The U.S. Supreme Court (SCOTUS) will soon weigh in on a landmark case regarding the government’s authority to dismiss whistleblower lawsuits brought by private citizens on its behalf, even if that citizen objects.
The False Claims Act is designed to penalize those who knowingly submit false or fraudulent claims to the government for services supported by public funds. A whistleblower is someone who witnesses fraud taking place, either directly or through reasonable suspicion. A “qui tam” lawsuit can be filed by a whistleblower, also referred to as the relator, who brings an action against the alleged offender on behalf of the government.
Once a whistleblower lawsuit is filed, the U.S. Department of Justice (DOJ) is allowed 60 days to investigate the case details and decide whether to intervene. If it chooses to intervene, the whistleblower could receive a percentage of the government’s award for exposing the fraud, which would have gone unnoticed without their efforts. If the government declines, the whistleblower may continue the lawsuit on their own.
The DOJ may dismiss the lawsuit at any time after giving the whistleblower notice of its motion to dismiss and holding a hearing on that motion.
In the case before the Supreme Court, a whistleblower objected to the DOJ’s decision to dismiss his case, which was upheld in several lower courts, including the 3rd U.S. Circuit Court of Appeals. SCOTUS agreed to re-examine the decision, which may change the future of whistleblower lawsuits.
Whistleblower cases are crucial to ensuring that public funds are not misused by companies or individuals entrusted with them. Whistleblowers helped the government recover $48.2 billion from 1987-2021, but most of that came from the 20% of cases the DOJ opted to join. Just $3.5 billion of that number was recovered by whistleblowers who proceeded alone, which highlights the important role played by the government in protecting taxpayer money.
What’s At Stake with the Supreme Court Whistleblower Case?
Should the DOJ have the power to dismiss whistleblower cases, even after it declines to intervene?
That’s the question SCOTUS faces as they review the case at hand.
In 2012, Dr. Jesse Polansky sued his former employer, UnitedHealth’s Executive Health Resources (EHR), for allegedly defrauding Medicare of billions of dollars by falsely certifying hospital admissions as medically necessary. The DOJ declined to intervene, so Polansky continued alone, working diligently on the case for the next five years.
But in 2019, the DOJ suddenly sought the case’s dismissal, citing its concern that a “tremendous” amount of requests for documents in discovery was placing too large of a burden on the government. Polansky objected, but the motion to dismiss was granted anyway.
Polansky argues that the DOJ should not be allowed to dismiss the case after waiting so long to get involved; EHR contends that lessening the DOJ’s power to dismiss whistleblower lawsuits would render the qui tam sections of the FCA unconstitutional, encouraging the filing of meritless lawsuits and wasting government resources.
Polansky’s attorneys point out that if the DOJ were given unfettered authority to dismiss qui tam lawsuits for any reason – even after the relator puts years of personal effort in – potential future whistleblowers may decide there’s no point in coming forward.
SCOTUS will also consider what standard a court must use, if any, to grant a DOJ motion to dismiss. Polansky says a dismissal should satisfy some kind of rational standard, given the relator’s right to pursue his interest in the case. The DOJ, however, says that under the False Claims Act, it must only meet the relator’s basic constitutional right to be informed of the motion and attend a hearing.
While discussing the case, Justice Samuel Alito questioned whether it would be enough for the government to dismiss a qui tam suit simply “because we feel like it.”
No appeals court in history has allowed a whistleblower suit to proceed after the government motions to dismiss it. If SCOTUS sides with the DOJ by upholding its power to dismiss cases, many experts believe that would send a signal to dishonest companies that defrauding the government will not have consequences.
U.S. Law Protects Whistleblowers
While the scope of whistleblowers’ impact may change due to the Supreme Court’s decision, their legal protections will remain. Without whistleblowers, dishonest individuals and companies would get away with stealing taxpayer money or creating unsafe situations.
Fraud or wrongdoing can include not just misuse of public funds but any violation of federal law, abuse of authority, or danger to health and safety. Citizens who have reasonable evidence of these at their current or former workplace are protected by the Whistleblower Protection Act of 1989, which prohibits an employer from retaliating against whistleblowers. Examples of retaliation include demotion, termination, harassment, or intimidation.
If you’re considering a whistleblower lawsuit, contact Herman, Herman & Katz at 844-943-7626 or fill out our online contact form. We can answer all your whistleblower questions during a free, confidential consultation.
Jed Cain is a partner with Herman, Herman & Katz, LLC. He has dedicated his career to representing injured folks and their families.