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1 1 (September 27, 2023)

handle is hein.crs/govemyx0001 and id is 1 raw text is: Congressional__ ~ Research Service Legal Standards for Government Dismissal of Qui Tam Cases Under the False Claims Act September 27, 2023 The False Claims Act (FCA) subjects a person to civil penalties and triple damages if he or she submits a false or fraudulent claim seeking payment from the federal government. The Attorney General may pursue these remedies by bringing a civil action in federal court against the person alleged to have violated the act (the defendant). To encourage whistleblowers to report fraud on the government, the act also authorizes qui tam actions, in which private individuals called relators sue FCA defendants on behalf of themselves and the government. While the government and the relator are nominally on the same side of a qui tam case (as plaintiffs), they are not always aligned on litigation strategy, including whether to voluntarily dismiss or settle a particular action. As explained in a previous Legal Sidebar, lower courts had reached different conclusions about when and under what circumstances the government could dismiss a qui tam action over the relator's objection, prompting the Supreme Court to take up the issue. On June 16, 2023, the Supreme Court decided United States ex rel. Polansky v. Executive Health Resources, Inc., holding that (1) the government must intervene in an FCA qui tam action before moving to dismiss that action; and (2) the government's motion to dismiss is subject to Federal Rule of Civil Procedure 41(a), which governs voluntary dismissal of civil actions. Although Polansky places some limits on the government's ability to dismiss FCA qui tam actions, the Court also affirmed the government's broad discretion to seek dismissal and instructed courts to largely defer to the government's dismissal decisions. Thus, going forward, it will likely be difficult for relators to overcome a government motion to dismiss. This Legal Sidebar discusses the Polansky decision and some of the legal options for Congress in light of the Court's ruling. Background on Dismissal of FCA Qui Tam Actions While private relators may file qui tam actions under the FCA, they act only as assignees of part of the government's damages claim. In a successful action or settlement, the relator is awarded a portion of the government's proceeds and can recover his or her reasonable expenses, attorneys' fees, and costs from the defendant. If, however, the case is dismissed or the defendant prevails at summary judgment or trial, the relator bears, at a minimum, his or her own litigation expenses, attorneys' fees, and costs. That the government is a real party in interest in an FCA qui tam action is reflected in various provisions of the statute. For instance, the complaint in an FCA action remains under seal (i.e., not Congressional Research Service https://crsreports.congress.gov LSB11047 CRS Legal Sidebar Prepared for Members and Committees of Congress

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