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United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp.

United States Court of Appeals for the Ninth Circuit

October 7, 1997, Argued, Submitted, San Francisco, California ; June 19, 1998, Filed

No. 96-15024

Opinion

 [*1141]  SCHROEDER, Circuit Judge:

This is a qui tam case under the False Claims Act (FCA). One citrus company seeks damages from other [**2]  citrus companies, claiming that they made false statements to the government in connection with a citrus marketing program. The government intervened several years after the litigation began and sought dismissal under 31 U.S.C. § 3730(c)(2)(A) because it had decided to abandon the entire marketing program. The case must be seen against the background of a war in the citrus industry related to the administration of that program. The district court granted the government's motion to dismiss, finding that the government's decision to end that war on all fronts, including dismissal of the qui tam claims, was rationally related to a legitimate governmental purpose. See United States ex rel. Sequoia Orange Co. v. Sunland Packing House Co., 912 F. Supp. 1325 (E.D. Cal. 1995).

The qui tam relators appeal contending that because the false claims actions had some merit, the government cannot seek dismissal. The appeal thus requires us to consider what standard a court should apply when considering the government's motion to dismiss a qui tam action that otherwise would not be dismissed before the litigation was fully resolved. We affirm.

BACKGROUND

Sequoia Orange Company (an orange processor)  [**3]  and Lisle Babcock (an orange grower) filed 34 qui tam actions against a number of citrus industry growers and packinghouses alleging violations of the orange and lemon marketing orders promulgated by the Secretary of Agriculture pursuant to the Agricultural Marketing Agreement Act of 1937 (AMAA), 7 U.S.C. §§ 601-626. The relators began filing the actions in 1988.

] The AMAA "authorizes the Secretary of Agriculture to issue marketing orders limiting  [*1142]  the quantity of commodities shipped into markets identified by the Secretary, thus protecting prices for producers and maintaining orderly marketing conditions." Cecelia Packing Corp. v. USDA, 10 F.3d 616, 618 (9th Cir. 1993). The Secretary in 1984 had issued orange and lemon marketing orders that regulated the quantity of oranges and lemons shipped to market by citrus handlers in Arizona and California. See 7 U.S.C. § 608c; 7 C.F.R. §§ 907.1, 908.1, 910.1 (1994). ] Citrus handlers who ship oranges and lemons in excess of their allotment ("prorate") are subject to criminal fines and civil penalties. See 7 U.S.C. §§ 608a(5), 608c(14).

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151 F.3d 1139 *; 1998 U.S. App. LEXIS 13140 **; 98 Cal. Daily Op. Service 4710

UNITED STATES OF AMERICA, EX REL., SEQUOIA ORANGE COMPANY; LISLE BABCOCK, Plaintiffs-Appellants, v. BAIRD-NEECE PACKING CORPORATION; SUNKIST GROWERS INC.; SUNLAND PACKING HOUSE COMPANY; SAN JOAQUIN CITRUS; BAKER BROTHERS SUNKIST PACKING HOUSE; DEPT. OF AGRICULTURE, Clayton Yeutter, Secretary of Agriculture; JACK PARNELL, Deputy Secretary of Agriculture; JOANN SMITH, Assistant Secretary of Agriculture; DAN HALEY, Administrator, Agricultural Marketing Service; KAWEAH CITRUS ASSOCIATION; OXNARD LEMON COMPANY; EDWARD MADIGAN, Secretary of Agriculture; MISSION CITRUS COMPANY; VENTURA PACIFIC COMPANY; SATICOY LEMON ASSOCIATION; DOLE CITRUS, a California corporation aka Blue Goose Growers, Inc., dba Central Valley Citrus; STRATHMORE PACKING HOUSE COMPANY; MILLWOOD PACKING INC.; BLUE BANNER COMPANY INC.; VENTURA COUNTY FRUIT GROWERS, INC.; LIMONERA COMPANY, Defendants-Appellees.

Subsequent History:  [**1]  Certiorari Denied January 11, 1999, Reported at: 1999 U.S. LEXIS 105.

Prior History: Appeal from the United States District Court for the Eastern District of California. D.C. No. CV-88-00566-OWW, 89-00002-OWW, 89-00050-OWW, 91-00194-OWW, 91-00195-OWW, 91-00196-OWW, 91-00197-OWW, 93-05016-OWW, 94-05287-OWW, 94-05288-OWW, 94-05289-OWW, 94-05290-OWW, 94-05291-OWW. Oliver W. Wanger, District Judge, Presiding.

Disposition: AFFIRMED.

CORE TERMS

qui tam, intervene, orange, district court, prorate, motion to dismiss, marketing order, lemon, settlement, false claim, citrus, cases, violations, prosecutorial, citrus industry, legitimate government, meritorious, provisions, elected, government's decision, judicial estoppel, regulations, marketing, litigate, invalid, reasons, powers, suits

Business & Corporate Compliance, Governments, Agriculture & Food, Commodity Exchange Act, Product Promotions, Product Quality, Admiralty & Maritime Law, Maritime Forfeitures & Penalties, General Overview, Criminal Law & Procedure, Sentencing, Fines, Governments, Federal Government, Claims By & Against, Labor & Employment Law, False Claims Act, Scope & Definitions, Qui Tam Actions, Fraud Against the Government, False Claims, Penalties, Remedies, Costs & Attorney Fees, Civil Procedure, Appeals, Standards of Review, De Novo Review, Legislation, Interpretation, Parties, Intervention, Fraud, Dismissal, Involuntary Dismissals, Voluntary Dismissals, Court Order, Terms & Conditions of Dismissal, Constitutional Law, Fundamental Freedoms, Freedom of Speech, Political Speech, Motions to Intervene, Abuse of Discretion, Judgments, Preclusion of Judgments, Estoppel, Judicial Estoppel, Abuse of Discretion, State & Territorial Governments, Pleadings, Amendment of Pleadings, Leave of Court