Opinion
Civil Actiion No. H-00-1169
February 12, 2002
MEMORANDUM ORDER
Pending are numerous motions to dismiss, set forth in detail in the Order below, which were filed by several of the school districts that Plaintiff has named as defendants in this case, as well as Defendant Corpus Christi Consolidated Independent School District's Motion for More Definite Statement (Document No. 15), Defendant San Angelo Independent School District's Motion for More Definite Statement (Document No. 17), Defendant Texarkana Independent School District's Conditional Motion for More Definite Statement (Document No. 54), Defendant Texas Association of School Boards, Inc.'s Motion to Dismiss and Alternative Motion for More Definite Statement (Document No. 48), and Defendant National Heritage Insurance Company's Motion for Extension of Time to Answer or Otherwise to Plead (Document No. 43), Defendant Deloitte Touche LLP's Unopposed Motion for Extension of Time Within Which to Respond to Original Complaint (Document No. 59), and Defendant Deloitte Touche LLP's Unopposed Motion for Extension of Time to Respond to the Complaint (Document No. 199).
I. Defendant School Districts
Several of the defendant school districts argue that Plaintiff's action against them under the False Claims Act must be dismissed pursuant to the Fifth Circuit's decision in United States ex rel. Garibaldi v. Orleans Parish School Board, 244 F.3d 486, 495 (5th Cir. 2001), reh'g and reh'g en banc denied, 264 F.3d 1143 (5th Cir. 2001), cert. denied, 122 S.Ct. 808 (2002). Garibaldi held that local governmental entities such as school boards may not be held liable under the False Claims Act. 244 F.3d at 495. Plaintiff concedes that Garibaldi "under normal circumstances would mandate dismissal of all defendant school boards and other agencies of local government," but cites United States ex rel. Chandler v. Cook County Illinois, 2002 WL 75859 (7th Cir. 2002), as being in conflict withGaribaldi. Therefore, Plaintiff argues, this Court should further defer ruling on the pending motions or certify the question for interlocutory appeal. Notwithstanding the contrary opinion of the Seventh Circuit inChandler, this Court is obliged to follow the precedent of the Fifth Circuit in Garibaldi. Moreover, this Court has already deferred ruling at Plaintiff's request to await the Fifth Circuit's consideration of a motion for rehearing en banc of Garibaldi, and again to await the Supreme Court's consideration of a petition for writ of certiorari in Garibaldi. Rehearing en banc was denied and certiorari was denied. Garibaldi is the law in this Circuit. Accordingly, the pending motions to dismiss by the Defendant school boards will be granted, and Plaintiff's claims against those school boards and all other Defendant school boards that have moved, answered, or otherwise appeared herein, will be dismissed. See Bazrowx v. Scott, 136 F.3d 1053, 1054 (5th Cir. 1998) (district court may dismiss action on its own motion under Rule 12(b)(6) so long as procedure employed is fair). Plaintiff's claims against the remaining school district defendants sued, identified in Exhibit A to Plaintiff's Complaint, but that have not been served with summons and a copy of the complaint, unsealed more than a year ago, will be dismissed without prejudice. Fed.R.Civ.P. 4(m).
The majority of school districts listed in Exhibit A appear never to have been served with process. Even if they were served with process, Plaintiff's claims against them would be subject to dismissal under Garibaldi.
II. Defendant Texas Association of School Boards
Defendant Texas Association of School Boards, Inc. ("TASB") argues that the claims against it must be dismissed because (1) the False Claims Act's qui tam provision violates Article II of the United States Constitution; (2) Plaintiff failed to serve process in a timely manner as required by Fed.R.Civ.P. 4(m); and (3) Plaintiff has failed to plead fraud with particularity as required by Fed.R.Civ.P. 9(b). First,Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749, 757 (5th Cir. 2001), held that the qui tam provisions of the False Claims Act do not violate Article 11.
TASB filed its motion before the Fifth Circuit issued this en bano decision, which reversed a panel decision upon which TASB had relied.
Second, Fed.R.Civ.P. 4(m) requires that service of both a summons and a copy of the complaint be made on the opposing party within 120 days after filing the complaint. If the plaintiff provides good cause for extending the time within which service must be made, then the court must extend the time. See FED. R. Civ. P. 4(m); Lindsey v. United States R.R. Ret. Bd., 101 F.3d 444, 446 (5th Cir. 1996); Thompson v. Brown, 91 F.3d 20, 21 (5th Cir. 1996). The burden of establishing good cause for untimely service rests with the plaintiff, who must show "at least as much as would be required to show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance of the rules usually do not suffice." Lindsey, 101 F.3d at 446. If good cause is not provided, then the court may, in its discretion, either extend the time for service or dismiss the case without prejudice. See Thompson, 91 F.3d at 21.
Plaintiff filed this action under seal on April 5, 2000. The Complaint was unsealed by Order entered December 5, 2000, and Plaintiff was ordered to serve the defendants. Plaintiff effected service of the summons and a copy of the Complaint on TASB on April 10, 2001, 126 days after entry of the Order that all defendants be served, or less than one week after expiration of the 120 days allotted by Rule 4(m). TASB has not argued or demonstrated that it suffered any prejudice because Plaintiff did not effect service at least a week sooner. Given the circumstances of this case, the Court finds that sufficient justification exists to extend by a mere week the time for effecting service even if Plaintiff has not shown good cause. See Thompson, 91 F.3d at 21 (stating that the court has discretion to extend the time for service absent good cause). The time for service of process upon TASB is therefore enlarged until April 10, 2001, and service upon TASB was timely made.
Finally, TASB argues that Plaintiff failed to plead its action with particularity as required by Fed.R.Civ.P. 9(b). "The complaint in a False Claims Act suit must fulfill the requirements of Rule 9(b)." United States ex rel. Russell v. Epic Healthcare Mgmt. Group, 193 F.3d 304, 308 (5th Cir. 1999). Rule 9(b) requires that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." FED. R. Civ. P. 9(b). To satisfy Rule 9(b), a plaintiff must plead the time, place, and contents of the allegedly false representations, the identity of the speaker, and what the speaker obtained by making the representations. Epic Healthcare, 193 F.3d at 308; Williams v. WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1997). These requirements are not relaxed merely because the suit is brought under the False Claims Act. Epic Healthcare, 194 F.3d at 308-09.
Plaintiff has not pled the time, place, and contents of the allegedly false representations made by Defendant TASB, nor has he alleged who made the specific representations on which his False Claims Act action is based. Therefore, his False Claims Act suit against TASB will be dismissed unless Plaintiff, within twenty (20) days after the entry of this Order, files a more definite statement in the form of an amended complaint, in which he pleads his claim against TASB with sufficient particularity to comply with Rule 9(b).
III. Order
For the foregoing reasons, it is
ORDERED that Defendant Bryan Independent School District's Motion to Dismiss (Document No. 11), Defendant Spring Independent School District's Motion to Dismiss (Document No. 12), Defendants Abilene Independent School District, Harlingen Independent School District, Northside Independent School District, and Wall Independent School District's Motion to Dismiss (Document No. 13), Defendant Corpus Christi Consolidated Independent School District's Motion to Dismiss (Document No. 14), Defendant San Angelo Independent School District's Motion to Dismiss (Document No. 16), Defendant Austin Independent School District's Motion to Dismiss (Document No. 18), Defendant Ector County Independent School District's Motion to Dismiss (Document No. 19), Defendant Longview Independent School District's Motion to Dismiss (Document No. 20), Defendant San Marcos Consolidated Independent School District's Motion to Dismiss (Document No. 21), Defendant Arlington Independent School District's Motion to Dismiss (Document No. 22), Defendant Wichita Falls Independent School District's Motion to Dismiss (Document No. 23), Defendant Lubbock Independent School District's Motion to Dismiss (Document No. 24), Defendant North East Independent School District's Motion to Dismiss (Document No. 25), Defendant San Antonio Independent School District's Motion to Dismiss (Document No. 27), Defendant San Angelo Independent School District's Motion to Dismiss (Document No. 28), Defendant Harlingen Consolidated Independent School District's Motion to Dismiss (Document No. 29), Defendant Waco Independent School District's Motion to Dismiss (Document No. 30), Defendant Galveston Independent School District's Motion to Dismiss (Document No. 31), Defendant Alvin Independent School District's Motion to Dismiss (Document No. 32), Defendant Spring Branch Independent School District's Motion to Dismiss (Document No. 33), Defendant Sherman Independent School District's Motion to Dismiss (Document No. 36), Defendant Tyler Independent School District's Motion to Dismiss (Document No. 37), Defendant Texas City Independent School District's Motion to Dismiss (Document No. 38), Defendant Mission Consolidated Independent School District's Motion to Dismiss (Document No. 41), Defendant Fort Worth Independent School District's Motion to Dismiss (Document No. 42), Defendant Brownsville Independent School District's Motion to Dismiss (Document No. 44), Defendant Brownsville Independent School District's Motion to Dismiss (Document No. 46), Defendant Edinburg Consolidated Independent School District's Motion to Dismiss (Document No. 50), Defendant Killeen Independent School District's Motion to Dismiss (Document No. 51), Defendant Temple Independent School District's Motion to Dismiss (Document No. 52), Defendant Texarkana Independent School District's Motion to Dismiss (Document No. 53), Defendant Angleton Independent School District's Motion to Dismiss (Document No. 55), Amarillo Independent School District's Motion to Dismiss (Document No. 60), Defendant Dallas Independent School District's Motion to Dismiss (Document No. 120), Defendant Laredo Independent School District's Motion to Dismiss (Document No. 152), Defendant College Station Independent School District's Motion to Dismiss (Document No. 161), Defendant Marshall Independent School District's Motion to Dismiss (Document No. 170), Defendant Victoria Independent School District's Motion to Dismiss (Document No. 185), and Defendant El Paso Independent School District's Motion to Dismiss (Document No. 187) are all GRANTED, and Plaintiff's claims against each of the aforementioned Defendants are DISMISSED on the merits. It is further
ORDERED that Plaintiff's claims against all other Defendant school districts that have moved, answered, or otherwise appeared herein are likewise DISMISSED on the merits. It is further
ORDERED that Plaintiff's claims against all remaining school district defendants, identified in Exhibit A to Plaintiff's Complaint, and that have not been served with summons and a copy of the Complaint, are DISMISSED without prejudice. It is further
ORDERED that Defendant Corpus Christi Consolidated Independent School District's Motion for More Definite Statement (Document No. 15), Defendant San Angelo Independent School District's Motion for More Definite Statement (Document No. 17), and Defendant Texarkana Independent School District's Conditional Motion for More Definite Statement (Document No. 54) are all DENIED as MOOT in light of the foregoing. It is further
ORDERED that Defendant Texas Association of School Boards, Inc.'s Motion to Dismiss and Alternative Motion for More Definite Statement (Document No. 48) is DENIED as to dismissal, and is GRANTED to require a more definite statement. Accordingly, Plaintiff's claim against Texas Association of School Boards, Inc. will be dismissed unless Plaintiff, within twenty (20) days after the date of entry of this Order, files an amended complaint that sets forth his claims against TASB in compliance with Rule 9(b).
Defendants Texas Department of Health, Texas Education Agency, Texas Department of Human Services, and Texas Health and Human Services Commission have not filed Answers in this case. It appears from the record that these Defendants have not been served with summons and a copy of the Complaint, and this action as to these four Defendants is therefore susceptible to being DISMISSED without prejudice for want of prosecution. FED. R. Civ. P. 4(m). Accordingly, it is
ORDERED that Plaintiff, within ten (10) days after the entry of this Order, shall file a response to show good cause, if any exists, why this lawsuit should not be dismissed without prejudice against these Defendants. It is further
ORDERED that Defendant National Heritage Insurance Company's Motion for Extension of Time to Answer or Otherwise to Plead (Document No. 43), and Defendant Deloitte Touche LLP's Unopposed Motion for Extension of Time to Respond to the Complaint (Document No. 199) are both GRANTED, as follows: Defendants National Heritage Insurance Company and Deloitte Touche LLP will move, answer or otherwise plead no later than March 4, 2002.
This motion supersedes Deloitte Touche LLP's earlier motion at Document No. 59, which is DENIED as moot.
The Clerk will enter this Order and provide a correct copy to all counsel of record.