SCOTUS Ruling Gives Government Broad Authority in Dismissing FCA Whistleblower Cases

If a whistleblower files a False Claims Act lawsuit can the government dismiss the action? Yes, so long as the government first intervenes in the action. That was the recent ruling from the U.S. Supreme Court in a case styled United States el rel. Polansky v. Executive Health Resources, Inc., et al.

The False Claims Act allows a private citizen (relator) to file a complaint under seal and present it to the government, which then has 60 days to decide whether to intervene. If it chooses not to then the relator can move forward on their own.

In this case, the relator — petitioner Dr.  Jesse Polansky — filed a qui tam (whistleblower) action in 2012 alleging that respondent Executive Health Resources (EHR) helped hospitals overbill Medicare. Polansky was a doctor who worked as a consultant to EHR, Inc., a company that assists doctors and hospitals submit bills to Medicare.

In 2014, the government declined to intervene during the seal period, and the case spent years in discovery.

Instead of dismissing the action, Polansky and the government agreed he would file an amended, narrower complaint. The government informed the district court that it would not move to dismiss the case but “reserve[d] the right to determine whether its dismissal was warranted in the future based on further developments.” 

In August 2019, the government filed a motion to dismiss, which the court granted despite Polansky’s objection that the government lacked the authority and that counsel had already incurred around $20 million in attorneys’ fees.

Relying on decisions from the Sixth and Seventh circuits, the court of appeals held first that the government must intervene before moving to dismiss, “but it can seek leave to intervene at any point in the litigation upon a showing of good cause.â€

In writing the majority opinion, Justice Elena Kagan stated: “We hold that 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. We also hold that in handling such a motion,

district courts should apply the rule generally governing voluntary dismissal of suits: Federal Rule of Civil Procedure 41(a).

In writing the sole dissenting opinion, Justice Clarance Thomas stated: “In my view, the text and structure of the False Claims Act afford the government no power to unilaterally dismiss a pending qui tam action after it has decline[d] to take over the action from the relator at its outset. Thus, I would vacate the judgment below and remand for the Third Circuit to consider the serious constitutional questions that may affect the disposition of the government’s motion to dismiss petitioner’s qui tam suit.

This ruling could impact the government’s decision whether to intervene at the start of qui tam cases in the future.

According to the U.S. Department of Justice, whistleblowers filed 652 qui tam suits in fiscal year 2022, and this past year the department reported settlements and judgments exceeding $1.9 billion in these and earlier-filed suits.

The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as its ability to defend those who become the target of a whistleblower action. For more information call us at 305-358-4500 or email info@vitalehealthlaw.com