In this issue:
- Supreme Court holds that the government may intervene in an FCA case and file a motion to dismiss any time "good cause" is shown, even if it initially declined to intervene and notwithstanding the relator's objection.
- New York doctor fails to allege sufficient particularity to nab his former boss for re-using single-use medication vials.
- Dismissal of HUD fraud shows the continued importance of causation in FCA claims.
- Pfizer advocates narrowing the scope of the Anti-Kickback Statute based on two seemingly unrelated Supreme Court cases issued this term.
It's My Party, I'll Dismiss When I Want To
United States ex rel Polansky v. Executive Health Resources, Inc., 143 S. Ct. 1720 (2023)
The Supreme Court held in an 8-1 decision that the government may move to dismiss under 31 U.S.C. '3730(c)(2)(A) any time it has intervened in a qui tam action filed under the False Claims Act (FCA), even if the seal period has passed and the relator objects, and that the standard for assessing the motion to dismiss an FCA action over a relator's objections is the same standard applied to voluntary dismissal in ordinary civil suits (Federal Rule of Civil Procedure 41(a)).
Dr. Jesse Polansky was a consultant for Executive Health Resources (EHR), a provider of billing review and certification services to hospitals and physicians. Polansky filed an FCA suit, alleging that EHR systematically enabled its client hospitals to charge inpatient rates for services that should have been provided on an outpatient basis, resulting in improper billing of Medicare at higher rates. The government investigated the case for two years, but ultimately decided not to intervene. Seven years later, after receiving demands from EHR for documents and deposition testimony during discovery and assessing the burden of discovery, the government determined that the demands of the suit outweighed its value and it filed a motion to dismiss the action, notwithstanding the relator's objection.
The district court granted the government's motion to dismiss, and the Third Circuit affirmed. The relator then appealed to the US Supreme Court, arguing that the government could not move to dismiss after it declined to intervene during the seal period following the filing of relator's complaint.
The Court held that, even if the government initially declined to intervene in a relator's FCA case, once the government has actually intervened, it has the authority to move to dismiss the relator's case, notwithstanding the relator's objection. This is because, the Court explained, ' 3730(c)(2)(A) of the FCA, which grants the government the power to dismiss or settle FCA cases, does not apply if the government is not a party to the litigation; thus, the government must intervene to become a party prior to moving to dismiss. Section 3730(c)(2)(A) does...
