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Roderick Thomas Comments on Qui Tam Ruling Involving Relator Objections
Roderick Thomas, chair of Wiley Rein's White Collar Defense Practice, was quoted in a Federal Contracts Report story on a ruling by the U.S. Court of Appeals for the District of Columbia that the government may not settle a quitam case when the relator objects, unless the court approves the settlement.
BNA reported the appeals court decision reversed a district court's ruling and stated that for a district court to dismiss certain qui tam claims, it must "hold a hearing to determine if a settlement was fair, adequate and reasonable." In addition, the "opinion directly addressed the district court's doubts about the constitutionality of a False Claims Act provision requiring judicial approval of settlement agreements if relators object."
Mr. Thomas told BNA the decision is disappointing for those trying to resolve FCA matters a timely manner and without litigation.
"The decision allows self-interested relators to put up an additional hurdle to a settlement agreement that both the United States and defendant deem fair, perhaps leveraging a threat of litigation to pursue a larger payout," Mr. Thomas said. "This result is at odds with the qui tam provisions' intent that relators pursue FCA cases 'in the shoes' of the United States."