In a qui tam suit, a plaintiff sues on behalf of the government in the role of a relator and receives a share of any damages awarded to the government. Typically the government also has the right to intervene in the suit. But what happens if the relators decide they don’t want to press forward with the lawsuit and the Government hasn’t stepped in? The Fifth Circuit recently held that a relator can voluntarily dismiss a claim with prejudice—but the trial court can limit that prejudice to the relator.

A group of allergists filed a qui tam suit against a company that operates remote allergy centers, claiming that the company had unlawfully billed government healthcare providers. The federal government chose not to intervene. After three years of delays and opening filings the allergists decided they wanted out and filed a motion to dismiss their claims with prejudice. But the allergists also asked that any order dismissing the case be without prejudice to the federal government. The trial court agreed, the allergy-center company appealed, and the Fifth Circuit affirmed.

The Fifth Circuit noted that “whether the non-intervening Government may be dismissed without prejudice when relators voluntarily dismiss themselves with prejudice” had not been answered in that circuit. Because “[i]ts answer implicates the fundamental relationship between a relator and the Government in qui tam actions . . . we begin with first principles and build from there.”

First, it was already “well-settled that a final judgment on the merits of a relator’s claim will have a binding effect on even the non-intervening Government.” But “when the case’s outcome is decided by the relator’s voluntary decision to quit, courts tend not to bind the Government to that decision automatically.” And the Fifth Circuit had already held that when the relator loses on a motion to dismiss, that decision won’t bind the Government “if the dismissal is for reasons not tied to the underlying legal merit” of the claim.

With these rules in mind, the Fifth Circuit held that the relators could withdraw their claim without prejudicing the Government. The relators decided to quit the case based simply on the relators’ private interests, not the merits: The relators “sought to abandon their claims because they no longer wished to participate in the litigation.” So “[t]he Government—even one that chooses not to intervene—should not be bound by this decision . . . .” The Fifth Circuit went on to hold that the trial court’s order was not an abuse of discretion and affirmed.

Read the Fifth Circuit’s opinion here.

Article III of the federal constitution limits federal-court jurisdiction to “cases [and] controversies,” and there can’t be a case or controversy without concrete harm. A plaintiff must have standing. The Sixth Circuit recently issued an opinion reminding us that Plaintiffs who bring class-action claims under Rule 23 must show their own standing—even if the absent class members would have concrete injury.

The case was about gas-station credit holds. When you buy gas at a gas station you usually have to swipe your credit card before you can get any gas from the pump. When you swipe your card the gas station puts a temporary hold on your card that freezes a set amount of credit as payable to the gas station. After you pump your gas the station posts the actual amount to charge and releases the temporary hold.

A group of gas-station customers filed class-action suits against the gas stations, alleging that the stations had unlawfully held too much credit frozen for too long after selling gas. The trial court found that the customers lacked standing and dismissed the case. The Sixth Circuit affirmed.

The Sixth Circuit began by rehearsing the well-known basics of standing, including “concrete” injury and reviewing the Plaintiffs’ allegations. The Plaintiffs had alleged that the large holds had temporarily denied them access to the frozen credit. But “[n]owhere in Plaintiffs’ pleadings or briefs do Plaintiffs articulate what is ‘real’ about the harm arising from Defendants’ temporary preauthorization holds.”

The named Plaintiffs practically conceded they suffered no concrete harm, while arguing that “it is likely – and even probable – that the loss of credit occasioned by such holds has indeed resulted in [concrete] deprivations for other unnamed Class members.” But a named class member can’t rely on an absent class member’s injury to get standing. The Sixth Circuit concluded that “[t]he district court was therefore correct to dismiss Plaintiffs’ actions for want of standing.”

Read the Sixth Circuit’s opinion here.