chevron-down Created with Sketch Beta.
September 01, 2020 Procurement Lawyer

Separating the Wheat from the Chaff or Undermining Congressional Intent? The US's Proactive Dismissals of Qui Tam Actions

by Shelley R. Slade

Shelley R. Slade is a co-chair of the Procurement Fraud and False Claims Committee of the ABA’s Public Contract Law Section, and a member of Vogel, Slade & Goldstein, LLP, a law firm representing qui tam plaintiffs in False Claims Act actions. She gratefully acknowledges the assistance in the drafting of this article of Procurement Fraud and False Claims Committee co-chairs Brian Hill, Mark Sweet, and Gail Zirkelbach and VSG paralegals Brendan Keenan and Matthew McColl.

One of the most important tools in the government’s anti-fraud toolbox is the federal False Claims Act (FCA),1 a Civil War–era statute with a treble damage remedy and qui tam2 provisions that incentivize and protect private persons who bring civil actions to recover damages arising from fraud on government programs.3 The use of a private attorney general to supplement the sovereign’s resources has roots in our country’s statutes and in English law dating back hundreds of years.4 Private individuals are often much better situated, motivated, and even equipped to detect and redress wrongdoing. Indeed, in the last 30 years, qui tam actions have recovered more than $42 billion for the U.S. Treasury that otherwise potentially would have been lost as a result of fraud.5

In the Trump administration, however, practitioners have seen an uptick in government-led dismissals of such actions, with more motions to dismiss filed by the government in the last two years alone than in the previous 32 years. This sudden shift followed quickly upon the issuance of an internal, January 2018 Department of Justice (DOJ) memorandum by Michael Granston, Director of the Civil Fraud Section (the Granston Memo), that encouraged DOJ attorneys to dismiss declined qui tam actions when necessary to protect policy, resources, national security, and other government interests as well as to contain the risk of adverse decisions arising from meritless cases.6 This article traces the history of the government’s dismissal authority and analyzes the Department’s escalating use of this authority in the past two years.

Background

In general terms, the FCA is a federal law that imposes liability for, among other things, the submission of false claims to the United States or a recipient of federal funds or the use of false records or statements that are material to the decision to pay such a claim.7 Violators of the statute are liable for civil damages equal to three times the government’s loss, plus penalties for each violation of the law.8

The statute was enacted in 1863 to respond to fraud on the Union Army,9 with Congress of the view that qui tam provisions were warranted because “setting a rogue to catch a rogue” is often the most effective way to bring fraudsters to justice.10 In other words, to detect fraud, which is by its nature concealed, Congress decided to offer a carrot to persuade participants in the fraud to turn in their fellow thieves. As originally drafted, the law, however, did not prevent an individual from filing a complaint based on no more than public information such as a grand jury indictment. As a result, in 1943 Congress amended the law to bar actions “based upon evidence or information in the possession of the United States, or any agency, officer or employee thereof, at the time such suit was brought.”11 However, as drafted, this was an overcorrection, and the statute quickly fell into disuse as potential whistleblowers were chilled from filing cases due to a concern that somewhere in the government’s vast files there might be pieces of information that could be used to quash their suits.

During the Reagan administration, fiscal concerns and an increasing awareness of fraud in the Pentagon’s procurement of military equipment finally pushed Congress to reinvigorate the FCA. In 1986, through bills sponsored by Congressman Howard Berman (D-CA) and Senator Chuck Grassley (R-IA), Congress eliminated the “government knowledge” defense, increased rewards and protections for qui tam plaintiffs, and authorized the DOJ to issue “civil investigative demands” to investigate allegations.12 At the same time, Congress added a government-dismissal authority providing that “the Government may dismiss [a qui tam] action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.”13

The word “hearing” is undefined in the statute. The only relevant legislative history is found in Senate Report 99-345,14 in which the Senate Committee on the Judiciary commented on an earlier version of section 3730(c)(2)(A), which had provided that “[i]f the Government proceeds with the action … the [relator] shall be permitted to file objections with the court and to petition for an evidentiary hearing to object to … any motion to dismiss filed by the Government.”15 In explaining the purpose of this earlier version, the Judiciary Committee noted that a relator may object to a government motion to dismiss in order to prevent the government from “dropp[ing] … false claims cases without legitimate reasons” and may petition for an “evidentiary hearing,” which the court should grant “if the relator presents a colorable claim that the … dismissal is unreasonable in light of existing evidence, that the Government has not fully investigated the allegations, or that the Government’s decision was based on arbitrary or improper considerations.”16 More generally, the Judiciary Committee stated that the False Claims Amendments Act of 1986 “provides qui tam plaintiffs with a more direct role . . . in acting as a check that the Government does not neglect evidence, cause undue delay, or drop the false claims case without legitimate reason.”17

In its current form, the FCA’s qui tam provisions permit a private person to file an FCA action in federal district court on behalf of the United States, provided the person, who is referred to as the qui tam plaintiff or relator, files the action under seal, without serving the defendant, and discloses substantially all his or her material evidence and information to the government.18 The government then has 60 days, plus extensions granted for good cause, to investigate and decide whether to intervene in the action.19 If the government intervenes, it takes the lead in pursuing the litigation.20 If the government declines to join the case, the qui tam plaintiff may take the action forward on his or her own,21 so long as that action is not barred based on an earlier-filed action or a public disclosure.22 If the qui tam action leads to a settlement or judgment, the qui tam plaintiff ordinarily will be entitled to recover attorney fees and costs from the defendant and to share in 15 to 30 percent of the government’s recovery, depending upon whether the government intervened and the extent to which the qui tam plaintiff contributed to the success of the case.23

The Declined Qui Tam Quandary

The last 30 years have seen an explosion in the number of qui tam filings. While these filings have increased annual FCA recoveries 30- to 60-fold compared to annual pre-amendment recoveries,24 the DOJ, due to resource constraints, policy concerns, or questions about the merits, has declined to intervene in the majority of filed qui tam cases.25 When the government declines to intervene, qui tam plaintiffs often voluntarily dismiss their actions.26 In many cases, however, the relators proceed with their actions at the risk of treading on the toes of law enforcement and the affected program agencies. Declined actions can result in the government spending time and resources responding to broad-ranging subpoenas and monitoring court rulings in matters that it believes lack merit or, in some cases, even abuse the legal system. Declined actions can also interfere with regulators’ preferences in some cases to deal with noncompliant actors outside the court system or to waive enforcement in light of countervailing interests. Finally, declined actions sometimes are based on bad facts and, as a result, create bad law that could jettison the DOJ’s efforts to enforce the FCA in meritorious cases.

On the other hand, some of the DOJ’s most successful uses of the FCA have been based on legal theories first developed and pursued by relators in declined cases generating recoveries of hundreds of millions of dollars.27 Sometimes a private person, particularly one with experienced, well-funded counsel, is more motivated and better positioned than government counsel to push the envelope on risky new legal theories.

The quandary for the DOJ has been how to weed out those declined qui tam cases that are likely to harm the government’s interests without inadvertently barring cases that ultimately will benefit the taxpayers.

The DOJ’s Pre-2018 Use of Its Dismissal Authority

Notwithstanding the problems arising from some declined cases, between 1986 and 2018, the DOJ rarely exercised its dismissal authority under 31 U.S.C. § 3730(c) (2)(A), seeking dismissal on average roughly once a year. An inordinate number of these cases were ones that almost certainly would have been dismissed by the court regardless of the DOJ’s motion. For example, four cases involved claims pursued by the government in other proceedings28 or claims that the government asserted were already resolved and released.29 There were also 16 cases in which the qui tam plaintiff, standing in the shoes of the United States, brought claims against the United States or its agents.30 In Galvan v. Federal Prison Industries, Inc., for example, the government moved to dismiss an action in which the qui tam plaintiff, an inmate at a federal penitentiary, sued Federal Prison Industries, Inc., a “wholly owned government corporation created to further the Bureau of Prison’s goal of providing meaningful work for inmates.”31 On appeal, the D.C. Circuit affirmed the district court’s dismissal, finding that Federal Prison Industries enjoyed sovereign immunity.32 Other actions the government moved to dismiss during this 32-year period allegedly relied on sensitive, classified information;33 were thinly supported actions brought against an entire industry with specific allegations involving only several industry players;34 or were ill-advisedly brought pro se.35

The Standard of Review for Government Dismissal Motions

In the years prior to issuance of the Granston Memo, two appellate courts addressed the question of the appropriate standard of review for a court faced with a section 3730(c)(2)(A) motion to dismiss. In the absence of any express standard set forth in the statute, these courts arrived at different tests, creating a circuit split between the D.C. Circuit and the Ninth Circuit.

First, in 1998, the Ninth Circuit reviewed the district court’s dismissal of United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., a qui tam action in which the relator, a fruit processor and orange grower, brought qui tam claims against other growers in the industry alleging that they violated citrus marketing orders promulgated by the Secretary of Agriculture that rationed the quantity of oranges and lemons that could be brought to market by individual producers.36 The government moved to dismiss the action following service of the complaint on the defendant, offering a number of reasons, including its purported desire to terminate protracted and burdensome litigation and to allow growers and agricultural cooperatives to collaborate in shaping new marketing tools.37 The district court granted the motion, adopting “a two-step analysis to test the justification for dismissal: (1) identification of a valid governmental purpose; and, (2) a rational relation between dismissal and accomplishment of that purpose,” with the burden then shifting to the relator to demonstrate that dismissal is “fraudulent, arbitrary and capricious, or illegal.”38

On appeal, the Court of Appeals for the Ninth Circuit affirmed the district court’s decision, rejecting the relator’s argument that the applicable standard should be as set forth in Fed. R. Civ. P. 41(a)(2), which “vests the court with discretion to determine proper terms and conditions if the government seeks to dismiss a case after the defendant has answered or filed a motion to dismiss.”39 The Ninth Circuit concluded that the district court’s two-step standard was supported by the legislative history in Senate Report 99-345, which stated that the relator was entitled to an evidentiary hearing if he or she had a colorable claim that the government lacked a legitimate reason for dismissal.40 The court concluded that while the statutory language, as clarified by its legislative history, contemplated government dismissals of even meritorious cases, it also was intended to provide for meaningful judicial review of such motions.41

The Tenth Circuit subsequently followed the Ninth Circuit and required the government to establish a rational relationship to a legitimate government purpose when moving to dismiss a qui tam action following service of the complaint on the defendant.42

In the seminal 2003 decision Swift v. United States, the D.C. Circuit rejected the standard adopted by the Ninth Circuit in Sequoia Orange, ruling that the government has virtually unlimited discretion to dismiss qui tam actions at will.43 In Swift, the qui tam plaintiff, a former DOJ attorney, brought a qui tam claim against current and former DOJ employees, alleging that they had conspired to defraud the government. The government quickly moved to dismiss the case pursuant to 31 U.S.C. § 3730(c)(2)(A), claiming that “the amount of money involved did not justify the expense of litigation even if the allegations could be proven.”44 Applying the standard set in Sequoia Orange and finding that the motion was “rationally related to a valid governmental purpose,” the district court dismissed the case. Swift appealed, arguing that the government did not adequately justify its decision to dismiss.

On appeal, the D.C. Circuit disagreed with the district court’s use of the “Sequoia Test,” reading the dismissal provision to give the government an unfettered right to dismiss an action absent fraud on the court: “Nothing in 3730(c)(2)(A) purports to deprive the Executive Branch of its historical prerogative to decide which cases should go forward in the name of the United States.”45 Finding that the Ninth Circuit relied upon inapplicable legislative history and that the sole function of granting a relator’s request for a hearing is simply to give the plaintiff a formal opportunity to convince the government not to end the case, the D.C. Circuit concluded that “the provision neither sets ‘substantive priorities’ nor circumscribes the government’s ‘power to discriminate among issues or cases it will pursue.’”46 The D.C. Circuit ruled that, absent a showing of fraud on the court, the court should order dismissal upon a government motion pursuant to 31 U.S.C. § 3730(c)(2)(A).47

The last 30 years have seen an explosion in the number of qui tam filings. Due to resource constraints, policy concerns, or questions about the merits, the DOJ has mainly declined to intervene.

Finding neither standard of review to be particularly demanding, most courts faced with government motions to dismiss under 31 U.S.C. § 3730(c)(2)(A) have avoided the question of what standard to adopt, by concluding that the government’s motion to dismiss should be granted regardless of which standard is used. For example, in United States ex rel. Wickliffe v. EMC Corp., the Tenth Circuit considered whether to follow Sequoia Orange or the Swift test when the government moved to dismiss prior to service of the complaint on the defendant, and then held that deciding what standard of review to adopt was not required because “even under the greater judicial scrutiny imposed by the Sequoia standard, the government’s motion to dismiss passes muster in this case.”48

Issuance of the Granston Memo — January 2018

Against this backdrop of case law affirming the DOJ’s broad discretion to dismiss qui tam actions, and an administration committed to exercising broad executive branch authority, in early 2018, DOJ policymakers decided that the DOJ should serve as a more vigilant gatekeeper over declined qui tams. The Granston Memo, issued on January 10, 2018, firmly placed exercise of the DOJ dismissal authority among the Section’s policy priorities, while emphasizing the need for DOJ attorneys to maintain consistency in approach and ensure that their dismissal motions furthered the government’s interests. In light of the “record increases in qui tam actions filed under the False Claims Act, with annual totals approaching or exceeding 600 new matters,” Granston stressed the necessity of the Department’s shift away from its historically circumspect use of this tool.49 Granston identified seven factors that the government has previously relied upon to justify dismissal, which he explained should serve DOJ attorneys as a general — but not exhaustive — basis for evaluating whether to move for dismissal:

  1. curbing meritless qui tams;
  2. preventing parasitic or opportunistic qui tam actions;
  3. preventing interference with agency policies or programs;
  4. controlling litigation brought on behalf of the government;
  5. safeguarding classified information and national security interests;
  6. preserving government resources;50 and
  7. addressing egregious procedural errors.

Granston noted that the government’s dismissal motions will often follow shortly upon the government’s notice of its declination to intervene, although sometimes they will be warranted at a later point due to an intervening change in the law or the evidentiary record. He cautioned that, in light of the prior expenditure of resources, courts may be less receptive to such motions if filed after litigation is underway.51

DOJ’s Use of Its Dismissal Authority After the Granston Memo

The DOJ quickly moved to adopt the Granston Memo as official policy, incorporating the heart of the memo into the Justice Manual in September 2018.52 In the ensuing two years, it moved to dismiss 45 qui tam cases53 — more than in the whole prior 155-year history of the FCA, and almost four percent of the 1,170 qui tam actions filed during this two-year period.54

What is perhaps more significant than the increase in the quantity of qui tam cases that the DOJ has moved to dismiss, however, is the evolution in the reasons for which DOJ now targets actions for dismissal. While in the pre–Granston Memo world, the DOJ’s dismissal activity focused primarily on pro se actions, actions involving classified information, and actions that by any stretch of the imagination failed to assert a cognizable claim, in 2018 and 2019 the DOJ began moving to dismiss qui tam lawsuits with legal theories its client agency — the agency allegedly victimized by the fraud — opposed on policy grounds. It also began moving to dismiss actions when the potential burdens imposed on the client agency appeared to exceed the anticipated recovery in light of flaws in the suit’s factual basis or legal theory.

This increased deference to client agency preferences with regard to qui tam dismissals is consistent with the Granston Memo’s direction to DOJ attorneys to consider dismissals when “an agency has determined that a qui tam action threatens to interfere with an agency’s policies or the administration of its programs” or when “the government’s expected costs are likely to exceed any expected gain.”55 It may also be a reflection of what appears to be a new policy to take into consideration the views of the client agency on the question of whether qui tam lawsuits are an appropriate vehicle at all for violations of entire categories of agency rules. For example, in October 2019, DOJ entered into a memorandum of understanding (MOU) with the U.S. Department of Housing and Urban Development (HUD) that expressly recognized that violations of Federal Housing Authority (FHA) requirements by participants in FHA mortgage insurance programs should be addressed “primarily through HUD’s administrative proceedings” (except when action beyond HUD’s administrative capabilities is warranted).56 The MOU had its origins in concerns raised by HUD Secretary Ben Carson two years earlier that aggressive use of the FCA to fight mortgage fraud in the wake of the 2008 housing crisis was chilling banks from participating in the FHA’s single-family home mortgage program.57 As Secretary Carson explained to the industry publication HousingWire shortly after issuance of the MOU,

[Banks] were in before and obviously they were in because it was beneficial to them. And then the housing crisis occurred and all of the sudden, the False Claims Act became a monster that started chasing everybody around the room, making their lives miserable, causing them an inordinate amount of pain. So they got out. But now, the monster has been slayed.58

The heightened willingness, over the last year, to move for dismissal based on executive branch policy and anticipated burden may also be influenced by the views of Attorney General Barr, who, like former Attorney General Sessions, is an ardent advocate of a strong executive branch unfettered by legislative or other intrusions into traditional executive powers.

Deferring substantially to client agency views when deciding whether to let a qui tam action proceed is, of course, a double-edged sword. While such deference may protect important public interests that run counter to the FCA lawsuit and/ or conserve agency, judicial, and private resources from being squandered on the litigation of baseless claims, it may also create a scenario in which the DOJ accedes to the dismissal requests of government agency personnel who are unduly friendly with the industries they regulate. Indeed, Senator Chuck Grassley, the Senate sponsor of the FCA’s 1986 amendments and a well-known protector of whistleblowers, has questioned the DOJ’s focus on “vague and at times questionable concerns over prerogatives or limited government resources.”59 In a September 2019 letter to Attorney General William Barr, Senator Grassley expressed his concern that the DOJ’s aggressive use of its dismissal authority in these circumstances not only could deter relators from pursuing serious fraud on the taxpayers, it could also fly in the face of the legislative intent behind the qui tam provision, which is to give whistleblowers the ability to proceed in precisely the circumstances in which DOJ is exercising its dismissal authority, i.e., when “DOJ either would not or could not pursue the case.”60

Dismissals Motivated by Agency Policy & Administrative Concerns

The so-called white coat marketing cases are good examples of cases that the DOJ has moved to dismiss based, at least in part, on the client agency’s policy considerations. White coat marketing refers to pharmaceutical company efforts to persuade physicians to prescribe their drug products by offering up the free services of medical professionals, such as nurses (hence the reference to the “white coat”) and reimbursement specialists, to educate the physicians’ patients on matters relating to the drug company’s medications or to help bill insurance for the company’s drugs. In a number of qui tam actions, relators have alleged that these practices violate the Anti-Kickback Statute (AKS)61 when linked to physician prescribing practices, ultimately leading to FCA violations. The government has responded by moving to dismiss the cases on the ground that these practices are more beneficial for patients than harmful to the interests protected by the AKS.

For example, in United States ex rel. SCEF, LLC v. Astrazeneca, Inc., filed in the Western District of Washington, the government moved to dismiss relators’ allegations that the defendant pharmaceutical manufacturers violated the AKS by providing “free nursing services to physicians as illegal remuneration in exchange for the providers prescribing” the blood thinner Brilinta, the diabetes medication Bydureon, and the asthma drug Symbicort.62 The government argued that dismissal would protect “important policy prerogatives of the federal government’s healthcare programs” while the relators’ advancement of their claims would “undermine common industry practices the federal government has determined are, in this particular case, appropriate and beneficial to federal healthcare programs and their beneficiaries.”63 The government has moved to dismiss many other such cases on similar grounds, and has been successful in all but one case so far.64

In other types of qui tam actions, the DOJ has shown an increased willingness to use its dismissal authority to allow agencies to enforce their rules through means other than qui tam. For example, in moving to dismiss relators’ allegations in United States v. Gilead Sciences, Inc., the United States deferred to the preferences of the client agencies — in that case, the Food & Drug Administration (FDA) and CMS — to handle the alleged wrongdoing outside the context of a qui tam action.65 The relators had alleged that Gilead, in seeking FDA marketing approval, had misrepresented the sourcing of an ingredient in anti-HIV viral medications. Gilead eventually asked for and received FDA approval for its actual sourcing — which was from China — but not before it had marketed and sold the drug with the Chinese-sourced ingredient for several years. Several years into relators’ litigation of the declined cases, and after supporting the relators on discrete legal issues, the government moved to dismiss the action

… to prevent [the relators] from undermining the considered decisions of FDA and CMS about how to address the conduct at issue here … the FDA has “taken into account [the relators’] claims in its regulatory oversight of Gilead[ ] and taken actions it deemed appropriate.”66

Similarly, in the past two years, the DOJ has exercised its dismissal authority in a number of cases involving alleged fraud on the FHA mortgage program, a category of claims that HUD Secretary Carson has said he would prefer to see handled through agency administrative proceedings.67 While the government maintained that the Schneider and Maldonado cases lack merit and, accordingly, would unduly burden government resources, it supported its motion to dismiss in Academy Mortgage with only a claim of undue burden.

The United States has also moved to dismiss actions to protect the efforts of the Office of Inspector General of the Department of Health & Human Services (HHSOIG) to enforce independently the Emergency Medical Treatment and Active Labor Act (EMTALA).68 In other cases, the United States has cited agency policy concerns as a supplemental factor justifying dismissal of cases it believed lack merit.69

When the government wishes to dismiss a declined qui tam, it often first provides an opportunity for the relator to voluntarily dismiss his or her action. However, when relators voluntarily dismiss their declined qui tam actions — whether upon request of the government or on their own initiative, and if the government then uses alternative means to recover its losses, relators may not be able to successfully claim a share of the recovery.70

Dismissals Based on Undue Burden

An additional, recurring justification for the DOJ’s recent dismissal motions has been concerns about discovery that would burden the client agency, ordinarily, but not always, coupled with concerns that the claims lack legal and/ or factual support, suggesting that the burden would outweigh any potential benefits of the litigation.71 Indeed, a 2016 Supreme Court holding that the FCA’s materiality element may involve an evidentiary inquiry into the government’s payment decisions opened the door for broad-ranging subpoenas into internal government communications.72 In almost any qui tam action, this discovery, if unchecked, could easily overwhelm government resources and intrude on sensitive government deliberations and functions.

The DOJ has been attuned to the risk that defendants could try to leverage the Escobar decision to overwhelm agencies with evidentiary requests in order to motivate them to lobby for dismissal of the qui tam, and has warned defense counsel that they will be alert to these tactics and will not allow them to succeed. As then Director Granston advised,

Defendants should be on notice that pursuing undue or excessive discovery will not constitute a successful strategy for getting the government to exercise its dismissal authority. … The government has, and will use, other mechanisms for responding to such discovery tactics.73

Dismissals of Pro Se Actions and Actions Against the Sovereign

In addition to moving to dismiss declined qui tams to protect agency policy priorities and conserve resources from being expended on cases it believes lack merit, during the last two years, the government has continued to clear the dockets of pro se actions74 and claims against U.S. government defendants75 — claims that courts likely would dismiss on their own, but only after significant judicial and private resources had been needlessly expended on litigating defendants’ motions to dismiss.

The Standard for Judicial Review Post-Granston Memo

In facing the post-2017 uptick in government motions to dismiss, the courts have generally deferred to executive branch discretion and granted the motions, usually citing both the Sequoia Orange and Swift standards and ruling that the motion passes muster under either standard.76 Moreover, the courts have consistently dismissed these actions with prejudice as to relators. There are indications, however, that some courts are not entirely comfortable with the DOJ’s willingness to dismiss cases based on agency policy and cost concerns, perhaps sharing Senator Grassley’s view that such dismissals may undercut congressional intent. For example, in the “white coat marketing case,” United States ex rel. CIMZNHCA, LLC v. UCB, Inc.,77 the district court denied the DOJ’s motion to dismiss on the ground that the DOJ had conducted an insufficient investigation to support its claimed purpose for dismissal, which was to terminate an action that lacked merit, conflicted with governmental prerogatives, and would lead to unduly burdensome litigation costs. Applying the more stringent Sequoia Orange standard, the court rejected the legitimacy of the government’s purpose, opining that “one could reasonably conclude that the proffered reasons for decision to dismiss are pretextual and the Government’s true motivation is animus towards the relator.”78

Likewise, in United States v. Academy Mortgage Corporation, a case in which the relator alleged false certifications on applications for government mortgage insurance, the court found that the government’s investigation was deficient, consisting only of “interviewing the relator and examining documents produced by her.”79 In light of the relator’s unrebutted evidence and the lack of a clear government-conducted cost-benefit analysis, the District Court for the Northern District of California held that the motion to dismiss should be denied.

The DOJ’s ramped-up dismissal activity has also led to some significant relator challenges to the standard of review, including an appeal to the Fifth Circuit by relator Health Choice Alliance, in which the relator argued that the court of appeals should overturn the district court’s dismissal on the ground that the government acted arbitrarily and capriciously by conducting an inadequate investigation and moving to dismiss his case based on constantly shifting reasons and possible hostility towards the corporate relator.80 The relator argued on appeal that Congress could not have intended for the hearing requirement to be so toothless that district court judges following Swift had to do no more than host a conversation between the relator and the government:

[T]he statutory grant of a hearing cannot mean that the court is simply to preside in an open forum while relators seek — through a presentation to the judge — to convince the Article II Branch to reverse its executive decision.



[U]nder the standard urged by the government, the presiding judge becomes a proverbial potted plant. Or, as one district judge colorfully stated in rejecting the government’s proposed no-review standard: “[T]he suggestion that the statute provides nothing more than an opportunity for us to host you in this wonderful venue and perhaps serve you some donuts and coffee is almost preposterous.”81

The relator in Schneider made a similar argument in his petition for certiorari requesting that the Supreme Court weigh in on the circuit split over the standard of review for section 3730(c)(2)(A) dismissals. Urging the Supreme Court to grant his petition and adopt the Sequoia standard, Schneider argued:

The FCA provides that qui tam relators have all the rights of a party in intervened actions: the right to conduct actions after the government declines; the right to object to the fairness, adequacy, and reasonableness of settlements; and the right to a hearing on dismissals initiated over their objection. 31 U.S.C. § 3730, et seq. Together, these provisions reflect a significant role for relators in enforcing the FCA that is inconsistent with the absence of any meaningful review of a government motion to dismiss a qui tam case.82

The DOJ urged the Supreme Court to deny certiorari in the Schneider action, arguing that the court of appeals correctly followed the Swift decision because the government’s dismissal authority is an “unreviewable exercise of prosecutorial authority.”83 The Supreme Court denied certiorari on April 6, 2020.84

The relator in Polanksy v. Executive Health Resources, Inc. is also appealing the district court’s order granting the government’s motion to dismiss, with his opening brief due on May 15, 2020.

* * * * *

In the next several years, we can expect to see the courts and perhaps even the Congress grapple with the arguments raised by Health Choice Alliance and Schneider over the proper standard for judicial review of the government’s use of its section 3730(c)(2)(A) dismissal authority. Indeed, Senator Chuck Grassley, one of the two sponsors of the FCA’s 1986 amendments, strenuously objected to the solicitor general’s position in the Schneider case that the government has unreviewable authority to dismiss qui tam actions. In a searing May 4, 2020, letter to Attorney General Barr that concluded with a handwritten note penned by the senator himself, he chastised the DOJ for ignoring both the plain and the legal meanings of the term “hearing” as “an adjudicative procedure where the court acts as an arbiter.”85 Senator Grassley characterized the DOJ’s position as “erroneous and contrary to Congressional intent.”86

We can also expect to see continued proactive DOJ exercise of its dismissal authority, although perhaps not in cases in which the only concern is burdensome discovery. The DOJ has made clear it will not be bullied by defense tactics designed to overwhelm government resources. We may also see that the DOJ’s use of its dismissal authority has the unanticipated effect of emboldening federal courts to deny defense motions to dismiss that previously might have been granted. Perceiving the DOJ as the “new gatekeeper” with regard to frivolous or abusive litigation, the courts may be more inclined to presume the bona fides of those declined actions that are not targeted for government dismissal. Indeed, when addressing the question of whether permitting a Stark/ FCA action to proceed against a hospital might open up the floodgates to litigation of a similar ilk against top hospitals, the Third Circuit observed in an opinion that it subsequently vacated:

Federal courts are not the first line of defense against abusive suits; the Justice Department is. Indeed, it recently took a more aggressive approach to dismissing qui tam actions, urging its lawyers to consider dismissal every time the government decides not to intervene.



While our Court has not yet specified the standard of review for a § 3730(c)(2)(A) dismissal, our sister circuits defer a great deal to the Justice Department. … That deference gives the government plenty of room to make good on its stated intention to scrutinize and dismiss more qui tam actions than in the past. So there is little reason to fear that a flood of frivolous cases will reach discovery.87
Entity:
Topic:
The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.
  1. 31 U.S.C. § 3729 et seq.
  2. The term qui tam comes from the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, which means, “he who sues for the king as well as himself in what follows.”
  3. The government may join a qui tam action following investigation of the private person’s sealed filing. If it does not do so, the private person may litigate the case on his or her own, standing in the shoes of the United States. See 31 U.S.C. § 3730(b).
  4. Trevor W. Morrison, Private Attorneys General and the First Amendment, 103 Mich. L. Rev. 589, 599 (2005) (citing Marvin v. Trout, 199 U.S. 212, 255 (1905) (“Statutes providing for actions by a common informer, who himself had no interest whatever in the controversy other than that given by statute, have been in existence for hundreds of years in England, and in this country ever since the foundation of our Government.”)).
  5. Fraud Statistics Overview, U.S. Dep’t of Just., https://www.justice.gov/opa/press-release/file/1233201/download (last accessed Feb. 26, 2020).
  6. See Memorandum from Michael D. Granston, Factors for Evaluating Dismissal Pursuant to 31 U.S.C. 3730(c)(2)(A) (Jan. 10, 2018), https://assets.documentcloud.org/documents/4358602/Memo-for-Evaluating-Dismissal-Pursuant-to-31-U-S.pdf [hereinafter Granston Memo].
  7. See 31 U.S.C. § 3729(a).
  8. Id.
  9. Cong. Globe, 37th Cong., 3d Sess. 348 (1863).
  10. Id. at 955–56 (Remarks of Senator Jacob Howard).
  11. Act of December 23, 1943, ch. 377, 57 Stat. 608 (codified as amended at 31 U.S.C.A. §§ 232–235 (1976)).
  12. False Claims Amendments Act of 1986, Pub. L. No. 99-562, 100 Stat. 3154.
  13. 31 U.S.C. § 3730(c)(2)(A).
  14. S. Rep. No. 99-345 (1986), reprinted in 1986 U.S.C.C.A.N. 5266.
  15. Id. at 42 (p. 42 of the Report not reprinted in U.S.C.C.A.N.).
  16. Id. at 26, 1986 U.S.C.C.A.N. at 5291.
  17. Id. at 25–26, reprinted in 1986 U.S.C.C.A.N. at 5291.
  18. 31 U.S.C. § 3730(b)(2).
  19. Id. § 3730(b)(2), (3).
  20. Id. § 3730(b)(4)(A), (c)(1).
  21. Id. § 3730(b)(4)(B), (c)(3).
  22. There are several statutory limitations to a relator’s ability to pursue nonintervened FCA actions. See id. § 3730(b)(5), (e)(1)–(4). Generally, the relator must be the first person to file an FCA action based on the facts underlying the complaint. Id. § 3730(b)(5). Furthermore, a relator may not bring an FCA action “which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil money penalty proceeding in which the Government is already a party.” Id. § 3730(e)(3). Similarly, the allegations or transactions alleged in the complaint must not have been publicly disclosed “(i) in a Federal criminal, civil, or administration hearing in which the Government or its agent is a party; (ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) from the news media,” unless the relator is an original source of the information. Id. § 3730(e)(4) (A); see id. § 3730(A)(5) (defining “original source”). If the allegations or transactions in the complaint have been publicly disclosed, the court “shall dismiss [the] action or claim . . . unless opposed by the Government.” Id. § 3730(4)(A).
  23. Id. § 3730(d).
  24. Fraud Statistics Overview, supra note 5. In 1987, just 30 qui tam cases were filed and just over $86 million recovered; in contrast, 2018 saw the filing of 646 qui tam actions and qui tam recoveries of almost $3 billion.
  25. The U.S. Attorney’s Office for the Eastern District of Pennsylvania reported in 2012 that the government historically had intervened in less than 25 percent of qui tam actions. See Memorandum from Dep’t of Justice, False Claims Act Cases: Government Intervention in Qui Tam (Whistleblower) Suits (June 13, 2012), https://www.justice.gov/sites/default/files/usao-edpa/legacy/2012/06/13/InternetWhistleblower%20update.pdf.
  26. During the six years between January 2012 and January 2018, qui tam plaintiffs voluntarily dismissed more than 700 qui tam cases following a government declination decision. Granston Memo, supra note 6, at 8.
  27. DOJ’s Fraud Statistics significantly understate the level of recoveries in declined qui tam cases. This is because the government often intervenes in qui tam actions for purposes of filing settlement documents months or even years following an initial declination to intervene and the relator’s subsequent pursuit of the case. See, e.g., United States v. Everglades Coll., Inc., 855 F.3d 1279 (11th Cir. 2017) (referencing DOJ intervention in district court action for purposes of settlement).
  28. See, e.g., United States ex rel. Wickliffe v. EMC Corp., 473 F. App’x 849 (10th Cir. 2012) (government moved to dismiss because qui tam suit claims allegedly duplicated claims in earlierfiled qui tam involving defendant’s sale of defective computers to government agencies).
  29. See, e.g., United States ex rel. Amico v. Citigroup, Inc., No. 14-CV-4370 (CS), 2015 WL 13814187 (S.D.N.Y. Aug. 7, 2015) (government moved to dismiss action involving false claims in connection with the marketing and sale of residential mortgagebacked securities on grounds that (i) government had already resolved claims duplicative of relators’ claims; (ii) claims such as relators’ claims should be deterred as they are parasitic; (iii) the government should not have to pay an award to relators that did not contribute to the outcome; and (iv) litigation of relators’ claims would squander government resources); United States ex rel. Piacentile v. Amgen Inc., No. 04 CV 3983(SJ)(RML), 2013 WL 5460640 (E.D.N.Y. Sept. 30, 2013) (case arguably barred under first-to-file doctrine in which relator—a “serial relator” previously convicted of Medicare fraud—refused to consent to the government’s proposed settlement of earlier-filed claims or its offer to pay him a $1.8 million relator share); Wickliffe, 473 F. App’x 849 (in addition to duplicating claims currently being litigated in another qui tam action, the action involved claims previously resolved by the government); In re Nat. Gas Royalties Qui Tam Litig., No. MDL 1293, 2002 WL 35651694 (D. Wyo. Oct. 9, 2002) (case against more than 300 members of the oil and gas industry for underpayment of royalties on gas extracted from federal lands that was, in part, per the government, repetitive of earlierfiled case in which the government had intervened with other claims lacking factual support).
  30. See, e.g., United States ex rel.Liptak v. United States, No. 14-01348 (ADC), 2016 WL 6091693 (D.P.R. July 28, 2016) (case against IRS, DOJ, and government officials alleging fraudulently imposed taxes); United States v. Mitchell, No. CV149771DMGPJWX, 2016 WL 857301 (C.D. Cal. Mar. 4, 2016), aff’d sub nom. United States ex rel. Yagman v. Mitchell, 711 F. App’x 422 (9th Cir. 2018) (relator sued the United States, the CIA, CIA employees, and the contractor who developed the enhanced interrogation techniques used on detainees); Braswell v. Unger, No. CV-14-02574-TUC-JAS, 2015 WL 13810123 (D. Ariz. Aug. 11, 2015) (relator sued an IRS employee); United States ex rel. Roach v. Obama, No. CV 14-470 (RCL), 2014 WL 7240520 (D.D.C. Dec. 18, 2014) (case against Pres. Obama for holding office without, supposedly, being a natural-born citizen); Nasuti ex rel. United States v. Savage Farms, Inc., No. CIV.A. 12-30121-GAO, 2014 WL 1327015 (D. Mass. Mar. 27, 2014), aff’d sub nom. Nasuti v. Savage Farms Inc., No. 14-1362, 2015 WL 9598315 (1st Cir. Mar. 12, 2015) (case against not only farmers but also USDA officials for false claims for disaster relief funds); Skrynnikov v. Fed. Nat’l Mortg. Ass’n, 943 F. Supp. 2d 172, 175 (D.D.C. 2013) (relator sued Fannie Mae); Berg v. Obama, 656 F. Supp. 2d 107 (D.D.C. 2009), aff’d, 383 F. App’x 7 (D.C. Cir. 2010) (relator sued Pres. Obama for false claims for a salary because he allegedly wasn’t a U.S. citizen); Greene v. I.R.S., No. 1:08CV0280LEKDRH, 2008 WL 5378120 (N.D.N.Y. Dec. 23, 2008), aff’d, 348 F. App’x 625 (2d Cir. 2009) (government moved to dismiss because qui tam plaintiff brought claims against the IRS for imposition of a federal income tax); Swift v. United States, 318 F.3d 250 (D.C. Cir. 2003), cert. den., 539 U.S. 944 (2003) (DOJ employee relator sued other DOJ employees); Lion Raisins, Inc. v. Kagawa, No. CV-F-02-5665 REC LJO, 2003 WL 27387421 (E.D. Cal. Nov. 3, 2003) (relator sued USDA inspectors for inadequate inspections of raisins purchased by relator); United States ex rel. Casey v. Blevins, No. 4:02CV00060 GH, 2002 WL 35651492 (E.D. Ark. July 5, 2002) (case against a regional office of HUD and a HUD employee for misusing Community Development Block Grant funding); United States ex rel. Pentagen Techs. Int’l Ltd. v. United States, No. 00 CIV. 6167 (DAB), 2001 WL 770940 (S.D.N.Y. July 10, 2001) (relator sued the United States, a government official, as well as numerous of its competitors and their law firms, based on the government’s failure to purchase its software technology and alleged misappropriation of its software by its competitors, having already lost approximately nine suits based on the same or a similar factual predicate; the relator requested appointment of an independent prosecutor to investigate its claims); Galvan v. Fed. Prison Indus., Inc., 199 F.3d 461 (D.C. Cir. 1999) (relator sued Federal Prison Industries, a wholly owned government corporation); and United States v. Fiske, 968 F. Supp. 1347 (E.D. Ark. 1997) (relator sued independent counsel).
  31. Galvan, 199 F.3d at 462.
  32. Id.
  33. United States ex rel. Mateski v. Raytheon Co., No. CV-0707035BROFMOX, 2014 WL 12639249 (C.D. Cal. Aug. 12, 2014), aff’d sub nom. United States. ex rel. Mateski v. Mateski, 634 F. App’x 192 (9th Cir. 2015) (classified military information); United States ex rel. Ridenour v. Kaiser-Hill Co., 174 F. Supp. 2d 1147 (D. Colo. 2001), aff’d sub nom. Ridenour v. Kaiser-Hill Co., 397 F.3d 925 (10th Cir. 2005), cert. den., Ridenour v. United States, 546 U.S. 816 (2005) (involving false claims for environmental cleanup of a former nuclear weapons component manufacturing facility); United States ex rel. Fay v. Northrop Grumman Corp., No. CIVA06CV00581EWN-MJW, 2008 WL 877180 (D. Colo. Mar. 27, 2008) (involving classified military information and a government claim that relator had improperly already disclosed classified information).
  34. See, e.g., United States ex rel Wright v. AGIP Petroleum Co., No. 5:03-CV-264-DF, 2005 WL 8167952 (E.D. Tex. Feb. 3, 2005) (action against 45 members of the oil and gas industry, and many allegations in which the government did not intervene; the government cited the heavy burden of discovery in the declined part of the case in support of its dismissal motion); In re Nat. Gas Royalties Qui Tam Litig., No. MDL 1293, 2002 WL 35651694 (D. Wyo. Oct. 9, 2002) (case against more than 300 members of the oil and gas industry for underpayment of royalties on gas extracted from federal lands).
  35. See, e.g., United States ex rel. Mesi v. Nat’l Default Servicing Corp., No. 315CV00508RCJVPC, 2017 WL 3749677 (D. Nev. Aug. 30, 2017) (pro se case involving allegations of fraud on the IRS); United States ex rel. Eanes v. O’Hanlan, No. 3:16-CV-10563, 2017 WL 1196468 (S.D. W. Va. Mar. 7, 2017), report and recommendation adopted, No. CV 3:16-10563, 2017 WL 1193732 (S.D. W. Va. Mar. 29, 2017) (pro se complaint alleging fraud on the Public Defender Serv. by a circuit court judge and attorney); United States ex rel. May v. City of Dallas, No. 3:13-CV-4194-N-BN, 2014 WL 5454819 (N.D. Tex. Oct. 27, 2014) (pro se case based on newspaper articles alleging City of Dallas failed to compensate owners of land for mineral rights in late 1960s and early 1970s when it took land to build airport).
  36. 151 F.3d 1139, 1141 (9th Cir. 1998), cert. den., 525 U.S. 1067 (1999).
  37. United States ex rel. Sequoia Orange Co. v. Sunland Packing House Co., 912 F. Supp. 1325, 1341–42 (E.D. Cal. 1995), aff’d sub nom. United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139 (9th Cir. 1998), cert den., 525 U.S. 1067 (1999).
  38. Id. at 1341.
  39. Id. at 1338.
  40. Sequoia, 151 F.3d at 1141–42.
  41. Id. at 1147.
  42. Ridenour v. Kaiser-Hill Co., 397 F.3d 925, 935 (10th Cir. 2005).
  43. Swift v. United States, 318 F.3d 250 (D.C. Cir. 2003), cert. den., 539 U.S. 944 (2003).
  44. Id. at 251.
  45. Id. at 253.
  46. Id.
  47. Id.
  48. 473 F. App’x 849, 853 (10th Cir. 2012).
  49. Granston Memo, supra note 6, at 1.
  50. As noted by Deputy Associate Attorney General Stephen Cox, “when we don’t exercise the dismissal authority in non-meritorious qui tam cases, this not only imposes obvious costs on defendants, but it results in substantial costs that the government must bare to monitor the enormous docket of declined qui tam cases and the costs incurred when an agency gets dragged into those cases through discovery.” Stephen Cox, Deputy Assoc. Att’y Gen., Remarks at the Federal Bar Association Qui Tam Conference (Feb. 28, 2018), https://www.justice.gov/opa/speech/deputyassociate-attorney-general-stephen-cox-delivers-remarks-federalbar-association.
  51. Granston Memo, supra note 6, at 8.
  52. DOJ Dismissal of a Civil Qui Tam Action, Justice Manual 4-4.111. (Sept. 2018), https://www.justice.gov/jm/jm-4-4000-commercial-litigation.
  53. Letter from Steven Boyd, Assistant Att’y Gen. for Legislative Affairs, to Senator Charles Grassley (Dec. 19, 2019), https://www.vsg-law.com/news/doj-moves-to-dismiss-just-under-4-ofwhistleblower-filings/.
  54. Id.
  55. Granston Memo, supra note 6, at 6.
  56. Memorandum of Understanding Between Dep’t of Hou. & Urban Dev. & Dep’t of Justice, Inter-Agency Coordination of Civil Actions Under the False Claims Act Against Participants in FHA Single Family Mortgage Insurance Programs (Oct. 21, 2019), https://www.hud.gov/sites/dfiles/SFH/documents/sfh_HUD_DOJ_MOU_10_28_19.pdf.
  57. Ben Lane, Exclusive: HUD’s Carson on False Claims Act—“The Monster Has Been Slayed.” HUD Wants Banks to Return to FHA Lending, HousingWire (Oct. 28, 2019), https://www.housingwire.com/articles/exclusive-huds-carson-on-false-claimsact-the-monster-has-been-slayed/.
  58. Id.
  59. Press Release, Senator Charles Grassley, Grassley Questions Use of DOJ Memo to Limit Recovery of Tax Dollars Lost to Fraud (Sept. 4, 2019), https://www.grassley.senate.gov/news/news-releases/grassley-questions-use-doj-memo-limit-recovery-tax-dollars-lost-fraud.
  60. Id.
  61. 42 U.S.C. § 1320a-7(b).
  62. No. 2:17-CV-1328-RSL, 2019 WL 5725182, at *1 (W.D. Wash. Nov. 5, 2019).
  63. Id. at *2.
  64. See, e.g., United States v. EMD Serono, Inc., 370 F. Supp. 3d 483 (E.D. Pa. 2019); Health Choice All. LLC ex rel. United States v. Eli Lilly & Co., Inc., No. 5:17-CV-00123-RWS-CMS, 2019 WL 4727422 (E.D. Tex. Sept. 27, 2019), appeal docketed, No. 19-40906 (5th Cir. Oct. 29, 2019); United States ex rel. CIMZNHCA, LLC v. UCB, Inc., No. 17-CV-765-SMY-MAB, 2019 WL 1598109 (S.D. Ill. Apr. 15, 2019) (motion to dismiss denied); United States ex rel NHCA-TEV, LLC v. Teva Pharm. Prod. Ltd., No. CV 17-2040, 2019 WL 6327207 (E.D. Pa. Nov. 26, 2019).
  65. No. 11-CV-00941-EMC, 2019 WL 5722618, at *7 (N.D. Cal. Nov. 5, 2019).
  66. Id. at *5.
  67. See, e.g., United States ex rel. Schneider v. J.P. Morgan Chase Bank, N.A., No. CV 14-1047 (RMC), 2019 WL 1060876 (D.D.C. Mar. 6, 2019), aff’d sub nom. United States ex rel. Schneider v. JPMorgan Chase Bank, Nat’l Ass’n, No. 19-7025, 2019 WL 4566462 (D.C. Cir. Aug. 22, 2019), cert den., 2020 WL 1668623 (Apr. 6, 2020); United States ex rel. Maldonado v. Ball Homes, LLC, No. 5: 17-379-DCR, 2018 WL 3213614 (E.D. Ky. June 29, 2018); United States v. Acad. Mortg. Corp., No. 16-CV-02120-EMC, 2018 WL 3208157 (N.D. Cal. June 29, 2018), appeal docketed, No. 18-6408 (9th Cir. July 27, 2018) (court denied government motion to dismiss).
  68. See, e.g., United States ex rel. Sibley v. Delta Reg’l Med. Ctr., No. 4:17-CV-000053-GHD-RP, 2019 WL 1305069 (N.D. Miss. Mar. 21, 2019) (government moved to dismiss relator’s claims based on alleged EMTALA violations).
  69. See, e.g., United States ex rel. Graves v. Internet Corp. for Assigned Names & Numbers, 398 F. Supp. 3d 1307 (N.D. Ga. 2019) (government moved to dismiss claims that defendant unlawfully collected $590 million in fees relating to Internet registry and registrar services, citing (i) pro se relator’s failure to state a valid claim and (ii) bipartisan policy goal to facilitate Department of Defense efforts to privatize control of the Internet); United States ex rel. Farmer v. Republic of Honduras, No. CV 17-00470-KD-N, 2020 WL 496509 (S.D. Ala. Jan. 30, 2020), appeal docketed, United States v. McAvoy, No. 20-10604 (11th Cir. Feb. 18, 2020) (in lawsuit brought against the country of Honduras, officials of the U.S. Agency for International Development (USAID), and other persons for false claims for USAID funds, government moved to dismiss, citing (i) lack of meritorious claims, (ii) international comity concerns, and (iii) undue interference with USAID’s mission).
  70. See United States v. L-3 Commc’n Eotech, Inc., 921 F.3d 11 (2d Cir. 2019) (relator who voluntarily dismissed his action without prejudice to avoid a government motion for dismissal had given up his right to share in any recovery subsequently obtained by the government); United States ex rel. Davidheisen v. Capitol Rail Contractors, No. 1:19-CV-593, 2019 WL 8161575 (E.D. Va. Oct. 22, 2019) (granting government motion to dismiss claims that relator refiled after government negotiated settlement of those claims in purported side deal).
  71. See, e.g., Polansky v. Exec. Health Res., Inc., 422 F. Supp. 3d 916, 926 (E.D. Pa. 2019), appeal docketed, No. 19-3810 (3d Cir. Dec. 15, 2019) (burden, risk of disclosure of privileged information); United States v. Gilead Sci., Inc., No. 11-CV-00941-EMC, 2019 WL 5722618, at *7 (N.D. Cal. Nov. 5, 2019) (burden, impairment of agency work); United States v. Cooperatieve Rabobank Bank U.A., No. 17 CIV. 2708 (LGS), 2019 WL 5593302, at *3 (S.D.N.Y. Oct. 30, 2019) (burden); United States ex rel. Johnson v. Raytheon Co., 395 F. Supp. 3d 791 (N.D. Tex. 2019) (protecting classified information, burden); United States ex rel. Bozilleri v. Bayer HealthCare Pharm., Inc., No. CV 14-031 WES, 2019 WL 5310209, at *2 (D.R.I. Oct. 21, 2019), appeal docketed, No. 10-1066 (1st Cir. Jan. 16, 2020) (burden); United States ex rel. Toomer v. TerraPower, LLC, No. 4:16-CV-00226-DCN, 2018 WL 4934070, at *4–5 (D. Idaho Oct. 10, 2018), motion to certify appeal denied, No. 4:16-CV-00226-DCN, 2019 WL 6689888 (D. Idaho Dec. 6, 2019) (burden, lack of damages, no viable claims, and impairment of agency work); United States ex rel. Stovall v. Webster Univ., No. 3:15-CV-03530-DCC, 2018 WL 3756888 (D.S.C. Aug. 8, 2018) (burden, controlling litigation brought on behalf of the United States); United States ex rel. Borzilleri v. AbbVie, Inc., No. 15-CV-7881 (JMF), 2019 WL 3203000, at *2 (S.D.N.Y. July 16, 2019) (burden); United States ex rel. Henneberger v. Ticom Geometrics, Inc., 2019 WL 8161574 (E.D. Va. June 12, 2019) (burden, lack of factual basis); Crandell v. Hardy Cty. Dev. Auth., No. 2:18-CV-124, 2019 WL 2720812, at *2 (N.D. W. Va. May 22, 2019), report and recommendation adopted sub nom. United States ex rel. Crandell v. Hardy Cty. Rural Dev. Auth., No. 2:18-CV-124, 2019 WL 2717980 (N.D. W. Va. June 27, 2019) (burden, action filed pro se, lack of viable claims); Chang v. Children’s Advocacy Ctr. of Del., 938 F.3d 384 (3d Cir. 2019) (burden, lack of factual or legal basis for claims); United States ex rel. Davis v. Hennepin Cty., No. 18-CV-01551 (ECT/ HB), 2019 WL 608848 (D. Minn. Feb. 13, 2019), appeal dismissed sub nom.; United States ex rel. Davis v. Hennepin Cty., No. 19-1530, 2019 WL 4296887 (8th Cir. May 14, 2019) (burden, no prospect for a recovery); United States ex rel. Kammarayil v. Sterling Operations, Inc., No. CV 15-1699 (BAH), 2019 WL 464820 (D.D.C. Feb. 6, 2019) (burden, no harm or damages to U.S. from defendant’s alleged armed robbery of subcontractor in Afghanistan).
  72. See Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989, 2003 (2016) (“The materiality standard is demanding. . . . A misrepresentation cannot be deemed material merely because the Government designates compliance with particular statutory, regulatory, or contractual requirement as a condition of payment. Nor is it sufficient for a finding of materiality that the Government would have the option to decline to pay if it knew of the defendant’s noncompliance”); United States ex rel. Henneberger v. Ticom Geometrics, Inc., No. 1:16-CV-670 (AJT/IDD), 2019 WL 8161574 (E.D. Va. June 12, 2019) (“It is unclear how Plaintiff would be able to make the requisite showing [of materiality] without substantial discovery from the agency officials.”).
  73. Michael Granston, Deputy Assist. Att’y Gen., Remarks at the Fed. Bar Ass’n Conf. (Mar. 1, 2019), excerpts available at DOJ Atty Warns FCA Targets on Discovery Tactics, Law360 (Mar. 2, 2019), https://www.law360.com/articles/1134479/doj-atty-warns-fca-targets-on-discovery-tactics (last accessed Mar. 10, 2020).
  74. See, e.g., Martin v. United States Dep’t of Agric., No. CV 118-009, 2019 WL 166554 (S.D. Ga. Jan. 10, 2019); Crandell, 2019 WL 2720812.
  75. Martin, 2019 WL 166554; United States ex rel. Farmer v. Republic of Honduras, No. CV 17-00470-KD-N, 2020 WL 496509 (S.D. Ala. Jan. 30, 2020), appeal docketed, United States v. McAvoy, No. 20-10604 (3d Cir. Jan. 30, 2020) (relator’s amended complaint added USAID officials as named defendants and coconspirators with Honduras).
  76. See, e.g., Bozilleri, 2019 WL 5310209; Polansky, 422 F. Supp. 3d 916; United States ex rel. NHCA-TEV, LLC v. Teva Pharm. Prod. Ltd., No. CV 17-2040, 2019 WL 6327207 (E.D. Pa. Nov. 26, 2019).
  77. United States ex rel. CIMZNHCA, LLC v. UCB, Inc., No. 17-CV-765-SMY-MAB, 2019 WL 1598109 (S.D. Ill. Apr. 15, 2019).
  78. Id. at *4.
  79. No. 16-CV-02120-EMC, 2018 WL 3208157, at *1 (N.D. Cal. June 29, 2018).
  80. Brief of Appellants at 37–54, United States ex rel. Health Choice Alliance, L.L.C. v. Eli Lilly & Co., Inc., No. 19-40906 (5th Cir. Jan. 7, 2020). Appellants are represented by former Solicitor General Kenneth Starr.
  81. Id. at 29, 34.
  82. Petition for Writ of Certiorari, United States ex rel. Schneider v. JPMorgan Chase Bank (2019) (No. 19-678), 2019 WL 6341148.
  83. Brief for the United States at 8–9, United States ex rel. Schneider v. JP Morgan Chase Bank (2020) (No. 19-678).
  84. United States ex rel. Schneider v. JPMorgan Chase Bank, No. 19-678, 2020 WL 1668623 (Apr. 6, 2020), cert. denied. 
  85. Letter from Sen. Charles E. Grassley to Att’y Gen. William P. Barr, at 2–3 (May 4, 2020), available at https://www.grassley.senate.gov/sites/default/files/2020-05-04%20CEG%20to%20DOJ%20%28FCA%20Dismissal%20authority%29.pdf.
  86. Id. at 2.
  87. United States ex rel. Bookwalter v. UPMC, 938 F.3d 397, 417 (3d Cir.), reh’g granted, judgment vacated, 944 F.3d 965 (3d Cir. 2019), and on reh’g, 946 F.3d 162 (3d Cir. 2019) (citations omitted).