United States ex rel. Michaels v. Agape Senior Community, Inc., 848 F.3d 330

Relators (former Agape employees Michaels and Whitesides) brought a qui tam False Claims Act (FCA) suit alleging Agape billed federal health programs for services not provided or for ineligible patients; the United States declined to intervene.
Relators sought to prove liability/damages using statistical sampling because individual chart review would be extremely costly; Agape opposed statistical sampling.
The district court ruled (March 2015) that statistical sampling would be improper on the facts of this case and later (June 2015) sustained the Attorney General’s objection to a privately negotiated settlement between relators and Agape.
The Government objected to the settlement despite not intervening and did not move to intervene later under § 3730(c)(3); it asserted an absolute veto under § 3730(b)(1).
The district court certified both the statistical-sampling and veto rulings for interlocutory appeal under 28 U.S.C. § 1292(b); the Fourth Circuit affirmed the veto ruling and dismissed the statistical-sampling appeal as improvidently granted.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Attorney General has an absolute, unreviewable veto over voluntary settlements in qui tam FCA suits when the Government declined to intervene	Relators: Government may have veto power in typical cases but here engaged in "de facto intervention," so any objection must be subject to court review for reasonableness	Agape: Government cannot unreasonably withhold consent; relator has right to conduct and settle action when Government declines to intervene	Court: Attorney General has an absolute veto under § 3730(b)(1); affirmed district court's ruling rejecting judicial reasonableness review of the AG’s objection
Whether statistical sampling may be used to prove FCA liability/damages in this case	Relators: Proposed sampling methodology meets Daubert standards and is appropriate to establish liability/damages without prohibitive costs	Agape: Sampling is inappropriate here; patient charts are available and direct review is feasible; sampling would be unreliable	Court: District court’s determination that sampling was improper turned on case-specific fact- and discretion-intensive considerations; interlocutory review under § 1292(b) was inappropriate — appeal as to sampling dismissed as improvidently granted

United States ex rel. Killingsworth v. Northrop Corp., 25 F.3d 715 (9th Cir. 1994) (concluded government’s consent-to-dismiss limitation is temporal and subject to court review)
Searcy v. Philips Elecs. N. Am. Corp., 117 F.3d 154 (5th Cir. 1997) (recognized Attorney General’s absolute veto over voluntary qui tam settlements)
United States v. Health Possibilities, P.S.C., 207 F.3d 335 (6th Cir. 2000) (affirmed absolute veto power to protect public interest in qui tam settlements)
United States ex rel. Milam v. Univ. of Tex. M.D. Anderson Cancer Ctr., 961 F.2d 46 (4th Cir. 1992) (noting qui tam suits are brought in the name of the United States and government consent required for settlement)
Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939 (1997) (observing relators’ differing motivations from the Government in qui tam cases)
King v. Burwell, 135 S. Ct. 2480 (2015) (canon cited for reading statutory text in context)