On March 21, 2019, the District Court for the Northern District of Mississippi granted the Department of Justice’s (DOJ) motion to dismiss a qui tam complaint brought by relator Candi Sibley against Delta Regional Medical Center. The complaint, filed in April 2017, alleged that Delta Regional Medical Center violated the False Claims Act (FCA), 31 U.S.C. §§ 3729 et. seq, by failing to treat patients with emergency medical conditions before transferring them to other facilities, as required by the Emergency Medical Treatment & Labor Act (EMTALA), 42 U.S.C. § 13955dd.
On April 24, 2018, DOJ declined to intervene and on July 10, 2018, the defendant moved to dismiss. While the defendant’s motion was pending, the court requested DOJ’s guidance on an issue it described as one of first impression: Can EMTALA violations form the basis of an FCA case?
On November 5, 2018, DOJ responded, questioning the merits of relator’s allegations, and writing that “EMTALA violations typically involve turning patients away from a hospital emergency room rather than treating them and, thus, do not lead to the submission of any false claims to the Government.” But rather than simply respond to the court’s request for its opinion on EMTALA, DOJ moved to dismiss the relator’s complaint pursuant to 31 U.S.C. § 3730(c)(2)(A).
In moving to dismiss, the United States Attorney’s Office for the Northern District of Mississippi joined a long line of USAOs flexing their c2A muscle following new departmental guidance on government dismissal issued in January 2018 by the Director of DOJ’s Civil Fraud Section, known as the “Granston Memo.”
Last Thursday, the district court issued its opinion, granting the government’s motion to dismiss. While the Fifth Circuit Court of Appeals has not yet ruled on which of two standards (Sequoia or Swift) should apply to motions under 31 U.S.C. § 3730(c)(2)(A), the district court considered prior Fifth Circuit precedent examining the government’s power over non-intervened FCA cases to support a reading of the statute that provides the government with unfettered discretion to dismiss a qui tam FCA action (the Swift standard).
The court went on, however, to explain that, even under the Sequoia standard, in which the government must establish a rational relation to a valid governmental purpose for its dismissal, the government met its burden. The court pointed to three valid reasons for the government’s dismissal: 1) continuing the case threatened to interfere with the Department of Health and Human Services-Office of the Inspector General’s EMTALA enforcement efforts; 2) dismissing the case would conserve government resources; and 3) relator’s failure to plead fraud with particularity supported the government’s interest in dismissing meritless claims. DOJ’s motion to dismiss, which highlighted these three factors, is consistent with its briefing in other districts where it also pointed to factors other than simply governmental burden to justify dismissal.
If you have any additional questions about the False Claims Act, please feel free to contact Derek Adams at firstname.lastname@example.org.