By Douglas W. Baruch, John T. Boese, and Jennifer M. Wollenberg, attorneys based in Washington, DC who lead the False Claims Act and FIRREA practice group at Fried Frank Harris Shriver & Jacobson LLP.

In some recent False Claims Act (“FCA”) cases, the Department of Justice (“DOJ”) has opposed defendants’ attempts to obtain from federal agencies evidence that would tend to show that the FCA violations alleged were not material to the agency’s payment of claims—i.e., evidence that could be outcome-determinative under Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016).  While the government understandably may not want the curtain to be drawn back to reveal the actual agency record for the claims at issue as well as similar claims, the government has no grounds to oppose such discovery once an FCA litigation has commenced.  In fact, DOJ itself should evaluate that agency record as part of its litigation diligence before it launches FCA litigation or makes an intervention and/or dismissal decision in a qui tam suit.  The options are simple:  The government can either allow an FCA matter to proceed and open up the agency to materiality discovery, or the government can shut the suit down.  There is no “third” option:  DOJ cannot properly allow an FCA case to be litigated but then deny legitimate discovery on this topic.