On June 16, 2023, the U.S. Supreme Court decided United States ex rel. Polansky v. Executive Health Resources, Inc., No. 21-1052, holding that the Government may intervene and move to dismiss a False Claims Act suit at any time in the life of the case and that district courts should evaluate such motions under the general Federal Rule of Civil Procedure 41(a) voluntary dismissal standard.
The False Claims Act (FCA) imposes liability on persons and companies, typically contractors, who defraud the federal government. The Act primarily does this through a unique “qui tam” enforcement scheme. Under this qui tam system, private whistleblowers can file FCA suits on behalf of the Government. The Government then has the opportunity to decide whether to “intervene” and take control of the case or to allow the whistleblower to proceed on their own, albeit with the Government retaining the right to intervene at a later date if necessary. If the whistleblower prevails, the FCA allows them to receive between 15-30% of the recovery. The Government keeps the rest.
In 2012, Dr. Jesse Polansky filed a qui tam suit. He accused his former employer of overbilling Medicare for various medical services. The Government declined to intervene at the case’s outset, and so Polansky proceeded to litigate on his own. After five years of extensive discovery, the Government determined that Polansky’s suit was imposing a substantial burden on the Government (because it had to participate in discovery) and that the suit was not likely to succeed in any event. Thus, in 2019, the Government moved to intervene and dismiss Polansky’s suit, over Polansky’s vigorous objection. The district court granted the Government’s motion and the Third Circuit affirmed.
The Supreme Court affirmed the Third Circuit and, in so doing, set forth the legal standard for resolving a contested motion to dismiss a qui tam suit. As an initial matter, the Court confirmed that the Government may intervene and move to dismiss a qui tam suit at any point in the case’s life. Even if the Government waits years to intervene, as was the case here, “the Government’s interest in the suit is the same . . . to redress injuries against the Government.” Thus, the Government always retains the right to “reassess [a] qui tam action and change its mind” about whether the suit should go forward.
In terms of what standard to apply when evaluating such a motion to dismiss, the Court held that district courts should apply the rule generally governing voluntary dismissals of suits in ordinary civil litigation — Federal Rule of Civil Procedure 41(a). This standard permits actions to be dismissed “by court order, on terms that the court considers proper.” The Government will meet this standard, the Court then explained, so long as it “offers a reasonable argument for why the burdens of continued litigation outweigh its benefit.” Because the Government met that low bar here, dismissal was appropriate.
Justice Kagan delivered the opinion of the Court, in which Chief Justice Roberts and Justices Alito, Sotomayor, Gorsuch, Kavanaugh, Barrett, and Jackson joined. Justice Kavanaugh filed a concurring opinion, in which Justice Barrett joined. Justice Thomas filed a dissenting opinion.
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