United States District Court, W.D. Washington, Seattle
UNITED STATES OF AMERICA, ex rel. RAJU A.T. DAHLSTROM, STATE OF WASHINGTON, ex rel. RAJU A.T. DAHLSTROM, Plaintiffs,
SAUK-SUIATTLE INDIAN TRIBE OF WASHINGTON, et al., Defendants.
ORDER REGARDING THE PLAINTIFF'S NOTICE OF
BANKRUPTCY, THE PARTIES' RESPONSES TO THE COURT'S
ORDER TO SHOW CAUSE, AND CERTAIN MOTIONS
L. ROBART UNITED STATES DISTRICT JUDGE.
the court are: (1) Plaintiff Raju A.T. Dahlstrom's notice
of Chapter 13 bankruptcy (Bankr. Not. (Dkt. # 84)); (2) the
parties' responses to the court's order to show cause
why the court should not award a portion of Defendants'
attorney's fees against Mr. Pope, personally, as a
sanction pursuant to 28 U.S.C. § 1927, Federal Rule of
Civil Procedure 11(b), or its inherent authority (Def. OSC
Resp. (Dkt. # 89); Pope OSC Resp. (Dkt. # 101); see
also SJ Order (Dkt. # 79) at 36-37 (detailing order to
show cause)); (3) Mr. Dahlstrom's and his attorney
Richard L. Pope's agreed motion for Mr. Pope to withdraw
as Mr. Dahlstrom's counsel (MTW (Dkt. # 83)); and (4) Mr.
Dahlstrom's motion for relief from the deadline to file a
motion for reconsideration of the court's summary
judgment order (MFR (Dkt. # 87); see also SJ Order).
The court has reviewed the bankruptcy notice, the
parties' responses to and other submissions regarding the
court's order to show cause, Mr. Dahlstrom's motions,
the parties' submissions filed in support of and
opposition to the motions, the relevant portions of the
record, and the applicable law. Being fully advised, the
court (1) STAYS consideration of its imposition of
attorney's fees and costs against Mr. Dahlstrom due to
his bankruptcy notice; (2) AWARDS a portion of
Defendants' attorney's fees against Mr. Pope
personally as a sanction for bad faith conduct pursuant to 28
U.S.C. § 1927 and the court's inherent authority;
(3) GRANTS Mr. Dahlstrom's and Mr. Pope's agreed
motion for Mr. Pope to withdraw as Mr. Dahlstrom's
counsel; and (4) GRANTS in part and DENIES in part Mr.
Dahlstrom's motion for relief from the deadline to file a
pro se motion for reconsideration as described
Sauk-Suiattle Indian Tribe of Washington's (“the
Tribe”) initially hired Mr. Dahlstrom as a social
worker for the Tribe's Indian Child Welfare Department in
2010. (6/6/19 Nedderman Decl. (Dkt. # 67) ¶ 2, Ex. 1.)
Mr. Dahlstrom became the Director of the Department in 2011.
(Id. ¶ 3, Ex. 2.) On April 30, 2015, the Tribe
appointed Mr. Dahlstrom interim Health and Social Services
(“HSS”) Director. (Id. ¶ 4, Ex. 3.)
In July 2015, the Tribe appointed him HSS Director.
(Id. ¶ 5, Ex. 4.) As an at-will employee, Mr.
Dahlstrom acknowledged that the Tribe “may terminate
[his] employment at any time, with or without cause.”
(Id. ¶ 6, Ex. 5.) The Tribe placed Mr.
Dahlstrom on administrative leave with pay in October 2015.
(Id. ¶ 7, Ex. 6.) The Tribal Counsel terminated
his employment without cause on December 4, 2015.
(Id. ¶ 8, Ex. 7; see also Metcalf
Decl. (Dkt. # 66) ¶ 2.) Mr. Dahlstrom received a letter
confirming his termination on December 8, 2015. (6/6/19
Nedderman Decl. ¶ 9, Ex. 8.)
January 12, 2016, approximately one month after the Tribal
Counsel terminated his employment, Mr. Dahlstrom filed this
qui tam lawsuit as a pro se litigant.
(Compl. (Dkt. # 1).) Mr. Dahlstrom asserted claims under the
federal False Claims Act (“FCA”), 31 U.S.C.
§ 3729, et seq., and the Washington Medicaid
Fraud False Claims Act (“the Washington Medicaid Fraud
FCA”), RCW ch. 74.66. (See Compl. ¶¶
71-82.) He also brought claims for FCA retaliation and
Washington Medicaid Fraud FCA retaliation. (See id.
a plaintiff may not prosecute a qui tam action
pro se, see Stoner v. Santa Clara Cty. Office of
Educ., 502 F.3d 1116, 1127 (9th Cir. 2007), on January
22, 2016, the court issued an order to show cause within 30
days why the matter should not be dismissed (see
1/22/16 OSC (Dkt. # 2) at 1-2). Alternatively, the court
ordered Mr. Dahlstrom to retain counsel within the same
timeframe. (Id. at 2.) On February 18, 2016, Mr.
Pope appeared on Mr. Dahlstrom's behalf. (Not. of App.
(Dkt. # 3).) Mr. Pope attests that he “believed Mr.
Dahlstroms' claims . . . to be valid when [he] entered
[his] [n]otice of [a]ppearance” (9/26/19 Pope Decl.
¶ 22), however, Mr. Pope does not describe what, if any,
investigation he undertook prior to agreeing to represent Mr.
Dahlstrom (see generally id.).
September 26, 2016, the United States of America and
Washington State notified the court of their decision not to
intervene in the action. (Notice (Dkt. # 8) at 2 (citing 31
U.S.C. § 3703(b)(4)(B) and RCW 74.66.050).) Accordingly,
on September 28, 2016, the court unsealed the case and
ordered Mr. Dahlstrom to serve Defendants with the complaint
and related filings. (9/28/16 Order (Dkt. # 9) at 2.)
January 12, 2017, Defendants Sauk-Suiattle Indian Tribe of
Washington (“the Sauk-Suiattle” or “the
Tribe”), Community Natural Medicine, PLLC
(“CNM”), Christine Morlock, Robert Morlock, and
Ronda Metcalf's (collectively “Defendants”)
filed a motion to dismiss arguing that they were immune from
suit due to the Tribe's sovereign immunity and that this
immunity extended to all Defendants. (MTD (Dkt. # 13).)
Defendants did not challenge the merits of Mr.
Dahlstrom's allegations in their motion. (See
Id. at 4 (“Movant expresses no opinion upon the
merits of Plaintiff Dahlstrom's allegations . . .
.”).) On March 21, 2017, the court granted
Defendants' motion to dismiss as to the Tribe but denied
the motion as to all other Defendants. (3/21/17 Order (Dkt. #
39).) The court concluded that Defendants failed to establish
that the other Defendants shared in the Tribe's sovereign
immunity. (Id. at 7-9.)
6, 2019, the remaining Defendants filed a motion for summary
judgment on all of Mr. Dahlstrom's alleged false claims.
(MSJ (Dkt. # 64).) On July 8, 2019, Mr. Dahlstrom filed his
response to Defendants' motion opposing each ground for
summary judgment. (SJ Resp. (Dkt. # 72).) On August 29, 2019,
the court granted Defendants' motion for summary judgment
and dismissed Mr. Dahlstrom's action with prejudice. (SJ
Order (Dkt. # 79) at 2, 37.)
responsive memorandum to Defendants' motion for summary
judgment, Mr. Dahlstrom described Dr. Morlock's medical
practices as “dangerous, ” “worthless,
” “deleterious, ” “fraudulent,
” and “to the detriment of children, youth and
their families, residing within and beyond the boundaries of
the Sauk-Suiattle Indian Reservation.” (SJ Resp. at 4.)
He further accused Dr. Morlock of “actively and
serially injecting [the Tribe's] children, youth and
families, ” and other patients, with
“spoiled” and “expired” vaccines.
(Id. at 3.) He asserted that the Tribe's
children were at risk from Dr. Morlock's “barbaric
reaches” and that she “dangerously and with
reckless abandon violated” those children.
(Id. at 5.) Yet, despite this litany of scurrilous
and potentially professionally-damaging allegations, Mr.
Dahlstrom was unable to sustain a single false claim related
to Dr. Morlock and the tribal vaccines. (See SJ
Order at 19-22.) Mr. Dahlstrom's counsel of record, Mr.
Pope, signed the responsive memorandum containing the
foregoing statements. (See SJ Resp. at 24.)
to 31 U.S.C. § 3730(d)(4) and RCW 74.66.070(d)(4), the
court concluded in its summary judgment order that all of Mr.
Dahlstrom's claims were “frivolous, ”
“clearly vexatious, ” and “brought for the
primary purpose of harassing and embarrassing . . .
Defendants.” (SJ Order at 34-36.) Accordingly, the
court granted Defendants' motion for an award of
reasonable attorney's fees and expenses against Mr.
Dahlstrom and ordered Defendants to file, within fourteen
days, a motion setting forth the reasonable fees and expenses
they incurred in bringing their motion for summary judgment
and conducting any necessary preceding discovery.
(Id. at 36.) The court also ordered Mr. Pope
“to show cause why the court should not impose a
portion of its attorney's fees award, if any, against him
personally pursuant to 28 U.S.C. § 1927, [Federal] Rule
[of Civil Procedure] 11(b), or its inherent authority.”
(Id. at 36-37.) The court also permitted Defendants
to respond to the court's order to show cause.
(Id. at 37.)
September 12, 2019, Mr. Dahlstrom and Mr. Pope filed a joint
motion seeking the court's permission for Mr. Pope to
withdraw as Mr. Dahlstrom's attorney. (See MTW.)
On the same day, Mr. Dahlstrom filed a notice of Chapter 13
bankruptcy. (See Bankr. Not.) In addition, Mr.
Dahlstrom filed a motion seeking relief from the deadline to
file a pro se motion for reconsideration of the
court's summary judgment order. (See MFR.)
September 12, 2019, Defendants filed a response to the
court's June 6, 2019, order to show cause. (Def. OSC
Resp. (Dkt # 89); see also SJ Order at 36-37.)
Defendants assert that the court has the authority to impose
sanctions in the form of an award of fees against Mr. Pope
personally for his conduct in this litigation, and they seek
an award of $25, 000.00 against Mr. Pope personally. (See
generally id.; see also 9/12/19 Nedderman Decl.
(Dkt. # 90) ¶ 2, Ex. 1 (attaching a spreadsheet of
Defendants' counsel's billing records related to this
Pope filed his response to the court's order to show
cause on September 26, 2019. (See Pope OSC Resp.)
Mr. Pope opposes the entry of sanctions against him
personally. (See id.) In his defense, he
argues that he “had nothing to do with the research,
drafting or filing of Mr. Dahlstrom's pro se
complaint.” (9/26/19 Pope Decl. (Dkt. # 100) ¶ 2.)
He states that he “certainly believed Mr.
Dahlstrom's claims . . . to be valid when [he] entered
[his] [n]otice of [a]ppearance.” (Id. ¶
22.) He also states that “Mr. Dahlstrom . . . agree[d]
to assist with research, briefing and organization - which he
disappointingly fell short on later in this
litigation.” (Id.) Mr. Pope does not indicate
that he conducted any independent investigation into Mr.
Dahlstrom's claims prior to accepting the representation
and entering his notice of appearance in this suit. (See
part of his response to the court's order to show cause,
Mr. Pope attests that he had an agreement with Mr. Dahlstrom
whereby Mr. Dahlstrom would provide Mr. Pope with a draft
response to Defendants' motion for summary judgment seven
days prior to the filing deadline. (Id. ¶ 25.)
Mr. Pope then planned to “refine” Mr.
Dahlstrom's draft with his “own corrections,
additional research and input, by the response
deadline.” (Id.) Mr. Pope blames Mr. Dahlstrom
for “not timely doing his part of the work” and
not providing Mr. Pope “with a draft response until
6:56 p.m. . . . just a few hours before the midnight filing
deadline.” (Id. ¶ 26.) Mr. Pope admits
that he signed and filed Mr. Dahlstrom's draft
“with very few corrections, much less
improvements.” (Id. ¶ 28.) He
acknowledges that he only “lightly” edited and
proofread Mr. Dahlstrom's draft. (Id. ¶
29.) He again blames Mr. Dahlstrom by stating: “If I
had gotten ANYTHING for a draft in advance, I would have been
able to do something a lot more useful.” (Id.)
He acknowledges being “very embarrassed, ” but
states he “was in a situation where [he] basically had
to file something.” (Id.)
Pope also acknowledges the reasonableness of the court's
and Defendants' concerns about the language he uses in
the summary judgment response regarding Dr. Morlock. (See
Id. ¶ 56 (“Both the court and . . .
Defendants (especially [Dr.] Morlock herself) are
understandably not pleased with the language used to describe
her involvement in the . . . vaccine program.”).)
Indeed, he attests that he “very much regret[s] the
tone and wording that . . . [he] used in relation to Dr.
Morlock.” (Id. ¶ 58.) He acknowledges
that-had he not relied on Mr. Dahlstrom's draft and then
failed to properly review the draft prior to filing-he would
have used “quite substantially different
wording.” (Id. ¶ 58.)
court now addresses Mr. Dahlstrom's bankruptcy notice,
the court's order to show cause concerning Mr. Pope, and
Mr. Dahlstrom's motions.
Mr. Dahlstrom's Notice of Chapter 13 Bankruptcy
noted above, Mr. Dahlstrom filed a notice of Chapter 13
bankruptcy on September 12, 2019. (See Bankr. Not.)
Although the filing of a bankruptcy petition automatically
stays an action or a proceeding “against the debtor
that was or could have been commenced before the commencement
of the [bankruptcy] case, ” 11 U.S.C. § 362(a)(1),
the automatic stay does not apply to actions brought by the
debtor, nor does it “prohibit a defendant in an action
brought by a plaintiff/debtor from defending itself in that
action, ” In re Way, 229 B.R. 11, 13 (B.A.P.
9th Cir. 1998); see also In re White, 186 B.R. 700,
704 (B.A.P. 9th Cir. 1995); In re Merrick, 175 B.R.
333, 336, 338 (9th Cir. BAP 1994). Thus, Mr. Dahlstrom's
notice does not act as a stay on these proceedings generally.
pursuant to 31 U.S.C. § 3730(d)(4) and RCW
74.66.070(d)(4), the court previously ruled that Defendants
are entitled to an award of their attorney's fees and
expenses from Mr. Dahlstrom because his claims were
frivolous, clearly vexatious, and brought for the primary
purpose of harassing and embarrassing Defendants. (SJ Order
at 34-36.) The court order ordered Defendants to file a
motion detailing their reasonable fees and expenses no later
than September 12, 2019. (8/30/19 Order (Dkt. # 82) at 2.)
Following Mr. Dahlstrom's bankruptcy notice, Defendants
were concerned that filing such a motion may be contrary to
the automatic stay provided in 11 U.S.C. § 362. (Def.
OSC Resp. at 2-3 & n.2.) Accordingly, Defendants did not
file and note their motion on the court's docket but
rather attached it as an exhibit to a declaration. (See
id.; see also 9/12/19 Nedderman Decl. (Dkt. #
90) ¶ 12, Ex. 6 (attaching a copy of Defendants'
court agrees that, although the automatic bankruptcy stay
does not apply to this action generally, it does apply to any
motion for fees and expenses against Mr. Dahlstrom. See
Morawski v. Lightstorm Entm't, Inc., No. CV 11-10294
MMM (JCGx), 2013 WL 12122290, at *2 (C.D. Cal. Aug. 7, 2013)
(“[C]ourts frequently stay claims for costs against
losing plaintiffs who subsequent seek protection in
bankruptcy court.”) (citing Conley v. Pitney Bowes,
Inc., 978 F.Supp. 892, 902 (E.D. Mo. 1997) (noting that
“although [the prevailing defendant's claim for
costs was] part of a proceeding initiated by plaintiff,
” the claim for costs could “be construed as a
judicial proceeding against a debtor”)). Accordingly,
the court stays its consideration of Defendants' motion
until the bankruptcy stay is lifted. The court further ORDERS
the parties to notify the court within seven (7) days of any
change in the status of Mr. Dahlstrom's bankruptcy
proceeding that would lift the automatic stay and permit the
court to consider Defendants' motion for fees and
expenses against Mr. Dahlstrom.
The Court's Order to Show Cause Concerning Mr.
response to the court's order to show cause, Defendants
assert that the court has the authority to impose sanctions
in the form of an award of fees against Mr. Dahlstrom's
attorney, Mr. Pope, under (1) Federal Rule of Civil Procedure
11(b), (2) 28 U.S.C. § 1927, and (3) the court's
inherent authority to levy sanctions. (Def. OSC Resp. at
3-5.) Mr. Pope opposes the imposition of any ...