Key Points

  • The Fifth Circuit held that the False Claims Act's good-cause standard for late government intervention requires only a legally sufficient reason, and that Federal Rule of Civil Procedure 24(b) does not apply.
  • Following Polansky, the court held that Rule 41 governs a government dismissal under 31 U.S.C. § 3730(c)(2)(A), and that before an answer or summary-judgment motion the government is entitled to dismissal if the relator receives notice and a hearing and no constitutional limit is violated.
  • The court held that a hearing on the briefs satisfies the statute's hearing requirement, and it affirmed dismissal with prejudice as to the relator and without prejudice as to the government.
  • Jackson's § 3730(h) retaliation claim against Ventavia failed because she did not plausibly allege protected activity aimed at fraud on the government or Ventavia's knowledge of such activity.
  • Judge Willett, concurring, questioned the constitutionality of qui tam suits under Article II and urged reconsideration of the en banc Riley decision; Chief Judge Elrod, concurring, called the concerns en banc worthy.

The federal government can take over and dismiss a whistleblower lawsuit it once declined to join, over the whistleblower's objection, by offering only a legally sufficient reason, a federal appeals court ruled Friday, ending a False Claims Act suit that accused Pfizer and two contractors of fraud in the company's COVID-19 vaccine trial.

Judge Don R. Willett wrote for a U.S. Court of Appeals for the Fifth Circuit panel that affirmed in full a federal district court's dismissal of the suit brought by Brook Jackson, a former regional clinical-trial director at Ventavia Research Group LLC. Chief Judge Jennifer Walker Elrod and Judge Richman sat on the panel, and no judge dissented. The court also upheld the dismissal of Jackson's separate claim that Ventavia fired her in retaliation for raising concerns about the trial.

The ruling applies the Supreme Court's 2023 decision in United States ex rel. Polansky v. Executive Health Resources Inc. to the question of what the government must show to intervene late in a qui tam case, a suit a private citizen, called a relator, files on the government's behalf in exchange for a share of any recovery. The panel held that the statute's "good cause" requirement is easily met and that Federal Rule of Civil Procedure 24(b), which sets conditions for outsiders seeking to join ordinary lawsuits, does not apply. "The FCA gives the Government wide latitude to intervene upon a showing of good cause—a deliberately undemanding standard," Willett wrote.

Two of the three judges also questioned whether qui tam suits are constitutional. The full Fifth Circuit, sitting en banc, upheld the device over a dissent in 2001 in Riley v. St. Luke's Episcopal Hospital, a precedent the panel had to follow. "Riley binds us today, but it should not bind us forever," Willett wrote in a separate concurrence. Elrod wrote that Willett's concerns were "no doubt en banc worthy."

Ventavia, which ran three sites in Pfizer's Phase III vaccine trial, hired Jackson in September 2020. During a tenure of roughly two weeks, she repeatedly raised concerns with supervisors about protocol deviations and regulatory violations and recommended pausing enrollment. The day she reported her concerns to the Food and Drug Administration, Ventavia fired her for not being a "good fit."

Jackson sued Pfizer, Ventavia and Icon PLC, which managed the trials for Pfizer, under seal in January 2021. The government declined to intervene during the seal period, when it investigates a relator's claims, but reserved the right to join later. After a first dismissal, Jackson amended her complaint to allege that Pfizer's submissions to the FDA contained fabricated or manipulated data and that the agency would not have authorized the vaccine for emergency use had it known.

The government then moved to intervene and dismiss, arguing that the claims lacked merit, rested on "misinformation" and conflicted with public-health policy, and that continued litigation would impose heavy discovery burdens on federal agencies. The district court dismissed the fraud claims with prejudice as to Jackson and without prejudice as to the government.

On appeal, Jackson argued that the government had to satisfy Rule 24(b), support its reasons with affidavits and show that circumstances had changed since it first declined. The panel rejected each argument. Because the late-intervention provision applies only to the United States, Willett wrote, "the Government is not situated like a typical intervenor—it owns the fraud claim." Requiring more, Willett added, could leave the government "locked out of its own claims simply because it initially declined intervention during the seal period."

The panel next held that Rule 41, which governs voluntary dismissals, controlled the government's motion, as Polansky instructed. Because no defendant had filed a responsive pleading to the amended complaint, the rule entitled the government to dismissal so long as Jackson received notice and a hearing and no constitutional limit was breached. "Because Congress did not require an evidentiary hearing, a hearing on the briefs suffices," Willett wrote, adding that the district court's three-hour hearing gave Jackson more process than required. The court rejected without extended analysis her arguments that the dismissal violated her First Amendment right to petition, the separation of powers, equal protection and substantive due process.

The retaliation claim, a separate cause of action that the government's dismissal did not reach, failed on the pleadings. The court held that Jackson did not allege activity aimed at fraud on the government, because "her allegations focused on protocol deviations and regulatory noncompliance, not fraud on the Government." Nor did she allege that Ventavia knew she suspected fraud. The panel called the timing of her firing, on the same day she contacted the FDA, suspicious, but wrote that "Jackson did not allege that Ventavia knew she contacted the FDA when it fired her." After the district court flagged the defects, the panel noted, Jackson's only change to those allegations was replacing "as a result of" with "because."

In the concurrence, Willett wrote that the case itself showed the problem: the United States was the named plaintiff in a suit it did not file or run, and it sided with the defendants when they moved to dismiss. "In qui tam world, the plaintiff in name is not the plaintiff in fact," Willett wrote. The concurrence also raised doubts under the Appointments Clause, which governs how federal officers are chosen.

Willett called the Constitution's Vesting and Take Care clauses, which place executive power in the president and charge the president with enforcing the laws, a "stronger" basis for objection, because no executive official directs a relator once the government declines a case. "True, the Government can still intervene, but control that must be reclaimed is not control," Willett wrote. The concurrence noted that three other Fifth Circuit judges and three Supreme Court justices have raised similar doubts.

The constitutional question was not before the panel. Willett wrote that the issue "was not raised below or on appeal," and Elrod wrote that in a proper case "it may be time for our en banc court to revisit Riley." "Whether it binds us tomorrow is for the en banc court," Willett wrote.