Court Dismisses Without Hearing in Qui Tam Action

In a precedential decision, a federal appeals court confirmed that a False Claims Act (FCA) lawsuit may be dismissed without first giving a claimant in the action an in-person hearing. Federal law affords claimants only “an opportunity for a hearing” on such a motion to dismiss. ABA Section of Litigation leaders caution that practitioners should be sure to explicitly request a hearing if they want one.

FCA Allows Third Parties to Sue on Behalf of the Government

The FCA outlaws the making of false claims for payment against the United States. To help enforce the law, the FCA allows for third parties who are aware of such false claims, called relators, to file what is known as a qui tam lawsuit against the alleged offender. If successful, third-party relators may get a percentage of any amount recovered.

Once a relator files a qui tam action, the government has 60 days to review the claim and decide whether it will prosecute the lawsuit. This time may be extended. If the government does not intervene, the relator may prosecute the action. Whether or not it chooses to intervene, the government may move to dismiss the case at various points in litigation. However, the relator must be notified of the motion and be provided “with an opportunity for a hearing on the motion” before the court under the FCA.