When the Government Speaks, Relators Should Listen

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Although the government declines to intervene in False Claims Act cases for a variety of reasons, many of which have more to do with resources (or lack thereof) than the merits of the action, often the government’s reason for not intervening directly bears on the merits of the relator’s allegations. Government lawyers regularly advise relator’s counsel to both inquire about why the government has declined to intervene and, more importantly, to listen carefully to the government’s answer. That information should be the primary basis for the relator’s decision whether to proceed with the case despite the lack of intervention.

United States¬†ex rel. Smith v. Boeing Company, No. 05-1073¬†(D. Kansas Oct. 8, 2014), is an object lesson in why relators should heed this advice. In Smith, which involved highly technical Federal Aviation Administration regulations relating to manufacturing tolerances, the “relators’ allegations were specifically investigated, reviewed and rejected by the FAA.”

Notwithstanding that the FAA considered and rejected the relators’ interpretation of the regulations at issue, the relator persisted:

Relators clearly disagree with the FAA, but the agency considered their arguments and evidence and reached a conclusion with a rational basis. Relators’ arguments that FAA investigators lacked the proper expertise or that the investigation was otherwise flawed provide no basis for this court to disregard the FAA’s considered conclusion that the parts were acceptable.

Smith demonstrates well that courts are loathe to, in effect, overrule the considered determinations of the impacted agency by allowing False Claims Act cases to proceed when the agency has found the claims lack merit. Not surprisingly, the trial court granted summary judgment in favor of the defendants, finding that the submitted claims were not, in fact, false.

When the agency speaks, relators should listen…carefully.