On June 16, 2023, the U.S. Supreme Court, in United States ex rel. Polansky v. Executive Health Resources Inc., held that the Government may seek dismissal of a False Claims Act ("FCA") qui tam suit over a relator's objection so long as it intervenes in the litigation, either during the initial seal period or afterward. The Court also held that, when handling such a motion, district courts should apply Federal Rule of Civil Procedure ("FRCP") 41(a), the rule generally governing voluntary dismissal of suits. And in a dissent that'in the long run'may end up being more impactful than the Court's holding, Justice Thomas (joined in a concurring opinion by Justices Kavanaugh and Barrett) questioned the constitutionality of the qui tam provisions themselves.
Background
In 2012, relator Jesse Polansky filed a qui tam action alleging that his employer, Executive Health Resources, enabled its hospital clients to over-admit patients by certifying inpatient services that should have been provided on an outpatient basis and then billed those services to Medicare. The Government declined to intervene during the seal period, but Polansky proceeded with the suit on his own. Then, in 2019, years after its declination and well into discovery, the Government decided that the burdens of the suit outweighed its potential value, so the Government moved to dismiss the action under its dismissal authority pursuant to 31 U.S.C. ' 3730(c)(2)(A) ("' 3730(c)(2)(A)"). The district court granted the motion, noting that the Government had "thoroughly investigated the costs and benefits of allowing [Polansky's] case to proceed and ha[d] come to a valid conclusion based on the results of its investigation." 422 F. Supp. 3d 916, 927 (E.D. Pa. 2019).
The U.S. Court of Appeals for the Third Circuit affirmed, finding that the Government had effectively intervened in the suit when it filed its motion to dismiss, and the Government had satisfied the burden articulated in FRCP 41(a) in making its motion. The Supreme Court then granted certiorari to resolve two circuit splits: (1) Whether the Government has the authority to dismiss a qui tam action under ' 3730(c)(2)(A) if it declined to intervene in the suit during the seal period; and (2) What standard should apply to a ' 3730(c)(2)(A) motion to dismiss.
Government's Dismissal Authority
The Court first assessed whether the Government has the authority to dismiss a qui tam action under ' 3730(c)(2)(A) if it declined to intervene during the seal period. Analyzing the plain language of the statute, the Court affirmed the Third Circuit's conclusion that the Government's dismissal power endures after the initial seal period, so long as it has intervened in the litigation.
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