Shea v. Verizon Wireless: False Claims Act's First-to-File Bar Applies Even After First Complaint's Dismissal
On April 11, 2014, the U.S. Court of Appeals for the District of Columbia Circuit held in U.S. ex rel. Shea v. Cellco Partnership d/b/a Verizon Wireless that the "first-to-file" bar of the False Claims Act (FCA) has no temporal limitation. Under Shea, the filing of a qui tam action permanently bars any later related qui tam action, even if the earlier action is dismissed before the later action is filed.
In Shea, all three judges on the D.C. Circuit panel agreed that the district court correctly dismissed a qui tam suit under the first-to-file bar, because an earlier qui tam action gave the government notice of the fraud alleged in the later suit. But the two-judge majority opinion also affirmed the district court's dismissal of the action with prejudice, concluding that the relator could not re-file his FCA claims even though the first-filed action had since been dismissed upon settlement.