You Can’t Turn Back Time: The Eleventh Circuit Provides Guidance On Res Judicata In The False Claims Act Context
“Res judicata,” Latin for “a matter judged,” is “the principle that a cause of action may not be relitigated once it has been judged on the merits.”[1] In Milner v. Baptist Health Montgomery, et al., No. 23-12985 (11th Cir. Mar. 31, 2025), the Eleventh Circuit provided an analysis of how the principle of res judicata operates in the context of a retaliation claim under the False Claims Act (“FCA”).[2] This blog post will discuss that opinion and will provide a hypothetical to further demonstrate the concept.
In Milner, the plaintiff was a physician at a hospital owned by the Defendants.[3] Milner alleged that the Defendants overprescribed opioids to patients and fraudulently billed the Government for them, and he asserted the amount improperly billed was about $4,000,000.[4] According to Milner, following his complaint related to the practice, Defendants terminated his employment.[5] In an earlier lawsuit, Milner brought a retaliation claim under the FCA stemming from his termination, but “that lawsuit was dismissed with prejudice for failure to state a claim.”[6] In the case before the Eleventh Circuit, Milner appealed the district court’s decision dismissing “Milner’s qui tam (FCA) action as barred by res judicata because of his earlier retaliation action[.]”[7] In reaching its decision, the district court relied upon two Eleventh Circuit decisions, Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235 (11th Cir. 1999), and Shurick v. Boeing Co., 623 F.3d 1114 (11th Cir. 2010).[8]
As explained by the Eleventh Circuit, “‘Res judicata prevents plaintiffs from bringing claims related to prior decisions when “the prior decision (1) was rendered by a court of competent jurisdiction; (2) was final; (3) involved the same parties or their privies; and (4) involved the same causes of action.”’”[9] As the court noted, only the third and fourth elements were relevant to the case at issue.[10] Regarding the first element, the question for the court was “whether Milner, who was a party in his earlier lawsuit, is also a party here because of his status as a relator.”[11] In Ragsdale, the Eleventh Circuit faced the “‘mirror image’” of Milner, where a plaintiff first brought an FCA action and later an FCA retaliation claim against his employer.[12] The court “held that the plaintiff was the same party in both cases.”[13] According to the court, “[g]iven our categorical holding in Ragsdale, we can dispose of Milner’s argument that, while his retaliation lawsuit was brought on his own behalf in his personal capacity, this lawsuit is brought only on behalf of the United States because he is merely the ‘statutorily designated agent of the United States.’”[14]
The court rejected Milner’s arguments that Ragsdale’s decision regarding the identity of the parties was not part of the holding (and thus not binding precedent) and that if he was “barred from proceeding, the United States would lose the benefit of passively recovering 70% of any judgment against the Defendants without having to litigate.”[15] In essence, Milner attempted to persuade the Eleventh Circuit that Ragsdale was wrongly decided, but the court noted that “under our prior-panel-precedent rule, we cannot ignore Ragsdale as a panel even if that decision did not consider some arguments that Milner now advances.”[16] The court asserted that even if not bound by Ragsdale, Milner is incorrect that the United States’s ability to recover was in peril, as the United States had not intervened in the matter and was thus not a party to the case.[17] As stated by the court, “if there is a future case regarding the alleged fraud and the United States appears as a party, that would be the first case in which the United States appears in this capacity,” and res judicata would not apply.[18] The court held that the district court was thus correct in dismissing the action as to Milner but without prejudice to the United States (i.e., leaving the door open for a future case against defendant if the United States chooses to pursue it).[19]
Turning to the cause of action element of res judicata, the Eleventh Circuit held that Milner’s two cases arose out of the “same nucleus of operative fact.”[20] As asserted by the court, “the elements of the claims need not be the same; what matters is whether they arise from a common nucleus of operative fact.”[21] In essence, because the facts largely overlapped between the FCA claim and the FCA retaliation claim, they were effectively the same cause of action.[22] The court stressed, “Since Milner was also fired before filing either his retaliation lawsuit or his [FCA] lawsuit, both claims were in existence at the time the original complaint was filed, so a final judgment in one precluded litigation of the other.”[23] The court rejected Milner’s argument that the two claims could not be brought together due to service of process (i.e., formal notice of litigation to the defendant) deadlines under the Federal Rules of Civil Procedure, as there is a rule for sealed complaints (FCA claims are sealed from public disclosure at the initial stage) that tolls (i.e., pauses) the time to serve a defendant.[24] The court therefore concluded that “Milner’s instant FCA qui tam action shares the same cause of action with his earlier FCA retaliation action for res judicata purposes” and affirmed the lower court’s dismissal of the case with prejudice as to Milner.[25]
By way of example, Wile Blanc is an employee of Acme, a defense contractor. Mr. Blanc raises complaints to Acme management regarding the poor (and frankly dangerous) quality of the company’s products. Acme subsequently terminates Mr. Blanc within just a few weeks of his complaints. Mr. Blanc first files an FCA retaliation claim against Acme. While that is pending, he also files an FCA claim, even though both actions should have been filed together. The court dismisses Mr. Blanc’s FCA retaliation claim because he did not successfully state a claim. Several months later, after his FCA claim is unsealed and the Government has decided not to intervene in the case, the court dismisses Mr. Blanc’s claim under the principle of res judicata (without prejudice to the United States). Pursuant to Milner, the court would be correct in dismissing the claim, as it clearly arose under the same set of facts and involved the same party (Mr. Blanc). If Mr. Blanc could turn back time, he surely would find a way to instruct his counsel to file the FCA claim and FCA retaliation claim in the same complaint.
As we have previously noted, the FCA is very complicated, and it is important to seek counsel if you feel you have such a claim. If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.
[1] “Res judicata,” Cornell Law School Legal Information Institute, available at https://www.law.cornell.edu/wex/res_judicata (last visited Apr. 29, 2025).
[2] The opinion is available at https://media.ca11.uscourts.gov/opinions/pub/files/202312985.pdf (last visited Apr. 29, 2025).
[3] Milner, at *2. The court refers to Dr. Milner as simply “Milner” in the opinion. This blog post will do so as well.
[4] Id., at *2-3.
[5] Id., at *2.
[6] Id.
[7] Id.
[8] Id.
[9] Id., at *5 (quoting Rodemaker v. City of Valdosta Bd. of Educ., 110 F.4d 1318, 1324 (11th Cir. 2024) (other citation omitted)).
[10] Id.
[11] Id., at *6.
[12] Id., at *6-7.
[13] Id., at *7.
[14] Id. (citations omitted).
[15] Id., * 8-9.
[16] Id., at *10 (citation omitted).
[17] Id., at *11.
[18] Id.
[19] Id., at *12.
[20] Id., at *15.
[21] Id. (citations omitted).
[22] Id., at *15-16.
[23] Id., at *16.
[24] Id., at *17.
[25] Id., at *18.