FALSE CLAIMS ACT-GOVERNMENT INTERVENTION-GOVERNMENT’S ABILITY TO- DISMISS

United States ex rel. Polansky v. Exec. Health Res., Inc., 216 L. Ed. 2d 370 (U.S. S. Ct. June 16, 2023) (Kagan, J.) The False Claims Act (FCA), 31 U. S. C. §§3729-3733, imposes civil liability on any person who presents false or fraudulent claims for payment to the Federal Government. The statute is unusual in authorizing private parties—known as relators—to sue on the Government’s behalf. When a relator files a complaint, the Government gets an initial opportunity to intervene in the case. If the Government does so, it takes the lead role. If not, that responsibility falls to the relator, the only person then pressing the suit. But even when that is so, the Government retains certain rights, including the right to intervene later upon a showing of good cause.
The questions presented here concern the Government’s ability to dismiss an FCA suit over a relator’s objection. Everyone agrees that if the Government intervenes at the suit’s start, it can later move to dismiss. But the parties dispute whether, or in what circumstances, the same is true if the Government declines its initial chance to intervene. And the parties disagree as well about the standard district courts should use in deciding whether to grant a Government motion to dismiss.
Today, we hold that the Government may seek dismissal of an FCA action over a relator’s objection so long as it intervened sometime in the litigation, whether at the outset or afterward. We also hold that in handling such a motion, district courts should apply the rule generally governing voluntary dismissal of suits: Federal Rule of Civil Procedure 41(a). Petitioner Jesse Polansky is a doctor who worked for respondent Executive Health Resources (EHR), a company that helped hospitals bill the United States for Medicare-covered services. In 2012, Polansky filed (under seal, as required) a qui tam action against EHR. The complaint alleged that EHR was enabling its clients to cheat the Government—essentially, by charging inpatient rates for what should have been outpatient services. After reviewing Polansky’s evidence, the Government declined to intervene during the seal period. The case then spent years in discovery, with EHR demanding both documents and deposition testimony from the Government. As its discovery obligations mounted and weighty privilege issues emerged, the Government assessed and reassessed whether the suit should go forward. By 2019, it had decided that the varied burdens of the suit outweighed its potential value. The Government therefore filed a motion under Subparagraph (2)(A) to dismiss the action over Polansky’s objection. The District Court granted the request, finding 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 (ED Pa. 2019).