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The DOJ is dismissing more qui tam lawsuits. What does this mean?

Every year, numerous whistleblowers file qui tam lawsuits after noticing fraudulent activity. Under the False Claims Act (FCA), someone who has evidence of fraud against the federal government can file a claim and receive protection from retaliation—and possibly a financial award for reporting the fraud.

But last year, the Department of Justice filed an amicus brief stating that it would dismiss a qui tam cases that it does not deem pertinent to the public interest. In the few months since it was filed, this unprecedented brief has had major implications for many FCA lawsuits.

An amicus brief with important implications

If the Supreme Court declines to hear an FCA lawsuit and remands it to a lower court, the DOJ has the authority to dismiss the case. For nearly 30 years, the department rarely exercised this authority. However, in November of 2018, the Justice Department advised the Supreme Court in an amicus brief that the DOJ would seek to dismiss a high-profile case that was remanded to district court.

This set a major precedent. In just under one year, the DOJ has indeed sought dismissals more often than it did before—eleven cases total, involving 38 defendants. Generally, the Justice Department cited the federal government’s interest in preserving limited resources and avoiding adverse precedents as its reason for dismissal.

The DOJ’s amicus brief primarily addressed two areas of FCA law: the materiality standard, and the department’s right to dismiss FCA cases that the Supreme Court declines. It has several major implications:

  • It could become standard precedent for the DOJ to dismiss qui tam cases remanded to lower court
  • Fewer FCA cases could survive in district court
  • Smaller cases that are not in the public interest may flounder and eventually be dismissed
  • Cases that are similar in nature could receive dismissal

What this means for whistleblowers

This is not a positive sign for whistleblowers. Whistleblowers whose cases would have proceeded to district court may now find that the DOJ dismisses their case before it can go to trial. This outcome is far from desirable—after all, whistleblowers hope to bring the party that committed fraud to justice and perhaps receive an award from the court. If the plaintiff wants to challenge their case’s dismissal, the burden will fall to them and their legal team to demonstrate that the dismissal was fraudulent, arbitrary and capricious, or illegal.

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