United States ex rel. Polansky v. Executive Health Resources, Inc.

Background

Petitioner Jesse Polansky, a doctor and whistleblower, sued Executive Health Resources, a company that helped hospitals bill Medicare, under the False Claims Act. Polansky filed his complaint under seal and the Government initially declined to intervene. After years of discovery and burden on the Government, the Department of Justice moved to dismiss the suit under the FCA provision that allows the Government to dismiss over a relator’s objection. The District Court granted dismissal and the Third Circuit affirmed.

Reasoning

The main question was whether the Government may seek dismissal if it did not intervene during the initial seal period. The Court read the statute’s structure and concluded that the Government’s dismissal power under §3730(c)(2)(A) is available whenever the Government has intervened, whether at the start or later after showing good cause. The Court also held that district courts should apply Federal Rule of Civil Procedure 41’s dismissal standards, while providing the relator notice and a hearing, and that courts should generally defer to reasonable Government judgments about costs and benefits.

Real world impact

This decision affects whistleblowers, companies sued under the FCA, and the Government. It makes it easier for the Government to stop qui tam suits after joining them later, especially where discovery is expensive or privileged material is at stake. Relators may lose suits they have prosecuted for years and may receive smaller recoveries if the Government takes over. The ruling does not decide the case’s merits and leaves factual disputes and possible recoveries to be resolved in other cases.

Dissents or concurrances

Justice Kavanaugh concurred in the judgment and noted constitutional questions; Justice Thomas dissented, arguing the statute does not allow the Government to dismiss a suit after declining to take it over initially and warning that qui tam suits may raise Article II problems. That disagreement signals ongoing debate about the constitutional role of private whistleblowers in Government litigation.