The Supreme Court has granted certiorari in the Polansky v. Executive Health Resources Inc., No. 19-3810 (3d Cir. Oct. 28, 2021) matter and is expected to resolve circuit splits on whether the government has authority to dismiss a relator’s qui tam action pursuant to 31 U.S.C. § 3730(c)(2)(A) of the False Claims Act (FCA) and what dismissal standard is appropriate. The Relator in Polansky argued that the government does not have the power to dismiss if they do not intervene at the outset. However, lower federal courts of appeals have provided a variety of answers to the foregoing question resulting in major splits.
In 2012, Dr. Jesse Polansky filed a FCA action in the Eastern District of Pennsylvania alleging that EHR’s certifications were false and caused the submission of false claims to the government. The government investigated Polansky’s allegations for approximately two years and ultimately decided not to intervene. Thus, Polansky continued this matter as the plaintiff until approximately 2019 when the government notified all parties that it intended to dismiss the action pursuant to 31 U.S.C. § 3730(c)(2)(A). The District Court stayed the matter from February 2019 to August 2019 but ultimately granted the government’s motion to dismiss. The relator appealed the District Court’s decision.
The U.S Court of Appeals for the Third Circuit affirmed the District Court’s decision to dismiss but held, like the Sixth and Seventh Circuits, that the government must first intervene in the qui tam matter before moving to dismiss. The foregoing is in direct contradiction of the D.C., Ninth, and Tenth Circuits, which held that the government need not intervene prior to moving for dismissal. Similarly, the standard of review for determining whether the government can dismiss over the relator’s objection is also at odds amongst circuit courts. The Third and Seventh Circuits require the government to satisfy Federal Rule of Civil Procedure 41(a) standards for voluntary dismissals. The Ninth and Tenth Circuits apply a two-step analysis and require the government to identify a “valid government purpose” and “a rational relation between dismissal and the accomplishment of the purpose.” The D.C. and First Circuit take the position that the government has “an unfettered right” to dismiss a qui tam matter.
The Supreme Court’s decision will settle the competing standards outlined above when this matter is briefed next term. Notably, while this is a major development in FCA litigation, the government rarely exercises its powers to dismiss qui tam matters.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act litigation and health care fraud matters. If you need assistance with such a matter, please contact us today.