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DOJ signals more dismissals for whistleblower False Claims Act suits

Justice Department guidance revisions aim to increase prosecutors’ discretion to terminate qui tam cases, and defendants may be able to petition for dismissal.

Reported · Written up by our desk · Liability Insurance

The US Department of Justice has encouraged prosecutors to dismiss more lawsuits brought by whistleblowers under the False Claims Act, and a former top DOJ civil division official said the approach is expected to continue.

Paul Perkins, formerly an associate deputy attorney general who helped oversee DOJ’s revisions to FCA policy, said the department’s authority to dismiss whistleblower suits “will be utilized more aggressively.” Under qui tam provisions, a whistleblower can receive a share of recovered funds if a case succeeds, while the government can intervene, let the relator pursue the case with oversight, or shut it down altogether.

Perkins, in an interview with Bloomberg News, said DOJ will consider factors including whether the underlying allegations have merit. He added that the updated Justice Manual guidance gives prosecutors more discretion to terminate whistleblower cases, including encouraging intervention to dismiss matters the department previously stayed out of.

The story also notes that DOJ has taken a softer approach in some corporate enforcement actions, including greater use of civil settlements and deferred prosecution agreements rather than trials, and that Perkins said defendants of qui tam litigation may be able to petition the government for dismissal.

Perkins is joining Morrison Foerster in Washington as a partner in its investigations and white collar defense group, where he will chair the firm’s FCA practice.

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