A longstanding but rarely tested corner of whistleblower law flew to the forefront this month in the form of a decision by the U.S. Supreme Court.

We get into the specifics below, but here’s the underlying lesson: In today’s legal environment, whistleblowers benefit greatly from retaining counsel with a thorough understanding of the law and a solid track record of communicating with the U.S. Department of Justice.

Understanding the decision requires a bit of background. We often help whistleblowers here at Keller Grover, so here’s a quick recap of the general process: Our lawyers help False Claims Act whistleblowers to confidentially alert the DOJ to alleged fraud against the government. The government prosecutes the case in court, and whistleblowers can get up to 30 percent of recouped funds.

But sometimes, the DOJ declines to pursue a case. In those instances, the whistleblowers (or “relators”) are free to proceed on behalf of the government with what’s known as a qui tam action. Notably, recoveries from these “non-intervened” FCA cases topped $1.2 billion in fiscal 2022, more than half of total recoveries.

So what’s the problem? 

For a long time, if the government declined a case, it stayed out of the case. But in recent years, amendments have allowed the government to intervene later — even to the point of dismissing a case despite the objections of the whistleblower.

That’s exactly the situation that landed this question before SCOTUS. And, in an opinion released June 16, the court sided with the government, affirming its broad discretion to intervene later and dismiss a case, even if the whistleblower disagrees.

However — it’s important to note that this right is rarely exercised, and we don’t expect that to change following this decision. The decision wasn’t a complete surprise. Again, it simply underscores the need for expert counsel.

But it can be informative to understand the particulars. In the case at issue, a whistleblower named Jesse Polansky alleged that compliance solutions provider Executive Health Resources was helping its health care clients misclassify patient treatments in order to get higher Medicare reimbursements. After the government declined to intervene, Polansky filed a qui tam action. The case spent years in discovery; then the government decided that the burdens of the suit outweighed its potential benefits and filed for dismissal, which a District Court granted.

The Supreme Court opinion upheld lower court rulings that, as long as the government first moves to intervene in a case, then offers notice and an opportunity for a hearing, dismissal may take place. 

“And here, the Government gave good grounds for thinking that this suit would not do what all qui tam actions are supposed to do: vindicate the Government’s interests,” the opinion syllabus stated. “Absent some extraordinary circumstance, that sort of showing is all that is needed for the Government to prevail on a motion to dismiss.”

That’s why communication must happen early and often. Counsel that has a firm grasp on whistleblower law and is skilled at communicating with the DOJ about its view of non-intervened cases can make a world of difference for whistleblowers.

Keller Grover attorney Kate Scanlan has been watching these issues closely; she’s a member of The Anti-Fraud (TAF) Coalition, which works to empower whistleblowers, and is chair of TAF’s Public Education Committee. We will continue to follow any further developments.

If you want advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation. With our proven track record of advocating for whistleblowers, we can help you understand all your options, protections, and best next steps. In more than 25 years litigating fraud and employment cases, Keller Grover has recovered billions for its clients.