Fifth Circuit Affirms Government’s Broad Power to Dismiss Qui Tam Lawsuits Under the False Claims Act

This article is from VitalLaw: https://www.vitallaw.com/news/qui-tam-whistleblower-suits-5th-cir-fifth-circuit-upholds-dismissal-of-a-qui-tam-lawsuit-after-the-government-had-dismissed-the-case/hld01d11d56dc16684703bf11f5efa0294846 In a significant decision reinforcing the federal government’s authority under the False Claims Act (FCA), the Fifth Circuit Court of Appeals upheld the dismissal of a qui tam lawsuit brought by a whistleblower, finding the government has broad discretion to end such cases—even over a relator’s objections.

In United States ex rel. Vanderlan v. Jackson HMA, L.L.C. (Apr. 18, 2025), the court affirmed the district court’s decision to grant the government’s motion to dismiss, citing the statutory authority provided by 31 U.S.C. § 3730(c)(2)(A) and Rule 41(a)(1) of the Federal Rules of Civil Procedure.

The Case at a Glance

Dr. Blake Vanderlan, a physician at Jackson HMA, alleged the hospital violated the Emergency Medical Treatment and Labor Act (EMTALA) and filed a qui tam suit under the FCA. Although the Centers for Medicare and Medicaid Services (CMS) confirmed EMTALA violations and referred the matter to the Office of Inspector General (OIG), no civil monetary penalties were ultimately imposed.

While OIG began administrative settlement discussions with Jackson HMA, Dr. Vanderlan filed his FCA lawsuit. The government declined to intervene in the suit but later moved to dismiss it, citing concerns that the case interfered with ongoing administrative settlement efforts.

The district court granted the motion to dismiss. Dr. Vanderlan appealed, arguing that the court erred in denying an evidentiary hearing, in applying the FCA’s dismissal standard rather than a settlement standard, and in failing to protect his due process rights.

Fifth Circuit: The Government Has Broad Dismissal Authority

The Fifth Circuit rejected all of the relator’s arguments, affirming the dismissal on several key grounds:

✅ The Government Controls Qui Tam Actions

The court emphasized that the FCA gives the government wide latitude to dismiss qui tam actions, even if the whistleblower objects. As long as the government provides notice and a hearing, the dismissal is valid.

“The government retains the right to commandeer a relator’s case and, if it so chooses, dismiss it,” the court stated.

📑 No Evidentiary Hearing Required

Although Dr. Vanderlan argued he was entitled to a live evidentiary hearing, the court ruled that a hearing “on the briefs” is sufficient under the FCA. In this case, the district court exceeded that standard by allowing multiple rounds of briefing and holding a live hearing where Vanderlan presented his arguments.

🔍 Dismissal vs. Settlement Standards

The relator argued that the court should have applied the settlement fairness standard under § 3730(c)(2)(B). However, the Fifth Circuit found this argument inapplicable and forfeited, as no settlement was proposed or finalized, and Vanderlan failed to raise the issue properly in the district court.

🛑 Rationale for Dismissal Was Valid

The court accepted the government’s position that ongoing litigation risked undermining its ability to resolve EMTALA-related claims administratively. This, the court concluded, was a valid basis for dismissal.

Key Takeaways for Government Contractors and Whistleblowers

This ruling serves as a clear reminder that:

• The federal government has the final word on whether a qui tam suit should proceed.

• Relators have limited power to challenge the government’s dismissal decisions under § 3730(c)(2)(A).

• Evidentiary hearings are not guaranteed under the FCA. Courts may rely on written submissions unless extraordinary circumstances exist.

• Dismissal and settlement are distinct processes under the FCA—relators cannot invoke settlement protections unless the government formally proposes a settlement.

  
  

Final Thoughts

The Vanderlan decision strengthens the government’s hand in managing enforcement priorities and preserving administrative discretion. While whistleblowers play an essential role in exposing fraud against the government, this ruling clarifies that the FCA is a tool to vindicate government—not individual—interests.

As FCA enforcement continues to evolve, both relators and contractors should consult experienced counsel when navigating the complexities of False Claims Act litigation, particularly when the government declines intervention or seeks dismissal.