WASHINGTON (CN) — The Supreme Court appeared hesitant on Tuesday to second-guess the government when it would prefer to throw out whistleblower suits that don't serve its interest.
In the underlying dispute, a doctor named Jesse Polansky discovered purported medical billing discrepancies with his employer and filed suit under the False Claims Act. The statute allows individuals like Polansky to file suits — with the opportunity to collect treble damages — for uncovering acts of fraud against the government.
While the government can intervene in qui tam actions as these types of cases are known, it can also demur, allowing the whistleblower to continue with the action alone.
In Polansky's case, the government opted to dismiss the suit against his wishes after years of discovery and mounting legal fees.
Polansky wants the Supreme Court to find that the government had no authority to dismiss his suit, but the justices seemed unlikely to do so.
“Things can change, as the other side points out,” Justice Brett Kavanaugh said. “The discovery could reveal new facts. There could be a new administration that comes in. There could be burdens on the agency that were not apparent at the outset. So to bind the government to its initial decision strikes me as just increasing the Article II concerns.”
Chief Justice John Roberts viewed Polansky’s case as an example of one in which new facts emerge that change how the government views a case.
“This was a specific case in which the government makes a strong argument that the facts did change and changed dramatically,” the Bush appointee said.
Justice Elena Kagan noted that the government had the right to get involved in a case filed on its behalf.
“It's the government's action,” the Obama appointee said. “Why shouldn't the government have the ability to say things have changed, we think the merits are less strong, we think the discovery burdens are greater than we initially did, and so we want to essentially reverse our prior decision?”
Justice Ketanji Brown Jackson said Polansky’s all-or-nothing view of the government’s role in these suits was in contrast to Congress’ mandate.
“It seems as though the history of the statute is pretty clear that Congress only amended it to allow for later intervention because it was concerned that the government didn't have an opportunity to intervene after the initial period,” the Biden appointee said.
Polansky claims Executive Health Resources — where he worked as a consultant — was committing billing fraud by causing hospitals to overbill the Centers for Medicare and Medicaid Services. Executive Health Resources, Polansky claims, was allowing inpatient rates — which receive a higher reimbursement — to be billed for what should have been considered an outpatient service.
The government initially opted not to intervene after a two-year investigation. As Polansky continued with his suit without the government, a district court in 2016 rejected the bid by Executive Health Resources to dismiss. Polanksy's legal fees mounted in the meanwhile to more than $20 million.
After a discovery dispute that resulted in Polansky locating 14,000 documents that had not been provided to Executive Health Resources, the government notified both parties that it intended to dismiss the suit.
The court granted the government’s motion, and the Third Circuit affirmed, leaving Polansky to appeal to the Supreme Court.
Polansky argues that the government does not have the authority to dismiss suits where it did not intervene.
“The government lacks the statutory authority to dismiss a False Claims Act case after declining to proceed with the action, and that conclusion follows directly from the Act's plain text, structure, history, and purpose,” said Daniel Geyser, an attorney for the doctor with Haynes and Boone.
While Polansky claims his argument is supported by history, Justice Clarence Thomas said the country was different at the time of the founding, noting the attorney general was only a part-time position.
“I understand that you would like to rely on that history, but I think we need a little bit more,” the Bush appointee said.
The government says its power to dismiss suits is codified directly in the False Claims Act; it just has to first notify the relator, another word for the whistleblower.
“Congress could have easily said that the government may dismiss only ‘if the government elects to intervene,’” Assistant to the U.S. Solicitor General Frederick Liu said. “Those are the words that Congress used elsewhere in the statute when it wanted to make a right contingent on the government's election to intervene. Yet Congress didn't include those words or anything like them in Section 3730(c)(2)(A).”
Executive Health Resources claims no court has interpreted the Federal Claims Act to strip the government of its authority to dismiss these suits, and that it would be unconstitutional if the law had done so.
“That interpretation would interfere with the government's dismissal authority because the government cannot always determine during the seal period whether a suit should be dismissed,” said Mark Mosier, an attorney from Covington & Burling representing Executive Health Resources. “Whether the claims lack merit or whether they could interfere with other enforcement actions may not be known before the litigation proceeds. If the False Claims Act prevents the government from ending litigation that no longer serves the interests of the United States, then the statute is unconstitutional.”
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