A recently leaked internal DOJ memo reveals a dramatic shift in DOJ’s approach to dismissal of non-intervened qui tam suits. Citing the “significant resources” that the government expends even in non-intervened cases, the memo—drafted by Commercial Litigation Branch Director Michael Granston—sets forth a series of factors for lawyers with DOJ and U.S. Attorneys’ offices to consider when evaluating whether to seek dismissal of a qui tam case.
The FCA gives the United States the authority to move for dismissal of a qui tam action, even over the objections of the relator, so long as the relator is given notice and an opportunity to participate in a hearing on the motion. Historically, the government has only rarely exercised this authority.
The memo offers a “non-exhaustive” list of potential bases upon which to premise a motion to dismiss, along with citations to cases in which the government has previously asserted each basis:
- Curbing meritless qui tams
- Preventing parasitic or opportunistic qui tam actions
- Preventing interference with agency policies and programs
- Controlling litigation brought on behalf of the United States
- Safeguarding classified information and national security interests
- Preserving government resources
- Addressing egregious procedural errors
Notably, with respect to the first factor, the memo suggests that even where allegations are not “facially deficient,” the government should consider seeking dismissal if it concludes after completing an investigation that a case “lacks merit.” However, not all factors are likely to inure to the benefit of the defense bar. For example, DOJ is adopting a broad view of the policy rationales for “controlling litigation,” extending even to dismissing a case to “avoid the risk of unfavorable precedent.”
The memo makes clear that the articulated factors should, as appropriate, be asserted in tandem with alternative bases for dismissal, such as the first-to-file or public disclosure bars, and that, in some cases, it may be appropriate to dismiss only certain of a relator’s claims. LDOJ lawyers considering seeking dismissal are encouraged to communicate this to relators’ counsel, in the hopes that some relators will elect instead to voluntarily dismiss their claims. Companies named in declined qui tams now have new opportunities to develop a strategy around advocating for DOJ dismissal.
A footnote in the memo states that the government will collect statistics on the number of qui tams that the government dismisses each year and work to develop a “reporting mechanism” for those metrics. Industries commonly targeted by qui tam suits will closely watch the extent to which the government gives this new policy bite.
A copy of DOJ’s memo can be found here.