In an opinion released early this week, the Seventh Circuit both fortified the U.S. Department of Justice’s position that it has broad authority to proactively dismiss actions brought under the False Claims Act’s qui tam provisions and carved a new path for defending such dismissal motions. By reversing a rare district court decision concluding that DOJ failed to provide a sufficient rational basis for dismissal pursuant to 31 U.S.C. section 3730(c)(2)(A), the Seventh Circuit’s decision adds to the overwhelming body of cases siding with DOJ on this issue and increases the degree of difficulty for relators challenging an affirmative dismissal. However, the novel approach on which this decision is based creates a three-way circuit split. That split, combined with recent rumblings from Congress, creates a heightened risk that the rules of the road regarding affirmative qui tam dismissals may soon be in flux.
