Supreme Court Holds That the Government Must Intervene in Order to Move to Dismiss Over a Relator’s Objection
On June 16, 2023, the Supreme Court affirmed the Third Circuit’s decision in U.S. ex rel. Polansky v. Executive Health Resources, a case which involved the power of the government to dismiss a False Claims Act qui tam action over the objection of the whistleblower who brought the case. Justice Kagan delivered the opinion of the Court, with Justices Kavanaugh and Barrett concurring, and Justice Thomas dissenting.
False Claims Act qui tam actions are brought by private citizens on behalf of themselves and the government and are filed under seal to give the government time to investigate the allegations. After the government investigates, it can either intervene and take over control of the case, with the relator taking a secondary role, or it can decline to intervene, in which case the relator can “proceed with the action.”[1] The government can later intervene for “good cause.”[2] The government is also granted the power within the False Claims Act to move to dismiss a qui tam action notwithstanding the objection of the relator, provided the relator gets notice of the motion and a hearing.[3]
The issue in this case involved whether the government had to intervene in order to move to dismiss a case over the relator’s objection, or whether the government had an unfettered right to dismiss qui tam actions at any time. Also at issue was what standard district courts should use in determining whether to grant the government’s motion to dismiss. The Court held that the government may seek dismissal of a qui tam action over the objection of the relator after it has been granted leave to intervene, whether during the investigative period when the case is still under seal, or after it has declined to intervene and the relator has proceeded with the action. The Court further held that if the government is granted leave to intervene after initially declining, district courts should apply the rule of civil procedure which governs whether and how a party to a suit may voluntarily dismiss the case.
The Court closely examined the text of the False Claims Act and determined that the government must intervene prior to moving to dismiss. Once it intervenes, the Court explained, the government “proceeds with the action,” and takes over the primary responsibility for prosecuting or voluntarily dismissing the case.
The Court explained that while district courts should analyze the government’s post-intervention dismissal motion under the standard for voluntary dismissals by a party, analysis is slightly different in qui tam actions, because the relator is due notice and a hearing under the False Claims Act. Further, courts should consider and balance the interests of the government in wanting to dismiss the case with the interests of the relator in proceeding, noting that if the government moves to dismiss after many years of litigation, the relator may have committed tremendous resources to the cause.
Ultimately, however, the Court emphasized that the government would likely prevail on its motion to dismiss “in all but the most exceptional cases,” and that the government’s views are “entitled to substantial deference.” The Court held that the government “enumerated the significant costs” associated with continuing the case, as well as the potential to expose privileged materials, and detailed its view that the case was not likely a winner in the end, while the relator disputed this and pointed to the huge potential recovery that the government would miss out on. The Court found that the Third Circuit properly weighed the arguments and determined that the government had made a sufficient showing that continuing the suit would not “vindicate the government’s interests,” which is what qui tam actions are meant to do, and affirmed the decision.
In Justice Thomas’s dissent, he argued that the text of the False Claims Act did not allow for the government to dismiss a qui tam suit after initially declining to intervene. He based this interpretation on the statutory language allowing the government to intervene following declination, “without limiting the status and rights of [the relator],” arguing that this language required the government to allow the relator to maintain control of the action. Given this interpretation, Thomas questioned whether the qui tam provisions of the False Claims Act ran afoul of Article II of the U.S. Constitution, because the Executive Branch or its officers, in his opinion, are exclusively responsible for enforcing federal law, and if the government does not have the power to take over a qui tam suit from a relator at any time during the litigation, it is ceding that control to private citizens. He also suggested that because relators were not appointed officers of the United States, a private relator could not represent the interests of the government in litigation.
However, these arguments have been considered and rejected every time they have been raised. First, the Executive Branch (through the Department of Justice) rejects the assertion that the qui tam provision in the False Claims Act is unconstitutional and did not raise it in this case. Second, Congress which is responsible for drafting the laws has confirmed that there is nothing unconstitutional about enlisting the help of private citizens in fighting fraud on the government every time it has taken up the False Claims Act over the last 30 plus years. Third, there is a large body of caselaw created by the Judicial Branch holding that the False Claims Act is constitutional.[4] Indeed, the majority of justices in this case did not agree with Justice Thomas’s assertions – which were not raised by any of the parties. Some cases have compared the powers given to a qui tam relator during a case with those given to an independent counsel under the Ethics in Government Act.[5] In those cases, the courts found that because relators received much less discretion than independent counsel, and the independent counsel provisions had been deemed constitutional, the qui tam provisions of the FCA must also be deemed constitutional.
Further, courts have held that the qui tam provisions do not run afoul of the requirements that law enforcement be carried out by appointed officers, explaining that a relator only represents the government in the case at hand and the “position is without tenure, duration, continuing emolument, or continuous duties.”[6] Courts have also held that the long-standing use of qui tam provisions, since the founding of the country, suggests that the provisions are constitutional, and that nothing in the constitution suggests that the three branches of the government were required to maintain complete control over the duties under their responsibility.[7] It is well settled in all three branches of the federal government that the qui tam provisions of the False Claims Act are in line with Article II.
As noted by the Court in upholding the Third Circuit’s decision, the government maintains significant control over qui tam actions, may intervene for good cause and move to dismiss, and courts should give the government substantial deference in determining whether to grant the government’s motion to dismiss.
Jacklyn DeMar is the Director of Legal Education at The Anti-Fraud Coalition
[1] 31 U.S.C. §§3730(b)(2)–(3)
[2] 31 U.S.C. §3730(c)(3)
[3] 31 U.S.C. §3730(c)(2)(A)
[4] 24 False Cl. Act and Qui Tam Q. Rev. 10 (October 2001)
[5] See e.g. United States ex rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir. 1993)
[6] See e.g. United States ex rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032 (6th Cir. 1994)
[7] See e.g. Riley v. St. Luke’s Episcopal Hospital, 252 F.3d 749 (5th Cir. 2001)
