United States, ex rel. Hayes v. Allstate Ins. Co., 16-705

Relator J. Michael Hayes brought a qui tam action under the False Claims Act (FCA) alleging insurers and trucking companies failed to reimburse Medicare as required by the Medicare Secondary Payer Act.
The district court (W.D.N.Y.) found Hayes had falsely asserted personal knowledge of defendants’ nationwide scheme and imposed dismissal with prejudice as a Rule 11 sanction.
Hayes appealed the Rule 11 dismissal and denial of leave to amend; all defendants defended the sanction on appeal.
Several defendants (the non‑FedEx defendants) raised an alternative ground: that the district court lacked subject‑matter jurisdiction because Hayes’s suit violated the FCA’s first‑to‑file rule due to an earlier related suit (Takemoto) pending when Hayes filed.
The Second Circuit considered whether the FCA first‑to‑file rule is jurisdictional and, joining the D.C. Circuit, held it is not jurisdictional but a merits‑type limitation; because the court affirmed the Rule 11 dismissal in a companion summary order, it did not decide the first‑to‑file merits.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FCA first‑to‑file rule is jurisdictional	Hayes argued his case should be decided on merits; implicitly that jurisdiction existed	Non‑FedEx defendants argued that Takemoto was pending first, so district court lacked subject‑matter jurisdiction under §3730(b)(5)	The first‑to‑file rule is nonjurisdictional; it governs the merits (claim‑bar) not subject‑matter jurisdiction
Whether the district court erred by dismissing under Rule 11	Hayes argued misstatements were not in bad faith and he should have leave to amend	Defendants maintained Hayes acted in bad faith and dismissal with prejudice was proper	Court affirmed district court’s Rule 11 dismissal (decision on this issue in accompanying summary order)

Arnold v. Lucks, 392 F.3d 512 (2d Cir. 2004) (appellate courts must satisfy themselves of subject‑matter jurisdiction)
Kellogg Brown & Root Servs., Inc. v. U.S., ex rel. Carter, 135 S. Ct. 1970 (Sup. Ct. 2015) (describes FCA qui tam structure and first‑to‑file rule application)
U.S. ex rel. Heath v. AT&T, Inc., 791 F.3d 112 (D.C. Cir. 2015) (first‑to‑file rule is nonjurisdictional)
Arbaugh v. Y & H Corp., 546 U.S. 500 (clarifies test for treating statutory limitations as jurisdictional)
Sebelius v. Auburn Reg'l Med. Ctr., 133 S. Ct. 817 (warns against overbroad use of "jurisdictional" label)
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (Article III requires courts to address jurisdiction before merits)
Zipes v. Trans World Airlines, Inc., 455 U.S. 385 (statutory language that does not refer to jurisdiction is ordinarily nonjurisdictional)
Kucana v. Holder, 558 U.S. 233 (textual differences within a statute suggest different congressional intent)