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U.S. EX REL. MARION v. HEALD COLLEGE, LLC, 5:12-cv-02067-PSG. (2015)

Court: District Court, N.D. California Number: infdco20151005848 Visitors: 1
Filed: Sep. 30, 2015
Latest Update: Sep. 30, 2015
Summary: ORDER GRANTING MOTION TO DISMISS SECOND AMENDED COMPLAINT (Re: Docket No. 86) PAUL S. GREWAL , Magistrate Judge . Acting on behalf of the United States, Plaintiff Carolina Marion brought this suit under the False Claims Act against Defendants Heald College, LLC, Corinthian Colleges, Inc. and four Heald administrators—Eeva Deshon, Barbara Gordon, Terry Rawls and Karen Rose (the "Individual Defendants"). 1 The court dismissed Marion's First Amended Complaint because its allegations were not
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ORDER GRANTING MOTION TO DISMISS SECOND AMENDED COMPLAINT (Re: Docket No. 86)

Acting on behalf of the United States, Plaintiff Carolina Marion brought this suit under the False Claims Act against Defendants Heald College, LLC, Corinthian Colleges, Inc. and four Heald administrators—Eeva Deshon, Barbara Gordon, Terry Rawls and Karen Rose (the "Individual Defendants").1 The court dismissed Marion's First Amended Complaint because its allegations were not materially different from those in prior suits.2 In response, Marion amended her complaint to add a new relator—Christi Hays, the relator from one of these earlier suits.3

Once again, the Individual Defendants move to dismiss. Once again, the court GRANTS the Individual Defendants' motion. It does so for the same reason: the unavoidable plain language of the Act's first-to-file rule.4

"When a person brings an action under [the False Claims Act], no person other than the Government may intervene or bring a related action based on the facts underlying the pending action."5 This rule creates a jurisdictional bar on successive related complaints under the Act.6 "[T]he facts underlying the later-filed compliant need not be `identical' to those underlying the earlier-filed complaint for the later complaint to be barred."7 All that is required is that the two complaints share "the same material elements of fraud."8

In granting the previous motion to dismiss, the court noted that Hays' case was pending, along with several others,9 even though by then they already had been stayed due to Corinthian's bankruptcy. Applying the above standard, the court held that Marion's previous complaint did not allege any material facts that were not alleged in the earlier cases.10 Specifically, Marion's allegations of enrollment fraud were not materially different from Hays' allegations of attendance fraud.11

Adding Hays and her allegations to the complaint does not change this analysis Hays' case is still pending. Marion has added no new allegations other than those that Hays already brought in her own case,12 so the court has already found that the complaints are related. In this situation Congress has commanded that "no perso other than the Government"—including Marion and Hays—"may intervene or bring a related action."13 The Ninth Circuit has held that this provision's "plain language does not contain exceptions."14 Inexorably, the first-to-file rule still applies, and the court still has no subject matter jurisdiction over the Second Amended Complaint.

Dismissal without leave to amend is only appropriate if it is clean that the complaint could not be saved by amendment such as after a plaintiff's "repeated failure to cure deficiencies by amendments previously allowed."15 Because the court previously provided Marion with leave to amend the identified flaw, but it remains in her Second Amended Complaint, the court is persuaded that additional amendment would be futile. Marion and Hays also did not argue for leave to amend in their opposition to the instant motion. Leave the amend is therefore DENIED. The court will issue judgment in Defendants' favor.

SO ORDERED.

FootNotes


1. See Docket No. 82 at ¶¶ 11-25.
2. See Docket No. 81.
3. See Docket No. 82.
4. See 31 U.S.C. § 3730(b)(5).
5. Id.
6. See United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1130 (9th Cir. 2015) (en banc) (citing United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1186-87 (9th Cir. 2001)).
7. Id. (quoting Lujan, 243 F.3d at 1183).
8. Lujan, 243 F.3d at 1189.
9. See Docket No. 81 at 3-4.
10. See id. at 5.
11. See id. at 5-8. Marion and Hays urge the court to "reconsider" this finding in light of Hartpence. Docket No. 88 at 6-7. This request is procedurally improper under Civ. L.R. 7-9. It is also unwarranted on the merits. Hartpence was issued before the court's previous order, and it did not change the law governing the first-to-file rule. See Hartpence, 792 F.3d at 1131 (citing Lujan extensively to explain the first-to-file rule and reversing a district court's application of that rule).
12. See Docket No. 53; Docket No. 57-1, Ex. 2; Docket No. 82.
13. 31 U.S.c. § 3730(b)(5).
14. Lujan, 243 F.3d at 1187.
15. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
Source:  Leagle

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