Three times previously we have “reported from the front” on the federal government’s efforts to dismiss False Claims Act litigation – ostensibly (and often ostentatiously) filed in the government’s name – after the government has concluded that the particular case is more bother than it is worth. The most recent of those posts was late last year, and reported on Polansky v. Executive Health Resources, Inc., 17 F.4th 376 (3d Cir. 2021).
On June 21, 2022, the Supreme Court granted certiorari and will determine whether, and under what standard the government can seek dismissal of obnoxious FCA suits after it initially declined to intervene in the action. We had commented in our prior post about the proliferation of contradictory standards that government-sought dismissals had generated.
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.” As discussed in our prior post, these are the positions taken by the District of Columbia, and the Ninth, Circuits, respectively. 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.
While we thought that the Third Circuit’s Polansky decision represented a third way of addressing governmental dismissal request, the petitioning qui tam relator’s petition (that the Court granted) claimed (at pp. 11-19) that there were actually four different standards. That, presumably, is one of the things that the Court will now sort out.
Then there is what we called the petitioner’s “extreme position” that once the government declines to intervene at the beginning of the litigation, it forever loses its ability to seek dismissal at any later date – no matter how much of a hash the relator might ultimately make of the litigation. The petition makes that argument as well:
Congress gave the government a binary choice upfront: it “shall” either (A) proceed with the action, in which case the action shall be conducted by the Government, or (B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action. Once the government declines, the relator’s control is exclusive.
Petition at 20 (citations and quotation marks omitted). In short, the petitioner-relator is arguing that if, it does not take the action over at the outset (and give the relator a free ride to a bounty), the government loses any say about how an FCA action brought in its name is conducted or resolved.
That argument seems absurd to us, but otherwise the aforementioned four-way circuit split probably doesn’t amount to very much. As our prior posts demonstrate, the phrasing of the judicial review preceding recent FCA government-sought dismissals hasn’t changed the ultimate result – under the various tests, all recent outcomes (except one held to be interlocutory) have been the same: the government’s dismissal request being granted.
So it’s off to the races on FCA dismissals in the Supreme Court. While the petitioning relator used a multi-faceted circuit split to get the Court’s attention, it looks like the petitioner’s main argument, now that review has been granted, will be that the government lacks any ability to dismiss at all.