Senator Grassley Proposes Legislation To Strengthen False Claims Act

On July 30, 2020, United States Senator Charles Grassley announced that he intends to introduce legislation which would strengthen the federal False Claims Act (FCA).  Grassley indicated that his proposed legislation would, at least in part, specifically address the 2018 “Granston Memo,” which laid out the circumstances under which Department of Justice (DOJ) lawyers should consider dismissing whistleblower suits filed under the FCA’s qui tam provisions over the whistleblower’s (known as a “relator” under the FCA) objection.

As we discussed in more detail in a blog post in June, while the relator is typically permitted to pursue an FCA case on the government’s behalf even if the government decides to decline intervention, the FCA gives the government the right to dismiss the suit over the relator’s objections.  Specifically, the FCA provides that “[t]he Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.”  31 U.S.C. § 3730(c)(2)(A).

On January 10, 2018, the DOJ issued the Granston Memo, which encourages DOJ attorneys to consider seeking dismissal of qui tam actions under the above-referenced provision in certain circumstances where the government declines intervention. Prior to the Granston Memo, the government sought dismissal of qui tam claims only in very rare circumstances. But, according to the DOJ, a record number of qui tam actions have been filed in recent years, but the rate of intervention in those actions has remained relatively stable; begging the question whether newly filed qui tam actions were meritorious or worth the expenditure of limited government resources.  According to the DOJ, in the 30 years prior to the Granston Memo, the government used its dismissal authority only about 45 times.  Since the Granston Memo, however, it has been used approximately 50 times.

In response to the Granston Memo, Senator Grassley, among others, opposed the DOJ’s dismissal authority and wrote a letter to Attorney General Bill Bar which raised concerns that the exercise thereof “could undermine the purpose of the False Claims Act by discouraging whistleblowers and dismissing serious fraud on the taxpayers.”

While Senator Grassley has not yet provided specific details as to what his proposed legislation would  say, in a speech on July 30, he stated that his proposed legislation would amend the FCA so as to “provide timely, critical protections to whistleblowers working in our nation’s law enforcement agencies,” and would also require that the DOJ state its reasons for declining to pursue a whistleblower claim.

Senator Grassley has long been a strong supporter of the FCA and other whistleblower laws, and was behind the passage of a 1986 amendment to the FCA, which has led to over $62 billion in recoveries since.  

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations and False Claims litigation.  If you need assistance with such a matter, please contact us today.