D.C. District Court dismisses qui tam suit at request of US over relator's objection

by Ben Vernia | February 10th, 2010

In a decision on February 2, D.C. District Judge Royce Lamberth agreed with the US’s motion to dismiss the qui tam suit in order to effectuate a settlement to which one of two relators objected. The relators in the case alleged that the defendant had sold non-compliant products to the US and had violated its federal contract by not providing government purchasers with its best price. The US declined to intervene and the relators began to litigate the case. Despite the government’s declination, it entered into settlement discussions reached a settlement calling for the company to pay the US $1.2 million, 19% of which the government proposed sharing with the whistleblowers. One of the two relators objected, and the US moved to dismiss the case.

Judge Lamberth surveyed DC Circuit law and concluded that, in light of the Take Care Clause of the Constitution, the government had absolute discretion in whether to dismiss a qui tam suit. He noted that this appeared to conflict with the False Claims Act, 31 USC § 3730(c)(2)(B), which conditions the Court’s approval of a settlement over the relator’s objection upon a finding that it is “fair, adequate, and reasonable under all the circumstances.” The concluded that under the law of the circuit, this provision was a dead letter, and it granted the government’s motion without passing on the fairness of the proposed settlement. Judge Lamberth further noted that the provision was likely unconstitutional because it empowered the judiciary to intrude upon the executive branch’s powers under the Take Care Clause.

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