DC Circuit Requires Fairness Hearing Where Relator Objects To False Claims Act Settlement

Summary: The Court of Appeals for the DC Circuit ruled last week that the United States cannot settle a qui tam action over a relator's objection without a judicial finding that the proposed settlement is fair, adequate, and reasonable under the circumstances. The decision will potentially complicate efforts by the government and defendants to resolve cases under the False Claims Act, especially those with little merit or damage to the government.

On April 20, 2012, the US Court of Appeals for the DC Circuit held that the United States cannot settle a qui tam action over a relator's objection without a judicial finding that the proposed settlement is fair, adequate, and reasonable under the circumstances, United States ex rel. Schweizer v. Oce N.V., --- F.3d ---, 2012 WL 1372219, potentially complicating efforts by the government and defendants to resolve cases under the False Claims Act (FCA), 31 U.S.C. § 3729 et seq., especially those with little merit or damage