Summary
disallowing an injunction because the defendants might transfer assets and referencing the Uniform Fraudulent Transfer Act as a legal remedy that gravitates strongly against irreparable injury
Summary of this case from Nail v. ShippOpinion
CASE NO. 8:11-cv-1303-T-23TBM
01-23-2018
UNITED STATES and STATE OF FLORIDA ex rel. ANGELA RUCKH, Plaintiffs, v. SALUS REHABILITATION, LLC, et al., Defendants.
ORDER
After a six-week trial, a jury found $115 million in damages, which yielded $347 million in judgments for the United States and the State of Florida. For several reasons (including the relator's failure to adduce competent and sufficient proof of materiality and scienter), a January 11, 2018 order (Doc. 468) grants the defendants' renewed motion for judgment as a matter of law, vacates the judgments for the governments, and directs the entry of judgment for the defendants. Despite the defendants' success in this action, the relator moves (Doc. 470) to enjoin the defendants' conducting a transaction outside the ordinary course of business until the Eleventh Circuit decides the relator's forthcoming appeal.
The first paragraph of the relator's motion brazenly announces the fallacy on which the motion relies: An injunction pending appeal "is crucial for protecting Relator's, the United States', and the State of Florida's interests." (Doc. 470 at 2) In fact, vacating the judgments extinguished the governments' interest in the defendants' assets. No longer judgment creditors, the United States and the State of Florida enjoy no right to collect money from the defendants and enjoy no right to interfere with the defendants' use or disposition of the defendants' assets (that is, no rights stemming from this qui tam action). Grupo Mexicano de Desarollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999), which holds that equity prohibits an injunction intended to increase the likelihood that a non-judgment creditor can collect on a future money judgment, forecloses the relator's request.
Unlike in this action, the plaintiff in Grupo Mexicano held an interest in the defendant's assets.
Additionally, equity permits an injunction only if the movant lacks an "adequate remedy at law." Rosen v. Cascade Intern., Inc., 21 F.3d 1520, 1527 (11th Cir. 1994). The relator contends that the defendants might transfer assets to evade the now-vacated judgments, but the relator says nothing about the Uniform Fraudulent Transfer Act, a legal remedy that permits voiding a false or fraudulent transfer. See, e.g., Regions Bank v. Kaplan, 2017 WL 3446914 at *3 (M.D. Fla. Aug. 11, 2017) ("[The plaintiff] argues that the possibility that the defendants might transfer assets to hinder the ability of [the plaintiff] to collect a future money judgment warrants a preliminary injunction, but [the Uniform Fraudulent Transfer Act] affords [the plaintiff] a legal remedy that gravitates strongly against the prospect of an irreparable injury.").
Even if equity countenances the requested relief, none of the injunction factors favors the relator. For at least the reasons explained in the defendants' response (Doc. 472), the relator's appeal likely will not succeed (and almost certainly will not restore the lion's share of the now-vacated judgments, $331 million of which depends on a "corporate scheme," the existence of which is wholly unsupported in the evidence).
Also, the now-vacated judgments depend on "diciest possible form of sparse and attenuated statistical sampling." (Doc. 468 at 18)
Also, the relator fails to show that the governments likely will suffer an irreparable injury absent an injunction. Without citing record evidence, the relator asserts that the defendants "will be able to transfer" assets to another company. In effect, the relator relies on the possibility that the defendants might transfer assets to hinder collection (a contingency that arises only if the Eleventh Circuit reverses the January 11 order, finds a new trial unwarranted, and reinstates the now-vacated judgments). But the Supreme Court routinely cautions against an injunction based on the "possibility" of an irreparable injury; the movant must show that an irreparable injury is "likely." Winter v. Nat'l Res. Def. Council, 555 U.S. 7, 22 (2008) ("Our frequently reiterated standard requires plaintiffs seeking preliminary relief to demonstrate that irreparable injury is likely in the absence of an injunction.") (italics original).
Although Winter involves a preliminary injunction, the relator correctly argues that the "same legal standard" governs a preliminary injunction and an injunction pending appeal. (Doc. 470 at 3) --------
Additionally, the relator argues that the balance of the equities favors an injunction and that the requested injunction "imposes no significant burdens on [the] [d]efendants." (Doc. 470 at 8) But the requested injunction inflicts a disabling injury on the defendants by restraining for at least a year the defendants' freedom to pursue and to advance the defendants' principal business: providing critical and life-sustaining care to several thousand frail and mostly elderly patients throughout Florida.
Finally, the public's interest disfavors the requested injunction, which threatens to impair the operation of several dozen skilled-nursing facilities that provide continuing care to a mass of vulnerable patients in Florida.
CONCLUSION
Because equity disfavors the requested injunction in this instance, because the relator fails to show that the appeal likely will succeed, because the relator fails to show that the governments likely will suffer an irreparable injury, because the balance of the equities favors denying the requested injunction, and because the public's interest favors the unimpeded operation of the skilled-nursing facilities, the motion (Doc. 470) to enjoin the defendants' conducting a transaction outside the ordinary course of business during the pendency of the appeal is DENIED.
ORDERED in Tampa, Florida, on January 23, 2018.
/s/_________
STEVEN D. MERRYDAY
UNITED STATES DISTRICT JUDGE