In June the Supreme Court issued an opinion that affirmed the government’s broad discretion to intervene after a whistleblower files a False Claims Act case, and move to dismiss the case against the whistleblower’s objections. Six months later, however, the Justice Department indicates it has no plans to broadly use this dismissal authority on non-intervened FCA cases.

Here’s more about the case at issue: In U.S. ex rel. Polansky v. Executive Health Resources, Inc., et al., whistleblower 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 initially declined to intervene, Polansky continued to litigate the 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.

While the government chose to intervene and move to dismiss this case, it’s important to note the Justice Department doesn’t intend to expand its criteria for dismissals. That’s important for whistleblowers who have credible information about a fraud to understand. The government relies on whistleblowers, especially those who move ahead with cases after the DOJ declines to intervene. Notably, recoveries from non-intervened FCA cases topped $1.2 billion in fiscal 2022, more than half of total recoveries and more than cases where the government intervened. The decision in Polansky has not changed that.

“Polansky continues to afford the government substantial flexibility in deciding whether to move to dismiss. But I don’t expect that to change the government’s ultimate approach to the use of the dismissal authority,” said Michael D. Granston, Deputy Assistant U.S. Attorney General for the Commercial Litigation Branch. “The government’s decision to dismiss will remain subject to the justice manual requirements, that any decision to dismiss be exercised judiciously and transparently.”

Opportunistic defendants have, unfortunately, latched on to Justice Clarence Thomas’ dissent in Polansky questioning whether the False Claims Act is constitutional to undermine the government’s most effective fraud-fighting tool.

However, as The Anti-Fraud (TAF) Coalition wrote in a brief supporting qui tam relators in the first post-Polansky constitutional challenge to the False Claims Act (U.S. ex rel Brooks v. Exactech), all three branches of government have unanimously accepted qui tam actions for more than 200 years, firmly establishing the False Claims Act’s constitutionality.

“The FCA is modeled on a method of law enforcement that has been in existence since the founding of the country, and the Act itself is over 150 years old,” TAF’s attorneys wrote. “Throughout the Act’s history, Congress and the Executive Branch have worked together to enhance the Act’s effectiveness, and courts have repeatedly rejected challenges to the Act’s structure. In light of that experience, Defendant’s efforts to revive such challenges ring hollow.”

In November, the U.S. District Court for the District of Alabama resoundingly rejected Exactech’s argument that the FCA was unconstitutional. While there are other cases where these challenges are still pending, the decision in Exactech is consistent with every appellate court to have considered the constitutionality of the FCA’s qui tam provisions.

Keller Grover attorney Kathleen R. Scanlan has been watching these issues closely and will continue to monitor any further developments; she’s a member of TAF, which works to empower whistleblowers, and is chair of TAF’s Public Education Committee. 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.

As Ms. Scanlan said during a recent webinar sponsored by the Federal Bar Association’s Qui Tam Section, whistleblower attorneys are unlikely to take on cases that lack merit due to the risk that relators and their attorneys take. She also noted the DOJ has continually expressed the need for whistleblowers to help the government reclaim funds lost to fraud.

“We aren’t going to continually run the risk that the DOJ will come in and move to dismiss us,” she said. “That’s a waste of my time and resources.”

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.