Paper Hearings Suffice: Sixth Circuit Confirms FCA § 3730(c)(2)(A) “Hearing” May Be Satisfied by Written Submissions and Reaffirms Broad DOJ Discretion to Intervene and Dismiss

Paper Hearings Suffice: Sixth Circuit Confirms FCA § 3730(c)(2)(A) “Hearing” May Be Satisfied by Written Submissions and Reaffirms Broad DOJ Discretion to Intervene and Dismiss

Introduction

In U.S. ex rel. USN4U, LLC v. Wolf Creek Federal Services, Inc., the Sixth Circuit affirmed a district court’s order permitting the United States to intervene late and dismiss a qui tam False Claims Act (FCA) suit brought by relator USN4U, LLC against Wolf Creek Federal Services, Inc. and several employees tied to facilities work at NASA’s Glenn Research Center. While designated as “Not Recommended for Publication,” the opinion makes two consequential contributions to FCA practice in the Sixth Circuit:

  • It joins other circuits in holding that the FCA’s “hearing” requirement for government dismissal under 31 U.S.C. § 3730(c)(2)(A) can be satisfied by written submissions; an in-person oral hearing is not required.
  • It applies the Supreme Court’s Polansky framework to reaffirm the Department of Justice’s (DOJ) broad discretion to intervene after initially declining and to seek dismissal, which district courts should grant in all but exceptional cases when the government offers reasonable resource and merits-based reasons.

The court also rejected a separation-of-powers challenge, concluding that the trial court’s strong prompting that DOJ “take over” or “dismiss” did not impermissibly compel Executive Branch action, especially where DOJ independently asserted that intervention and dismissal were its own discretionary choices.

Summary of the Opinion

Relator USN4U alleged Wolf Creek inflated work order estimates to induce NASA to agree to higher price points, in violation of the FCA. After a prior Sixth Circuit remand allowed USN4U’s fraudulent inducement theory to proceed into discovery, the district court held an evidentiary hearing on alleged seal breaches and expressed deep concerns about the relator’s credibility. It then paused the schedule and asked DOJ to decide whether to intervene or move to dismiss. DOJ moved to intervene and dismiss, citing resource burdens, weaknesses in the claims in light of discovery, and serious credibility problems with relator Douglas Warren.

The district court granted intervention and dismissal (without prejudice to the United States refiling), and the Sixth Circuit affirmed. Key holdings include:

  • No separation-of-powers violation occurred. The district court did not compel intervention; DOJ independently exercised its discretion.
  • Good cause to intervene is a flexible, low bar; DOJ satisfied it by pointing to monitoring costs and the case’s weaknesses.
  • Dismissal under Rule 41(a)(2), as incorporated by Polansky, should be granted in all but exceptional cases when DOJ presents reasonable cost-benefit reasons; the relator’s sunk costs are not dispositive.
  • Section 3730(c)(2)(A)’s “hearing” requirement was satisfied by the district court’s consideration of the parties’ written submissions; an oral, in-person hearing was not necessary absent prejudice.

Analysis

Precedents Cited and Their Role

The panel anchored its reasoning in a line of Supreme Court and circuit authority that collectively affords DOJ expansive control over qui tam litigation once it intervenes:

  • Supreme Court’s United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023): The centerpiece. Polansky holds that DOJ may move to dismiss whenever it has intervened (even if late), that Rule 41 governs the motion, and that such motions should be granted in all but “exceptional” cases when the government offers a reasonable argument that burdens outweigh benefits. The Sixth Circuit applies Polansky’s abuse-of-discretion review and its deferential standard for granting government dismissals.
  • Sixth Circuit authorities emphasizing governmental primacy and FCA structure:
    • United States ex rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032 (6th Cir. 1994) (sealing extensions; openness to later DOJ intervention);
    • United States v. Health Possibilities, P.S.C., 207 F.3d 335 (6th Cir. 2000) (FCA serves public, not parochial relator interests);
    • United States ex rel. Holloway v. Heartland Hospice, Inc., 960 F.3d 836 (6th Cir. 2020) (government may dismiss post-intervention over relator’s objection);
    • United States ex rel. USN4U, LLC v. Wolf Creek Fed. Servs., Inc., 34 F.4th 507 (6th Cir. 2022) (earlier appeal recognizing relator’s fraudulent-inducement theory as adequately pleaded);
    • United States ex rel. Angelo v. Allstate Ins. Co., 106 F.4th 441 (6th Cir. 2024); State Farm Mut. Auto. Ins. Co. v. Angelo, 95 F.4th 419 (6th Cir. 2024) (FCA goals and relator incentives); United States ex rel. Martin v. Hathaway, 63 F.4th 1043 (6th Cir. 2023) (qui tam suits brought on behalf of the government); SHH Holdings, LLC v. Allied World Specialty Ins. Co., 65 F.4th 830 (6th Cir. 2023) (seal and disclosure obligations).
  • Definition of “good cause” to intervene (persuasive circuit authority):
    • Polansky (3d Cir. 2021) and CIMZNHCA v. UCB, Inc., 970 F.3d 835 (7th Cir. 2020): “Good cause” is capacious and flexible, essentially a “legally sufficient reason.” The Sixth Circuit adopts this practical, low-threshold approach.
  • Section 3730(c)(2)(A) “hearing” requirement:
    • The panel “joins” the Fourth and Second Circuits in holding that written submissions can satisfy the hearing requirement: United States ex rel. Doe v. Credit Suisse AG, 117 F.4th 155 (4th Cir. 2024); Brutus Trading, LLC v. Standard Chartered Bank, 2023 WL 5344973 (2d Cir. Aug. 21, 2023).
    • Purpose of the hearing, per First Circuit: Borzilleri v. Bayer Healthcare Pharms., Inc., 24 F.4th 32 (1st Cir. 2022) — to ensure the relator knows the government’s reasons and can contest them. The Sixth Circuit notes USN4U had notice, reasons, and full briefing.
  • Separation of powers and docket management:
    • United States v. Renfro, 620 F.2d 569 (6th Cir. 1980) (courts cannot intrude into DOJ’s internal decision-making);
    • Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101 (2017) (courts’ inherent authority to manage their dockets);
    • Patchak v. Zinke, 583 U.S. 244 (2018); In re Austrian, German Holocaust Litig., 250 F.3d 156 (2d Cir. 2001) (contours of judicial-executive boundaries).
  • Rule 41 dismissal mechanics:
    • Wellfount, Corp. v. Hennis Care Ctr. of Bolivar, Inc., 951 F.3d 769 (6th Cir. 2020);
    • Grover by Grover v. Eli Lilly & Co., 33 F.3d 716 (6th Cir. 1994).

Legal Reasoning

1) Separation of Powers: A Court’s “Request” Is Not Compulsion

USN4U argued that the district court violated separation of powers by effectively ordering DOJ to intervene. The Sixth Circuit declined to read the trial judge’s comments as a mandate. Two anchors drove that conclusion:

  • DOJ expressly stated that the decision to intervene and seek dismissal was its own, consistent with its statutory discretion under § 3730(c). The district court likewise acknowledged that it “did not, and could not” order intervention.
  • Citing Goodyear and related caselaw, the court recognized the trial judge’s inherent power to manage the docket, including pressing the parties and government to clarify paths forward when a case has consumed significant resources.

Because the Executive Branch retained and affirmatively exercised independent decision-making, there was no judicial incursion into prosecutorial discretion.

2) Intervention: “Good Cause” Is Flexible and Easily Met

DOJ’s reasons for late intervention were straightforward: continuing litigation would impose substantial monitoring costs, and discovery undermined relator’s ability to prove FCA violations, compounded by serious credibility concerns about the relator. The Sixth Circuit, drawing on the Third and Seventh Circuits’ readings of “good cause” as a “uniquely flexible and capacious concept,” concluded that these are legally sufficient reasons.

Importantly, the court rejected the notion that the FCA requires balancing DOJ’s monitoring costs against the relator’s expenditures. The statute’s purpose is to protect the public fisc, not to vindicate relators’ sunk costs. That framing prevents relators from turning their investment into leverage against the government’s gatekeeping role.

3) Dismissal: Polansky’s Deferential Rule 41 Standard

The Supreme Court’s Polansky decision governs government-initiated FCA dismissals after intervention: Rule 41(a)(2) applies, and courts should grant the motion in all but the most exceptional cases if the government offers a reasonable explanation that the burdens of continued litigation outweigh its benefits. The Sixth Circuit held that DOJ’s resource-burden rationale, its merits skepticism in light of the record, and the relator’s credibility problems comfortably satisfy Polansky’s standard.

USN4U’s counter that the district court improperly counted DOJ’s costs “if it intervened” rather than “if it did not intervene” was immaterial. Polansky asks whether the government’s overall cost-benefit assessment for continued litigation is reasonable, not whether it chose the least burdensome path among procedural permutations. The panel underscored that even if the relator “presents a credible assessment to the contrary,” courts should still grant DOJ’s motion when the government’s position is reasonable.

4) The “Hearing” Requirement: Written Submissions Are Enough

Section 3730(c)(2)(A) requires that, before the government’s dismissal over a relator’s objection, the relator must receive notice and “an opportunity for a hearing.” The Sixth Circuit joined the Second and Fourth Circuits in holding that a district court can satisfy this requirement by considering the parties’ written submissions; an in-person, oral hearing is not compulsory absent prejudice.

Here, USN4U had ample notice, knew DOJ’s reasons, and fully briefed its objections. The panel cited Borzilleri’s functional approach: the hearing requirement ensures relators can understand and test the government’s grounds. Because USN4U did so in writing and identified no specific prejudice from the lack of an oral proceeding, the “hearing” requirement was met.

Impact

On FCA Litigation in the Sixth Circuit

  • Hearing by Papers: District courts may resolve § 3730(c)(2)(A) motions on the papers. Relators should not assume they will receive an evidentiary or oral hearing absent a concrete showing of prejudice or need.
  • DOJ’s Late Intervention and Dismissal: Polansky’s deferential framework is now firmly embedded in Sixth Circuit practice. Reasonable resource-and-merits-based reasons will typically suffice for both late intervention and dismissal.
  • Relators’ Sunk Costs Are Not Controlling: The government’s public-interest calculus, not a relator’s investment, is paramount. This narrows relators’ ability to resist dismissal based on the extent of their efforts or expenses.
  • Credibility and Record Weaknesses Matter: DOJ can rely on litigation infirmities—such as a relator’s credibility problems, evidentiary gaps, or agency acquiescence—to justify dismissal, especially after discovery.
  • Docket Management Signals: District courts may strongly encourage DOJ to decide whether to step in or end a case without trenching on separation of powers, so long as the Executive retains independent decision-making and articulates its own reasons.

For Practitioners

  • Relators should anticipate that DOJ can revisit its non-intervention decision and move to dismiss late in the case, especially if discovery exposes weaknesses or credibility concerns.
  • When contesting dismissal, identify concrete prejudice that would uniquely be addressed by an oral hearing; otherwise, expect briefing to suffice.
  • Defendants should consider engaging DOJ with the practical burdens of continued litigation and evidentiary weaknesses to support dismissal, even post-decline.
  • Maintain strict seal compliance and candor; credibility issues can tip DOJ’s calculus toward dismissal.

Complex Concepts Simplified

  • Qui tam action: A lawsuit brought by a private party (relator) on behalf of the United States to recover funds lost to fraud; the relator may receive a share of recoveries.
  • Relator: The private whistleblower who files the FCA suit.
  • Seal period: A statutory period (at least 60 days) during which the complaint is filed under seal so DOJ can investigate without tipping off defendants.
  • Intervention: DOJ’s formal entry into the case. Even if DOJ initially declines, it can later intervene upon a showing of “good cause.”
  • Good cause (to intervene): A flexible, low-threshold standard; any legally sufficient reason (e.g., resource burdens, new evidence, strategic considerations) will usually do.
  • Rule 41(a)(2): A rule allowing a plaintiff (here, the United States after intervention) to voluntarily dismiss a case by court order on proper terms once the defendant has answered or moved for summary judgment.
  • § 3730(c)(2)(A) hearing: Before DOJ can dismiss a relator’s case over objection, the relator must have notice and an opportunity to be heard. In the Sixth Circuit, that opportunity can be satisfied by written submissions.
  • Separation of powers: The Constitution’s division of government authority means courts cannot commandeer DOJ’s prosecutorial discretion, but courts may manage their dockets and request clarity from DOJ without compelling action.

Conclusion

The Sixth Circuit’s decision in U.S. ex rel. USN4U v. Wolf Creek reinforces the government’s primacy in FCA enforcement and clarifies procedure for dismissals over a relator’s objection. Two clear takeaways stand out:

  • The § 3730(c)(2)(A) “hearing” requirement does not guarantee an in-person proceeding; written submissions can suffice when the relator has notice and a full opportunity to respond.
  • Under Polansky and Rule 41, district courts should grant DOJ’s dismissal motions in all but exceptional cases where the government offers reasonable, public-interest reasons such as resource burdens, evidentiary weaknesses, and credibility concerns.

Although unpublished, the decision aligns the Sixth Circuit with sister circuits on the “paper hearing” question and cements a practical, government-centered approach to late-stage intervention and dismissal. For relators, the opinion is a cautionary note: even a viable pleading can founder after discovery if the government reasonably concludes that further litigation is not worth the candle. For courts and DOJ, it affirms that efficient resolution—guided by public, not private, interests—remains the statute’s lodestar.

Case Details

Year: 2025
Court: Court of Appeals for the Sixth Circuit

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