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United States ex rel. Hartnett v. Physicians Choice Laboratory Services

United States District Court, W.D. North Carolina, Charlotte Division

August 26, 2019

UNITED STATES OF AMERICA ex rel. TARYN HARTNETT, and DANA SHOCHED, Plaintiffs,
v.
PHYSICIANS CHOICE LABORATORY SERVICES, DOUGLAS SMITH, PHILIP MCHUGH AND MANOJ KUMAR, Defendants.

          ORDER

          FRANK D. WHITNEY, CHIEF UNITED STATES DISTRICT JUDGE

         THIS MATTER is before the Court regarding multiple pending motions filed by the parties. This matter involves the United States' partial intervention in two qui tam complaints originally filed in two separate district courts pursuant the qui tam provisions of the United States False Claims Act, 31 U.S.C. § 3730(b) (the “False Claims Act” or “FCA”), and various state false claims acts. One complaint was originally filed by relators Jenkins, Coyle and Merry on January 7, 2014, in the United States District Court for the Eastern District of Tennessee (the “Jenkins Complaint”). This case was transferred to this court in January 2017, and assigned case number 3:17-cv-46. The other complaint was filed by relators Hartnett and Shoched on November 10, 2014, in the United States District Court for the Middle District of Florida (the “Hartnett Complaint”). This case was also transferred to this court in January 2017, and was assigned case number 3:17-cv-37.

         Under the FCA, and the analogous state laws, a private citizen, referred to as a “relator, ” may file a complaint in Federal District Court in the name of the United States and state plaintiffs. 31 U.S.C. § 3730(b)(1). The United States may proceed with the action, known as intervening, and take over the case, or may decline to intervene, in which case relator may move forward with the case. 31 U.S.C. § 3730(b)(4). The United States filed notices of partial intervention in both the Jenkins and Hartnett cases on February 19, 2019, intervening in claims based on allegations that PCLS and certain of its agents paid illegal kickbacks to James Lord and the practice Southeast Spine and Pain Associates, LLC, and paid illegal kickbacks through the provision of MedX software to physicians' practices. The United States declined intervention in claims based on all other allegations in the complaints. (Doc. No. 70 in case 3:17-cv-46 and Doc. No. 31 in case 3:17-cv-37). All of the named state plaintiffs declined intervention in both cases in their entirety.

         On June 17, 2019, the United States requested that the two cases be consolidated for trial because overlapping issues of law and fact predominated in the cases. On June 20, 2019 this Court granted the order to consolidate the cases and established Case No. 3:17-cv-37 as the lead case.

         Under the FCA, if the Government elects to proceed with the case, it “may file is own complaint or amend the complaint [of the relator] to clarify or add detail to the claims in which the Government is intervening and add any additional claims with respect to which the Government claims it is entitled to relief.” 31 U.S.C. § 3731(c). On June 20, 2019, the United States filed its complaint in intervention adding details to the intervened claims and asserting new claims not addressed in the Relators' complaints. Relators intend to dismiss all claims contained in the two qui tam complaints based on allegations on which the United States did not intervene.

         The following filings are before the Court:

1) Relators Jenkins, Coyle and Merry's (The “Jenkins Relators”) “Unopposed Motion for Voluntary Dismissal Without Prejudice of all Non-Intervened Claims” (Doc. No. 47);
2) The Jenkins Relators' “Notice of Voluntary Dismissal of Certain Defendants” (Doc. No. 48);
3) The Jenkins Relators' “Amended Motion for Voluntary Dismissal of All Non-Intervened Claims” (Doc. No. 55);
4) The Jenkins Relators' “Amended Notice of Voluntary Dismissal of Certain Defendants” (Doc. No. 56);
5) Relators Hartnett and Shoched's (the “Hartnett Relators”) “Unopposed Motion for Voluntary Dismissal Without Prejudice of All Non-Intervened Claims” (Doc. No. 45);
6) The Hartnett Relators' “Notice of Voluntary Dismissal of Certain Defendants” (Doc. No. 46);
7) The Hartnett Relators' ÔÇťAmended Motion for Voluntary Dismissal of all Non-Intervened ...

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