Claim Preclusion Between FCA Retaliation and Qui Tam Claims Reaffirmed; Government Not Barred and Rule 4(m) Harmonized with FCA Seal — Milner v. Baptist Health (11th Cir. 2025)

Claim Preclusion Between FCA Retaliation and Qui Tam Claims Reaffirmed; Government Not Barred and Rule 4(m) Harmonized with FCA Seal — Milner v. Baptist Health (11th Cir. 2025)

Introduction

In Jeffery D. Milner v. Baptist Health Montgomery; Prattville Baptist; and Team Health, the Eleventh Circuit (Judge Lagoa, joined by Judges Branch and Luck) issued a published opinion affirming dismissal of a qui tam action under the False Claims Act (FCA) on claim-preclusion (res judicata) grounds. Dr. Milner, an emergency physician, alleged that while employed at a Prattville, Alabama hospital, defendants forced physicians to overprescribe opioids and fraudulently billed Medicare and Medicaid, and that he was then fired for whistleblowing. He first filed an FCA retaliation action that was dismissed with prejudice for failure to state a claim. He later filed a sealed qui tam complaint. The district court dismissed the qui tam case with prejudice as to Milner (but without prejudice as to the United States) under res judicata, relying on Eleventh Circuit precedents Ragsdale v. Rubbermaid, Inc. and Shurick v. Boeing Co. The Eleventh Circuit affirmed.

This opinion does several important things: (1) it reaffirms that an FCA retaliation suit and a related qui tam fraud suit involve the same parties and the same cause of action for claim-preclusion purposes where both arise from the same nucleus of operative fact; (2) it clarifies that the United States is not bound as a party in a non-intervened qui tam case and remains free to bring its own action; (3) it rejects the Seventh Circuit’s contrary approach in Lusby v. Rolls-Royce; and (4) it explains that the Rule 4(m) service clock is not incompatible with the FCA’s seal requirement—service is tolled until the court orders service after unsealing or, alternatively, good cause extends the time.

Summary of the Opinion

  • Holding: Milner’s qui tam case is barred by res judicata due to his earlier FCA retaliation case, which ended in a final judgment with prejudice. The district court’s dismissal with prejudice as to Milner—and without prejudice as to the United States—is affirmed.
  • Identity of Parties: A relator is a “party” for res judicata purposes. The court applies Ragsdale to hold that Milner, though suing as relator in the qui tam case, is the same party as in his personal-capacity retaliation case, even though the United States did not intervene here.
  • Same Cause of Action: The retaliation case and the qui tam case arise from the same nucleus of operative fact—alleged opioid overprescription, fraudulent billing, and Milner’s reporting and termination in the same place and period—thus they are the same “claim” for res judicata.
  • Claim Splitting: Filing the qui tam action while the retaliation case was still pending does not avoid preclusion; claims “in existence” when the first suit was filed must be brought then. A final judgment in the first precludes the second.
  • Government’s Interests: Dismissal on res judicata grounds binds Milner but does not bar the United States from bringing its own FCA action later because the United States is not a party in a non-intervened case. Other relators are not necessarily barred either, as the public disclosure bar can be lifted if the Government opposes dismissal.
  • Rule 4(m) vs. FCA Seal: There is no procedural incompatibility. The FCA’s seal provision tolls service until the court orders service after unsealing, and Rule 4(m) also allows extensions for good cause.

Analysis

Precedents Cited and Their Role

  • Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235 (11th Cir. 1999) — The cornerstone precedent. There, a relator first filed a qui tam suit and later an FCA retaliation suit; this court held the same party and same cause of action existed for res judicata. Milner is the “mirror image”: he filed retaliation first, then a qui tam. The court applies Ragsdale’s categorical rule that a relator is a party and that retaliation and qui tam claims arising from the same facts are one claim for preclusion. The opinion also confirms that Ragsdale’s identity-of-parties determination was part of its holding, not dicta.
  • Shurick v. Boeing Co., 623 F.3d 1114 (11th Cir. 2010) — Extends Ragsdale to state-law retaliation claims and rejects arguments that simultaneously filed suits avoid preclusion. If both claims existed when the first complaint was filed, the later is barred once the first reaches final judgment.
  • United States ex rel. Eisenstein v. City of New York, 556 U.S. 928 (2009) — The United States is not a party in a non-intervened FCA case. Milner’s reliance on a broad reading that the U.S. is always bound is narrowed: here, the res judicata judgment binds only Milner; it does not preclude a later government suit.
  • United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023) — Confirms the non-party status of the United States in non-intervened qui tam suits.
  • Yates v. Pinellas Hematology & Oncology, P.A., 21 F.4th 1288 (11th Cir. 2021) — The United States is not a formal party in a non-intervened qui tam action in this circuit.
  • Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039 (11th Cir. 2015) — Supports the remedial structure: dismissal with prejudice as to the relator but without prejudice to the United States.
  • Citibank, N.A. v. Data Lease Fin. Corp., 904 F.2d 1498 (11th Cir. 1990); I.A. Durbin, Inc. v. Jefferson Nat’l Bank, 793 F.2d 1541 (11th Cir. 1986); N.A.A.C.P. v. Hunt, 891 F.2d 1555 (11th Cir. 1990) — Provide the governing “same nucleus of operative fact” framework and the rule that res judicata applies to all theories arising from the same facts.
  • Rodemaker v. City of Valdosta Bd. of Educ., 110 F.4th 1318 (11th Cir. 2024); TVPX ARS, Inc. v. Genworth, 959 F.3d 1318 (11th Cir. 2020) — Recite modern elements of res judicata and burden allocations.
  • Hart v. Yamaha-Parts Distribs., Inc., 787 F.2d 1468 (11th Cir. 1986); In re Justice Oaks II, Ltd., 898 F.2d 1544 (11th Cir. 1990); Mann v. Palmer, 713 F.3d 1306 (11th Cir. 2013) — Define “party” and identity-of-parties principles for preclusion.
  • Pleming v. Universal-Rundle Corp., 142 F.3d 1354 (11th Cir. 1998) — Claims “in existence” at the time of the first complaint must be brought then; a later suit is precluded after final judgment in the first.
  • Davila v. Delta Air Lines, Inc., 326 F.3d 1183 (11th Cir. 2003) — Different elements of proof do not defeat res judicata if the claims share a factual nucleus.
  • United States ex rel. Weiner v. Siemens AG, 87 F.4th 157 (2d Cir. 2023) — Persuasive support that the Rule 4(m) service clock starts when the district court orders service after unsealing under the FCA; used to rebut the “procedural incompatibility” argument.
  • Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000) — Relators are not “simply” agents of the United States; they possess their own stake in FCA claims. The opinion uses this to undermine the “mere agent” argument about party identity.
  • United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849 (7th Cir. 2009) — The Eleventh Circuit explicitly rejects Lusby’s contrary approach that personal employment litigation should not preclude a qui tam case to preserve federal recovery interests, reaffirming adherence to Ragsdale under the prior-panel-precedent rule.

Legal Reasoning

The court applies a two-element segment of the four-part res judicata test (the parties disputed only elements three and four: same parties and same cause of action).

  • Identity of Parties: A “party” is one named in the action, subject to jurisdiction, and possessed of rights to control the proceeding. Ragsdale held a relator is a party in an FCA case. That principle applies with “even more force” here because, unlike Ragsdale (where the Government intervened), the United States did not intervene. Milner argued he sued only on behalf of the United States as its “statutorily designated agent,” but the court cites Stevens to explain that the relator has his own stake, confirming party status. The court also rejects the suggestion that Ragsdale’s party-identity holding was dicta; it was necessary to the judgment.
  • Same Cause of Action: The Eleventh Circuit’s core test is whether the suits arise from the same “nucleus of operative fact.” The court compares substance, not labels or differing elements of proof. As in Ragsdale and Shurick, both of Milner’s suits are anchored in the same alleged misconduct (opioid overprescription and fraudulent billing) at the same facility in the same 2014–2017 period and Milner’s reporting/termination linked to that misconduct. That is enough to render the claims the same for preclusion purposes.
  • Claim Splitting and Timing: Milner filed the qui tam while the retaliation suit was pending, but that timing does not save it. Claims “in existence” at the time of the first complaint must be brought then (Pleming; Shurick). Because both claims existed when he filed the first suit, the second is precluded once the first reached final judgment.
  • Government’s Interests and Non-Party Status: The court rejects Lusby’s “passive recovery” concern. The United States is not a party in a non-intervened suit (Eisenstein; Polansky; Yates). A res judicata dismissal here binds Milner, not the Government; the Government retains the ability to sue later. Other relators are also not necessarily foreclosed because the public disclosure bar is dismissible “unless opposed by the Government”—the Government can permit a later relator action to proceed. The court distinguishes Eisenstein’s statement that the United States is “bound by the judgment” by observing that the Eisenstein judgment was a merits dismissal of fraud allegations, whereas here the judgment precludes only Milner from pressing the claim; it does not adjudicate the underlying fraud as to the Government.
  • Rule 4(m) and FCA Seal: Addressing a practical objection, the court explains there is no conflict between Rule 4(m)’s 90-day service rule and § 3730(b)(2)’s seal and “no service without court order” mandate. The FCA tolls service until the court orders it after unsealing, and Rule 4(m) independently allows extensions for good cause. By citing Weiner v. Siemens AG, the court underscores that the service period begins when the court orders service.
  • Remedy Framing: Echoing Urquilla-Diaz, the proper disposition is dismissal with prejudice as to the relator but without prejudice to the United States. The district court used that framing, and the Eleventh Circuit affirms it.

Impact

  • Binding Rule in the Eleventh Circuit: Practitioners should treat Ragsdale as fully controlling: FCA retaliation and related qui tam claims arising from the same factual nucleus are a single “claim” for preclusion; a relator is the same “party” across those suits, even when the United States does not intervene. Milner cements this understanding and forecloses Lusby-style arguments in this circuit.
  • Strategic Considerations for Whistleblowers: Potential relators who also have employment retaliation claims should plan holistically. Filing the employment suit first (or alone) risks precluding a later qui tam. The court’s Rule 4(m) analysis undercuts arguments that the seal procedure makes joinder impractical; litigants can seek extensions or sequencing orders and should proactively manage timing and venue to avoid claim splitting.
  • Government’s Enforcement Options Preserved: The Government’s ability to bring its own FCA action remains intact when it did not intervene in the relator’s suit. District courts should continue to dismiss precluded qui tam actions “with prejudice” as to the relator but “without prejudice” as to the United States.
  • Circuit Disagreement: The opinion highlights a divergence with the Seventh Circuit’s Lusby decision. While that increases the visibility of a circuit split on res judicata’s application to FCA retaliation/qui tam pairings, the Eleventh Circuit’s prior-panel-precedent rule keeps Ragsdale controlling absent en banc or Supreme Court intervention.
  • Procedural Clarity: Litigants now have additional Eleventh Circuit guidance that Rule 4(m)’s 90-day service period and the FCA’s seal requirement are compatible—and that the service clock is tolled until the court authorizes service, or extensions can be granted for good cause.

Complex Concepts Simplified

  • False Claims Act (FCA) Qui Tam: A private person (relator) sues on behalf of the United States alleging fraud on the government. If money is recovered, the relator gets a share.
  • FCA Retaliation Claim: A separate cause of action protecting employees from retaliation by their employer for engaging in protected activity related to FCA enforcement (e.g., investigating or reporting potential fraud).
  • Res Judicata (Claim Preclusion): Once a case is finally decided, the parties cannot relitigate the same claim or other claims arising from the same core facts that could have been brought earlier. It promotes finality and efficiency.
  • Same Nucleus of Operative Fact: The touchstone for whether two suits are the “same claim.” Courts look to whether the facts overlap in time, place, origin, and underlying transactions, not to whether the legal elements match.
  • Identity of Parties: For res judicata, a “party” is someone named in the action, subject to the court’s power, and possessing control and rights within the litigation. In the FCA context, a relator is a party even if the United States does not intervene.
  • Public Disclosure Bar: A rule that can require dismissal if fraud allegations were publicly disclosed before filing, unless the relator qualifies as an original source. However, the statute lets the Government oppose dismissal to keep the case alive.
  • Rule 4(m) vs. FCA Seal: Rule 4(m) generally requires service within 90 days, but the FCA requires a qui tam complaint to be filed under seal and forbids service until the court orders it. Courts treat the service clock as tolled until unsealing and order of service; good-cause extensions also apply.
  • Prior-Panel-Precedent Rule: In the Eleventh Circuit, a later panel must follow a prior panel’s holding unless overruled by the en banc court or the Supreme Court.

Conclusion

Milner reinforces and clarifies the Eleventh Circuit’s stringent application of claim preclusion to FCA litigation: a relator who litigates a retaliation claim cannot later bring a qui tam case grounded in the same factual nucleus; the relator is the same party in both actions, and the cause of action is the same. The court further clarifies that such preclusion does not tie the Government’s hands because the United States is not a party to a non-intervened case and remains free to sue. It also dispels the notion that the FCA’s seal requirement creates a procedural barrier to consolidating claims, harmonizing Rule 4(m) with § 3730(b)(2).

The practical lesson is clear for would-be relators and counsel in the Eleventh Circuit: plan and package FCA-related theories arising from the same events together from the outset, or risk forfeiture by claim preclusion. Courts should continue to frame dismissals of precluded qui tam suits as with prejudice to the relator but without prejudice to the United States, preserving federal enforcement prerogatives while respecting finality and efficiency.

Case Details

Year: 2025
Court: Court of Appeals for the Eleventh Circuit

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