United States v. Marion Health
1:22-cv-00074
N.D. Ind.Jul 27, 2022Background
- Relator Charles E. Wade filed a qui tam False Claims Act suit alleging Medicare overbilling; the United States and State of Indiana declined to intervene.
- Wade moved to dismiss the case with prejudice before any defendant was served; his motion noted the Government Plaintiffs consented only if dismissal was without prejudice to their rights.
- The Court, having received no formal objection, granted dismissal with prejudice.
- Two days after dismissal, the United States moved to clarify that the dismissal with prejudice applied only to Wade and argued (citing 31 U.S.C. § 3730(b)(1)) that the government must consent to dismissals and therefore the government’s claims could only be dismissed without prejudice.
- The Court concluded that when the government declines to intervene it has no right to veto or dictate the terms of dismissal; it also found the government’s clarification motion untimely under local rules and noted authority (UCB) supporting the relator’s right to conduct the action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the United States can prevent dismissal of the qui tam action after declining to intervene | Wade: once the government declines to intervene, it effectively waives any veto; relator has the right to conduct and dismiss the action | United States: § 3730(b)(1) requires court and Attorney General written consent to dismissal, so government must consent to any dismissal | Court held government, having not intervened, has no right to object to dismissal and cannot veto it |
| Whether § 3730(b)(1) requires government consent only for dismissals without prejudice but not for dismissals with prejudice (i.e., government can insist on dismissal without prejudice) | Wade: no authority supports parsing (b)(1) to allow government to force dismissal without prejudice; relator may dismiss with prejudice | United States: even if it cannot veto dismissal entirely, it at least can require dismissal be without prejudice to preserve its claims | Court rejected the government’s unsupported parsing and found no authority allowing the government to dictate that dismissal be only without prejudice |
| Timeliness / procedural right to challenge after failure to object | Wade: government failed to timely object under N.D. Ind. L.R. 7-1(d)(3)(A); silence permitted dismissal | United States: sought clarification after dismissal | Court held the government’s clarification motion was untimely and, having not objected within the deadline, the Court could assume no objection; denied the motion |
Key Cases Cited
- Minotti v. Lesnick, 895 F.2d 100 (2d Cir. 1990) (once United States declines to intervene, rationale for requiring AG consent to dismissal is weak)
- U.S. ex rel. Fender v. Tenet Healthcare Corp., 105 F. Supp. 1228 (N.D. Ala. 2000) (decision not to intervene is tantamount to consent to dismissal)
- U.S. ex rel. Hullinger v. Hercules, Inc., 80 F. Supp. 2d 1234 (D. Utah 1999) (government veto over dismissal is inconsistent with relator’s right to conduct and settle suit)
- United States v. UCB, Inc., 970 F.3d 835 (7th Cir. 2020) (when government does not intervene it is not a party and cannot control the relator’s conduct of the action)
- United States v. Health Possibilities, P.S.C., 207 F.3d 335 (6th Cir. 2000) (contrary view that government retains veto power over dismissal)