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United States ex rel. Thomas v. Duke University

United States District Court, W.D. Virginia, Danville Division

March 28, 2017

DUKE UNIVERSITY, et al., Defendants.


          Hon. Jackson L. Kiser Senior United States District Judge

         Before me is Defendants Duke University (“Duke”), Duke University Health Systems, Inc. (“DUHS”), and Dr. William M. Foster's Motion to Transfer.[1] [ECF No. 68]. The issue was fully briefed, and the United States filed a Statement of Interest in opposition of the Motion. [ECF No. 94]. I held oral arguments on March 21, 2017. For the reasons stated below, I will grant the Motion to Transfer this case to the United States District Court for the Middle District of North Carolina.


         Relator Joseph M. Thomas initiated this qui tam action on May 17, 2013, alleging that Defendants violated the False Claims Act (“FCA”). 31 U.S.C. § 3729 et seq; (see generally Compl., May 17, 2013 [ECF No. 1].) On November 11, 2015, Relator filed an Amended Complaint which remained under seal while the U.S. Attorney's Office for the Western District of Virginia (“USAO-WDVA”) investigated and decided whether to intervene. (Am. Compl., Nov. 13, 2015 [ECF No. 25] (hereinafter “the Complaint”).) Relator's suit alleges that Defendants knowingly falsified medical research data in order to obtain federal grants from various agencies, including the Environmental Protection Agency and National Institutes of Health. (See Am. Compl. ¶¶ 346-402.)

         While none of the alleged events took place in the Western District of Virginia (“the WDVA"), the FCA has a broad venue provision which allows venue in “any judicial district in which . . . any one defendant can be found, resides, [or] transacts business . . . .” 31 U.S.C. § 3732(a) (emphasis added). Relator alleges that “Duke University solicited and enrolled students from the [WDVA], advertised in the [WDVA], [and] participated in academic activities in the [WDVA] . . . . Likewise, DUHS transacted business at its Cardiovascular Surgery of Danville clinic in Danville, VA.” (Am. Compl. ¶ 12.) DUHS is a subsidiary of Duke. (Id. at ¶ 20.)

         At the time of the alleged events, Relator was a Laboratory Research Analyst in the Pulmonary, Asthma and Critical Care Division of Duke University Health Systems (“the Pulmonary Division”). (Am. Compl. ¶ 18.) Relator resides in North Carolina. (Id. at ¶ 16). Appearing pro se, Defendant Erin Potts-Kant resides in Durham, but she has not joined her co-Defendants' Motion.[2] Potts-Kant was a Clinical Research Coordinator in the Pulmonary Division, (id. at ¶ 23), and is charged with directly manipulating the research in question. (Id. at ¶ 156.) Defendant William M. Foster, who also resides in the MDNC, was a Research Professor of Medicine in the Pulmonary Division and was Potts-Kant's direct supervisor. (Id. at ¶ 24-25.)

         On August 8, 2016, nearly three and a half years after Relator filed his Complaint, the United States notified this Court that it would not exercise its right to intervene in this suit as provided by 31 U.S.C. § 3730(b)(4). (Notice, Aug. 8, 2016 [ECF No. 35]). Accordingly, I entered an Order unsealing the Complaint and allowing Relator to proceed on behalf of the United States. (Order, Aug. 9, 2016 [ECF No. 36].) Duke, DUHS, and William Foster, filed a motion to transfer this case to the Middle District of North Carolina (“the MDNC”) on January 4, 2017 [ECF No. 68]. Relator filed a response, opposing the Motion, [ECF No. 92], and Defendants filed their Reply on February 24, 2017. [ECF No. 102]. The United States filed a Statement of Interest in opposition of Defendants' Motion. (Statement of Interest, Feb. 10, 2017 [ECF No. 94].)


         28 U.S.C. § 1404(a) states that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . .” It is well settled that “[d]ecisions whether to transfer a case pursuant to 28 U.S.C. § 1404(a) are committed to the discretion of the transferring judge.” Brock v. Entre Computer Ctrs., Inc., 933 F.2d 1253, 1257 (4th Cir. 1991). In determining whether transfer is proper, a court should consider four factors: “(1) the weight accorded to plaintiff's choice of venue; (2) witness convenience and access; (3) convenience of the parties; and (4) the interest of justice.” Trustees of the Plumbers & Pipefitters Nat'l Pension Fund v. Plumbing Servs., Inc., 791 F.3d 436, 444 (4th Cir. 2015). The movant has the burden of showing that a transfer is proper under the circumstances. Gen. Creation LLC v. Leap Frog Enterprises, Inc., 192 F.Supp.2d 503, 504 (W.D. Va. 2002). Transfer will not be granted if it would only shift the inconvenience to the non-moving party. JTH Tax, Inc. v. Lee, 482 F.Supp.2d 731, 738 (E.D. Va. 2007). The plaintiff's choice of forum should rarely be disturbed unless the balance is strongly in favor of the defendant. Alpharma, Inc. v. Purdue Pharma L.P., 634 F.Supp.2d 626, 632 (W.D. Va. 2009).


         A. The United States' Status as a Party

         Before turning to the merits of Defendants' Motion, I want to address the United States' position in this litigation. The Government filed a Statement of Interest opposing the Motion to Transfer. They have a statutory right to do so. 28 U.S.C. § 517 (“The Solicitor General, or any officer of the Department of Justice, may be sent by the Attorney General to any State or district in the United States to attend to the interests of the United States in a suit pending in a court of the United States. . . .”) At oral arguments, however, I rejected the Government's request to argue against the Motion to Transfer. I did so because the United States, by virtue of declining to intervene, is not a party to this litigation. While the United States remains the real party in interest, its ability to direct the course of the litigation is highly limited. See United States v. Whyte, No. 4:12-cr-00021-002, 2017 WL 377949, at *4 (W.D. Va . Jan. 26, 2017) (“[I]f the government elects not to intervene [in an FCA case], it retains no right to control the litigation in any meaningful way. . . . It is entitled to receive pleadings and deposition transcripts, but no more.”) (citing 31 U.S.C. § 3730(c)(3)). At oral arguments, the Government asserted that it had issued a “no decision” in terms of intervention, and that a request to intervene was in the process of being approved by “Main Justice” in Washington, D.C.

         The statute could not be clearer: the Government is either in or out. See 31 U.S.C. § 3730(b)(4) (giving the Government the option to either “proceed with the action” or “notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.”). There is no middle-ground. The Government declined to intervene, and while it may change its decision and seek to intervene at a later date, it cannot do so as a matter of right. Id. at § 3730(c)(3) (requiring the Government to seek leave to intervene once it has initially declined to do so). As a result, the United States' preferred forum has no bearing on this Court's decision, and even if it did, the United States' argument is unconvincing.

         The United States argues that the U.S. Attorney's Office for the Western District of Virginia (“USAO-WDVA”) has spent years investigating this case, and if this case was transferred, new prosecutors in the MDNC would need to start “from scratch.” This conflicts with Defendants' assertions that attorneys, agents, and investigators for USAO-WDVA have interviewed witnesses all over the country, and that the bulk of the witness interviews took place in Durham. The United States' argument that it would have to restart its investigation if the Motion is granted seems exaggerated. U.S. Attorney's Offices regularly coordinate on matters across jurisdictional lines. Given that attorneys from USAO-WDVA reportedly went to Durham multiple times to conduct witness interviews and participate in a settlement conference, it would be a minimal burden to litigate in North Carolina. The local rules of the MDNC would not bar an AUSA from the WDVA to appear before an MDNC court. S ...

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