(Reuters) — The U.S. Supreme Court on Friday upheld the Justice Department’s authority to unilaterally dismiss lawsuits filed under a law that allows whistleblowers to sue companies on behalf of the government to recover taxpayer money paid to companies based on false claims in exchange for a part of any recovery.
The 8-1 ruling, written by liberal Justice Elena Kagan, upheld a lower court’s decision to allow the Justice Department to file a lawsuit against a unit of UnitedHealth Group Inc. by a former employee named Jesse Polansky who accused it of wrongdoing.
Dr. Polansky had sought to prevent the department from dismissing lawsuits filed under the False Claims Act in cases where the government initially declined to exercise its right to take over the cases.
The Philadelphia-based 3rd US Circuit Court of Appeals upheld the dismissal of Polansky̵
7;s 2012 lawsuit that had accused UnitedHealth’s Executive Health Resources unit of defrauding Medicare, the government’s health insurance program for people age 65 and older, by falsely certifying hospitalizations as medical necessary.“Today, we hold that the government may seek dismissal of an FCA (False Claims Act) action over a relator’s objection so long as it intervened at some point in the litigation, either initially or afterward,” Justice Kagan wrote.
Conservative Justice Clarence Thomas dissented.
Cases brought under the False Claims Act resulted in $48.2 billion in recoveries from 1987 to 2021, according to Justice Department data. Most of that came from the 20% of cases the government exercised its right to join and take over, with cases where whistleblowers alone brought in $3.5 billion over the same time period.
Business groups, including the U.S. Chamber of Commerce, have said the fact that few cases where the government has not intervened are successful shows why the Justice Department should exercise its power to fire those without merit.
The Department of Justice requested the rejection of Dr. Polansky’s 2019 lawsuit, citing concerns including the “enormous” burden of requests for the government to produce documents. Executive Health Resources denied wrongdoing and argued that the department was entitled to dismiss the case because Dr. Polansky’s objections.
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