordinarily low likelihood of an
erroneous denial of a motion to dismiss under
§ 3730(c)(2)(A). Cf. Mohawk Indus., 558 U.S. at 110 n.2.
The test set out in Sequoia Orange is not especially
demanding, as evidenced by the fact that this is the first time
a district court in our circuit has ever found the
Government’s argument for dismissal lacking. 11 There is
therefore no reason to think that a new exception to the final
judgment rule is necessary to accommodate this rare
situation.
Moreover, in many cases, there will be other
mechanisms available to mitigate any harms that could flow
from the erroneous denial of a motion to dismiss. For
example, in moving to dismiss here, the Government
claimed that it would be subjected to burdensome discovery
requests if the litigation proceeded. But to the extent these
requests materialize, the Government can seek to quash or
modify them, including on grounds of undue burden. See
Fed. R. Civ. P. 45(d); Exxon Shipping, 34 F.3d at 779. The
Government also argues that it has an interest in dismissing
cases to prevent the creation of unfavorable precedent. But
if the Government is concerned about the direction in which
a case is moving, it can move to intervene upon a showing
11
We are aware of only one other instance of a district court denying
a Government motion to dismiss under § 3730(c)(2)(A). See United
States ex rel. CIMZNHCA, LLC v. UCB, Inc., No. 17-CV-765-SMY-
MAB, 2019 WL 1598109, at *2–4 (S.D. Ill. Apr. 15, 2019), appeal
docketed No. 19-2273 (7th Cir. July 8, 2019). An appeal of that decision
is currently pending before the Seventh Circuit.
22 UNITED STATES V. UNITED STATES EX REL. THROWER
of good cause and take over the prosecution itself. 31 U.S.C.
§ 3730(c)(3).
We recognize that in some cases, the Government may
seek dismissal to protect more unique interests. For
example, in Sequoia Orange, we affirmed the district court’s
decision to dismiss a case at the Government’s behest in
order “to end the divisiveness in the citrus industry caused
by over ten years of litigation.” 151 F.3d at 1142, 1146. The
Government has also sought dismissal when it contended
that continued prosecution of a qui tam action would risk the
disclosure of classified information. See, e.g., United States
ex rel. Mateski v. Mateski, 634 F. App’x 192, 193–94 (9th
Cir. 2015). But it would not be appropriate for us to expand
the collateral order doctrine to accommodate these atypical
cases. The issue of appealability must be determined “for
the entire category to which a claim belongs,” Digital
Equip., 511 U.S. at 868, and we cannot allow immediate
appeal of all orders denying § 3730(c)(2)(A) motions simply
because a subset of them may implicate interests more
important than simple cost avoidance, Mohawk Indus.,
558 U.S. at 112. We also see no need to do so because, at
least to this point, district courts have invariably granted
motions to dismiss when concerns of a higher order have
been raised. Cf. id. at 110 n.2.
We emphasize that our decision does not leave the
Government without options for seeking appellate review.
See id. at 110–11. Most obviously, the Government could
ask the district court to certify, and our court to accept, an
interlocutory appeal under 28 U.S.C. § 1292(b), which
allows for appeal of orders that “involve[] a controlling
question of law as to which there is substantial ground for
difference of opinion,” when an immediate appeal “may
materially advance the ultimate termination of the
UNITED STATES V. UNITED STATES EX REL. THROWER 23
litigation.” And, in extraordinary circumstances, such as
where the unjustified disclosure of classified information is
at risk, see Mateski, 634 F. App’x at 193–94, the
Government may seek a writ of mandamus. Mohawk Indus.,
558 U.S. at 111. These “safety valves” are more than
adequate to address denials of motions to dismiss that
implicate interests more important than run-of-the-mill
litigation burdens. Id. (alterations omitted).
IV.
As the Supreme Court has emphasized time and
again, the “small class” of immediately appealable collateral
orders must remain “narrow and selective in its
membership.” Will, 546 U.S. at 350. Because the interests
implicated by an erroneous denial of a Government motion
to dismiss a False Claims Act case in which it has not
intervened are insufficiently important to justify an
immediate appeal, we conclude that they fall outside of the
collateral order doctrine’s scope. We therefore dismiss this
appeal for lack of jurisdiction. 12
DISMISSED.
12
Thrower’s motion to strike documents from the Government’s
Excerpts of Record is DENIED as moot.