United States District Court, D. South Carolina, Charleston Division
United States of America, ex rel., Elaine Van Voris, Peter Van Voris, and John Johnston, Plaintiffs/Relators,
GenPhar, Inc.; Jian-yun Dong a/k/a John Dong; Danher Wang; Heung Yeung Yeung, Estate of William T. Ratliff, Jr.; Vaxima, Inc.; and Robert "Tex" S. Small, Jr., Defendants.
HOWE HENDRICKS, UNITED STATES DISTRICT
Elaine Van Voris, Peter Van Voris, and John Johnston
(collectively "Plaintiffs" or "Relators")
fled this qui tarn action under the False Claims Act, 31
U.S.C. §§ 3729 - 3733 ("FCA"), on January
2, 2009. The complaint was not served at that time and
remained sealed until April 1, 2016. Additionally, the case
was stayed during much of this time. On March 30, 2016, the
date on which the Court's stay ended, the Government
provided notice pursuant to 31 U.S.C. § 3730(b)(4)(B)
that it would not intervene. (ECF No. 69.) The Government
also requested that the matter be unsealed and that the
Relators be given 60 days within which to "serve the
Relator's Complaint or reach a settlement with the United
States." (Id.) The stay was not renewed, and in
an Order dated April 1, 2016, United States District Judge
Richard M. Gergel lifted the seal as to the Complaint and
"all other papers filed in this action" and ordered
that the Relators serve the Complaint upon Defendants within
60 days of the Order. (ECF No. 70.)
Relators served the Complaint on Defendants GenPhar, Inc.
("GenPhar"); Jian-yun Dong ("Dong");
Vaxima, Inc. ("Vaxima")"; and Robert Tex S.
Small, Jr. ("Small"). The Relators obtained a
waiver of service from Defendant William T. Ratliff, Jr.
("Ratliff), who is now deceased, and Ratliff s Estate is
now a party Defendant. It does not appear that Defendants
Danher Wang or Heung Yueng Yeung were served.
Small and Ratliff each filed motions to dismiss pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure (ECF
Nos. 99 and 104, respectively). Defendant Dong appeared pro
se and filed a motion to stay and for extension of time to
answer on his behalf and as a "representative" of
Defendant GenPhar. (ECF No. 85.) Subsequently, Dong filed
another motion for extension of time, again ostensibly on
behalf of GenPhar. (ECF No. 119.) The Court instructed
Defendants Dong and GenPhar that GenPhar must be represented
by counsel and ordered GenPhar to obtain counsel no later
than July 15, 2016. When GenPhar failed to do so, the
Relators filed a request for entry of default, which the
Clerk entered against GenPhar on August 23, 2016. In the
meantime, Dong also filed a motion to dismiss pursuant to
Rules 12(b)(6) and 9(b) of the Federal Rules of Civil
Procedure and a motion to join in and supplement the motions
to dismiss filed by Defendants Small and Ratliff. (ECF Nos.
123 and 124, respectively.)
accordance with 28 U.S.C. § 636(b)(1)(B) and Local Civil
Rule 73.02(B)(2)(d) (D.S.C.), this matter was referred to a
United States Magistrate Judge for pretrial proceedings. On
October 5, 2016, Magistrate Judge Kaymani D. West filed a
report and recommendation ("Report") addressing
Defendant Small's and Defendant Ratiffs motions to
dismiss. In her Report, the Magistrate Judge recommends that
the Court grant these Defendants' motions to dismiss;
however, the Magistrate Judge also recommends that the Court
hold the dismissals in abeyance for a 14-day period during
which the Relators may submit an amended complaint
supplementing the shortcomings addressed in her Report.
on October 27, 2016, the Magistrate Judge issued a second
Report addressing Defendant Dong's motion to dismiss and
his motion to join the motions to dismiss filed by Small and
Ratliff. In her second Report, the Magistrate Judge
recommends that the Court grant Dong's motion to dismiss
but hold the dismissal in abeyance for a 14-day period during
with the Relators may submit an amended complaint. The
Magistrate Judge also recommends that the Court deny
Dong's motion to join in and supplement the motions to
dismiss filed by Defendants Small and Ratliff.
to the Magistrate Judge's Reports was a notice advising
the parties of the right to file written objections to the
Reports within 14 days of receiving them. To date, however,
no objections have been filed.
Magistrate Judge makes only a recommendation to the Court.
The recommendation has no presumptive weight, and the
responsibility to make a final determination remains with the
Court. Mathews v. Weber, 423 U.S. 261 (1976). The
Court is charged with making a de novo determination only of
those portions of the Report to which specific objections are
made, and the Court may accept, reject, or modify, in whole
or in part, the recommendation of the Magistrate Judge, or
recommit the matter to the Magistrate Judge with
instructions. 28 U.S.C. § 636(b)(1). In the absence of
specific objections, the Court reviews the matter only for
clear error. See Diamond v. Colonial Life & Accident
Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (stating
that "in the absence of a timely filed objection, a
district court need not conduct a de novo review, but instead
must 'only satisfy itself that there is no clear error on
the face of the record in order to accept the
recommendation.'") (quoting Fed.R.Civ.P. 72 advisory
because no objections were filed, the Court has reviewed the
record, the applicable law, and the findings and
recommendations of the Magistrate Judge for clear error.
Finding none, the Court hereby adopts the Magistrate
Judge's Reports (ECF Nos. 136 and 144). Accordingly, the
Court grants the motions to dismiss filed by Small, Rati iff,
and Dong (ECF Nos. 99, 104, and 123). However, the Court
holds the dismissals in abeyance for a period of 14 days
during which time the Relators may file an amended complaint
addressing the issues outlined in the Magistrate Judge's
Reports. The Court also denies Dong's motion to join in
and supplement the motions to dismiss filed by Small and
Ratliff (ECF No. 124).
the Court notes that Defendant GenPhar has now retained
counsel and has filed a motion pursuant to Rule 55(c) of the
Federal Rules of Civil Procedure for relief from the entry of
default entered on August 23, 2016. Pursuant to Rule 55(c),
the Court may set aside an entry of default for good cause.
Fed.R.Civ.P. 55(c). After consideration, and in light of the
complicated nature of this case as well as the fact that the
Relators may file an amended complaint, the Court finds good
cause to ...