Opinion
CIVIL ACTION NO. 96-3505, SECTION "A".
September 12, 1997
RULING ON MOTIONS FOR DISMISSAL/SANCTIONS
Before the Court are two motions for sanctions against Louis R. Koerner, Jr. ("Koerner"), counsel for relator Michael Sampson in the captioned qui tam proceeding. Sampson's Complaint is the third in a series of three False Claims Act suits filed by Koerner involving alleged fraudulent medicare claims for reimbursement for ambulance transport of medically ineligible patients. All of the defendants, Crescent City E.M.S., Inc ("Crescent City") and the AMR defendants, including Medic One, American Medical Response, Inc., Jerry Varanay and Sue Birou, suggest that Koerner's conduct in signing, filing and advocating this third qui tam constitute flagrant violations of FRCP Rule 11. Movers characterize Sampson's qui tam Complaint as yet another "copy cat" suit which should be summarily dismissed.
Essentially, movers seek sanctions sufficient to curb Koerner's propensity for replicative filings under the False Claims and dismissal of this third qui tam suit as the law of the prior related qui tam cases filed by Koerner dictate. Movers note that the "so called Charity Bribery Scheme referred to in Sampson's suit is the same Charity Bribery Scheme alleged by Koerner in Civil Action 95-0979"A" [Koerner II] and such is a mere continuation of the alleged plot to illegally bill Medicare for improper ambulance transports of dialysis patients and other patients described by Boatright and Federal Recovery Services in Civil Action 91-4150"A" [Koerner I]." In short, movers argue convincingly that Sampson's Complaint (Koerner III), which is the third such complaint filed with this Court by Koerner, is "based upon" allegations publicly disclosed many years before Sampson began working for Crescent City EMS in 1993, and hence he is not the original source of the information upon which the suit is based and the Court lacks subject matter jurisdiction.
Movers' Joint Reply Brief, at pp. 4-5.
Koerner filed formal opposition arguing that FRCP Rule 11 is not applicable, and the only appropriate remedy regarding the conduct complained of in defendants' motions for sanctions is set forth in 31 U.S.C. § 3730(d)(4). In this vein, Koerner asserts that no motion to dismiss has been filed, and thus, any request for an award of attorneys' fees and expenses for filing a frivolous False Claims Act suit is premature.
Section 3730(d)(4) of the False Claims Act provides that "the court may award the defendant its reasonable attorneys' fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous. . . ."
At the outset the Court notes that it has discerned no authority which holds that pleadings signed, filed and advocated in False Claims Act cases are relieved from the dictates of FRCP Rule 11. Koerner has identified no such authority. Additionally, Koerner's suggestion that there is no motion to dismiss before this Court is ludicrous. Although defendants' motions are styled "Motion for Sanctions," the quite obvious thrust of the motions and memoranda in support is that dismissal of the instantqui tam Complaint is warranted on the very same bases that this Court dismissed two prior related qui tam proceedings, the second being almost identical to the this third qui tam Complaint. The very basis of defendants' request for imposition of sanctions is that the clear rulings and the law of prior related qui tam cases issued by this Court and by the Fifth Circuit command the conclusion that subject matter jurisdiction also does not exist in this third qui tam Complaint. Should this Court agree (and it does for the reasons explained hereinbelow), not only is dismissal of this third qui tam Complaint required, but also, FRCP Rule 11 sanctions against Koerner are warranted.
It is not disputed that Koerner participated not only as counsel of record but also as a party in the prior related qui tam cases to which the parties and this Court refers. He is no stranger to the law or the facts of the prior related qui tam proceedings. Defense counsel highlights that other than the shortened timeframe of the allegations of wrongdoing and the substitution of yet another relator in this third qui tam suit, it is identical to the second (i.e., CA 95-0979"A") which was filed by Koerner and dismissed by this Court for lack of subject matter jurisdiction.
The fact that the defendants' motions in this case were styled "Motion for Sanctions" instead of "Motion for Sanctions and Dismissal" is of no moment. Rule 1 of the Federal Rules of Civil Procedure provides that the rules "shall be construed and administered to secure the just, speedy, and inexpensive determination of every action." The tortuous trail swathed by Koerner in serially relating through himself and others allegations of false claims in triplicate has resulted in anything but a just, speedy, and inexpensive determination of the action.
Defendants' motions and supporting memoranda are more than sufficient to put the relator and his counsel on notice that the thrust of their motions is twofold, to wit: (1) dismissal of Sampson's case is warranted in light of the law of the two prior related qui tam proceedings which eviscerates any "good faith" belief that Sampson's case would not summarily suffer the same fate (i.e., dismissal for lack of subject matter jurisdiction; and concomitantly, (2) FRCP Rule 11 sanctions are warranted.
Only a myopic and disingenuous reading of the pleadings, defendants' motions and the law of prior related cases concerning these very same allegations of wrongdoing could induce an individual to persist in the prosecution of this "copycat" qui tam Complaint. This Court finds Koerner's persistence in opposing the instant Motion for Sanctions shocking. Rather than agreeing to dismiss Sampson's Complaint in light of this Court's and the Fifth Circuit's controlling and dispositive rulings in the prior related qui tam proceedings in which Koerner himself figured prominently as a counsel and a party, Koerner insists that the show must go on.
Koerner's opposition brief lends absolutely no assistance to the Court. Therein, Koerner attempts to obfuscate the issues and presents utterly preposterous arguments. It is quite apparent that Koerner has failed to retain or review the lessons taught by Federal Recovery Services case (Civil Action No. 91-4150"A" and Koerner ex rel v. Crescent City EMS, et al (Civil Action No. 95-0979"A"), Koerner I and Koerner II, respectively. Koerner's opposition memorandum telegraphs only a consummate study how to avoid the real issue — his sanctionable conduct in espousing precisely the same position previously rejected by this Court and the Fifth Circuit in connection with substantially similar if not identical allegations filed pursuant to the False Claims Act. The history of and rulings emanating from the prior related qui tam proceedings are discussed in some detail hereinbelow.
See, Discussion at pp. 14-17, infra.
See, Discussion at pp. 8-12, infra.
See, Discussion as pp. 6-12, infra.
In light of the striking similarities between the first, second and this third qui tam suits, all filed by Koerner, this Court is of the opinion that an evidentiary hearing is not warranted and the matter is deemed submitted for decision on the documents of record to date. This Court previously conducted an evidentiary hearing in connection with the defendants' motions to dismiss the almost identical Civil Action 95-0979 (Koerner II). But for the shortened timeframe and the substitution of Sampson as relator (which substitution this Court did not allow in Koerner II), Sampson's Complaint is identical to the second suit which was dismissed for lack of subject matter jurisdiction.
In addition to the foregoing, for the following reasons defendants motions are GRANTED and thus, both dismissal of the captioned matter and the imposition of FRCP Rule 11 sanctions against Koerner are warranted under the facts and the unmistakably applicable law.
Juxtaposition of the instant Complaint and the pleadings filed also by Koerner in prior related qui tam proceedings, in concert with a review of the rulings which the prior related proceedings evoked, lead only to the conclusion that FRCP Rule 11 sanctions are warranted in this case, including dismissal of the instant complaint. Koerner's bad faith in signing and serving the frivolous Complaint in the captioned case is patent and inexcusable in light of the law of prior related cases which presented this Court with precisely the same issues.
This Court has not been apprised of any mental or physical affliction affecting Koerner which could either account for and or excuse turning "a blind eye" to the applicable law penned in cases in which Koerner himself participated both as a party/relator and as counsel of record.
So that there is no mistake about the applicable law to which this Court refers, it repairs to the year 1990, when Koerner filed two state court suits on behalf of Priority E.M.S., Inc. against Crescent City and others in Louisiana state court, both alleging that Crescent City submitted fraudulent claims for reimbursement for ambulance services provided to individuals who were not medically eligible for those services. See, Priority E.M.S., Inc. v. Crescent City E.M.S. d/b/a Medic One, Inc., No. 90-19542 (La.Civ.Dist.Ct.), remedial writ denied, 607 So.2d 559 (La. 1992), cert. denied, 646 So.2d 380 (La. 1994);Priority E.M.S., Inc. v. Crescent City E.M.S., Inc. d/b/a Medic One, Inc. and Medic One, No. 64-668 (Jud.Dist.Ct.), remedial writ denied, 600 So.2d 660 (La. 1992). These were "public disclosures" and the Fifth Circuit so held.
Michael Boatright, owner of the competing ambulance service Priority E.M.S., Inc., discovered information which formed the basis of allegations of fraudulent claims for ambulance transport services against Crescent City and others, alerted the United States and the news media of his allegations, and filed two state court suits alleging unfair trade practices as well as several of the very same allegations set forth in the 1991 qui tam proceeding filed on behalf of Federal Recovery Services (Koerner I) with this Court [i.e., Civil Action No. 91-4150"A"].
Federal Recovery Services, Inc. v. United States, 72 F.3d 447, 451 (5th Cir. 1995) [Koerner I].
Thereafter, in 1991 and on behalf of Federal Recovery Services, Inc. ("FRS"), Koerner filed a False Claims Act suit (qui tam proceeding) in this Court against Crescent City, Varanay, and others based on substantially the same allegations made on behalf of Boatright by Koerner in the prior state court litigation. FRS was an entity incorporated by Koerner and others to serve as the relator in the first qui tam suit filed by Koerner with this Court under civil action number 91-4150"A" (Koerner I). In Koerner I, this Court determined that FRS, not an original source, had no standing to prosecute the qui tam suit which was based on previously and publicly disclosed allegations.
In connection with this third qui tam Complaint, Koerner contends that because Sampson allegedly witnessed specific acts of bribery while employed by Crescent City EMS, Inc. d/b/a Medic One that Sampson is an original source of the information in the subject third qui tam Complaint. The subject Complaint (Koerner III) refers to a Charity Bribery Scheme, which is the same Charity Bribery Scheme alleged by Koerner in Civil Action No. 95-0979 (Koerner II). As such, it is a continuation of the alleged plot to fraudulently charge Medicare for improper ambulance transports of dialysis and other patients described by Michael Boatright ("Boatright") and Federal Recovery Services ("FRS") in Civil Action No. 91-4150 (Koerner I).
It is important to note, as do movers in their original submissions and their joint reply brief, that all of the acts of bribery allegedly witnessed by Sampson occurred before the acquisition of Crescent City's ambulance related assets by the AMR defendants in September of 1994 and as such, the Complaint at issue fails to state a cause of action against the AMR defendants.
Defense counsel notes, and this Court recalls, that Sampson testified in the evidentiary hearing held in connection with Civil Action No. 95-0979, a qui tam action pursuant to the False Claims Act which is essentially identical to Sampson's. Therein, Sampson admitted that prior to retaining Koerner, he had discussions with Boatright about his other qui tam (Koerner I) and other suits alleging illegal ambulance transports charged to Medicare. The period of June of 1993 to August of 1994 which is covered by Sampson's Complaint (Koerner III) is overlapped by the time period covered by the FRS Complaint (Koerner I), which was the period from January of 1989 to September of 1994.
This Court's August 30th, 1993 Order and Reasons, issued in Koerner I and which consists of seventeen pages of findings of fact and conclusions of law, amply discusses and details the reasons for dismissing FRS's claims and denying its motion to amend to add Boatright as relator. This Court's order denying FRS' Motion to Amend was premised on the clear language of 31 U.S.C. § 3730(E)(4)(A), 3730(e) and 3740(b)(5), which prohibits intervention in a qui tam action by any person other than the Government. The Fifth Circuit also rejected Koerner's argument that Boatright could be substituted for FRS as relator and explained:
31 U.S.C. § 3730(e)(4)(A) limits the subject matter jurisdiction of courts adjudicating qui tam actions under the False Claims Act and provides that "[n]o court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil or administrative hearing, . . ., unless the action is brought by the Attorney General or the person bringing the action is an original source." Id.
In Federal Recovery Services, Inc. v. United States, 72 F.3d 447, 450 (5th Cir. 1995), the Fifth Circuit affirmed this Court's rulings in Koerner I, and held that: (1) the filings in the Louisiana state courts by Priority E.M.S. were "public disclosures" within the meaning of the statute, and that FRS'squi tam action (Koerner I) was "based on" these public disclosures." Id. at 450-51. The Fifth Circuit rejected Koerner's argument on behalf of FRS that its investigation unearthed additional instances of fraudulent conduct by Crescent City that were not part of the earlier state court litigation and explained: "`[A]n FCA qui tam action even partly based upon publicly disclosed allegations or transactions is nonetheless `based upon' such allegations or transactions.'"Id. at 451. The FRS court concluded that Federal Recovery Services could not avoid the jurisdictional bar simply by adding other claims that are substantively identical to those previously disclosed. Id.
An "original source" is immune from the jurisdictional bar of 31 U.S.C. § 3730(e). The False Claims Act defines an "original source" as "an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information." 31 U.S.C. § 3730(e)(4)(B).
In the FRS suit, the Fifth Circuit rejected Koerner's argument to the effect that FRS that even if it was not the original source of the information collected prior to its incorporation, it is the original source of that information obtained after its incorporation which significantly enhanced the value of the litigation to the United States. It held:
FRS was incorporated with the express purpose of pursuing qui tam litigation based on the information that others, either Priority E.M.S. or Boatright, had already obtained. Any information collected afterward was the product or outgrowth of the information that others had obtained. 452 F.3d at 453.
We do not take such a sanguine view of the federal courts' limited subject matter jurisdiction. That FRS sought to include Boatright as relator prior to the district court dismissing it from this suit is of no moment. . . . [R]egardless of when the district court actually determines it lacks subject matter jurisdiction over the original plaintiff, `Rule 15 . . . do[es] not allow a party to amend to create jurisdiction where none actually existed.' 72 F.3d at 453.
This Court's rulings in Koerner I (the FRS suit) were affirmed by the Fifth Circuit on appeal. See, Federal Recovery Services, Inc. v. United States, 72 F.3d 447, 450 and 452-53 (5th Cir. 1995).
In 1995, Koerner filed a second False Claims Act suit under civil action number 95-0979"A" (Koerner II) naming himself as relator and alleging that Crescent City, Varanay, Birou, AMR, Medic One and Bonnie Edwards submitted fraudulent medicare claims for reimbursement for the transport of patients medically ineligible for ambulance transport under medicare regulations. Therein, Koerner alleged that his claims were based on information derived from his own investigation and from Michael Sampson, a former Crescent City employee. Crescent City and the AMR defendants moved dismiss Koerner's second qui tam complaint on the basis of Koerner's lack of standing/lack of subject matter jurisdiction — that is, (1) the allegations of his second complaint (Koerner II) were previously and publicly disclosed; (2) Koerner was admittedly not the original source; and (3) the allegations of wrongdoing were previously publicly disclosed and mere outgrowth of the prior litigation. As was done in Federal Recovery Services (Koerner I), Koerner attempted to cure the jurisdictional defect in Koerner II by moving to substitute Sampson as relator instead of himself.
Here also, the Court notes that the period of from June of 1993 to August of 1994 covered by Sampson's Complaint (Koerner No. III) overlaps the period covered by Koerner's qui tam suit Civil Action No. 95-0979 (Koerner No. II).
In September of 1994, a subsidiary of Medic One, AMR, bought the assets of Crescent City (which formerly operated under the name of Medic One) and began operating an ambulance service in New Orleans under the name of AMR. AMR hired most of Crescent City's former employees, including Varanay and Birou, but did not hire Sampson who had been employed by Crescent City from June of 1993 up to August of 1994.
Regarding Koerner II, in its September 6, 1996 order this Court granted defendants' motion to dismiss and denied the Koerner's motion to substitute Sampson. In so doing, this Court relied on the law of prior related cases including the Fifth Circuit decision in Federal Recovery Services, 72 F.3d at 453.
Soon after this Court denied Koerner's Motion for Reconsideration of its order dismissing the second qui tam suit, Koerner filed the subject Complaint — his third qui tam proceeding filed with this Court, however this time naming Sampson as relator. With the exception of a more abbreviated time frame and the substitution of Sampson as relator, the pleadings in the second (Koerner's) suit and third (Sampson's) qui tam suit are identical. Most recently the Fifth Circuit has affirmed this court's judgment dismissing Koerner II for lack of subject matter jurisdiction.
Koerner did not serve the defendants with the third qui tam suit until May of 1997.
There is no question but that signing and serving the Complaint in the instant (Koerner's third) qui tam suit based upon the allegations of fraud involving transport of medicare patients which were based upon allegations made in the first and secondqui tam suits filed by Koerner constitute a flagrant violations of FRCP Rule 11. In the context of both civil action numbers 91-4150"A" (Koerner I) and 95-0979"A" (Koerner II), Koerner was instructed at length by this Court and the Fifth Circuit that the jurisdictional defect extant in both of those proceedings could not be cured by intervention, substitution or amendment.
See, Federal Recovery Services, Inc. v. United States, 72 F.3d 447, 450-53 (5th Cir. 1995); United States ex rel. Koerner v. Crescent City E.M.S., Inc., 946 F. Supp. 447, 450 (E.D. La. 1996).
The instant qui tam proceeding, Koerner III, is infected with the same fatal jurisdictional defects which resulted in the dismissal of Koerner I and II. Both judgments of dismissal in Koerner I and II were affirmed on appeal. The only reasonable expectation is that the same fate would befall Koerner III. Sampson's qui tam Complaint is identical in pertinent part to Koerner II.
Neither intervention by nor the substitution of another plaintiff in the place of the originally named qui tam plaintiff/relator is permissible. Similarly, filing yet anotherrelated proceeding with precisely the same allegations based information that was previously publicly disclosed, will not cure the jurisdictional defect. Such a result obtains whether the "new relator" adds a few or subtracts a few similar claims, such action does not make him an "original source."
A mathematical analogue is most apt in demonstrating the what's wrong with this picture. The variables include substitution of another party/plaintiff, intervention of another party/plaintiff, and subsequent related litigation instituted by another plaintiff based in part or derived from the prior publicly disclosed allegations. These three variables are assigned the factors A (FRS or Boatright), B (Koerner), C (Sampson), respectively. The factors A, B, and C are equivalent as they accomplish the same end — that is, the insertion of another plaintiff/relator. The factor Z is assigned to the constant — the constant in this case is qui tam actions which allege wrongdoing with some minor variations against the same defendants and within overlapping time frames. Given that A, B, and C, are the substantial equivalents, if Z + A ='s no jurisdiction (Koerner I), then both Z + B (Koerner II) and Z + C (Koerner III) also amount to no subject matter jurisdiction. All three of these scenarios were played out in the first and secondqui tam suits which Koerner filed. Koerner was told in no uncertain terms by this Court and the Fifth Circuit that "Z" was not viable in conjunction with either variable "A", "B" or "C". This third qui tam complaint is infected with the very same jurisdictional flaws which resulted in the early termination of both prior related qui tam suits in which Koerner participated as a party and as counsel of record.
The Fifth Circuit instructed Koerner in its Federal Recovery Services decision stating, inter alia: "FRS cannot avoid the jurisdictional bar simply by adding other claims that are substantively identical to those previously disclosed in the state court litigation." 72 F.3d at 451. The Fifth Circuit concluded its decision stating that neither FRS nor Boatright were proper parties to the qui tam litigation. Id.
In its ruling dismissing Koerner's qui tam suit (Koerner II), this Court noted that Sampson testified at the evidentiary hearing held in connection with the motion to dismiss and acknowledged that before contacting Koerner regarding the alleged fraudulent medicare conspiracy involving the illegal ambulance transport of patients, he contacted Boatright and discussed the allegations in the FRS suit (Koerner I). U.S. ex rel Koerner v. Crescent City E.M.S., Inc., 946 F. Supp. 447, 450 n. 12. (E.D. La. 1996).
In Koerner II, this Court concluded that Koerner merely reiterated the substance of the allegations made in Federal Recovery Services and simply added a few specific allegations regarding false claims in connection with the transport of certain Charity Hospital patients. Defense counsel aptly describes this matter, Sampson's suit (Koerner III), as "copy cat" litigation. It thus manifests the same fatal jurisdictional flaw that beset FRS, Boatright, and Koerner in Koerner I, as well as Koerner again along with Sampson in Koerner II.
Most recently on August 19, 1997 and via per curiam, the Fifth Circuit dismissed Koerner's appeal of this Court's judgment dismissing his second qui tam suit for lack of subject matter jurisdiction as frivolous and issued a sanctions warning. Presumably, Koerner also received a copy of the Fifth Circuit's dismissal order including the sanctions warning weeks before the hearing date noticed in connection with the instant motions for sanctions. In the wake of Koerner II, instead of voluntarily dismissing Koerner III with prejudice, Koerner persists with the subject complaint. It is based upon allegations previously publicly disclosed on several prior occasions. Koerner continues to advocate the erroneous position that the substitution of Sampson will cure the jurisdictional defects which beset Koerner II. In clear contravention of the law of the case, Koerner persists in bringing repetitive qui tam complaints with minor variations and swapping plaintiffs. Koerner III presents another whistleblower, also not an "original source," tooting the same horn.
FRCP Rule 11 unquestionably applies to the conduct of Koerner at issue. As previously alluded to, Koerner's arguments in opposition to the instant motions are specious. In footnote 4 of his opposition, Koerner twists and misconstrues the basis of this Court's dismissal of Koerner II. Contrary to Koerner's argument, this Court did not dismiss Koerner's second qui tam suit on the basis that Sampson was the "original source." Rather, this Court's dismissal of the second qui tam suit for lack of subject matter jurisdiction was predicated upon the following observations: (1) "Koerner admits that he is not the `original source' of the information regarding the alleged `false claims' made by defendants in connection with the transport of Charity Hospital patients;" (2) Koerner could not cure that jurisdictional defect by substituting anyone, including but not limited to Sampson; (3) the subject of the second qui tam suit was most apparently derived from and based on the earlier publicly disclosed allegations which resulted in FRS suit.
946 F.2d at 451. This Court also noted in its September 1996 order that "Koerner relates that he obtained information from Michael Sampson, Sr., a former employee of Medic One. . . ." 946 F. Supp. at 477.
In its September 1996 order dismissing Koerner's secondqui tam suit, this Court observed that:
Koerner [was] attempting the same plaintiff swapping maneuver that he, as counsel for FRS and Boatright, attempted in the earlier Federal Recovery Services qui tam litigation. Here too, Koerner recognizing that he is not the "original source" of the information upon which the allegations of the pending qui tam complaint are based, seeks to substitute Sampson instead of himself as relator. . . . 946 F. Supp at 449 n. 7.
In its September 1996 order, this Court held: "Essentially, Koerner repeats the substance of the allegations of the prior qui tam suit (i.e., that Crescent City and others defrauded the government by charging Medicare for non-medically necessary ambulance transportation) and simply adds a few specific allegations regarding false claims in connection with the transport of certain Charity Hospital patients. . . ." Id. at 450-51.
In Koerner II, there was no adjudication to the effect that Sampson was the "original source" of the allegations of wrongdoing in that suit. The quite obvious thrust of this Court's reported opinion dismissing Koerner's second qui tam suit for lack of subject matter jurisdiction was that Koerner was not the "original source," knew he was not the "original source," and yet filed the second qui tam suit naming himself as relator. Additionally and equally as important to this Court's ruling dismissing Koerner II, the allegations of wrongdoing which were the subject of Koerner II were derived in part and/or based upon the earlier information publicly disclosed via the FRS litigation, Koerner I.
Koerner cites Cooper v. Blue Cross and Blue Shield of Florida, Inc., 19 F.3d 562, 568 (11th Cir. 1994) for the proposition that a relator who acquires knowledge of wrongdoing through his own efforts, research, correspondence and independently of the publicly disclosed information is an "original source." However, the Cooper court noted that relator had requested an official investigation into defendant's wrongdoing before any hearing making public disclosure of any of the allegations.
Koerner's reliance on the Cooper case is misplaced. In the case at bar, Sampson did not apprise Government officials of any wrongdoing until September of 1996, that is six years after public disclosure via Boatright's state court litigation, five years after public disclosure via Koerner I, and some months after public disclosure of precisely the same allegations via Koerner II.
See, Koerner's Opposition to Motions for Sanctions, at p. 2.
As previously mentioned, Koerner's second qui tam and this, his third naming Sampson as relator, are almost identical. With minor variations, Sampson's complaint alleges precisely the same conspiracy publicly disclosed via Koerner I and II.
To make it perfectly clear, Koerner's complaint (i.e., his second qui tam suit) was dismissed for several reasons, including that the allegations were based in part upon and/or derived from his investigation in connection with and participation in theFRS case and Boatright's earlier state court suits. This thirdqui tam action also filed by Koerner, naming Sampson as relator, seeks to accomplish indirectly what this Court previously held could not be accomplished directly. By signing and serving the instant Complaint which is based on the same allegations of fraud which formed the basis of his two priorqui tam suits, Koerner has violated FRCP Rule 11.
This Court cannot countenance the sanctionable conduct complained of here. The Court finds unavailing Koerner's crimped and skewed view of the controlling cases in which he participated. Both Koerner I and II clearly command dismissal of the captioned matter for lack of subject matter jurisdiction.
As to the precise nature of sanctions, FRCP Rule 11(c)(2) provides:
A sanction imposed for violation of this rule shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated. Subject to the limitations in subparagraphs (A) and (B), the sanction may consist of, or include, directives of an non-monetary nature, an order to pay a penalty into Court or, if imposed on motion and warranted for effective deterrents, an order directing payment to the movant of some or all of the reasonable attorneys' fees and other expenses incurred as a direct result of the violation.
An award of reasonable attorneys' fees and other expenses incurred in defending against the subject frivolous complaint is unquestionably warranted. However, neither attorneys' fees imposed by this Court as sanctions in Koerner II nor the sanctions warning issued by the Fifth Circuit in Koerner II served to deter Koerner's prosecution of the third such suit. Thus, it is clear that a monetary penalty, by itself, will not serve to deter Koerner from persisting in this course of conduct. Accordingly, in addition to awarding reasonable attorneys' fees and expenses, the circumstances also warrant a directive from this Court which might serve to deter any such future frivolous filings. Koerner shall along with his filing of any future complaint apprise the judges of any district court to which any such case is allotted of this Court's ruling on the motions for sanctions in Koerner II and III. This Court does pause to consider whether such a directive will in fact serve to deter such future conduct when the Fifth Circuit's sanctions warning issued in connection with Koerner II (a pointed directive) most apparently went completely ignored. The Court will certainly consider a further sanction in the event that Koerner persists in this course of action.
Accordingly and for all of the above and foregoing reasons,
IT IS ORDERED that defendants' motions for sanctions are GRANTED.
IT IS FURTHER ORDERED that the counsel for the defendants' shall file their applications for attorneys' fees and expenses with this Court on or before October 3, 1997.
IT IS FURTHER ORDERED that Louis R. Koerner, Jr. shall have the opportunity to traverse and file any response to defense counsel's attorneys' fees application he may deem appropriate but in no event shall any response be filed later than October 17, 1997.
IT IS FURTHER ORDERED that this case is DISMISSED for LACK OF SUBJECT MATTER JURISDICTION.
The Clerk of Court is directed to enter judgment dismissing the case.