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D.C. Circuit Fetters Government Discretion to Settle Qui Tam Claims Over Relator's Objection

April 24, 2012

On Friday, April 20, 2012, in United States ex rel. Schweizer v. Océ N.V. the D.C. Circuit unanimously reversed the district court's approval of an FCA settlement over a relator's objection when the lower court did not examine the agreement's fairness. The D.C. Circuit held that, while the government has unfettered discretion under section 3730(c)(2)(A) to dismiss a qui tam action outright over a relator's objections, section 3730(c)(2)(B) is applicable to dismissal of settled cases over the relator's objection and -- as in other statutory schemes and despite the government's claim it would result in an unconstitutional violation of the Separation of Powers Clause -- requires the district court to conduct a hearing to determine whether the proposed settlement is "fair, adequate, or reasonable under all circumstances."

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Alan W. H. Gourley
Partner – Washington, D.C.
Phone: +1.202.624.2561