Encouraging Signs that DOJ May Finally Be Using Its Dismissal Authority

For several years now, the United States Department of Justice (“DOJ”) has indicated an increased desire to exercise its dismissal authority over qui tam actions, even over the objections of relators who initially brought the claims.  However, the slight uptick in such dismissals was seemingly stunted while United States ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419 (2023) (which involved the scope of the government’s authority to dismiss False Claims Act (“FCA”) qui tam actions) made its way to the United States Supreme Court (“SCOTUS”). 

Now, however, following SCOTUS’ Polansky Opinion empowering DOJ to dismiss these claims, DOJ seems to be flexing this muscle once again.  To that end, the government has moved to intervene and dismiss a qui tam action against Northstar Wireless, L.L.C., and related defendants.  United States ex rel. Vermont National Telephone Co. v. Northstar Wireless, L.L.C. et al., Case No. 15-00728 (D.D.C. Mar. 8, 2024) (Dkt. 189).  In that case, Vermont National Telephone Company alleges that several telecommunications companies defrauded the U.S. Government out of several billion dollars by manipulating Federal Communications Commission rules and falsely certifying their eligibility for discounts on spectrum licenses.

At the core of the government’s motion is the assertion that continued litigation in this qui tam would not serve to vindicate the government’s interests, a fundamental purpose of such lawsuits.  Despite the relator’s opposition, the government argues that the evidence, including evidence uncovered during extensive discovery, does not support the central allegations of non-disclosure by the defendants.  Moreover, the government points out the significant challenges in proving damages, given that the defendants never actually received the contested bidding credits.

The government’s motion to dismiss also highlights a critical aspect of any DOJ motion to dismiss: the cost-benefit analysis.  With the extensive discovery process imposing a substantial burden on various government agencies, the motion presents a stark reminder of the importance DOJ places on allocating its resources judiciously.  In this case, DOJ maintains that the likely outcomes of continuing the litigation do not justify these costs, and argues that courts must give the government substantial deference in its assessment of pending qui tam actions.

The government’s motion here hopefully shows that DOJ is growing bolder when it comes to dismissing qui tam cases facing significant legal hurdles that also impose substantial burdens on government resources.  Likewise, counsel for defendants in qui tam actions should consider pushing DOJ to take such action in flawed cases.  

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