29 June 2018

U.S. Solicitor General Agrees That First-to File Violations Require Dismissal

The Solicitor General recently filed a brief in the United States Supreme Court stating that “the required remedy for a first-to-file violation is dismissal.”  U.S. Br. 10 (emphasis added).

The brief was filed in the context of the long-running case that produced the Court’s opinion a few years ago in Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, 135 S. Ct. 1970 (2015).  On remand, the petitioner, Benjamin Carter, maintained that the intervening dismissals of two earlier-filed cases “cured” any first-to-file defect with his case, such that dismissal and re-filing of Carter’s complaint was unnecessary.  The district court and the Fourth Circuit disagreed.  Carter then sought certiorari, and the Supreme Court invited the Solicitor General to weigh in.  (The government recommended against certiorari, and the Court denied the petition on June 25, 2018.) 

Notwithstanding the denial of certiorari, the government’s brief makes several important points about the FCA’s first-to-file bar.  First, the “appropriate reference point for a first-to-file analysis is the set of facts in existence at the time that the FCA action under review is commenced.”  U.S. Br. 9.  Second, the “required” remedy for a violation is that the case “must be dismissed without prejudice.”  Id. at 10.  Third, the government clearly rejected the proposition—often raised by relators and sometimes entertained by courts—that a first-to-file violation can be “cured simply by amending or supplementing the complaint after the first-filed action has been dismissed.”  The Fourth Circuit had punted on that question, but the government did not:  “[i]n the view of the United States, the court of appeals need not have qualified its statement that ‘the only appropriate response for a first-to-file rule violation is dismissal,’” because any amendment “would not have cured the statutory violation or justified a remedy other than dismissal without prejudice.”  Id. at 13.  Finally, the SG was unpersuaded by relator’s policy “concern that requiring dismissal in these circumstances would lead to the ‘unnecessary termination of meritorious actions,’ … and could allow ‘wrongdoers to escape liability’ if a relator’s suit is dismissed after the statute of limitations has expired.”  Id. at 15.

The government’s filing is a valuable development for FCA defendants.  The consequences of a first-to-file violation had been subject to some uncertainty, with relators typically arguing that a violation did not mandate dismissal if the earlier-filed action was later dismissed or settled.  Defendants can now deploy the government’s clear position in resisting such remedial arguments and in forcefully pursuing dismissal.

A copy of the SG’s brief is here.

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