Ross Garber

The Connecticut legal community was caught by surprise but is generally supportive of an internal memo directing Department of Justice lawyers to seek dismissal of qui tam False Claims Act cases they deem “meritless.”

Past protocol was for the DOJ to join the litigation or opt not to intervene. The memo from Michael Granston, director of the Justice Department’s commercial litigation branch, was sent to branch attorneys and assistant U.S. attorneys across the nation on Jan. 10.

The memo, obtained by sister publication The National Law Journal, outlines factors attorneys should consider when deciding whether to seek dismissal of FCA cases brought by qui tam relators on behalf of the government. While the department can move to dismiss such cases, it’s rarely done.

Factors include whether the cases are duplicative of a government investigation, interfere with agency policies or programs, or would set unfavorable precedents.

“This is a good thing as it brings more efficiency to the way the judicial system addresses qui tam actions,” said Ross Garber, a partner with Shipman & Goodwin and co-chairman of the firm’s government investigation and white-collar crime group. “Connecticut has its fair share of qui tam cases and the implication is that only those with merit will survive for very long. It puts less of a burden on the government, the defendant and the judicial system.”

Garber said he is confident the government will not dismiss cases unless they are frivolous in nature. Many of the cases deal with Medicare, and road construction and aerospace claims.

“Honestly, I’ve found the government in this district does a lot of work to evaluate False Claims Act actions,” Garber said. “I really believe they will evaluate each case on its merits.”

Charles Goetsch, a New Haven solo practitioner specializing in whistleblower cases, said he also does not believe the government will dismiss legitimate cases.

“I think the DOJ is simply saying they do not want to waste their limited time and resources on frivolous cases,” Goetsch said. “If that is the case, I do not think any attorney would have a problem with it.”

Goetsch said the Justice Department recommendation should not affect his practice because he reviews clients’ cases before taking them on.

“I don’t take frivolous cases,” he said. “Part of my job is to screen potential relators to make sure the case has merit.”

Goetsch noted that it’s in the government’s best interest not to dismiss legitimate cases.

“Last year, $3.7 billion in defrauded taxpayer money was returned to the government because of qui tam actions,” Goetsch said. “The government would want to continue with meritorious qui tam cases. It is in their interest and the taxpayers interest.”

Stan Twardy Jr., a partner with Day Pitney in Hartford and head of the firm’s FCA division, said the DOJ’s recommendation presents “such a sea change to what we had in the past.”

“It will have a significant impact on the system because there are many cases in which the government has not intervened in the past and which they will now move forward to have those cases dismissed,” Twardy said.