United States and Michigan, ex rel. Mohamad Sy, et al. v. Oakland Physicians Medical Center, LLC, dba Pontiac General Hospital, et al.

The False Claims Act (“FCA”) provides that a qui tam complaint be placed under seal for a minimum of sixty days, which the Government may seek to extend upon good cause shown. 31 U.S.C. § 3730(b). After a qui tam complaint is unsealed, such a complaint is to be served pursuant to Federal Rule of Civil Procedure 4. Ibid. Under Rule 4, a district court must dismiss an action without prejudice if a defendant is not served within ninety days but may extend the time to effect service. Fed. R. Civ. P. 4(m). In some cases, dismissals for failure to effect service would nominally be without prejudice, but are effectively with prejudice, because the statute of limitations would preclude refiling the suit. The courts of appeals have divided over how to handle those cases. Four circuits apply the same heightened standard to all case-ending dismissals: The court may not dismiss unless it finds that the plaintiff ’s failure to comply was willful and that a lesser sanction would be inadequate. Three circuits hold that withoutprejudice dismissals are subject to a more lenient standard, even if the dismissal would end a case forever. In the decision below, the Sixth Circuit joined the minority view. The question presented is: Whether a district court may decline a discretionary extension of time to effect service and, in effect, dismiss with prejudice a relator’s individual FCA retaliation claim due to the operation of the applicable statute of limitations, when it repeatedly granted the Government’s requested extensions of time for the qui tam complaint to remain under seal.