Is the U.S. Department of Justice (DOJ) going to dismiss more meritless qui tam actions brought under the False Claims Act (FCA)? At a conference on Oct. 30, 2017, Michael Granston, the Director of DOJ's Civil Fraud Section, commented that, "While the qui tam provisions were designed to provide relators with a vehicle to proceed without the government's involvement, clearly meritless cases can serve only to increase the costs for the government and health care providers alike." Some construed the comment as signaling a major policy change, i.e. that the DOJ will move to dismiss qui tam actions when it determines that they have no merit. The DOJ has typically allowed almost all qui tam cases to proceed when it declines to intervene and take control of them. According to the National Law Review, between 2008 and 2016, there were a total of 5,486 qui tam actions instituted and the DOJ filed a motion to dismiss only in approximately 62 of those cases.

The DOJ elects to proceed (intervene) in only 20 percent to 25 percent of qui tam cases and it does a very good job of separating the wheat from the chaff. The cases in which the DOJ declines to intervene ultimately prove to be meritless a high percentage of the time. Of the $2.9 billion recovered in qui tam actions in fiscal year 2016, only $105 million – less than 1 percent – was obtained from actions in which the DOJ declined to intervene. Over the past 30 years, the 75 percent to 80 percent of qui tam cases in which the DOJ declined to intervene have yielded a mere 6 percent of the total recoveries from all qui tam cases during this period.

As a result of the DOJ's laissez-faire approach to qui tam actions in which it declines to intervene, government contractors and healthcare companies spend millions every year to defend against meritless allegations. Commentators have noted that the DOJ has little incentive to dismiss such qui tam cases given the possibility, however remote, that some small percentage of them will result in a recovery of funds for the government. Of course, this perspective ignores the harmful consequences of permitting unmeritorious FCA cases to proceed. These include the likelihood that contractors will pass on some of the costs of defense to the government or other customers in the form of higher prices, and the congestion of federal court dockets. Granston's comment is one of the few times the DOJ has publicly acknowledged some of these costs.

A change in approach by the DOJ would be a welcome development, but it remains to be seen whether such a change will be forthcoming. The DOJ on Nov. 17, 2017, indicated that it has not taken a more aggressive stance toward dismissing "clearly meritless" qui tam cases. Rather, it indicated that Granston's speech should be taken merely as an affirmation of its existing – and largely unexercised – power to ask courts to dismiss meritless suits. It is too early to tell whether some change is afoot. But the DOJ's public recognition of the costs of meritless FCA litigation provides some reason to hope it will more frequently exercise its power to seek dismissal. Because it investigates all qui tam cases at their inception, the DOJ is in a unique position to police the system by seeking dismissal of cases that clearly lack merit while allowing other cases to proceed. Such an approach would align with the policies of an administration that is looking to ease unnecessary burdens on business.