In its recent decision Polansky v. Executive Health Resources Inc., No. 19-3810 (3d Cir. Oct. 28, 2021), the U.S. Court of Appeals for the Third Circuit became the most recent to weigh in on the circuit split regarding the Government’s authority to dismiss False Claims Act (“FCA”) qui tam actions pursuant to 31 U.S.C. § 3730(c)(2)(A). Siding with the Seventh Circuit’s recently-adopted approach, the Third Circuit held that Federal Rule of Civil Procedure 41(a) applies to government dismissals in FCA qui tam actions the same as it would in any other suit. In doing so, the Third Circuit cemented what is now a three-way split regarding the standard the Government must meet to exercise its dismissal authority, rejecting both the D.C. Circuit’s approach, that the Government’s dismissal power is unfettered, and the Ninth Circuit’s approach that the motion to dismiss must have a “rational relation” to a valid government purpose. In the same opinion, the Third Circuit also entered the fray on a second, related split, siding with the Sixth and Seventh Circuits in finding that the Government must intervene in FCA suits before moving to dismiss. In contrast, the D.C., Ninth, and Tenth Circuits do not require the Government to intervene before moving for dismissal of an FCA suit at any point in the litigation.
The qui tam action in Polansky accused Executive Health Inc. of systematically enabling its client hospitals to over-admit patients by certifying inpatient services that should...
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