Getnick Law Comments on Supreme Court Declining to Address Standard for Government-Requested FCA Dismissals
The U.S. Supreme Court has denied review of United States ex rel. Cimznhca, LLC v. UCB, Inc., 970 F.3d 835 (7th Cir. 2020), a decision from the Seventh Circuit Court of Appeals that granted the U.S. Department of Justice’s request to dismiss a False Claims Act (“FCA”) action over the Relator’s objection.
Under the FCA, the government can move to dismiss an action over the relator’s objection so long as the relator is provided notice and an opportunity for a hearing. The FCA does not specify the standard of review a court must apply to a government’s request to dismiss an FCA action in this manner, and courts across the country have developed different standards. On the one hand, the D.C. Circuit Court of Appeals announced a standard in Swift v. United States, 318 F.3d 250 (D.C. Cir. 2003), that gives the government “unfettered” discretion to dismiss. On the other hand, the Ninth Circuit Court of Appeals, in United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139 (9th Cir. 1998), held that the government must first identify a “valid government purpose” and then show “a rational relation between dismissal and accomplishment of the purpose.”
In Cimznhca, the Seventh Circuit declined to adopt either the D.C. Circuit’s standard in Swift or the Ninth Circuit’s standard in Sequoia Orange, though the court explained that “the correct answer lies much nearer to Swift than Sequoia Orange.” Instead, the Seventh Circuit interpreted the government’s motion to dismiss as a motion to intervene and dismiss, and therefore applied the dismissal standard under Federal Rule of Procedure Rule 41(a), which applies to voluntary dismissals. Under that standard, once “the relator received notice and took its opportunity to be heard . . . that should have been the end of the case.” Judge Scudder, concurring in the judgment, wrote for himself that he would have decided the case on narrower grounds by holding that the government’s dismissal request in the case was sufficient even under the more demanding Sequoia Orange standard.
Relator’s petition for certiorari in Cimznhca would have provided the Supreme Court an opportunity to resolve the dispute among the Circuits as to the correct standard for the government to dismiss an FCA case over a relator’s objection. By declining to review the case, the Supreme Court has left the circuit split in place going forward.
Click here to read the Seventh Circuit’s opinion.
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