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United States v. Quest Diagnostics Inc.

United States District Court, E.D. California

October 6, 2014

UNITED STATES OF AMERICA, and STATE OF CALIFORNIA, ex rel. ELISA MARTINEZ, Plaintiffs,
v.
QUEST DIAGNOSTICS INCORPORATED, et al., Defendants.

ORDER

KIMBERLY J. MUELLER, District Judge.

The United States, on behalf of itself and the State of California, have requested their fifth extension of time in which to determine whether to intervene in this false claims act stemming from alleged improper billing to Medicare and Medicaid. Mot., ECF No. 25. As it has in its prior four extensions, it seeks and additional six months, up to and including March 26, 2015. Id.

In the order granting the fourth extension, the court said that any further requests by the government for an extension should be accompanied by "a detailed explanation with dates and specific timelines, which will be subject to this court's scrutiny. The explanation should detail what prejudice will result if the seal is lifted, and why the United States needs to evaluate defendants' respective positions before it can decide whether to intervene." ECF No. 20 at 2 (citing United States. ex. rel . Costa v. Baker & Taylor, Inc., 955 F.Supp. 1188, 1190-91 (N.D. Cal. 1997)).

The United States has supported this request with the declaration of Assistant United States Attorney Catherine Swann, who describes the steps taken during the last six months, the tasks yet to be completed, and the possibility of informal settlement, which will require consultation with the Office of the Inspector General, Department of Health and Human Services. Decl. of Catherine Swann, ECF No. 25-1.

Congress contemplated a term of 60 days for the United States to determine whether it would intervene in a qui tam action. 31 U.S.C. § 3730(b)(2). If good cause is shown, a court may grant extensions of time. Id. § 3730(b)(3). "The good cause' requirement of the statute is, therefore, a substantive one, which the government can only satisfy by stating a convincing rationale for continuing the seal." Costa, 955 F.Supp. at 1190. The government has not satisfied this standard.

In its previous order, the court directed the government to provide dates and specific timelines, but the current extension request does not provide that level of detail. Although the declaration outlines additional tasks the government intends to undertake, it says only generally that "the company will need time to analyze" any additional information the government provides. ECF No. 25-1 ¶ 7. This level of generality is not a "convincing rationale" for continuing to grant the government's request and thus continuing the seal. U nited States ex rel. Martin v. Life Care Ctrs. of Am., Inc., 912 F.Supp.2d 618, 624 (E. D. Tenn. 2012) ("This practice of conducting one-sided discovery for months or years while the case is under seal was not contemplated by Congress and is not authorized by the [FCA].'") (quoting Costa, 955 F.Supp.2d at 1191) (alteration in original). In this case it appears the government intends to settle the case under seal while stalling with respect to intervening. It has not shown this is justified under the False Claims Act.

IT IS THEREFORE ORDERED that:

1. The government's fifth motion for an extension of time is denied; and
2. The case is unsealed.

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