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Druding v. Care Alternatives

United States District Court, D. New Jersey

November 13, 2019

VICTORIA DRUDING, et al., Plaintiffs,


          STEVEN PENARO ALSTON & BIRD LLP WILLIAM H. JORDAN, pro hac vice JASON D. POPP, pro hac vice ALSTON & BIRD LLP On behalf of Defendant


          NOEL L. HILLMAN, U.S.D.J.

         This matter has come before the Court on Plaintiffs' Motion to Stay and to Review the Clerk's Order Granting in Part and Denying in Part Defendant Care Alternatives' Bill of Costs. (Docket Item 218.) For the reasons expressed below, Plaintiffs' Motion will be granted in part and denied in part.


         Plaintiffs in this case are four former employees of Defendant who initially brought this qui tam action on behalf of the United States on April 29, 2008. (Docket Item 1.) They alleged fraud related to the submission of false claims for hospice services, in violation of the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq. (See Docket Item 1.) After a stay, a terminated notice of call for dismissal, and several extensions, the United States declined intervention on July 21, 2015. (See Docket Items 5-9, 11, 15.)

         Also during that years-long period, Plaintiffs filed their First Amended Qui Tam Complaint, which added a second claim under the New Jersey False Claims Act, 2A:32C-1 et seq. (Docket Items 12.) On July 29, 2015, Defendant was served a redacted copy of that complaint. (Docket Item 16.) Defendant filed a Motion to Dismiss on September 25, 2015. (Docket Item 27.) The late Honorable Jerome B. Simandle granted that Motion in part and denied it in part on February 22, 2016. (Docket Item 48.) This left only the allegations of inappropriate patient admissions and re-certifications for hospice care in violation of the FCA. (Docket Item 49.)

         After a period of discovery disputes, Defendant filed both a second Motion to Dismiss (Docket Item 126) and a Motion for Summary Judgment (Docket Item 128) on September 8, 2017. Soon thereafter, the United States docketed a Statement of Interest. (Docket Item 153.) On September 26, 2018, the Court issued an Order denying the second Motion to Dismiss but granting summary judgment in Defendant's favor because Plaintiffs failed to present evidence of “objective falsehoods” or knowingly false certifications. (Docket Item 194.) Plaintiffs timely appealed that Order to the Third Circuit Court of Appeals on October 15, 2018. (Docket Item 196). That appeal is still pending.

         Meanwhile, Defendant filed a Motion for Attorney's Fees on October 29, 2018 (Docket Item 199), which the Court denied on January 28, 2019 (Docket Item 216). Defendant also filed a Motion for Bill of Costs on October 29, 2018. (Docket Item 198.) Plaintiffs opposed that Motion. (Docket Item 204.) The Clerk issued an Order on April 2, 2019, which granted Defendant's Motion for Bill of Costs in part and denied the same in part. (Docket Item 217.) Ultimately, the Clerk awarded Defendant $11, 039.35 in costs. (Id. at 18.) Plaintiffs then filed the present Motion to Stay and Review that Order on April 9, 2019. (Docket Item 218). Defendant opposed that Motion. (Docket Item 220.) Plaintiffs filed a timely reply. (Docket Item 221.)


         The Court exercises subject-matter jurisdiction over this action pursuant to 28 U.S.C. § 1331 because the claim arises under the laws of the United States. Specifically, Plaintiffs allege violations of the False Claims Act, 31 U.S.C. § 3729 et seq. The issue of the propriety of a stay aside, the Court retains jurisdiction to address the issues of costs although the Court's Order granting the Defendant's Motion for Summary Judgment is on appeal. See Mary Ann Pensiero v. Lingle, 847 F.2d 90, 97 (3d Cir. 1988) (“The district court retains jurisdiction [when an appeal has been filed], for example, to issue orders staying, modifying or granting injunctions, to direct the filing of supersedeas bonds, and to issue orders affecting the record on appeal, the granting of bail, and matters of a similar nature.”)


         Plaintiffs make several arguments in support of their Motion. First, Plaintiffs argue that Defendant's application to tax costs must be stayed pending the outcome of Plaintiffs' appeal of the Court's decision to grant summary judgment in favor of Defendant. Second, Plaintiffs argue that the FCA preempts Rule 54 of the Federal Rules of Civil Procedure and Rule 54.1 of the Local Civil Rules, thereby requiring the Court to vacate the Clerk's Order and deny Defendant's Motion for Bill of Costs. Third, Plaintiffs argue that Defendant failed to submit precise costs and therefore “waives its right to taxable costs.” (Docket Item 218-2, at 13-14.) The Court will address these issues in turn.

         A. Should the Court Stay Defendant's Motion for Bill of Costs Pending Plaintiffs' Appeal of the Court's Earlier Decision to Grant Summary Judgment in Favor of Defendant?

         The Court will first address Plaintiffs' argument that the Court should stay Defendant's Motion for Bill of Costs pending Plaintiffs' appeal of the Court's earlier decision to grant summary judgment in favor of Defendant.

         Whether a court will issue a stay is a question of judicial discretion that depends on the circumstances of the case before the court. See Nken v. Holder, 556 U.S. 418, 433-34 (2009). “The party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion.” Id. A court will be guided by four factors:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

Id. at 434 (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). The first two factors are “most critical” and must be met by the movant as a threshold matter before a court can grant a stay. See Reilly, 858 F.3d at 179 (quoting Nken, 556 U.S. at 434). Thus, the movant “must demonstrate that it can win on the merits (which requires a showing significantly better than negligible but not necessarily more likely than not) and that it is more likely than not to suffer irreparable harm in the absence of preliminary relief.” Id. Only once the movant has shown those two things may the court consider the remaining two factors and decide whether a stay is warranted. Id.

         “To establish irreparable harm, a stay movant ‘must demonstrate an injury that is neither remote nor speculative, but actual and imminent.' ‘The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm.'” In re. Revel Inc., 802 F.3d 558, 571 (3d Cir. 2015) (citations omitted) (first quoting Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 975 (2d Cir. 1989); and then quoting Sampson v. Murray, 415 U.S. 61, 90 (1974)). The Third Circuit has “long held that an injury measured in solely monetary terms cannot constitute irreparable harm.” Liberty Lincoln-Mercury, Inc. v. Ford Motor Co., 562 F.3d 553, 557 (3d Cir. 2009).

         In the case at hand, Plaintiffs argue that they will suffer irreparable harm if the Court does not stay Defendant's Motion. They only harm that Plaintiffs allege, however, is monetary: that each of the four plaintiffs would be required to pay approximately $3, 000 if the Court were to uphold the Clerk's Order. Because this harm is solely monetary, it cannot constitute irreparable harm under Third Circuit precedent.

         Regardless of Plaintiffs' likelihood of success in their appeal, their failure to show irreparable harm precludes this Court from staying Defendant's Motion for Bill of Costs. Therefore, the Court will not consider Plaintiffs' likelihood of success on appeal, and will ...

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