Court Dismisses EMTALA-Based Qui Tam Over Relator’s Objections
DOJ recently secured dismissal of a qui tam complaint premised on alleged violations of EMTALA over the relator’s objections, with the district court affirming that DOJ satisfied the Polansky standard for Section 3730(c)(2)(A) dismissals by presenting a “reasonable argument.” In this case, DOJ’s argument rested on perceived flaws in the viability of the relator’s legal theory, government litigation costs, and complex privilege issues that would need to be resolved during discovery.
The relator filed suit in October 2015 against a hospital (his former employer), alleging that the hospital violated EMTALA by engaging in “patient dumping.” According to relator, the hospital’s catchall certification on Medicare claim forms that it complied with all laws was therefore false. The government initially declined to intervene, but in November 2018 moved to dismiss the qui tam complaint, arguing that it 1) hindered settlement negotiations between the hospital and the Department of Health and Human Services Office of Inspector General “so long as the threat of FCA damages and penalties looms over” the hospital; 2) consumed excessive government resources by requiring it “to monitor closely this suit and…file one or more Statements of Interest clarifying the United States’ FCA legal positions in response to the arguments of both parties and participate in burdensome Government depositions and document discovery through litigation and deposition of government officials”; and 3) was not a viable false claims theory as the government had “a rational basis…for concluding that relator’s allegations…lack merit.” The court granted that motion in January 2021, and the relator moved for reconsideration.
Following the Supreme Court’s decision in United States ex rel. Polansky v. Executive Health Resources, Inc., 142 S. Ct. 2834 (2022) (discussed further here), in which the Court held that a government motion to dismiss under Section 3730(c)(2)(A) should be decided under a highly deferential standard akin to Federal Rule of Civil Procedure 41(a), the district court allowed the relator to supplement his pending reconsideration motion.
At oral argument, DOJ was even more descriptive than in its November 2018 motion to dismiss about the reasons for its Section 3730(c)(2)(A) motion. As summarized by the district court in its decision, DOJ “believes the burden” of allowing the qui tam to continue “outweighs the benefit,” noting “how litigious this case has been, how long it has been pending, the effort the United States has already expended monitoring the case and responding to pleadings, and the work still left to do.” For instance, in discussing the potential cost of continuing the case, the government noted that “[h]aving been involved in defending several lawyers who have been deposed at the Department of Justice, that is a very messy process with all sorts of privilege issues.” In addition, the government had assessed the relator’s theory, and in the court’s words was “unimpressed” with his theory and evidence.
The court concluded that dismissal was not a “close call,” explaining that even if the relator provided a “credible” argument to continue the litigation, DOJ is entitled to “substantial deference” once it articulates its “reasonable argument” for dismissal. “This minimal showing makes sense because the claim belongs to the United States, and the statute expressly says the Government may dismiss it ‘notwithstanding’ the relator’s ‘objections.’”
A copy of the court’s opinion can be found here. The government’s initial motion to dismiss can be found here.
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