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Decisions in Civil, Bankruptcy, and Class Action Suits

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By FindLaw Staff on May 19, 2010 4:35 PM

In US v. Apria Healthcare Group Inc., No. 06-1619, the Seventh Circuit faced a challenge to the district court's dismissal of plaintiff's qui tam action against a healthcare company for fraudulently billing the Medicare and Medicaid programs for medical devices and related services that were unnecessary or should have been recorded under less expensive reimbursement codes with prejudice based on two other similar qui tam actions pending against the same defendant.  In vacating the district court's dismissal, the court held that, although plaintiff's complaint falls within section 3730(b)(5), plaintiff is entitled to file a new qui tam complaint as section 3730(b)(5) applies only while the initial complaint is pending, and here, the two settled cases are no longer pending. 

In re S. Beach Sec., Inc., No.09-3079, concerned a challenge to the district court's affirmance of bankruptcy judge's refusal to confirm the debtor's reorganization plan and dismissal of the bankruptcy proceeding in Chapter 11 proceedings.  First, in affirming the judgment of the district court, the court rejected debtor's argument that the U.S. Trustee lacks standing because he is not a party in interest.  Next, the court held that the reorganization plan had not been proposed in good faith as the debtor's disclosure statement suggests no purpose other than to beat taxes.  Furthermore, the court held that the debtors and the lawyers that appeared for them in court are order to show cause why they should not be sanctioned for their conduct in their frivolous appeal. 

In re Burlington N. Santa Fe Ry. Co., No. 09-8023, concerned a challenge to the judgment of the district court remanding the case to state court following plaintiffs' amendment of the complaint to omit the class allegations in a suit against defendants alleging that their failure to inspect and maintain a railroad trestle caused the town to flood damaging their property.  However, because jurisdiction under CAFA is secure even though after removal the plaintiffs amended their complaint to eliminate the class allegations, and because the well-established general rule is that jurisdiction is determined at the time of removal, and nothing filed after removal affects jurisdiction, judgment of the district court is vacated and remanded. 

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