Industry organizations in business, healthcare, pharmaceuticals, and medical technology filed amicus briefs this week in support of the False Claims Act (FCA) defendants in the Supreme Court case United States, ex rel. Polansky v. Executive Health Resources, Inc. As previously reported here, this case raises whether the government has the proper authority to dismiss a FCA suit after it initially declined to proceed with its own action, and what dismissal standard applies if the government indeed has that authority.
The four amicus briefs filed on October 24, 2022, were submitted by (1) the Chamber of Commerce of the United States of America, the American Health Care Association, and the American Hospital Association, (2) the Washington Legal Foundation, (3) the Pharmaceutical Research and Manufacturers of America, and (4) the Advanced Medical Technology Association. Their briefs all highlight and emphasize the statutory and Constitutional authority granted to the government to dismiss FCA actions through a historic narrative and through past and recent case law.
Additionally, the amicus briefs each discuss the practical consequences of denying the government the ability to dismiss FCA actions in which it declines to intervene. The amici curiae describe an eruption of qui tam actions since the 1986 FCA amendments allowed private citizens to file false claims lawsuits on behalf of the government. According to the amici curiae, gamesmanship of this system has led to heavy burdens on businesses in defending these actions, a drain on executive and judicial resources, and harm to public interest by stifling innovation in business and technology, particularly within the medical technology, healthcare, and pharmaceutical industries. They further argue that parties named in qui tam suits often settle in order to avoid more costly litigation and face irreputable reputational harm. The amici curiae describe the government as a necessary arbitrator in qui tam lawsuits and in separating the meritorious versus the meritless qui tam actions.
SCOTUS has scheduled oral arguments in this case for December 6, 2022. Since the Department of Justice issued the Granston Memo in January 2018, the number of FCA cases it has moved to dismiss has greatly increased. The number of lower court opinions about what standard should be applied to such dismissals has also increased. This case may resolve the circuit split on that issue, and it is sure to be closely watched by industry participants and FCA practitioners alike.