On June 16, 2023, the United States Supreme Court issued a crucial decision in the case of United States el rel. Polansky v. Executive Health Resources, Inc., et al. In this landmark ruling, Justice Elena Kagan, writing for an eight to one majority, resolved a circuit split and established the standard the government must meet when seeking to dismiss a False Claims Act (FCA) case over the Relator’s (whistleblower’s) objection.  It was the Supreme Court’s second major FCA decision this month.  (We wrote about the first one here).

Dr. Jesse Polansky initiated a qui tam (whistleblower) action in 2012, asserting that Executive Health Resources submitted false or fraudulent claims to Medicare. The case remained under seal for two years while the government conducted an investigation into the Relator’s claims. In June 2014, the government decided not to intervene, allowing Polansky to continue with the litigation independently. However, in February 2019, the government notified the court and involved parties of its intention to step in and dismiss the action in accordance with 31 U.S.C. § 3730(c)(2)(A), leading to this pivotal Supreme Court ruling.

First, the Supreme Court confirmed that the government retains authority, with good cause shown, to intervene and move to dismiss a qui tam FCA suit, even if it initially declined to intervene. This authority allows the government to maintain control over FCA litigation and potentially prevent the misuse of federal law. The Court emphasized that the government must demonstrate good cause for dismissal, establishing a standard that arguably balances the interests of the government, qui tam relators, and the integrity of FCA enforcement.

Resolving a circuit split, the Supreme Court held that, in evaluating a government motion to dismiss a qui tam FCA case, district courts should apply Federal Rule of Civil Procedure 41(a), which governs voluntary dismissals in civil litigation. That Rule provides that once a defendant has served an answer or motion for summary judgment, the action may only be dismissed by court order, “on the terms that the court considers proper.”  The Supreme Court held that this approach provides a consistent framework for assessing the government’s motion. By aligning the FCA litigation process with established civil procedure rules, the Court enhances the clarity and predictability of dismissing non-meritorious cases.

The Supreme Court’s decision carries significant implications for both the government and qui tam relators. On one hand, it empowers the government to dismiss frivolous or non-meritorious cases, allowing for the preservation of resources and a focus on genuine FCA violations. On the other hand, there may be concerns about potential unjust dismissals and the need for safeguards to protect whistleblowers. All factors considered, the decision will likely discourage the filing of baseless lawsuits and benefit future FCA litigants with increased consistency in evaluating dismissal motions.

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and litigation, along with other civil and criminal litigation matters. If you need assistance with such a matter, please contact us today.