For a number of years now, the USA Division of Justice (“DOJ”) has indicated an elevated want to train its dismissal authority over qui tam actions, even over the objections of relators who initially introduced the claims. Nevertheless, the slight uptick in such dismissals was seemingly stunted whereas United States ex rel. Polansky v. Exec. Well being Res., Inc., 599 U.S. 419 (2023) (which concerned the scope of the federal government’s authority to dismiss False Claims Act (“FCA”) qui tam actions) made its method to the USA Supreme Court docket (“SCOTUS”).
Now, nevertheless, following SCOTUS’ Polansky Opinion empowering DOJ to dismiss these claims, DOJ appears to be flexing this muscle as soon as once more. To that finish, the federal government has moved to intervene and dismiss a qui tam motion in opposition to Northstar Wi-fi, L.L.C., and associated defendants. United States ex rel. Vermont Nationwide Phone Co. v. Northstar Wi-fi, L.L.C. et al., Case No. 15-00728 (D.D.C. Mar. 8, 2024) (Dkt. 189). In that case, Vermont Nationwide Phone Firm alleges that a number of telecommunications corporations defrauded the U.S. Authorities out of a number of billion {dollars} by manipulating Federal Communications Fee guidelines and falsely certifying their eligibility for reductions on spectrum licenses.
On the core of the federal government’s movement is the assertion that continued litigation on this qui tam wouldn’t serve to vindicate the federal government’s pursuits, a basic function of such lawsuits. Regardless of the relator’s opposition, the federal government argues that the proof, together with proof uncovered throughout intensive discovery, doesn’t assist the central allegations of non-disclosure by the defendants. Furthermore, the federal government factors out the numerous challenges in proving damages, on condition that the defendants by no means really acquired the contested bidding credit.
The federal government’s movement to dismiss additionally highlights a important facet of any DOJ movement to dismiss: the cost-benefit evaluation. With the intensive discovery course of imposing a considerable burden on varied authorities businesses, the movement presents a stark reminder of the significance DOJ locations on allocating its assets judiciously. On this case, DOJ maintains that the seemingly outcomes of constant the litigation don’t justify these prices, and argues that courts should give the federal government substantial deference in its evaluation of pending qui tam actions.
The federal government’s movement right here hopefully exhibits that DOJ is rising bolder in the case of dismissing qui tam instances going through vital authorized hurdles that additionally impose substantial burdens on authorities assets. Likewise, counsel for defendants in qui tam actions ought to contemplate pushing DOJ to take such motion in flawed instances.
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