Opinion
Cause No. 1:03-CV-1307-SEB-JPG.
December 15, 2004
ENTRY ON DEFENDANT'S MOTION TO DISMISS OR IN THE ALTERNATIVE TO TRANSFER
This is a qui tam action, brought by Kevin Miller in the name of the United States of America, pursuant to the False Claims Act, 31 U.S.C. § 3729, et seq. ("FCA"). The suit alleges that Defendant, Supportkids, Inc. d/b/a Child Support Enforcement ("CSE"), has knowingly filed with various agencies of the United States government false "order/notices" to withhold income for payment of child support from the paychecks of employees. Prior to filing this qui tam action, Miller sued CSE on his own behalf, after CSE had submitted an order/notice to the Department of Financing and Accounting Services (military payroll office) directing it to withhold certain amounts from his salary. That lawsuit, which began in the United States District Court for the District of Maryland but was transferred to and concluded in the Western District of Texas, was resolved through a settlement. Despite the earlier settlement, Miller has renewed his fight against CSE, this time in the name of the United States, seeking injunctive relief, declaratory relief, civil penalties and damages sustained by the government in connection with each order/notice filed by CSE with a government agency seeking payment of a false or fraudulent claim.
In a qui tam action, a private citizen brings an action on behalf of the government after alerting the government to the cause of action and allowing it to decide whether or not it wishes to assume responsibility for prosecuting the claim. As relator in a qui tam action under the False Claims Act, Miller is entitled to 25% to 30% of the proceeds of any successful prosecution, along with his costs and attorney fees. 31 U.S.C. § 3730(d)(2).
CSE takes issue with Miller's renewed litigation efforts. It claims that Miller waived all the claims asserted in this action when he entered into the settlement with CSE to resolve the earlier litigation and that the doctrine of res judicata bars this lawsuit. CSE has filed a motion to dismiss the Complaint for failure to state a claim and improper venue or, in the alternative, to transfer the case to the Western District of Texas, where the earlier case was litigated. Miller contends that res judicata does not apply because the United States is the real party in interest in this action and that he had no ability to waive any of the government's claims under the FCA. He also opposes any dismissal on venue grounds or transfer of venue to the Western District of Texas because the settlement agreement is inapplicable and there is no compelling convenience argument for placing the case in that jurisdiction.
In its Reply Brief, CSE raises for the first time the issue of subject matter jurisdiction. While it correctly maintains that subject matter jurisdiction may not be waived and may be addressed at any stage of the litigation, its Motion to Dismiss did not state that dismissal was sought on the basis of a lack of subject matter jurisdiction and it is entirely inappropriate for CSE to raise the issue in a reply brief. Subject matter jurisdiction could be appropriately raised in a separate motion, but we will not address the issue in the context of the pending motion which makes no mention of it.
Venue
We look first to the issue of proper venue, for if this case belongs elsewhere, we must not usurp what will ultimately be another court's authority to examine the issue of whether the previous litigation impacts Plaintiff's entitlement to relief in this case. CSE argues that the instant lawsuit should be dismissed because the prior settlement agreement provided that "jurisdiction and venue of any action to interpret or enforce this Agreement or any provision thereof shall be in Travis County, Texas." We note however, that this action has not been fashioned as one to enforce or interpret that settlement agreement. While the scope of that agreement and the nature of the claims released may well come to effect this case, we are reluctant to dismiss it based solely on the choice of venue provision contained in the earlier settlement agreement, especially when it is not clear from the face of the Complaint that this action seeks enforcement or an interpretation of that document.
We are not as constrained with regard to transferring venue. We have broad discretion in assessing the best interests of justice when fixing appropriate venue under 28 U.S.C. § 1404. Cote v. Wadel, 796 F.2d 981, 985 (7th Cir. 1986). Here, the only connection between this district and the circumstances of this litigation is that Plaintiff now resides here and has received correspondence from CSE while living here. CSE is a Texas corporation. Plaintiff alleges statutory violations resulting from claims presented by CSE to various government agencies presumably all over the country. Though witnesses theoretically could be drawn from many places around the country, it is likely that several will be officers or employees of CSE, whose office is in Texas, and further that discovery would delve into the files and records held by CSE at its Texas office. The previous litigation was conducted in the Western District of Texas, which includes Travis County, the venue selected for resolution of disputes regarding the earlier settlement between CSE and Miller. The earlier settlement provides that it is to be interpreted pursuant to Texas law (law which would be more familiar to a federal district court in Texas), and we foresee that such an interpretation will be virtually inescapable. In short, we find compelling reasons to transfer venue to the Western District of Texas.
Conclusion
CSE's motion is well taken insofar as it contends that the interests of justice will best be served by setting venue over this matter in the Western District of Texas. Accordingly, Defendant's (Alternative) Motion to Transfer is GRANTED and this case shall be TRANSFERRED to the United States District court for the Western District of Texas.