Thank You For Submiting Feedback!
United States Court of Appeals for the Third Circuit
November 18, 2020, Argued; October 28, 2021, Filed
[*380] OPINION OF THE COURT
KRAUSE, Circuit Judge.
] The False Claims Act (FCA), 31 U.S.C. § 3729, et seq., empowers not just the federal government, but also private individuals, to bring claims for fraud on the United States and to do so in the Government's name in exchange for a share of the proceeds. These individuals, known as relators, are generally on the same side as the Government, which has the option early on to either intervene or allow the relator to move forward with the action on her own. But what authority does the Government have when it declined to intervene at the outset and subsequently opposes the relator's suit?
To answer, we must resolve two key questions that have divided our sister circuits: (1) whether the Government in that situation can move for dismissal without first intervening, and (2) if the Government properly moves for dismissal, what, if any, standard must it meet for its motion to be granted? For the reasons [**3] that follow, we conclude that the Government is required to intervene before moving to dismiss and that its motion must meet the standard of Federal Rule of Civil Procedure 41(a). Because we also conclude that the District Court here acted within its discretion in granting such a motion by the Government, we will affirm the Court's order of dismissal.
A. Factual Background
The False Claims Act has its roots in the Civil War, when "a series of sensational congressional investigations" uncovered widespread fraud by wartime contractors that had bilked the federal government by charging for "nonexistent or worthless goods." United States v. McNinch, 356 U.S. 595, 599, 78 S. Ct. 950, 2 L. Ed. 2d 1001 (1958). In response, Congress not only prohibited the making of false claims to the Government, 31 U.S.C. § 3729(a)(1), and empowered the United States to seek civil remedies, id. § 3730(a); it also legislated a private enforcement mechanism, not unlike the bounty hunting common in the rough-and-tumble world of the mid-nineteenth century. ] That is, the statute permits private individuals, acting in the name of the Government, to assert FCA claims "for the person and for the United States Government." Id. § 3730(b)(1). These relator-initiated lawsuits, known as qui tam actions, effectively deputize citizens to act as private attorneys general, compensated with [**4] a share of the money recovered.1 See id. § 3730(d).
This case involves such a qui tam action. Relator-Appellant Dr. Jesse Polansky was an official at the Centers for Medicare and Medicaid Services (CMS) before consulting for Defendant-Appellee EHR, a "physician advisor" company that provides review and billing certification services to hospitals [*381] and physicians that bill Medicare.2 While employed as a consultant, Polansky became concerned that EHR was systematically enabling its client hospitals to overadmit patients by certifying inpatient services that should have been provided on an outpatient basis. As alleged in the complaint he eventually filed in the District Court, EHR was causing hospitals to bill the Government for inpatient stays that were not "reasonable and necessary" for diagnosis or treatment—a statutory requirement for reimbursement under the Government's Medicare program, 42 U.S.C. § 1395y(a)(1)(A), as explicated by CMS initially in guidance, and as of 2013, in a formal regulation, see 42 C.F.R. § 412.3(d)(1). From at least 2006 until the filing of his amended complaint in 2019, he alleged, EHR's certifications were false and caused the submission of false claims to the Government.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
17 F.4th 376 *; 2021 U.S. App. LEXIS 32304 **; 111 Fed. R. Serv. 3d (Callaghan) 437
JESSE POLANSKY, M.D., M.P.H.; THE STATE OF CALIFORNIA, THE STATE OF COLORADO, THE STATE OF CONNECTICUT, THE STATE OF DELAWARE, THE DISTRICT OF COLUMBIA, THE STATE OF FLORIDA,THE STATE OF GEORGIA, THE STATE OF HAWAII, THE STATE OF ILLINOIS, THE STATE OF INDIANA, THE STATE OF IOWA, THE STATE OF LOUISIANA,THE STATE OF MARYLAND, THE COMMONWEALTH OF MASSACHUSETTS, THE STATE OF MICHIGAN, THE STATE OF MINNESOTA, THE STATE OF MONTANA, THE STATE OF NEVADA,THE STATE OF NEW JERSEY, THE STATE OF NEW MEXICO, THE STATE OF NEW YORK, THE STATE OF NORTH CAROLINA, THE STATE OF OKLAHOMA, THE STATE OF RHODE ISLAND, THE STATE OF TENNESSEE,THE STATE OF TEXAS, THE COMMONWEALTH OF VIRGINIA, THE STATE OF WASHINGTON, and THE STATE OF WISCONSIN v. EXECUTIVE HEALTH RESOURCES INC; UNITEDHEALTH GROUP INC; UNITED HEALTHCARE SERVICES INC; OPTUM INC; OPTUMINSIGHT INC; OPTUMINSIGHT HOLDINGS LLC; COMMUNITY HOSPITAL OF THE MONTEREY PENINSULA; YALE NEW HAVEN HOSPITAL UNITED STATES OF AMERICA Jesse Polansky, M.D., M.P.H., Appellant.
Subsequent History: Petition for certiorari filed at, 01/26/2022
Prior History: [**1] On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. No. 2-12-cv-04239). Honorable Michael M. Baylson, U.S. District Judge.
Polansky v. Exec. Health Res., Inc., 422 F. Supp. 3d 916, 2019 U.S. Dist. LEXIS 192332, 2019 WL 5790061 (E.D. Pa., Nov. 5, 2019)
intervene, motion to dismiss, district court, proceeds, Circuits, parties, rights, limitations, good cause, notice, terms, provisions, elects, right to conduct, canon
Governments, Federal Government, Claims By & Against, Labor & Employment Law, False Claims Act, Scope & Definitions, Qui Tam Actions, Business & Corporate Compliance, Public Contracts Law, Voiding Contracts, Fraud & Whistleblowing, Civil Procedure, Appeals, Standards of Review, De Novo Review, Legislation, Interpretation, Reviewability of Lower Court Decisions, Preservation for Review, Courts, Judicial Precedent, Employer Liability, Burdens of Proof, Evidence, Competency, Dead Man's Acts, Elements, Statute of Limitations, Time Limitations, Constitutional Law, Separation of Powers, Voluntary Dismissals, Notice of Dismissal, Dismissal Without Prejudice, Two Dismissal Rule, Court Order, Motions for Dismissal, Dismissal, Stipulations, Fundamental Rights, Procedural Due Process, Scope of Protection, Judicial Officers, Judges, Discretionary Powers, Abuse of Discretion, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim