In a recent Law360 article, McGuireWoods lawyers Michael Podberesky, John Moran and Cassandra Burns reviewed where the U.S. Supreme Court and three circuit court rulings stand on False Claim Act (FCA) case dismissals and what the implications are for defendants and their counsel.
Titled “Tide Is Turning Against FCA Case Dismissals,” the July 28, 2021, article explained that the Supreme Court’s recent denial of certiorari left in place a three-way circuit split on what substantive standard to apply for granting government dismissals, commonly referred to as "(c)(2)(A) dismissals."
In 2018, a memo issued by the DOJ Civil Division’s Fraud Section, known as the Granston memo, underscored the importance of (c)(2)(A) dismissals to weed out nonmeritorious cases and those that run counter to the government's policy or litigation interest. The memo had the intended effect of increasing those dismissals.
The authors noted, however, that the Biden administration’s leanings toward a more pro-whistleblower and pro-enforcement stance and bipartisan congressional support for reigning in government dismissals of whistleblower suits will likely lead to more scrutiny of requests by defendants for prosecutors to exercise their (c)(2)(A) dismissal authority, and, ultimately, the government filing fewer (c)(2)(A) motions to dismiss.
That said, “until the Granston memo is formally superseded, (c)(2)(A) dismissals remain a potentially helpful tool for defendants in FCA cases,” the authors wrote, yet “defendants and their counsel should be thoughtful and strategic in their approach to requesting the government to exercise its dismissal authority.”