Can the Feds have a qui tam case dismissed?

On June 21, 2022, the U.S. Supreme Court agreed to hear a case that hinges on whether the federal government can drop cases taken up on its behalf as a qui tam action. The dispute involves whether the government can drop the case regardless of whether the relator or plaintiff representing the government consents to the action. This issue has so far divided the Appeals Courts.

The case

Former employee Jesse Polansky accused Executive Health Resources Inc (EHR), a United Health Group subsidiary, of falsely certifying inpatient admissions to a hospital as medically necessary. In doing this, EHR is allegedly potentially overbilling Medicare by billions of dollars.

The ex-employee petitioned the Supreme Court in January to hear the case after his appeal in the 3^rd U.S. Circuit Court of Appeals ruled in 2021 that Justice Department could have the case thrown out despite his objection. Polansky also took issue with the fact that the DOJ did not initially intervene in 2012 when he sued EHR in the Eastern District of Pennsylvania. However, in 2019, the DOJ asked the U.S. District Judge to dismiss the case, which the judge did.

Polansky appealed and argued in the 3^rd Circuit that the government had no authority to step in and still must show a valid purpose for requesting the dismissal. The government maintains that it has the right to shut down any qui tam case at any time. The Appeals Court Judge rejected both arguments but allowed the feds to dismiss the case as long as there was no bias.

A case of bias

The issue of bias arose when the then-director of the DOJ Civil Fraud Section sent a memorandum stating that it should seek to dismiss “meritless” or “parasitic” whistleblower cases because it wasted resources and could create unfavorable precedents in weak cases.

Where the Circuit Courts stand

The 3rd Circuit’s ruling is similar to the 7^th Circuit. The 8^th and 9^th Circuits ruled that the government must have a valid reason. The DC Circuit ruled that the government can dismiss any case at any time. The 1^st District found that the whistleblower must get a hearing to plead their case.