SCOTUS Polansky Decision Sets Forth Government-Requested False Claims Act Dismissal Standard
The Supreme Court issued its ruling in United States ex rel. Polansky v. Executive Health Resources, Inc. today, holding that the government must intervene in a False Claims Act qui tam case before moving to dismiss it over the whistleblower’s objection.
The False Claims Act is a statute that the government and entities or individuals can use to file suit against those who are defrauding the government. When entities or individuals file suit under the False Claims Act, they do so on behalf of the government in what is called a “qui tam” action. An entity or individual who files a qui tam action is known as the “relator” or “whistleblower.” After a qui tam action is filed, the government investigates the whistleblower’s allegations and can intervene and take over the case or decline to intervene and let the whistleblower proceed with the case. If the government initially declines to intervene, it can subsequently intervene for good cause. The government can also move to dismiss the qui tam action over the whistleblower’s objection so long as the relator is given notice and a hearing.
In Polansky, the government argued that it had an absolute right to dismiss a qui tam case at any time regardless of the whistleblower’s objection. The Court rejected this argument and held instead that the government had to intervene before moving to dismiss. The Court further held that if the government did intervene, courts should analyze the motion to dismiss under the general standard for voluntary dismissals by a party. Although the Court noted that lower courts should balance the interests of the government and whistleblower, it emphasized that the government was “entitled to substantial deference” and likely win its motion to dismiss “in all but the most exceptional cases.”
Notably, Justice Thomas wrote a dissenting opinion in which he argued that the False Claims Act did not allow the government to dismiss a qui tam suit if it initially declined to intervened, and then questioned whether the qui tam provisions of the False Claims Act violated Article II of the U.S. Constitution. A majority of the justices, however, did not concur with Justice Thomas’ opinion. Moreover, his stance is out-of-keeping with Congress, the Department of Justice, and multiple lower court decisions.
Read the Polansky decision here.