United States District Court, S.D. Illinois
UNITED STATES OF AMERICA, et al., ex rel. CIMZNHCA, LLC, Plaintiff,
UCB, INC., RXC ACQUISITION COMPANY d/b/a RX CROSSROADS, OMNICARE, INC., and CVS HEALTH CORPORATION, Defendants.
MEMORANDUM AND ORDER
M. YANDLE UNITED STATES DISTRICT JUDGE
matter is before the Court for consideration of the United
States of America's (the "Government") Motion
to Alter Judgment (Doc. 85). The Government, arguing the
Court misapplied the Ninth Circuit's decision in
United States ex rel. Sequoia Orange Co. v. Baird-Neece
Packing Corp., 151 F.3d 1139 (9th Cir. 1998), seeks
reconsideration of the Court's Order denying its Motion
to Dismiss (Doc. 83). Relator filed a Response in opposition
to the Motion (Doc. 86).
59(e) provides a basis for relief when a party challenges the
Court's application of the law to the facts of the case.
See Osterneck v. Ernst & Whinney, 489 U.S. 169,
174-76 (1989). A Rule 59(e) motion will be granted upon a
showing of either evidence in the record that clearly
establishes a manifest error of law or fact or newly
discovered evidence not previously available. Sigsworth
v. City of Aurora, Ill., 487 F.3d 506, 511-12 (7th Cir.
2007); Romo v. Gulf Stream Coach, Inc., 250 F.3d
1119, 1121 n.3 (7th Cir. 2001).
error” is not demonstrated merely by the disappointment
of the losing party. Sedrak v. Callahan, 987 F.Supp.
1063, 1069 (N.D. Ill. 1997). Rather, it is a court's
“wholesale disregard, misapplication, or failure to
recognize controlling precedent.” Id. The
Government contends this Court misapplied Sequoia
Orange by evaluating the Government's stated reasons
for dismissal rather than simply accepting them. This
argument, however, is premised on the standard adopted by the
D.C. Circuit Court in Swift v. United States, 318
F.3d 250, 252 (2003) - a standard this Court has rejected.
Sequoia Orange, courts do not blindly accept the
Government's stated reasons for dismissal, but instead,
conduct a judicial a limited judicial review to ensure the
Government's decision to dismiss is not fraudulent,
arbitrary or an abuse of power. The appropriate analysis
involves a determination of the existence of a valid
governmental purpose and a rational relationship between
dismissal and the accomplishment of that purpose. Sequoia
Orange Co., 151 F.3d at 1145.
the Government asserted that its move to dismiss was
rationally related to its legitimate interest in avoiding the
expenditure of substantial resources on a case it believes to
be without merit and contrary to important policy
prerogatives of its healthcare programs. The Government's
claim that it reached this conclusion after having conducted
an extensive investigation was belied by the parties'
briefing and the evidence adduced during the evidentiary
hearing, which showed that while the Government collectively
and generally investigated the eleven qui tam cases
filed by the Relator, its investigation into the claims
specifically asserted in this case was minimal and it
conducted no meaningful cost-benefit analysis.
the Government argues that this Court “…erred in
substituting its judgment for the government's in
determining how the government should apply its limited
resources, and in concluding that the government needed to
conduct further investigation before seeking to dismiss this
action to preserve those resources.” (Doc. 85, pp.2-3).
But this is an inaccurate depiction of the review the Court
actually conducted. The Court did not concern itself with how
the Government expends its resources. Rather, consistent with
Sequoia Orange, it tested the Government's
stated reasons for seeking dismissal against the facts and
evidence presented and concluded that the record simply did
not support a rational relationship between the
Government's identified cost and policy considerations
and dismissal of this qui tam action.
is also no newly discovered evidence supporting the
Government's Motion. The consideration of newly
discovered evidence requires a showing by the moving party
that it did not know and reasonably could not have discovered
with reasonable diligence the evidence proffered. See
Caisse Nationale de Credit Agricole v. CBI Industries,
Inc., 90 F.3d 1264, 1269 (7th Cir. 1996). Apparently
recognizing its failure to satisfy the Sequoia
Orange standard, the Government attached additional
exhibits to its Motion - two Declarations by Department of
Justice Attorneys and the Settlement Agreement from an
unrelated qui tam action against Novo Nordisk (Docs.
85-1, 85-2). The information contained in these exhibits was
obviously available to the Government prior to this
Court's ruling on the Motion to Dismiss. As such, it does
not constitute newly discovered evidence and may not be
properly considered at this juncture.
foregoing reasons, this Court is satisfied that it made no
errors of law or fact and that its ruling denying the
Government's Motion to Dismiss is correct. Accordingly,
the Motion to Alter Judgment (Doc. 85) is
DENIED in its entirety.