Source: https://www.thefcainsider.com/2017/12/ninth-circuits-application-of-the-fcas-government-action-bar-provides-finality-to-defendants/
Timestamp: 2019-04-22 14:20:21+00:00

Document:
The FCA contains several provisions that are aimed at discouraging “parasitic” or duplicative qui tam actions. One such provision, known as the “government-action bar,” prohibits relators from bring a qui tam action “based upon allegations or transactions which are the subject of a civil suit . . . in which the Government is already a party.” 31 U.S.C. § 3730(e)(3). In United States ex rel. Bennett v. Biotronik, Inc., — F.3d —-, No. 16-15919, 2017 WL 5907900 (9th Cir. Dec. 1, 2017), the Ninth Circuit offered a broad but sensible interpretation of the government-action bar, finding that it applied to claims that the Government declined to pursue in a prior qui tam action.
On December 31, 2009, Brian Sant filed a qui tam action against Biotronik, a medical device supplier. Sant alleged, among other things, that Biotronik bribed physicians with extravagant dinners, expensive sports and theater tickets, travel, and “paid, but useless, speaking engagements;” created “advisory boards” to funnel illegal payments to physicians; and used “sham clinical studies to provide kickbacks” for physicians who prescribed Biotronik’s products. The United Stated investigated Sant’s claims for almost four years. On May 14, 2014, the U.S. reached a settlement with Sant and Biotronik on “certain covered conduct.” Importantly, the settlement did not include the alleged sham clinical studies, and those claims were dismissed from the case without prejudice.
Only three months after Sant’s complaint was filed, Bennett, a former Biotronik product manager, filed a qui tam action that paralleled Sant’s claims. Bennett’s complaint provided additional details regarding the “uncovered conduct” from Sant’s complaint, including the alleged sham clinical studies, though it did not contain any new claims. Biotronik filed a motion to dismiss, asserting, among other things, the government-action bar. The district court dismissed the action, and Bennett appealed.
Bennett first argued that the government-action bar should not apply when the action in which the U.S. was a party has concluded. In support, Bennett noted that § 3730(e)(3) only bars cases “in which the Government is already a party,” and the U.S. was no longer a “party” in the Sant action because it had settled. The Ninth Circuit dismissed this argument, finding that such an interpretation was inconsistent the Federal Rules of Civil Procedure and the language in the FCA’s public disclosure bar, 31 U.S.C. § 3730(e)(4). The court concluded, “we presume the phrase ‘is a party’ has consistent meaning, and that once a party to an action, the Government remains a party to that action, regardless of the action’s conclusion.” Id. at *5.
Bennett also argued that that even if the government-action bar precludes similar actions after the original action concludes, the U.S. “declined party status” with respect to the alleged sham clinical studies, so he should be permitted to proceed on those claims because they were dismissed without prejudice. The Ninth Circuit disagreed. First, the Ninth Circuit noted that nothing in the FCA allows for the Government to intervene in certain parts of an action but not others. See 31 U.S.C. § 3730(b)(2). Reinforcing this principle, the U.S. Supreme Court has held that the Government becomes a party in a qui tam action when is has “exercised its right to intervene in the case.” Eisenstein v. City of New York, 556 U.S. 928, 931 (2009). Because the Government remained a party to the Sant action, and because the Government cannot have “partially” intervened, the Ninth Circuit concluded that Bennett’s lawsuit was barred by the government-action bar.
The Ninth Circuit’s interpretation of the government-action bar prohibits additional relators from raising the same claims in subsequent qui tam actions when the Government has intervened in the original action, regardless of the claims that the Government opts to pursue. This approach will help provide defendants with finality in cases in which the Government decides to intervene.

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