On 16 June 2023, the United States Supreme Court issued a decision in the case of United States ex rel. Polansky v. Executive Health Resources1, holding that the federal government (Government) maintains the authority to dismiss a federal False Claims Act (FCA) action over a relator's objection so long as the Government first intervenes in the action. The court also held that in assessing the Government's motion to dismiss a relator's FCA action, district courts should apply the rule governing voluntary dismissal of suits in ordinary civil litigation. This decision, in giving the Government broad discretion to dismiss a qui tam action, may affect the Government's decision on when to intervene in an action. Additionally, the decision reinforces FCA defendants' ability to urge the Government for dismissal throughout the lifecycle of the qui tam action, rather than solely at the pre-intervention phase.
BACKGROUND
The FCA allows private citizens'relators'to file FCA suits on behalf of the Government, which are known as qui tam suits. In a qui tam suit, the FCA allows the Government a 60-day period (subject to extensions) to investigate and evaluate the action, during which the relator's complaint remains under seal.2 The Government then has the choice to intervene and effectively take over the action or to decline to intervene and allow the relator to continue conducting the action on the Government's behalf.3 Even where the Government declines to intervene, the FCA makes clear that the Government has certain continuing rights in the action. For example, if the Government declines to intervene, the Government can later seek leave from the court to intervene "upon a showing of good cause."4 The FCA also allows the Government to "dismiss the action notwithstanding the objections of the [relator]" so long as the relator has received notice of the motion to dismiss and an opportunity for a hearing.5 But, the FCA is silent on whether the Government's dismissal authority survives where the Government has allowed the seal period to lapse without intervening. This silence led to a circuit split on the issue.6
In Polansky, the relator filed a qui tam action in 2012 alleging that the defendant had aided hospitals in a scheme to overbill the Medicare program.7 After reviewing the evidence, the Government declined to intervene within the seal period.8 Thereafter, the case spent a number of years in discovery before the Government finally decided, in 2019, that the "varied burdens of the suit outweighed its potential value."9 The District Court for the Eastern District of Pennsylvania granted the Government's motion...
