On June 16, 2023, the Supreme Court issued its opinion in United States ex rel. Polansky v. Executive Health Resources, affirming that courts should grant DOJ motions to dismiss over relator objections “in all but the most exceptional cases.” Prior coverage of this case is here and here.
Writing for the 8-1 majority, Justice Kagan affirmed the Third Circuit’s holding that, in an FCA action, the government may move to dismiss a qui tam suit whenever the government has intervened—regardless of whether it initially declined to intervene—and courts should apply the Federal Rule of Civil Procedure 41(a) standard for voluntary dismissals in reviewing the government’s motion. The Court added two caveats to this latter review: there must be a hearing on the dismissal (per 31 U.S.C. § 3730(c)(2)(A)) and the reviewing court should consider relator’s interest in the action moving forward in light of any invested resources. That said, the Court observed that the government’s dismissal will almost always satisfy Rule 41.
Polansky thus affirms that DOJ enjoys significant authority and discretion to balance the interests of the United States and move to dismiss qui tam actions over relator objections. As the Court explained, a reviewing court should grant the government’s motion to dismiss under 31 U.S.C. § 3730(c)(2)(A)—or a “(2)(A) motion”—if the government offers a “reasonable argument for why the burdens of continued litigation outweigh its benefits,” even if relator “presents a credible assessment to the contrary.”
The Court also concluded that while the government must intervene to file a (2)(A) motion to dismiss, the government is not constrained to filing a (2)(A) motion within the seal period. Rather, both as a matter of statutory interpretation and “the FCA’s [g]overnment-centered purposes,” the government need only intervene upon a showing of good cause, at any point in the litigation, for the government to move to dismiss the action.
As discussed here, DOJ had been more actively exercising its authority to dismiss qui tam actions under § 3730(c)(2)(A) in the several years before the Polansky opinion. Now that the Court has blessed DOJ’s broad authority to do so, DOJ may have renewed interest in government-initiated dismissals notwithstanding relator objections.
In a dissent, Justice Thomas concluded that the FCA’s text, structure, and history all establish that the statute affords the government “no power to unilaterally dismiss a pending qui tam action after it has ‘decline[d] to take over the action’ from the relator at its outset.” More intriguingly, the dissent also addressed “serious constitutional questions” regarding the FCA’s qui tam provisions. In short, “there is good reason to suspect that Article II does not permit private relators to represent the United States’ interests in FCA suits,” and the Justice would remand for the Third Circuit to consider this preliminary constitutional issue. Justice Kavanaugh, joined by Justice Barrett, wrote a two-sentence concurrence in which they acknowledged the “substantial arguments” put forth by Justice Thomas’s dissent that “the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation.” The concurrence encouraged the Court to take up in a future case the Article II concerns implicated by private whistleblowers purporting to represent the government in litigation. Defendants are sure to accept this invitation and we will monitor developments and report them here.
This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.