Under what circumstances can the government veto a settlement between a relator and the defendant in a case in which the government has not intervened? As previously reported here, that is a question that has divided the Circuits, and one that the Fourth Circuit will soon be deciding. See United States ex rel. Michaels v. Agape Senior Cmty., Inc., No. 15-2145 (4th Cir.).
The district court held that the plain language of the FCA gives the government absolute veto authority, adopting the approach of the Fifth and Sixth Circuits, and rejecting a Ninth Circuit ruling that the government has unreviewable veto authority only during the period following the filing of a qui tam suit when the government is deciding whether to intervene. Under the Ninth Circuit rule, once the government declines to intervene, government rejections of settlements are subject to a reasonableness review by the Court.
On January 19, Petitioner filed its opening merits brief in Universal Health Services v. United States ex rel. Escobar, urging the Supreme Court to reject entirely, or at the very least sharply curtail, the “implied certification” theory of FCA liability developed in the Circuit courts.