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DOJ's Dilemma: Granston Motions are on the Rise… But Not Always Met with Swift Justice

July 12, 2019

On July 3, 2019, in United States ex rel. Johnson v. Raytheon Co., the U.S. District Court for the Northern District of Texas granted the government’s motion to dismiss a qui tam suit over the objections of the relator. The Johnson case is just the latest example of the Department of Justice (DOJ) using its authority under Section 3730(c)(2)(A) of the False Claims Act to seek dismissal of meritless qui tam suits, consistent with a January 2018 DOJ Memorandum emphasizing the importance of that authority (the “Granston memo”).

The wave of Section 3730(C)(2)(A) motions filed since the release of the Granston memo have resulted in more than 30 decisions across the country with courts coalescing around two standards of judicial review — the Swift and Sequoia Orange standards. The ruling of the U.S. Court of Appeals for the District of Columbia Circuit in Swift v. U.S. recognizes that DOJ’s right to dismiss is essentially unfettered. In contrast, the U.S. Court of Appeals for the Ninth Circuit’s standard, established in Sequoia Orange v. Baird-Neece Packing Corp., requires that DOJ identify a valid purpose for dismissal and show a “rational relation” between the dismissal and accomplishing that purpose.

The majority of DOJ’s 3730(C)(2)(A) motions have been granted, but the 18 months since the release of the Granston memo have not been without setbacks for the government. Last month, the U.S. District Court for the Southern District of Illinois rejected the government’s request that the court alter an order in United States ex rel CIMZNHCA v. UCB, in which the court applied Sequoia Orange and denied DOJ’s motion to dismiss. That decision is noteworthy because the government is appealing the ruling to the Seventh Circuit, and CIMZNHCA is one of 10 nearly identical lawsuits filed by the National Healthcare Analysis Group (NHCA) that DOJ had moved to dismiss.

In an Expert Analysis article published in Law360, C&M attorneys provide an overview of the rise in Section 3730(c)(2)(A) motions and analyze the NHCA lawsuits as a case study on the government’s efforts to curb meritless qui tam actions.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

John T. Brennan Jr.
Partner – Washington, D.C.
Phone: +1.202.624.2760
Keith J. Harrison
Partner – Washington, D.C.
Phone: +1.202.624.2560