27 May 2020

Senator Grassley Pushes Back on DOJ’s View of Its Right to Seek to Dismiss FCA Actions over Relators’ Objections

In a May 4, 2020 letter to Attorney General William Barr, Senator Chuck Grassley “vehemently” disagreed with the Department of Justice’s (“DOJ”) view, expressed in a brief recently filed with the Supreme Court by the Solicitor General, that the DOJ’s authority to dismiss an FCA claim “is an unreviewable exercise of prosecutorial authority.”  As a principal author of the 1986 FCA amendments that substantially expanded the whistleblower provisions, Senator Grassley argued that he could “confidently say” that the text of the FCA plainly states that the court—not DOJ—should decide whether the government’s motion to dismiss a qui tam claim succeeds.

Senator Grassley’s disagreement with DOJ hinges on the FCA’s Section 3730(c)(2)(A), which states:

The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.

Exercising the authority granted by this section, DOJ has moved to dismiss at least forty-five FCA cases since January 10, 2018, when Michael Granston, Director of the Commercial Litigation Branch at DOJ, issued guidance on when DOJ should seek to dismiss qui tams, in the “Granston Memo,” on which we have previously reported here and here.  In seeking these dismissals, DOJ has asserted that Section 3730(c)(2)(A) grants DOJ unfettered discretion to dismiss a case over the objection of the relator, notwithstanding the requirement that the court provide the relator with a “hearing.”

DOJ reads “hearing” simply to mean an “opportunity to be heard” or to “publicly persuade” DOJ to abandon its motion to dismiss.  To Senator Grassley, however, “hearing” means much more—“an adjudicative procedure where the court acts as an arbiter.”  The “technical” legal meaning of “hearing,” Senator Grassley argues, entails a judicial session for the purpose of deciding issues of fact or law.  Similarly, the ordinary, non-legal meaning of “hearing” entails a court proceeding in a forum wherein a judge has decision-making authority.  Thus, applying both the legal and ordinary meanings of “hearing,” the FCA mandates that the court have the final say when DOJ moves to dismiss a qui tam.  If Congress had intended “hearing” to mean only an “opportunity to be heard,” Congress would have said so, according to Senator Grassley, as it has in numerous other statutes.  And if Congress had intended that DOJ have unfettered discretion to dismiss, Congress would simply have omitted the language on the hearing from the statute.

Further, Senator Grassley argues, the DOJ’s constricted understanding of “hearing” conflicts with other FCA provisions.  Indeed, Congress wrote other sections of the law to ensure that DOJ could not unilaterally dismiss a qui tam.  For instance, once sixty days have passed since DOJ allowed a relator to proceed on her own, DOJ must show “good cause” to intervene, pursuant to Section 3730(c)(3).  “[I]t makes little sense,” Senator Grassley concludes, “that Congress would require DOJ to show good cause for intervening but grant them unfettered discretion for dismissing a case they have not yet joined.”

In a hand-written postscript, Senator Grassley acknowledges that the Attorney General had changed his mind on the constitutionality of the FCA before assuming his present position in the Trump Administration.  Senator Grassley warned that accepting the constitutionality of the FCA does not preclude DOJ’s “neuter[ing]” it in other ways.  Senator Grassley suggested that the Granston Memo would hurt the FCA, a successful piece of legislation that, he says, has returned $63 billion to the Treasury.

The full text of Senator Grassley’s letter is available here.

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