Supreme Court supports federal government authority to dismiss False Claims Act cases

False Claims Act
United States, ex rel. Polansky v. Executive Health Resources Inc.
Date: June 16, 2023

Issue: Whether the federal government has authority to dismiss whistleblower False Claims Act (FCA) cases despite when it steps in.

Case Summary: In an 8-1 choice composed by Justice Elena Kagan, the U.S. Supreme Court ruled the federal government maintains authority to dismiss whistleblower FCA cases at any time once it steps in.

In 2012, Jesse Polansky submitted a qui tam action taking legal action against Executive Health Resources (EHR). A qui tam action permits a personal individual, called a relator, to prosecute a claim for the federal government and get a benefit. Polansky declared EHR assisted medical facilities overbill Medicare. Polansky implicated EHR of consistently licensing inpatient take care of service fee to federal government health care programs, which need to have been processed as more economical outpatient care. Under the FCA, relators such as Polansky need to submit grievances under seal and serve a copy with supporting proof on the federal government. The federal government then has 60 days (which might extend for great cause) to choose whether to step in and continue with the action. The federal government decreased to step in throughout the seal duration of the case, and the case invested years in discovery.

In 2019, the federal government relocated to dismiss after it figured out the different concerns of the fit exceeded its prospective worth. Under FCA § 3730(c)(2)(A), the federal government might dismiss a qui tam action in spite of the relator’s objections. The district court gave the termination, discovering the federal government completely examined the expenses and advantages and obtained a legitimate conclusion. On appeal, the Third Circuit verified. The Third Circuit thought about whether the federal government had authority to dismiss an action if it decreased to step in throughout the seal duration. The Third Circuit ruled the federal government maintains the authority to dismiss the case at any time once it steps in.

The U.S. Supreme Court verified the Third Circuit’s choice. Writing for the bulk, Justice Kagan stated: “The government may seek dismissal of an FCA action over a relator’s objection so long as it intervened sometime in the litigation, whether at the outset or afterward.” In the bulk’s view, a “straightforward reading” of the FCA refutes Polansky’s argument that the federal government surrendered its right to look for termination after at first decreasing to step in. The bulk discussed the FCA permits the federal government to step in early on and likewise “at a later date upon showing of good cause.” At that point, the federal government presumes main duty for the case, consisting of the right to dismiss it. The bulk stressed the federal government’s interest in a qui tam action is “the predominant one,” and this interest does not reduce in value due to the fact that the federal government waited to step in.

Additionally, the bulk concurred with the Third Circuit that Federal Rule 41(a) offers the requirement of evaluation for a movement to dismiss. The bulk discussed under Rule 41(a), “If the government offers a reasonable argument for why the burdens of contin­ued litigation outweigh its benefits, the court should grant the motion. And that is so even if the relator presents a credible assessment to the contrary.” The bulk declined the federal government’s position that it had “essentially unfettered discretion to dismiss.” The bulk likewise declined Polansky’s proposition of a “complicated form of arbitrary-and-capricious review.” Polansky proposed for the federal government to have main control of the action if it intervenes in the seal duration, while the relator would have main control if the intervention happens later on. According to the bulk, “the Third Circuit’s Goldilocks position is the legally right one,” and a district court need to examine a FCA Section (2)(A) movement to dismiss utilizing Rule 41’s requirements.

In dissent, Justice Clarence Thomas specified the FCA’s text and structure “afford the government no power to unilaterally dismiss a pending qui tam action after it has declined to take over the action from the relator at its outset.” Thomas likewise argued qui tam fits breach Article II. Justice Brett Kavanaugh, in a one-paragraph concurrence signed up with by Justice Amy Coney Barrett, revealed contract with Thomas’ view. Justice Kavanaugh concluded there are significant arguments that the qui tam gadget is irregular with Article II, which personal relators might not represent the interests of the United States in lawsuits.

Bottom Line: The Court’s choice validates the federal government has broad latitude to dismiss an FCA fit when lawsuits is not in the federal government’s interest.

Documents: Opinion


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