The district court dismissed a qui tam complaint over the relator’s objection, noting that the government has nearly unfettered discretion to request dismissal. In this case, the government had investigated identical allegations against the defendant raised in an earlier complaint and found they were unsupported. Though the government reached a separate settlement with the defendant after it was dismissed from the qui tam action, the court found the government within its rights to prevent the relator from bringing the defendant back to court.
In 2016, Nathan Davidheiser filed a qui tam complaint against Capital Rail Constructors, its subcontractor, Universal Concrete Products Corporation, and other defendants. On May 16, 2019, Relator Davidheiser initiated the present case, renaming the same defendant, CRC. Both complaints cited violations of the federal and Virginia state False Claims statutes. The allegations were based on the falsification of quality control records for concrete sold to CRC. The government intervened against all named co-defendants, except CRC, as a two-year investigation produced no evidence the firm had been complicit in a fraudulent scheme. Accordingly, the government suggested CRC be dismissed as a defendant. The relator voluntarily dismissed CRC without prejudice and the case proceeded.
The remaining parties reached a settlement in January 2019, and the relator and government filed a joint notice of voluntary dismissal with prejudice on the substantive claims. A year later, the relator file another action based on the same allegations, renaming CDC as a defendant. The relator argued that after CRC was dismissed as a defendant in his original complaint, the government negotiated a side settlement with CRC.
The government moved to dismiss, arguing that the court has very little discretion to deny its motion. In response, Davidheiser argued the court retained discretion to award him his portion of the alternate remedy settlement reached between the government and CRC.
The court first noted that the standards applied to such motions to dismiss are highly deferential to the government’s right to dismiss. The court agreed with this application, as the government is the true party in interest to the action, and may seek a stay or dismissal over the relator’s objection. Even assuming a case may be meritorious, the government retains the right to dismiss to conserve resources. In this case, the government already investigated the allegations against CRC and found them unsupported. Accordingly, the court found no reason not to grant the motion to dismiss.
