As previously discussed in a Law360 article by Jeffrey Belkin and Michael Mortorano, the DOJ’s Granston memo, dated January 10, 2018, “advised DOJ attorneys that, in tandem with their decisions to decline intervention in qui tam suits, they should consider proactively seeking dismissal under 31 U.S.C. § 3730(c)(2)(A).”
On September 4, 2019, Senator Charles Grassley (R-IA) wrote to Attorney General William Barr expressing his concerns about the DOJ’s implementation of the Granston memo, a topic that we noted Grassley had previewed during Barr’s confirmation hearing. While recognizing the government should dismiss meritless cases, Grassley highlighted the importance and impact of allowing whistleblowers to pursue cases even when the DOJ declines to intervene. Grassley expressed concern over recent cases where the DOJ seemingly sought dismissal for reasons unrelated to the merits of the case, such as to avoid the increasing litigation costs. To better understand the DOJ’s plans for future qui tam actions, Grassley requested the DOJ to provide additional information on cases where the DOJ moved for dismissal, including information related to the involvement of regulatory agencies, the role of the Granston memo in the DOJ’s decision to move to dismiss certain cases, the cost-benefit analysis used in processing litigation costs to warrant dismissal, and the number and description of cases where the DOJ has moved for dismissal since the Granston memo.
On December 19, 2019, Stephen Boyd, the assistant attorney general of the DOJ, responded to Grassley’s letter. Boyd agreed with the importance of qui tam cases and assured Grassley that dismissal was sought only in limited instances when pursuit of a qui tam case would undermine the False Claims Act’s (FCA) goals of preventing fraud or adverse effects on an important government interest. Boyd specifically cited that out of the 1,170 qui tam actions filed since January 1, 2018 (recall that the Granston memo is dated January 10, 2018), dismissal was sought in only 45 of them – less than 4%. Decisions have been rendered in 26 out of the 45 cases, with 25 cases dismissed and one denied but pending appeal. In addition to providing a chart listing the citation and status of 42 of these cases (three are under seal), Boyd bulleted the various reasons for moving to dismiss, including instances of cases filed by relators who were not represented by counsel, cases filed by relators whose claims were not legally cognizable under the FCA, and cases where there was a valid concern the case would undermine patient care. Boyd reassured Grassley of the DOJ’s continued commitment to allow proper qui tam cases to proceed.
While Boyd’s letter leaves many, indeed most, of Grassley’s questions unanswered and does not indicate whether the Granston memo influenced the DOJ’s decision to seek dismissal in those 45 cases, it seems, at least for now, that the Granston memo has not led to a deluge of dismissals. Therefore, we once again encourage defendants facing an FCA claim to keep in mind the points raised by our colleagues to reduce exposure to FCA claims in light of an increased focus on Section 3730(c)(2)(A) dismissals.
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