A panel of the U.S. Court of Appeals for the Fifth Circuit recently rejected an argument advanced by two subsidiaries of a nationwide health care “watchdog” that the government improperly moved to dismiss two False Claims Act (FCA) lawsuits in U.S. ex rel. Health Choice Alliance LLC et al. v. Eli Lilly & Co. Inc. et al., No. 19-40906 (5th Cir. Jul. 7, 2021). The relators accused Bayer Corp. and Eli Lilly & Co. Inc. of participating in a kickback scheme by offering free patient-education services to providers in exchange for providers prescribing their products in violation of the Anti-Kickback Act and the FCA. The government initially declined to intervene in the cases, then a year later, notified the relators that it intended to move to dismiss and detailed its concerns about the viability of the cases. After two-and-a-half months of negotiations with the relators, the government moved to dismiss the cases pursuant to its authority under 31 U.S.C. § 3730(c)(2)(A), citing, among other things, its two-year investigation into the relators’ cases. The District Court granted the motions and the relators appealed.
Before undertaking its substantive analysis under the FCA, the Fifth Circuit analyzed whether it had jurisdiction to hear the relators’ appeal. Though the relators and government agreed that there was appellate jurisdiction, the Fifth Circuit identified a potential issue based on the timeline of two events: (1) relators’ voluntary dismissal without prejudice; and (2) the District Court’s order granting the government’s motion to dismiss. Specifically, the Fifth Circuit analyzed whether the relators’ voluntary dismissal eight months prior to the government’s motion to dismiss deprived the District Court of the ability to issue a final appealable order. The Fifth Circuit declined to create a Circuit split on the question, and concluded “that the prior without-prejudice dismissals did not deprive the district court’s subsequent decision of finality.”
