The Western District of Virginia found that dismissal of a relator’s suit based on collateral estoppel and failure to prosecute does not prejudice the United States’ ability to subsequently pursue the same FCA claims, notwithstanding an earlier decision not to intervene. U.S. ex rel. Prince v. Virginia Resources Authority, No. 5:13CV00045, 2014 WL 3405657 (W.D. Va. July 10, 2014).

Relator Mark W. Prince alleged, on behalf of the United States, that the Virginia Resources Authority (“VRA”) and others violated the False Claims Act by knowingly presenting, or causing to be presented, a false or fraudulent claim for payment for approval related to federal subsidies and tax exempt status for certain bonds through the Build America Bonds program. The VRA successfully moved to dismiss Prince’s allegations based on a collateral estoppel defense arising from a Final Order issued in an action between the two parties in Shenandoah County Circuit Court.

The United States maintained that the action giving rise to collateral estoppel was inapplicable to the Government because it was not a party to that action and thus, it did not result in a valid, final judgment against the United States. The court agreed. The court further found that the dismissal for failure to prosecute was without prejudice to the Government because “[s]uch a dismissal is the result of [relator’s] failure to act, not any fault on the part of the United States, and is furthermore not a dismissal on the merits.”