“If the district court dismisses a nonmeritorious claim before discovery has begun, unnecessary costs to the litigants and to the court system can be avoided.”
How later courts described this case
- “If the district court dismisses a nonmeritorious claim before discovery has begun, unnecessary costs to the litigants and to the court system can be avoided.”
Written by the judges who cited it.
The opinion
United States District Court
for the
Southern District of Florida
United States ex rel. Troy )
Olhausen, Plaintiff, )
)
Civil Action No. 21-23916-Civ-Scola
v. )
)
Arriva Medical, LLC, and others, )
Defendants. )
Order Granting Stay of Discovery
In this case, the Defendants move to stay discovery pending resolution of
their motion to dismiss. (Defs.’ Mot., ECF No. 51.) The Defendants argue, inter
alia, that the Plaintiff’s suit should be dismissed under the False Claims Act
(FCA)’s “first to file bar,” 31 U.S.C. § 3730(b)(5). (Id. at 4.) The Plaintiff opposes
the Defendants’ motion to stay discovery, arguing that the first-to-file bar is
inapplicable and staying discovery would be prejudicial and inefficient. (Pl.’s
Resp., ECF No. 53, at 3, 6-7.) There is no need for the Defendants to file a
reply. For the reasons below, the Court grants the Defendants’ motion (ECF
No. 51) and stays discovery pending resolution of the Defendants’ motion to
dismiss (ECF No. 50).
District courts are given “broad discretion over the management of pre-
trial activities, including discovery and scheduling.” Johnson v. Bd. of Regents
of Univ. of Ga., 263 F.3d 1234, 1269 (11th Cir. 2001). As a general rule,
preliminary motions which may likely dispose of an entire suit should be
resolved as soon as practicable to obviate avoidable discovery costs. See
Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1368 (11th Cir. 1997) (“If
the district court dismisses a nonmeritorious claim before discovery has begun,
unnecessary costs to the litigants and to the court system can be avoided.”).
However, “[a] request to stay discovery pending a resolution of a motion is
rarely appropriate unless resolution of the motion will dispose of the entire
case.” See McCabe v. Foley, 233 F.R.D. 683, 685 (M.D. Fla. 2006).
To evaluate whether there is a strong likelihood “the motion [to dismiss]
will be granted and entirely eliminate the need for such discovery,” the district
court must take a “preliminary peek” at its merits. Feldman v. Flood, 176
F.R.D. 651, 652–53 (M.D. Fla. 1997) (cleaned up). The court must also weigh
“the harm produced by a delay in discovery” against “the likely costs and
burdens of proceeding with discovery.” Id. at 652 (cleaned up). Both concerns
are important—while a defendant should not be forced to expend substantial
resources answering discovery when the plaintiff’s claims clearly lack merit, the
delay and protraction of discovery can also create case management and
scheduling problems—for both the Court and the litigants—and unfairly hold
up the prosecution of the case. See Chudasama, 123 F.3d at 1368-69;
Feldman, 176 F.R.D. at 652-53. Ultimately, the proponent of the stay, here the
Defendants, bears the burden of demonstrating a stay’s necessity,
appropriateness, and reasonableness. McCabe, 233 F.R.D. at 685.
The Court has taken a preliminary peek at the merits of the Defendants’
motion and finds that it is likely to be granted. The Court believes that
disposing of the Defendants’ motion will be straightforward, absent a
compelling showing by the Plaintiff in his opposition.
The FCA’s “first-to-file bar provides that when a person brings an action
no person other than the Government may intervene or bring a related action
based on the facts underlying the pending action.” Kellogg Brown & Root Srvs.,
Inc. v. United States ex rel. Carter, 575 U.S. 650, 662 (2015) (cleaned up). “[A]
qui tam suit under the FCA ceases to be ‘pending’ once it is dismissed.” Id. at
664.
The Plaintiff believes that his first case ceased to be “pending” when the
Court dismissed it without prejudice and closed the case. (Pl.’s Resp., at 3.)
Thus, according to the Plaintiff, the first-to-file bar does not apply when he filed
his second action. (Id.) The Court disagrees. The Plaintiff filed a notice of appeal
in his first case on February 2, 2021. See United States ex rel. Olhausen v.
Arriva Medical, LLC, et al., Case No. 19-cv-20190-Civ-Scola (S.D. Fla.), ECF No.
83. This case was filed nearly nine months after that notice of appeal and while
the appeal was still pending. (Compl., ECF No. 1.) So, the Plaintiff’s prior
case—which undoubtedly is based on the same facts as the one before the
Court here—was pending at the time of the Plaintiff’s filing of this case because
it was still on appeal. See Miccosukee Tribe of Indians of Fl. v. United States
Dept. of Treasury, Case No. 20-cv-23182-KMW, 2020 WL 9720369, at *3 (S.D.
Fla. Oct. 1, 2020) (Williams, J.) (“Courts have routinely applied the first-filed
rule when the dismissal of the earlier-filed case is pending on appeal.”
(collecting cases)). If the Court were to conclude otherwise, the first-to-file rule
would be potentially frustrated when an appeal is successful because a
successful appeal would result in two pending suits on the same subject
matter—the scenario that the FCA seeks to avoid. Indeed, the Plaintiff’s appeal
in his first-filed matter was partially successful and his first-filed case is thus
still pending. (See Mandate of Eleventh Circuit Court of Appeals, Case No. 19-
cv-20190-Civ-Scola, ECF No. 92.) This current case likely violates the FCA’s
first-to-file bar.
The Defendants have also shown that “the likely costs and burdens of
proceeding with discovery” outweigh “the harm produced by a delay in
discovery.” Feldman, 176 F.R.D. at 652. Notably, it has been the Plaintiff that
has in the past opposed the lifting of a stay in this case—a stay much longer
than the one the Defendants are currently proposing. (See, e.g., Pl.’s Resp. to
Def.’s Mot. to Lift Stay, ECF No. 39.) In that opposition, the Plaintiff himself
stated that “[a] mere delay in litigation does not establish undue prejudice” and
that “the stage of this litigation weighs in favor of a stay because this dispute is
at an early juncture with fact discovery yet to commence and no trial date set.”
(Id. at 8.) The Plaintiff thus specifically asked for the “holding pattern” it now
cites as a reason to deny the Defendants’ motion to stay. (Pl.’s Resp., at 7.) On
balance, the Court finds that an additional (and shorter) stay in discovery is
warranted given the likely dismissal of this case. The Defendants’ motion to
dismiss presents almost exclusively legal questions that are “likely to be
dispositive.” See Olfumei v. Exclusive Assoc. Mgmt., 2024 WL 710547 (11th Cir.
Feb. 21, 2024) (“When there is a pending motion that presents a purely legal
question and is likely to be dispositive, a district court may stay discovery
pending the resolution of the motion.” (cleaned up)).
The Court thus grants the motion (ECF No. 51.)
Done and ordered, in Miami,
Robert N. Scola, Jr.
United States District Judge