PHILADELPHIA – A federal appellate court has sent an action revolving around alleged violations of the False Claims Act (FCA) back to its trial court, over that same trial court not considering the Poulis factors before dismissing the case.

On Dec. 13, judges D. Michael Fisher, Cheryl Ann Krause and Morton I. Greenberg decide to vacate the decision of the U.S. District Court for the Eastern District of Pennsylvania to dismiss plaintiff Gary Cressman’s appeal against Solid Waste Services, Inc., and remand the case to the trial court for further proceedings.

On Sept. 30, 2013, Cressman filed a qui tam action alleging Solid Waste Services violated the False Claims Act (FCA) by “falsely certifying that it was disposing of leached water in compliance with government regulations.”

The government declined to intervene, and after denying a motion to dismiss the complaint, the District Court ordered both parties to file their initial disclosures within 14 days. When Cressman failed to abide by this deadline, Solid Waste Services filed motions to compel and for sanctions. In response, the District Court ruled Cressman was required to produce his disclosures within seven days.

Cressman proceeded to file his disclosures eight days later instead. Solid Waste Services moved for sanctions, requesting Cressman’s complaint be dismissed with prejudice “for his failure to produce his initial disclosures in a timely fashion.” Cressman failed to respond, and the Court ordered Cressman to show cause why the matter should not be dismissed – specifying “failure to respond shall be deemed a failure to prosecute and comply with this Court’s Orders, and will result in dismissal of this action.”

Cressman once again failed to respond and on March 21, 2016, the District Court dismissed Cressman’s suit with prejudice for failure to prosecute. Cressman then filed a motion for reconsideration the same day for the District Court to “reconsider, vacate, or rescind that dismissal because the District Court did not balance the six Poulis factors.”

The District Court denied the request one week later and this appeal followed.

The Poulis factors are: “(1) The extent of the party’s personal responsibility; (2) The prejudice to the adversary caused by the failure to meet scheduling orders and respond to discovery; (3) A history of dilatoriness; (4) Whether the conduct of the party or the attorney was willful or in bad faith; (5) The effectiveness of sanctions other than dismissal, which entails an analysis of alternative sanctions; and (6) The meritoriousness of the claim or defense.”

On appeal, Cressman argued the District Court abused its discretion because “it failed to weigh the Poulis factors before dismissing this case, and because a balancing of the Poulis factors favors reinstatement of the case for adjudication on the merits.”

“We conclude that the District Court abused its discretion for two reasons. First, the record does not show any evidence that the District Court considered the Poulis factors before dismissing this case. Indeed, far from weighing them, the District Court did not mention Poulis at all,” Fisher said.

Fisher also stated contrary to the defendant’s claims, the Court’s decision in Asbestos Factors “does not dictate a different conclusion.”

“Unlike in Asbestos Products, where the district court had previously ‘discussed the Poulis factors’ and the parties ‘addressed them fully in their briefs,’ we have no basis to infer that the District Court considered their applicability here,” Fisher said.

“Because it was an abuse of discretion for the District Court to dismiss Cressman’s complaint without considering the Poulis factors, we will vacate the District Court’s dismissal order and remand this case to the trial court for further proceedings,” Fisher commented.

The plaintiff is represented by Alphonso Arnold Jr. in Harrisburg

The defendant is represented by William F. Fox Jr. of JP Mascaro & Sons, in Audubon.

U.S. Court of Appeals for the Third Circuit case 16-1971

U.S. District Court for the Eastern District of Pennsylvania case 2:13-cv-05693

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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