We’ve already provided two “reports from the front” about how the federal government is faring in False Claims Act cases where it has moved to dismiss actions over the objections of the relators supposedly pursuing recovery in the government’s name. Here’s a third one, about Polansky v. Executive Health Resources, Inc., ___ F.4th ___, 2021 WL 4999092 (3d Cir. Oct. 28, 2021). It’s the same basic fact pattern as the decisions discussed in our prior posts – the federal government, after declining to become involved, allowed a False Claims Act (“FCA”) relator to sue in its name for a while, but grew less and less enamored of the litigation, and ultimately moved, contrary to the wishes of the contingent fee relator, to dismiss the case with prejudice. Here, the government so moved shortly after “the parties commenced discovery.” Id. at *2. That in itself is significant, since FCA relators are often free riders from a discovery standpoint, demanding big bucks, but with little information of their own, so the government, in the name of which the relator is suing, has to expend almost all of the discovery related time and effort.
Having provoked the government into seeking to dismiss his FCA action, the relator took the extreme position that once the government decided not to intervene, it could never thereafter seek to dismiss the action. 2021 WL 4999092, at *4. That got nowhere. Nothing in the FCA “suggests that the relator’s right to control the action is exclusive vis-a-vis the Government.” Id. at *6. Further:
had Congress intended so draconian a consequence as to strip the Government of all ability to terminate a case brought in its name, it would not have obscured it in a clause preserving the “status and rights of the [relator].” Congress does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions − it does not, one might say, hide elephants in mouseholes.
Id. (citations and quotation marks omitted).
Polansky saw fit to require the government to move to intervene before it could seek dismissal. “[T]he Government must intervene before it can move to dismiss, but it can seek leave to intervene at any point in the litigation upon a showing of good cause.” Id. at *5. “Good cause,” Polansky held, “mean[s] simply a legally sufficient reason, and it is a standard the Government routinely satisfies.” Id. at *7 (citation and quotation marks omitted). Moreover, the intervention requirement seems mostly a formality, since Polansky went on to deem the government’s motion to dismiss as also constituting a motion to intervene:
Although the Government did not formally file such a[n intervention] motion before the District Court, that is no cause for remand on this record. Instead, we construe the Government’s motion to dismiss as including a motion to intervene because intervention was in substance what the government sought and in form what the False Claims Act requires.
Id. at *11 (citation and quotation marks omitted).
On the merits, the Third Circuit declined to adopt either the position “giv[ing] the government an unfettered right to dismiss an action” or “the rational relation test . . . drawn from . . . substantive due process jurisprudence.” Polansky, 2021 WL 4999092, at *10-11. As discussed in our prior post, these are the positions taken by the District of Columbia, and the Ninth, Circuits, respectively. Compare Swift v. United States, 318 F.3d 250, 252 (D.C. Cir. 2003), with United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139, 1145 (9th Cir. 1998). Instead, Polansky chose to complicate matters still further by adopting a third variant – judging the government’s dismissal motion against the standards of Fed. R. Civ. P. 41(a), governing voluntary dismissal. Polansky, 2021 WL 4999092, at *8. That means that, where, as in most cases, the government is seeking dismissal after the litigation has progressed, “dismissal must be only by court order, on terms the court considers proper.” Id. at *9.
What the heck does that mean?
Polansky doesn’t really say. Instead, the decision simply finds no abuse of discretion because:
The Court exhaustively examined the interests of the parties, their conduct over the course of the litigation, and the Government’s reasons for terminating the action. It discussed, for instance, the litigation costs that [the] suit imposed on the Government, . . . [as well as] the prejudice to the non-governmental parties, concluding that, even though the litigation was at an advanced stage and significant resources had been expended on it by both the parties and the Court, there was little risk of prejudice. . . . As for [the relator] , the District Court considered his argument . . . [and] also noted that [relator] had engaged in potentially sanctionable conduct during the course of discovery, and that this behavior was material and plays a role in the final disposition of this case.
Polansky, 2021 WL 4999092, at *11-12. Thus, Polansky provides essentially no guidance to future courts faced with similar motions. We do not know whether any of these actions are in fact required by the new Rule 41(a)-based standard – only that, since the district court did all that it did, dismissal was affirmed.
So while we can report that, once again, the government successfully obtained dismissal in Polansky we can’t tell you where, on the spectrum between Swift and Sequoia Orange, the Third Circuit falls, or even whether the Polansky is more, or less, deferential to the government’s position than the latter decision.