- Whether the complaint is facially lacking in merit for either legal or factual reasons.
- Whether the qui tam complaint duplicates a preexisting government investigation and adds no new information to the investigation.
- Whether the action interferes with agency policies or programs. The government specifically notes that dismissal may be appropriate when “an action is both lacking in merit and raises the risk of significant economic harm that could cause a critical supplier to exit the government program or industry.”
- Whether the action interferes with the government’s efforts to control its own litigation.
- Whether the action implicates classified information or national security interests.
- Whether the expected gain from allowing the litigation exceeds the expected cost to the government.
- Whether the relator has made “egregious procedural errors” that frustrate the ability of the government to litigate the case.
The memorandum should be of great interest to any company or in-house counsel involved in areas, such as healthcare and government contracting, where the risk of FCA claims is high. The memo provides guidelines for the types of arguments that the government attorney must consider in deciding whether to dismiss, and also presumably in determining whether to intervene in the first instance. The memo also suggests that the initial stages of a government investigation, before the intervention decision, will be of even more importance to defendants who have the opportunity not only to avoid government intervention but also to have the government affirmatively aid the defendant by dismissing the action and saving the defendant the costs and burdens of litigating the claim against the relator. Defendants facing FCA claims and their counsel should take into account the factors set out in the memo as they strategize a response to government inquiries connected to qui tam complaints.
This post initially appeared on the McGuireWoods blog Subject to Inquiry.