Pennsylvania Federal Judge: DOJ Must Provide Legitimate Reason for FCA Dismissals

Following the December 2018 attempt of the U.S. Department of Justice (DOJ) to dismiss nearly a dozen False Claims Act (FCA) lawsuits, a recent ruling by Pennsylvania Federal Judge Timothy J. Savage states that the DOJ must have a legitimate reason for dismissing whistleblower suits.

On Wednesday, April 3, 2019, Judge Savage granted a DOJ dismissal request – ending a case against Pfizer, Inc. – while also emphasizing that there must be a valid purpose for any FCA dismissal, rather than allowing the “unfettered discretion” of the DOJ to toss whistleblower suits. The requirement of “some justification, no matter how insubstantial…acts as a check against the executive [branch] from absolving a fraudster on a whim or for some illegitimate reason”, Savage added.

This justification for dismissal is needed partly because the FCA authorizes a court hearing if a whistleblower objects to dismissal. However, “if the government’s right to dismiss is ‘unfettered,’ as the [D.C.] Circuit has held,” Judge Savage wrote, “a hearing would be superfluous, rendering the requirement of a hearing a nullity.”

The case against Pfizer, in addition to the other cases that have been targeted for dismissal by the DOJ, was brought by the National Healthcare Analysis Group (NHCA), a healthcare research company that often takes on FCA suits. The suit alleged improper kickbacks to prescribers from drugmakers in the form of free nursing services and help obtaining insurance coverage.

Wednesday’s ruling found that the DOJ had reasonably concluded that any possible financial recovery from the Pfizer FCA suit wouldn’t justify the government’s costs of monitoring and assisting with the litigation.

In response to the recent FCA dismissals, the NHCA has accused the DOJ of displaying an “irrational animus” toward the company. However, Judge Savage’s ruling indicates the government’s reasons for tossing the case “do not mask any animus toward the corporate realtor.”

Although the NHCA has voluntarily dropped a few of the lawsuits that the DOJ was targeting for dismissal, they are focusing more heavily on the most advanced cases. Regarding a similar whistleblower case brought against UCB, Inc., John R. Mininno, co-founder of the NHCA, says he is “cautiously optimistic” that the dismissal request will fall through.

The Health Law Partners will continue to monitor and report updates as they become available.