Justices probe government’s authority to dismiss False Claims Act lawsuits



The Supreme Court heard oral argument on Tuesday in the case of Dr. Jesse Polansky, a whistleblower who had filed a claim on behalf of the government under the False Claims Act’s qui tam provision. The Department of Justice had initially allowed Polansky to proceed with the lawsuit against a company he accused of causing millions of dollars in false Medicare bills to the government, but after several years of litigation sought to force dismissal of the case. At issue is whether and when the government has authority to force such a dismissal, with the justices on Tuesday appearing to reject Polansky’s argument that the government has no such authority as well as the government’s argument that it maintains an unfettered right to dismiss. Instead, the justices appeared focused on identifying the appropriate standard and procedure, seemingly headed toward setting a low bar for the government to clear.

The FCA’s qui tam (an abbreviation for a Latin phrase meaning “Who sues on behalf of the King as well as for himself”) provision encourages whistleblowers to file suit on behalf of the government and gives the government the opportunity to decide whether to take control of the case (referred to as “intervening”) or allow the whistleblower to proceed. DOJ has used the False Claims Act to recover more than $70 billion since 1986, much of it driven by whistleblower lawsuits and largely focused on health care and defense contracting. As the number of qui tam cases has continued to increase (more than 500 have been filed annually in recent years) and the whistleblower’s bar has been increasingly aggressive about moving forward with cases, DOJ has ramped up use of its dismissal authority — not only declining to take over litigating qui tam cases, but affirmatively dismissing them to prevent the whistleblower from proceeding.

Disputes about whether and when DOJ can seek dismissal have heated up in recent years, centered around situations when DOJ initially declines to intervene and later decides to affirmatively seek dismissal. The result has been disagreement among U.S. courts of appeals as to whether DOJ must first intervene in order to dismiss a qui tam, and as to what standard should apply to the government’s motion to dismiss. The justices seemed likely to agree with Polansky on the first issue and require the government to intervene, though Justice Neil Gorsuch noted that process would likely be “academic,” and Assistant to the Solicitor General Frederick Liu, arguing on behalf of the government, seemed largely untroubled by the prospect in response to questioning.

Much of Tuesday’s argument surrounded identifying the appropriate dismissal standard – the statute requires a “hearing,” but the government argued that is only an opportunity for the whistleblower to try to convince the government to change its mind or for the whistleblower to raise constitutional violations, such as the dismissal being based on the whistleblower’s religion, race, or sex. The justices seemed to reject that argument, though not in a way likely to have tremendous practical impact on the government’s authority. (Justice Brett Kavanaugh joked that he had once attended a hearing held “to serve coffee and doughnuts” – the phrase sarcastically adopted by the U.S. Court of Appeals for the 7th Circuit to point out that if there is a hearing there should be a role for the trial court – but such hearings are “exceedingly rare.”) While the justices did not clearly coalesce around a standard, all seemed to contemplate a low bar, and it was not clear the justices would adopt a standard requiring the government to do anything more than articulate a legitimate rationale. As Justice Neil Gorsuch noted, “Normally when we invoke rational-basis review, it’s pretty cursory, pretty quick, and the government always wins.”

Multiple justices asked the parties what would qualify as an acceptable rationale for dismissal and whether the trial court should be permitted to delve into the accuracy and sincerity of the government’s proffered explanation. Although the justices appeared to view as sufficient DOJ explanations that a case is not viewed as meritorious or that discovery would be overly burdensome for the government, questioning sought to identify where the line should be drawn. In response to a hypothetical from Justice Samuel Alito, Liu freely conceded that “we consulted an astrologist” or “we feel like it” would not be a sufficient rationale for dismissal, while telling Gorsuch that “not a good use of resources” and “not an agency priority” would be sufficient rationales and the trial should not be permitted to order discovery or otherwise question their basis. Taking up a hypothetical initially posed by Alito, Justice Sonia Sotomayor pressed Liu as to whether “political pressure … that the senator of this defendant’s home state doesn’t want this defendant to be sued” would be a legitimate basis for dismissal, and she seemed to disagree with Liu’s response that it might suffice, depending on the specific facts.

Justices also questioned whether the government should have to explain its initial decision not to intervene when later seeking to dismiss and whether the trial court should be permitted to consider that. Alito asked what a trial court should do if the government’s explanation for not intervening earlier is “we’re embarrassed, Your Honor, but this kind of fell behind a filing cabinet in DOJ and we only found it recently.” (Polansky claims his counsel has incurred approximately $20 million in attorney time and costs litigating the matter.) Both Liu and the defendant company’s counsel, Mark Mosier, urged the court not to have sympathy for whistleblowers who spend years litigating cases before DOJ seeks to dismiss, arguing whistleblowers know that is the way the system works when they file a qui tamand choose to proceed despite the risks after the government declines to intervene.

Much of Tuesday’s argument centered around textual analysis of the FCA’s language, but with multiple justices focusing on the prospect that accepting Polansky’s view would create constitutional problems by giving too much governmental authority to private individuals. Justice Clarence Thomas opened the session’s questioning by pressing Polansky’s counsel, Daniel Geyser, on the separation of powers problems that would flow from taking away or significantly limiting the government’s dismissal authority, a result unlikely to occur based on the justices’ questions on Tuesday.

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