United States of America v. Health Possibilities, P.s.c.

1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0100P (6th Cir.)
File Name: 00a0100p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
UNITED S TATES OF AMERICA ,
Plaintiff-Appellant,
J OHN L. DOYLE , III, M.D.;
M ARIANN DOYLE ,
Plaintiffs-Appellees,
v.
HEALTH P OSSIBILITIES,
P.S.C.; URGENT TREATMENT
C ENTERS OF KENTUCKY , INC.;
BARRY BURCHETT , M.D.;
J OHN LANGEFELD , M.D.;
J OHN DOES, sued as unknown
persons; P HYSICIANS OF UTC,
P.S.C.,
Defendants-Appellees.
;>

1
No. 99-5259
Appeal from the United States District Court
for the Eastern District of Kentucky at Lexington.
Nos. 96-00485—Karl S. Forester, District Judge.
Argued: January 27, 2000
Decided and Filed: March 22, 2000

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2 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
Before: JONES, NORRIS, and SILER, Circuit Judges.
_________________
COUNSEL
ARGUED: Matthew M. Collette, U.S. DEPARTMENT OF
JUSTICE, CIVIL DIVISION, APPELLATE STAFF,
Washington, D.C., for Appellant. Thomas W. Miller,
MILLER, GRIFFIN & MARKS, Lexington, Kentucky,
Richard F. O’Malley, Jr., SIDLEY & AUSTIN, Chicago,
Illlinois, for Appellees. ON BRIEF: Mark B. Stern, U.S.
DEPARTMENT OF JUSTICE, CIVIL DIVISION,
APPELLATE STAFF, Washington, D.C., for Appellant.
Thomas W. Miller, MILLER, GRIFFIN & MARKS,
Lexington, Kentucky, Richard F. O’Malley, Jr., SIDLEY &
AUSTIN, Chicago, Illlinois, Stephen L. Barker, Douglas L.
McSwain, STURGILL, TURNER, BARKER & MALONEY,
Lexington, Kentucky, Hiram Ely III, GREENEBAUM, DOLL
& McDONALD, Louisville, Kentucky, for Appellees.
_________________
OPINION
_________________
NATHANIEL R. JONES, Circuit Judge. Raising an issue
of first impression in this circuit, this case requires that we
determine whether the Attorney General’s consent is required
before a private plaintiff may settle or otherwise dismiss an
action under the qui tam provisions of the False Claims Act
(“FCA”), 31 U.S.C. § 3730(b)(1). The district court
concluded that the consent provisions of the FCA apply only
to attempts to dismiss qui tam actions prior to the
government’s initial intervention decision, and that when the
government affirmatively declines to intervene, a private
plaintiff can settle a qui tam action notwithstanding the
government’s disapproval. We hold, however, that a qui tam
plaintiff may not seek a voluntary dismissal of any action
under the False Claims Act without the Attorney General’s

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No. 99-5259 United States, et al. v. Health
Possibilities, et al.
3
1“‘Qui tam’ is an abbreviation for the Latin phrase ‘qui tam pro
domino rege quam pro si ipso in hae parte seqintur,’ which means ‘who
sues on behalf of the King as well as for himself.’” United States ex rel.
Branhan v. Mercy Health System of Southwest Ohio, No. 98-3127, 1999
WL 618018, at *4 n.5 (6th Cir. Aug. 5, 1999) (unpublished opinion)
(citing Black’s Law Dictionary 1251 (6th ed. 1990)).
consent. Accordingly, we VACATE the district court’s
judgment and REMAND this case for further proceedings.
I.
Plaintiffs-Appellees Dr. John and Mariann Doyle were
formerly employed by Defendant-Appellee Health
Possibilities, P.S.C. Health Possibilities is a medical services
provider that staffed various health clinics in Lexington,
Kentucky, including a number of clinics owned and operated
by Defendants-Appellees Urgent Treatment Centers of
Kentucky, Inc. (“UTC”), Dr. Barry Burchett, and Dr. John
Langefeld. Dr. Doyle, Mariann’s husband, worked as a
physician, while Mrs. Doyle was a physician’s assistant. The
Doyles’ dispute with Defendants began in February 1996,
when a co-worker allegedly stated that Dr. Doyle had
committed adultery and used drugs. In May of that year, Dr.
Doyle responded by filing a defamation suit in state court
against the co-worker, a supervisor, and Defendants. Around
the same time, the Doyles began to believe that Defendants
were submitting false Medicare claims to the Department of
Health and Human Services. The Doyles eventually filed a
separate federal court action under the “qui tam” provisions
of the False Claims Act, 31 U.S.C. §§ 3729, 3730(b), which
allow private parties to recover damages for fraud committed
against the United States.1 The Doyles claimed that
Defendants had violated the FCA by illegally seeking
reimbursement for physician assistant services that were not
“incident to” physician services. See J.A. 21-28.
As required by § 3730(b)(2) of the FCA, the Complaint and
a subsequent First Amended Complaint were filed under seal.

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4 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
2The district court deemed this refusal to intervene to apply to the
charges lodged in both the original complaint and the First Amendment
Complaint. J.A. at 6.
3The Second Complaint was apparently served on the government
and Appellees simultaneously, and therefore was not filed under seal so
as to trigger the 60-day intervention period. See Gov’t Br. at 7; J.A. at 13.
Nevertheless, the Doyles met with the government in March, 1998 to
discuss the “upcoding” charges, and the government chose not to act.
J.A. at 261-262. Appellees appear to argue that there was no need to file
the amended complaint under seal, as the §3730(b)(2) intervention
procedure – allowing the government to intervene as a matter of right –
applies only after the filing of the original complaint. Appellees contend
that thereafter the government is limited to intervening for “good cause”
under § 3730(c)(3), and that it could have done so as new allegations
would certainly constitute “good cause.” See UTC Br. at 11 n. 8. In any
event, we do not reach this issue because the government does not raise
this purported lack of notice as a basis for reversal or for rejecting the
settlement.
The sealed complaint procedure grants the United States sixty
days to investigate the claims of a qui tam plaintiff, who is
called a “relator,” to determine whether it wants to intervene.
See 31 U.S.C. § 3730(b)(2). In January 1997, the government
declined to intervene in the Doyles’ suit, and the Complaint
was subsequently served on Defendants. See J.A. at 35.2
After extensive discovery, the Doyles filed a Second
Amended Complaint in May 1998. The Second Amended
Complaint added new allegations, claiming that Defendants
had fraudulently inflated their Medicare bills by “upcoding,”
or using billing codes that signified services that were more
expensive than the services Defendants actually provided.3
Shortly after filing the Second Amended Complaint, the
Doyles and Defendants reached a settlement agreement.
Under the agreement, the qui tam suit was settled in
conjunction with Dr. Doyle’s pending state court defamation
action. Regarding the qui tam suit, the Doyles agreed to
release Defendants from all claims “of any . . . kind or nature
whatsoever” that related to their submission of Medicare
claims, or claims under any other federal health care
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
17
before a voluntary dismissal motion is properly presented to
the court.
Appellees’ mootness contention is also misplaced. Their
mootness argument fails to appreciate that a relator acts on
the government’s behalf, acts to vindicate governmental
interests, and that the government is the real party in interest.
See supra. As noted before, the relator would not have
standing to bring an FCA claim if it were not clear that she
acted in the government’s stead. Thus, if the government’s
interests are adverse to those reflected in a putative settlement
agreement, a live controversy undoubtedly exists.
III.
In sum, we find nothing in the structure of § 3730,
legislative history, or policy that suggests that we should
ignore the undeniably clear and plain language of
§ 3730(b)(1). The Searcy court concluded that:
For more than 130 years, Congress has instructed courts
to let the government stand on the sidelines and veto a
voluntary settlement. It would take a serious conflict
within the structure of the False Claims Act or a
profound gap in the reasonableness of the provision for
us to be able to justify ignoring this language. We can
find neither.
Searcy, 117 F.3d at 160. We agree with this conclusion, and
hold that a qui tam plaintiff may not seek a voluntary
dismissal of any action under the False Claims Act without
the Attorney General’s consent. Accordingly, we VACATE
the judgment of the district court, and REMAND this case for
further proceedings.

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16 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
arise if we were to construe § 3730(b)(1) to apply after the
sixty day period. Appellees contend that such a construction
would impermissibly enable the Executive Branch to infringe
upon the Article III jurisdiction of federal courts, and that
when the relator and the defendant have agreed to a putative
settlement, mootness problems arise if courts are forced to
keep these cases on their active dockets.
To the extent any separation of powers issues exist, they are
not abated by limiting the consent provision to the sixty day
period. If the consent provision impermissibly infringes upon
Article III jurisdiction, the constitutional harm is not cured by
limiting the infraction to sixty days. In any event, Appellees’
contentions are without merit. Our conclusion might be
different if we construed the consent requirement to apply to
involuntary dismissals. However, a number of federal courts
have held that the § 3730(b)(1) "consent" provision applies
"only where the plaintiff seeks voluntary dismissal . . . and
not where the court orders dismissal." Minotti, 895 F.2d at
103-04; see In re Schimmels, 127 F.3d 875, 883 n. 16 (9th
Cir. 1997); Milam, 961 F.2d at 49. This construction is
consistent with congressional intent. Prior to the enactment
of the current "dismissal" language, the FCA provided that
the action could not be "withdrawn or discontinued" without
the government’s consent. See 31 U.S.C. § 232(b) (1976); Id.
at 103; see also United States ex rel. Laughlin v. Eicher, 56
F.Supp. 972, 973 (D. D.C. 1944) (holding that predecessor to
current consent provision "only refers to voluntary
dismissals"). As the Minotti court noted, this language was
changed to reflect modern terminology and usage, and was
not designed to affect a substantive change in the statute’s
meaning. See 895 F.2d at 103-04. In the voluntary dismissal
context, there are no jurisdictional problems as the consent
provision simply requires that the relator receives the
permission of the government, on whose behalf the relator
acts, before she can voluntarily dismiss a qui tam action.
Thus, the relator’s obligation to receive the Attorney
General’s consent is a precondition that must be satisfied
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
5
reimbursement program. J.A. at 204-205. In exchange,
Defendants agreed to pay the Doyles $150,000 in attorneys
fees and costs, and to implement a corporate compliance
program designed to ensure that they prospectively complied
with federal and state law governing medical reimbursements.
See J.A. at 263-268. While the Doyles did not receive any
damages for releasing the FCA claims, Dr. Doyle did receive
$150,000 in damages – and $50,000 for attorneys’ fees and
costs – for settling the defamation action. See Gov’t Br. at 8;
UTC Br. at 9-10; J.A. at 230. While § 3730(d)(2) of the FCA
ensures that the United States receives at least 70% of any
FCA settlement, the government did not receive any damages
here because the FCA suit was settled for fees and injunctive
relief.
Asserting that the settlement did not protect the interests of
the public, the United States objected to the settlement. The
government contended that § 3730(b)(1) of the FCA plainly
provides that a qui tam action “may be dismissed only if the
court and the Attorney General give written consent to the
dismissal . . . ,” and therefore a relator cannot settle an FCA
suit without the government’s permission. The United States
further asserted that the language of the statute is
unambiguous, and that such a veto power is essential to
ensuring the vindication of the public interest in qui tam
actions. Concerning the merits of the settlement, the United
States contended that the compliance program was
insufficient consideration for an all-encompassing release,
and that the inadequacy of this consideration was exacerbated
by the compliance program’s alleged lack of oversight
mechanisms. The United States further objected that all
monies flowed either to the relators or counsel, and suggested
that the relators essentially channeled damages payments to
the defamation action to avoid the settlement division
requirements of § 3730(d)(2). See J.A. at 229-230.
The district court rejected the government’s argument that
§ 3730(b)(1) provides the Attorney General with an absolute
veto of any proposed qui tam settlement. The district court

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6 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
held that the “consent” provision applies only to attempts to
settle or dismiss actions prior to the expiration of the 60-day
initial intervention period, and that to the extent the United
States wanted to challenge a settlement after it had already
declined intervention, it had to seek “good cause” intervention
under § 3730(c)(3). In so holding, the district court further
ruled that the government constructively consents to any
prospective dismissal when it decides not to intervene.
Finding that the government had “good cause” to object to the
breadth of the waiver provisions, the district court allowed the
government to intervene to challenge that portion of the
settlement, but rejected its challenge to the monetary terms.
The Doyles and Defendants subsequently twice modified
the release language. The final language provided that all
civil claims, whether judicial or administrative, would be
released in exchange for the previously approved fees
payments and the corporate compliance plan. J.A. at 310.
The district court thereafter approved the settlement and
dismissed the action, reiterating its earlier holding that after
the government declines intervention, a relator may settle a
§ 3730 suit without the Attorney General’s consent. The
United States now appeals the dismissal.
II.
This appeal turns entirely on the scope of the FCA’s
command that qui tam suits may not be dismissed without the
Attorney General’s consent. Section § 3730(b)(1) of the FCA
provides as follows:
A person may bring a civil action for a violation of
Section 3729 for the person and for the United States
Government. The action shall be brought in the name of
the Government. The action may be dismissed only if the
court and the Attorney General give written consent to
the dismissal and their reasons for consenting.
31 U.S.C. § 3730(b)(1) (emphasis added). We review the
district court’s construction of this language de novo. See
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
15
6We also reject the district court’s conclusion, which the Appellees
do not raise on appeal, that the government’s decision not to intervene
was “tantamount to consent by the Attorney General to have the action
dismissed.” J.A. at 282 (citation omitted). There is absolutely no
statutory authority for the proposition that simply because the government
decides not to expend the resources to proceed with an action itself, it
thereby authorizes the relator to settle the government’s claims in
whatever manner he wishes. See United States ex rel. McGough v.
Covington Technologies Co., 967 F.2d 1391, 1397 (9th Cir. 1992)
(holding that the government’s initial decision not to intervene is not
equivalent to § 3730(b)(1) “consent”). Indeed, such a construction would
only force the government to unnecessarily intervene in qui tam cases and
thereby frustrate the efficacy of the qui tam framework. Cf. Berge, 104
F.3d at 1458 (noting that there is “little purpose” to qui tam framework if
government is forced to pursue all meritorious claims).
of the United States to veto a settlement purportedly made on
its behalf is entirely consistent with an intention to foster qui
tam litigation. By providing financial incentives and limiting
the opportunity for the government to completely take over a
qui tam action after the initial sixty-day period, the 1986
amendments certainly "encouraged more private
enforcement" of the Act. Indeed, nowhere in the legislative
history relied upon by the Killingsworth court, or anywhere
else in the 1986 amendments, does Congress evince an
intention to limit the § 3730(b)(1) "consent" provision to the
sixty-day period. Without such a clearly expressed purpose,
we cannot amend the plain language of a statute. See St.
Martin Evangelical Lutheran Church v. South Dakota, 451
U.S. 772, 788 (1981) ("[I]ndefinite congressional expressions
cannot negate plain statutory language and cannot work a
repeal or amendment by implication."); Morton v. Mancari,
417 U.S. 535, 550 (1974) ("In the absence of some
affirmative showing of an intention to repeal, the only
permissible justification for a repeal by implication is when
the earlier and later statutes are irreconcilable.").6
Finally, Appellees assert that because § 3730(b)(1) requires
the Attorney General’s consent for "dismissal," and not just
settlements, separation of powers and mootness issues would

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14 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
The original FCA provided a version of the current consent
requirement, but provided no mechanism for government
intervention. See Act of March 2, 1863, ch. 67, 12 Stat. 696;
Searcy, 117 F.3d at 159. Although Congress enacted the
original FCA in 1863, it did not grant the government any
intervention authority until the statute was amended in 1943,
see Pub.L. No. 78-213, ch. 377, 57 Stat. 608 (1943), and it did
not allow "good cause" intervention until the statute was re-
amended in 1986. See False Claims Amendments Act of
1986, Pub.L. No. 99-562, 100 Stat. 3153, 3154 (1986); see
also Searcy, 117 F.3d at 159. Thus, the original FCA would
obviously not suggest that the consent requirement is limited
to the sixty day period, as at the time the statute was enacted,
no sixty day intervention period existed.
Moreover, there is no specific indication that any of the
amendments to the FCA were intended to limit the "consent"
requirement to the sixty-day intervention period. It is true, as
the Killingsworth court noted, that the 1986 amendments
were designed "to encourage more private enforcement" of
the Act by "increas[ing] incentives, financial and otherwise,
for private individuals to bring suits on behalf of the
Government." See S. Rep. No. 99-345, at 23-24 (1996),
reprinted in 1986 U.S.C.C.A.N. 5266, 5288-89; see also
Killingsworth, 25 F.3d at 721. The 1986 amendments also
indicate that the provision allowing government intervention
for "good cause" after the initial sixty-day period expands on
the "limited opportunity for government involvement" in qui
tam actions. Id. at 5266, 5291-92. The Killingsworth court
relied on this legislative history in concluding that Congress
intended "to place full responsibility for False Claims Act
litigation on private parties" and that an absolute right to veto
settlement agreements was inconsistent with this intention.
Killingsworth, 25 F.3d at 722.
However, simply because Congress intended to provide
more incentives to private parties to bring qui tam actions
does not signal that it intended to strip away the government’s
power to consent to settlements made in its name. The right
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
7
4Other appellate courts have discussed issues that implicated the
scope of the consent requirement, see United States ex rel. Milam v.
University of Texas M.D. Anderson Cancer Ctr., 961 F.2d 46, 49 (4th Cir.
1992); Minotti v. Lensink, 895 F.2d 100, 104 (2d Cir. 1990), but only the
Fifth and Ninth circuits have definitively addressed whether it applies
after the 60-day intervention period.
Vergos v. Gregg’s Enterprises, Inc., 159 F.3d 989, 990 (6th
Cir. 1998). The starting point in a statutory interpretation
case is the language of the statute itself. See Group Life &
Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 210 (1979);
Vergos, 159 F.3d at 990. In construing federal statutes, we
presume that the ordinary meaning of the words chosen by
Congress accurately express its legislative intent. See Mills
Music, Inc. v. Snyder, 469 U.S. 153, 164 (1985). Thus, "if the
words of the statute are unambiguous, the judicial inquiry is
at an end, and the plain meaning of the text must be
enforced." Hudson v. Reno, 130 F.3d 1193, 1199 (6th Cir.
1997). Our inquiry into legislative meaning is additionally
aided by contemporaneous legislative history and the
statutory context of the pertinent language. See Walton v.
Hammonds, 192 F.3d 590, 594 (6th Cir. 1999).
While the interpretation of the “consent “ requirement’s
breadth presents an issue of first impression in this Court, two
of our sister circuits have directly confronted this issue.4 In
Killingsworth v. Northrop Corp., the Ninth Circuit held that
the “consent” provision is not absolute, but applies only when
the United States is contemplating its initial intervention
decision. 25 F.3d 715, 722 (9th Cir. 1994). The Ninth
Circuit held that when the Attorney General declines to
intervene, the relator no longer needs her consent to settle,
and the government is restricted to challenging the settlement
for “good cause” under § 3730(c)(3). See id. at 722-23.
Analyzing the legislative history of the FCA and relevant
amendments, the Killingsworth court found that Congress
intended “to place full responsibility for False Claims Act
litigation on private parties.” Id. at 722. The Ninth Circuit
concluded that this intent is “fundamentally inconsistent” with

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8 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
“the asserted ‘absolute’ right of the government to block a
settlement and force a private party to continue litigation.” Id.
The court further noted that the statute provides that the
government “proceed[s]” with the action when it decides to
intervene, yet the relator “conduct[s]” the action when the
government does not intervene. Id.; see 31 U.S.C.
§ 3730(b)(2) & (c)(3). The court construed this framework to
require that, absent intervention for “good cause” under
§ 3730(c)(3), the relator’s right to “conduct” an action
necessarily included the right to settle, and the government
essentially forfeited any veto authority when it decided not to
“proceed” with the action itself. Id. at 722-23.
On the other hand, the Fifth Circuit, concluding that the
plain language of § 3730(b)(1) is “as unambiguous as one can
expect,” held that the statute plainly allows the government to
veto proposed settlements. Searcy v. Phillips Electronics of
N. Am. Corp., 117 F.3d 154, 159 (5th Cir. 1997). In reaching
this conclusion, the Fifth Circuit found nothing in either
legislative history or the statute’s structure to negate the
language’s plain meaning. See id.
We now join the Fifth Circuit in rejecting the Ninth
Circuit’s analysis, and hold that a relator may not seek
voluntary dismissal of any qui tam action without the
Attorney General’s consent. Section 3730(b)(1) unqualifiedly
provides that a qui tam action “may be dismissed only if the
court and Attorney General give written consent.” This
language clearly does not limit the consent provision to the
sixty-day intervention period. If Congress wanted to limit the
consent requirement to the period before the United States
makes its initial intervention decision, we presume that it
knew the words to do so. See Bates v. United States, 118
S.Ct. 285, 290 (1997) (“[W]e ordinarily resist reading words
or elements into a statute that do not appear on its face.”);
Keene Corp. v. United States, 508 U.S. 200, 208 (1993)
(providing that courts have a “duty to refrain from reading a
phrase into the statute when Congress has left it out”).
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
13
5On appeal, none of the parties raise the threshold issue of whether
the Doyles have standing to bring an action under the FCA. Even if no
party raises the propriety of a plaintiff’s standing, we “are under an
independent obligation to examine [our] own jurisdiction, and standing
‘is perhaps the most important of [the jurisdictional] doctrines.’"
FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 230-31 (1990) (quoting
Allen v. Wright, 468 U.S. 737, 750 (1984)). Because the United States is
the real-party-in-interest in FCA litigation, and relators are statutorily
empowered to act on the United States’ behalf, relators invoke the
standing of the United States to bring qui tam actions. See United States
ex rel. Barajas v. Northrop Corp., 147 F.3d 905, 910 (9th Cir. 1998);
United States ex rel. Berge v. Board of Trustees of the Univ. of Ala., 104
F.3d 1453, 1457-58 (4th Cir. 1997); United States ex rel. Hall v. Tribal
Dev. Corp., 49 F.3d 1208, 1213 (7th Cir. 1995); Kriendler & Kriendler,
985 F.2d at 1154. See also Vermont Agency of Natural Resources v.
United States ex rel. Stevens, 120 S.Ct.523 (1999) (mem.) (ordering
parties in qui tam appeal to brief whether relators have Article III standing
to bring FCA actions). In the instant case, the United States clearly has
standing to challenge Defendants’ alleged attempt to illegally appropriate
federal funds. Therefore, as relators – the statutorily designated agents of
the government – the Doyles also have standing to vindicate the harms
committed against the government.
authorize the court to require the parties to accept a settlement
to which they have not agreed.”).
In terms of statutory context and structure, we note that the
consent language appears immediately after the provisos
stipulating that a relator acts "for [himself] and for the United
States Government," and that "[t]he action shall be brought in
the name of the Government." See 31 U.S.C. § 3730(b)(1).
These requirements are indispensable to the qui tam
framework, as relators have Article III standing to bring FCA
actions only because they act on the government’s behalf.5
The location of the consent provision immediately after the
command that the action be brought in the government’s
name suggests that it is an important component of the
government’s ability to regulate qui tam actions.
Additionally, nothing in the statute’s legislative history
compels a result contrary to § 3730(b)(1)’s plain meaning.

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12 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
no monetary recovery on the FCA claim, but Dr. Doyle did
manage a $150,000 personal recovery on the defamation
claim. While we make no particular conclusions of the
propriety of the defamation settlement in this case, we merely
note that the potential for abuse exists and veto authority is
essential to ensuring the public interest is vindicated.
Accordingly, we conclude that the policies served by the veto
power are entirely consistent with the conclusion compelled
by § 3730(b)(1)’s plain meaning: that a relator may not settle
any qui tam action without the Attorney General’s consent.
This holding is also consistent with other portions of
§ 3730, including the relator’s right to “conduct” a qui tam
suit when the government decides not to intervene. Nothing
in the statute suggests that the right to “conduct” an action
provides the relator with unilateral and ultimate settling
authority. Moreover, as the Searcy court noted, "[a] relator
has ‘conducted’ an action if he devises strategy, executes
discovery, and argues the case in court, even if the
government frustrates his settlement efforts." 117 F.3d at
160. Nor does the right to "conduct" the action annul the
government’s status as the real-party-in-interest in qui tam
litigation. See Milam, 961 F.2d at 50 ("[T]he United States is
the real-party-in-interest in any False Claims Act suit, even
where it permits a qui tam relator to pursue the action on its
behalf."); United States ex rel. Hyatt v. Northrop Corp., 91
F.3d 1211, 1217 n. 8 (9th Cir. 1996) (holding that relators
"sue on behalf of the government as agents of the
government, which is always the real-party-in-interest");
Searcy, 117 F.3d at 156 ("[T]he United States is a real party
in interest even if it does not control the False Claims Act
suit."); United States ex rel. Rodgers v. Arkansas, 154 F.3d
865, 868 (8th Cir. 1998) (noting that the United States is
always the real-party-in-interest in qui tam litigation). The
government’s status as the real-party-in-interest renders a
relator’s unilateral attempt to settle akin to impermissibly
bargaining away the rights of a third party. See, e.g., Evans
v. Jeff D., 475 U.S. 717, 726 (1986) (“[T]he power to approve
or reject a settlement negotiated by the parties . . . does not
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
9
Moreover, we find that the clear import of this language is
strengthened by the FCA’s purpose, structure and legislative
history. Congress’ manifest desire to ensure that the
government retains significant authority to influence the
outcome of qui tam actions – even when it decides not to
intervene – is entirely consistent with the nature of qui tam
litigation. The FCA’s qui tam provision is
passed upon the theory, based on experience as old as
modern civilization, that one of the least expensive and
most effective means of preventing frauds on the
Treasury is to make the perpetrators of them liable to
actions by private persons acting, if you please, under the
strong stimulus of personal ill will or the hope of gain.
Hughes Aircraft Co. v. United States ex rel. Schumer, 520
U.S. 939, 949 (1997) (internal quotations and citation
omitted). Because the scope of fraud against the government
is much broader than the government’s ability to detect it, the
qui tam provisions allow the government to uncover fraud
that it would not otherwise be able to discern. See United
States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d
645, 650-51 (D.C. Cir. 1994). Pursuant to this goal, the FCA
provides private actors with a variety of incentives to bring
qui tam actions, and significant influence over the ensuing
development of qui tam suits – including “the right to conduct
the action” when the government decides not to intervene.
See 31 U.S.C. § 3730(c)(3) (providing right to “conduct the
action” when government declines intervention); 31 U.S.C. §
3730(d) (providing that, even when the government does
intervene, the relator remains a party to the action and is
guaranteed at least fifteen percent of any recovery); 31 U.S.C.
§ 3730(c)(2)(B) (providing that the relator retains the right to
challenge any settlements reached by the government as either
unfair, inadequate, or unreasonable); see also Killingsworth,
25 F.3d at 720 (“The statutory scheme of the False Claims
Act provides protection for the rights of both the relator and
the government.”).

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10 United States, et al. v. Health
Possibilities, et al.
No. 99-5259
However, given that private opportunism and public good
do not always overlap, see Searcy, 117 F.3d at 160; see also
United States ex re. Rabushka v. Crane Co., 40 F.3d 1509,
1519 (8th Cir. 1994) (Magill, J., dissenting) (noting that the
qui tam provisions “set[] a rogue to catch a rogue”) (citation
omitted), and that the harms redressed by the FCA belong to
the government, see United States ex rel. Kreindler &
Kreindler v. United Technologies Corp., 985 F.2d 1148, 1154
(2d Cir. 1993), the FCA provides a number of mechanisms to
ensure that the government retains significant authority to
regulate qui tam litigation. See Milam, 961 F.2d at 49 (noting
that the government maintains “extensive power” to control
the course of qui tam litigation). For example, not only does
the government retain absolute authority to intervene and
“proceed” with an action during the sixty days after the
complaint was filed, it can intervene for “good cause” at any
time in the litigation. See 31 U.S.C. § 3730(c)(3). Moreover,
even when the government does not intervene, it nevertheless
receives at least seventy percent of any recovery. Id. at
§ 3730(d)(1)-(2).
In our view, the power to veto a privately negotiated
settlement of public claims is a critical aspect of the
government’s ability to protect the public interest in qui tam
litigation. The FCA is not designed to serve the parochial
interests of relators, but to vindicate civic interests in avoiding
fraud against public monies. See United States v. Northrop
Corp., 59 F.3d 953, 968 (9th Cir. 1995) ("[T]he private right
of recovery created by the qui tam provisions of the FCA
exists not to compensate the qui tam relator, but the United
States. The relator's right to recovery exists solely as a
mechanism for deterring fraud and returning funds to the
federal treasury."); see also United States ex rel. Taxpayers
Against Fraud v. General Elec. Co., 41 F.3d 1032, 1041 (6th
Cir. 1994) (stating that the FCA’s qui tam provisions "have
been crafted with particular care to maintain the primacy of
the Executive Branch in prosecuting false-claims actions,
even when the relator has initiated the process"). Without the
power to consent to a proposed settlement of an FCA action,
No. 99-5259 United States, et al. v. Health
Possibilities, et al.
11
the public interest would be largely beholden to the private
relator, who – absent “good cause” government intervention
– would retain sole authority to broadly bargain away
government claims.
The recovery division requirements of the FCA provide
further incentive for the over-broad release of government
claims. See 31 U.S.C. § 3730(d) (requiring that the
government receive at least seventy percent of any qui tam
recovery). As the Searcy court recognized:
[R]elators can manipulate settlements in ways that
unfairly enrich them and reduce benefits to the
government. This case presents a relator who allegedly
wants to trade on the defendants’ desire to maximize
preclusive effects. Plaintiffs ordinarily prefer to keep
their options open; agreeing not to bring future suits can
be costly. In qui tam litigation, however, there is a
danger that a relator can boost the value of settlement by
bargaining away claims on behalf of the United States [at
little cost to himself].
Searcy, 117 F.3d at 160. The potential for such profiteering
is exacerbated when, as here, a relator couples FCA claims
with personal claims. In these circumstances, a relator can
avoid the FCA’s recovery division requirements by allocating
settlement monies to the personal claims. Relators can
thereby use the bait of broad claim preclusion to secure large
settlements, while steering any monetary recovery to the
personal action. See Searcy, 117 F.3d at 160 (noting that in
Killingsworth litigation, relator settled an FCA claim for $1.5
million, but settled a personal wrongful termination claim for
$ 2.7 million, illustrates manipulation of qui tam suit). See
also Christopher C. Frieden, Comment, Protecting the
Government’s Interests: Qui Tam Actions Under the False
Claims Act and the Government’s Right to Veto Settlements
of Those Actions, 47 Emory L.J. 1041, 1071 (1998) (noting
the use of "sweetheart settlements" to avoid the seventy
percent allocation). Indeed, in this case, the Doyles received

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