Aug 82023

First Court of Appeals to Apply Polansky Upholds DOJ’s Dismissal

Brenna E. Jenny and Matt Bergs
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The Eleventh Circuit recently became the first Court of Appeals to apply the Supreme Court’s decision in United States ex rel. Polansky v. Executive Health Resources, Inc., 143 S. Ct. 1720 (2023), when it affirmed a district court’s decision to grant DOJ’s motion to dismiss a qui tam suit over a relator’s objections.  In Polansky, which we analyzed in detail here, the Supreme Court held that the United States may move to dismiss under 31 U.S.C. § 3730(c)(2)(A) regardless of when it intervened in the case and that courts should review any such motion under Federal Rule of Civil Procedure 41(a).  The Eleventh Circuit’s decision underscores the United States’ broad dismissal power in False Claims Act cases.

The underlying qui tam before the Eleventh Circuit was filed by the relator in August 2013 against two physicians, their clinic, their pharmacy, and a company they contracted with to perform certain services.  The United States declined to intervene but pursued a simultaneous criminal case against the physicians, which partially overlapped with the relator’s qui tam.  In those proceedings, the United States ultimately obtained a jury verdict against the two physicians that resulted in criminal forfeiture proceedings.  In parallel, the physicians, their clinic, and their pharmacy defaulted in the relator’s qui tam in 2017.  All that was left was for the relator to obtain a default judgment against those parties.  Instead, over the next four years, the relator filed several motions and issued numerous discovery requests to the United States, all of which were intended to secure her share of the criminal forfeiture recovery.

In June 2022, almost nine years after the relator first filed the qui tam, the United States moved to intervene and dismiss the qui tam, arguing that the relator: “failed to prosecute this action to an enforceable judgment, neglected her responsibilities as a relator, burdened the United States with discovery requests that are either irrelevant or premature, and undercut the United States’ FCA enforcement efforts in this district.”  A judge in the Southern District of Alabama found these justifications for dismissal compelling and dismissed the case.  On appeal, the Eleventh Circuit affirmed the dismissal, finding that, notwithstanding the relator’s substantial expenditure of time and resources, the United States had done “more than enough to establish reasonable grounds for its view that ‘the burdens of continued litigation outweigh its benefits,’” as required by Federal Rule of Civil Procedure 41(a).

A copy of the opinion can be accessed 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.

Brenna E. Jenny

Washington, D.C.

bjenny@sidley.com

Matt Bergs

Chicago

mbergs@sidley.com

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