When Going It Alone Goes Wrong: Qui Tam Case Tossed After Messy Withdrawal of Counsel
"Me, Myself, and I" may be a winning mentality in some situations, but one recent case from this summer demonstrates how in the FCA world, acting alone is all risk and no reward for the relator.
On August 13, 2018, a Florida district court dismissed a relator's case after the relator fired his attorney and failed to hire a new attorney within the court's 90-day deadline. United States ex rel. Patel v. GE Healthcare Inc., 8:14-CV-120-T-33TGW, 2018 WL 3831185 (M.D. Fla. Aug. 13, 2018). The relator initiated his case on January 17, 2014, and fired his attorney on April 12, 2018. Three days later, the relator's counsel filed a motion to withdraw, explaining with astonishing candor that not only had the professional relationship been terminated by the relator, but that "continued litigation of relator's FCA claims could well expose undersigned counsel to personal liability for GE's attorneys' fees, costs and expenses." The court granted the motion and gave the relator 90 days to find a new attorney in light of the longstanding and universally acknowledged rule that a relator cannot litigate qui tam cases pro se. The relator failed to locate new counsel willing to take on his (apparently meritless) case within the 90-day deadline, and the court dismissed the case with prejudice. The court reasoned that with-prejudice dismissal was necessary because any other outcome would "unfairly allow Patel another bite at the apple" and would render the court's 90-day deadline "a mere option."
The government agreed with the proposition that relators cannot litigate pro se and filed a joint notice with defendant GE agreeing that the relator's complaint should be dismissed for exactly that reason. When asked for its position on whether dismissal should be without prejudice as to the government and/or relator, the government stated that the dismissal should be without prejudice to the government. Defendant GE went on to state that the dismissal should be with prejudice as to relator since amendment would be futile, but the government declined to join that part of the notice, stating in a footnote that the government played no role in the drafting, approval, or filing of relator's complaints and has no first-hand knowledge regarding the circumstances of the withdrawal of relator's counsel or attempts to secure new counsel.
But to us this seems to miss the point. The government had to have conducted at least some investigation into relator's allegations before the case was unsealed. This is precisely the time when government lawyers have been instructed by Michael Granston, Director of the Commercial Litigation Branch, Fraud Section, to consider whether to dismiss a case over a relator's objections. In an internal memo leaked in January of this year, Granston directed DOJ Civil attorneys when to decline intervention evaluating a recommendation, and to also consider whether the government's interests would be served by seeking dismissal. Thus, the reasons noted by the government in the Patel case for declining to weigh in on whether dismissal with prejudice as to relator was appropriate ring hollow and stand in contrast to the Granston memo. One might think that a case such as this would be the ideal candidate for government dismissal, where the government declined to intervene and then even the relator's attorneys, who had a financial interest in continued litigation, found the allegations untenable. Alas, the government seems to have been content to leave room for the relator to carry on with his meritless allegations in a new case, an avenue that was foreclosed when the court (rightfully in our opinion) dismissed the case with prejudice as to relator.
Cases such as this one are extreme examples of the needless litigation that can result when the government steps aside and leaves relators to proceed instead of stepping in to dismiss a meritless suit. Very rarely, as here, is it the relator's own attorney who makes the decision that a case should not continue. Most often, it is the defendants who must pay the ultimate price of litigating meritless cases.
© Arnold & Porter Kaye Scholer LLP 2018 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.