On June 16, 2023, the U.S. Supreme Court affirmed that the DOJ properly secured a dismissal of a whistleblower suit accusing Executive Health Resources Inc. of violating the False Claims Act by improperly billing Medicare. The case resolves a circuit split concerning DOJ’s authority to intervene and dismiss an FCA case, holding that courts are to apply the voluntary dismissal standard of Rule 41 in evaluating cases in which the government moves to dismiss.

The False Claims Act’s qui tam provision encourages whistleblowers to file suit on behalf of the government. The law also provides the government the option to take control of the case by intervening or to allow the whistleblower to proceed. DOJ has recovered over $70 billion under the FCA since 1986, with most recoveries driven by whistleblower lawsuits.

Under the FCA, the DOJ may move to dismiss a whistleblower suit by intervening in the case and providing notice, after which the whistleblower is provided an opportunity for a hearing on the motion. 31 U.S.C.§ 3730(c)(2)(A). In United States ex rel. Polansky v. Exec. Health Resources Inc., No. 21-1052, 2023 WL 4034314 (U.S. June 16, 2023), the whistleblower argued that an appeals court mistakenly dismissed the case because the government failed to properly intervene at the outset of the case before it moved for dismissal.

In an 8-1 decision written by Justice Elena Kagan, the Supreme Court held that “the Government may seek dismissal of an FCA action over a relator’s objection so long as it intervened some time in the litigation, whether at the outset or afterward.” Id. at *3. The majority opinion also held that courts “should apply the rule generally governing voluntary dismissal of suits: Federal Rule of Civil Procedure 41(a).” Id. The Court held the government’s authority to dismiss is not completely unfettered, but it is entitled to “substantial deference.” The Court further explained that “[i]f the Government offers a reasonable argument for why the burdens of continued litigation outweigh its benefits, the court should grant the motion. And that is so even if the relator presents a credible assessment to the contrary.” Id.

Justice Kagan was joined in the opinion by all justices except for Justice Clarence Thomas, who filed a dissenting opinion that raised concerns about the FCA’s constitutionality. Justice Brett M. Kavanaugh filed a concurring opinion, which was joined by Justice Amy Coney Barrett.

The U.S. Supreme Court’s opinion can be found here.