U.S. Supreme Court allows Justice Department to launch whistleblower cases

By Nate Raymond

(Reuters) – The U.S. Supreme Court on Friday preserved the power of the Justice Department to unilaterally dismiss lawsuits under a law that allows whistleblowers to sue companies on behalf of the government to recover money of taxpayers paid to businesses based on misrepresentation in exchange for a portion of any repossession.

The 8-1 ruling upheld a lower court’s decision to authorize the Justice Department to bring a lawsuit against a unit of UnitedHealth Group Inc by a former employee named Jesse Polansky who accused him of acts reprehensible.

Polansky had sought to prohibit the department from dismissing whistleblower lawsuits filed under the False Claims Act in cases where the government had initially refused to exercise its right to take over the cases.

The Philadelphia-based U.S. 3rd Circuit Court of Appeals upheld the dismissal of Polansky’s 2012 lawsuit that accused UnitedHealth’s Executive Health Resources unit of defrauding Medicare by falsely certifying that hospital admissions were medically necessary.

Whistleblower cases brought under the False Claims Act resulted in $48.2 billion in recoveries from 1987 to 2021, according to Justice Department data. Most of that came from the 20% of cases the government exercised its right to join and take over, with cases that whistleblowers alone litigated fetching $3.5 billion over the same period. .

Business groups, including the U.S. Chamber of Commerce, said the fact that few cases in which the government has failed to intervene proves why the Justice Department should exercise its power to dismiss those who lack merit. . It’s something the department has begun to do more often as part of a policy adopted in 2018 under former Republican President Donald Trump’s administration of seeking the dismissal of “baseless” or “parasitic” lawsuits. “that the government did not support.

The Justice Department sought the dismissal of Polansky’s lawsuit in 2019, citing concerns such as the “enormous” burden of requests for the government to produce documents. Executive Health Resources denied wrongdoing and argued the department was entitled to dismiss the case despite Polansky’s objections.

(Reporting by Nate Raymond in Boston; Editing by Will Dunham)

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