United States: False Claims Act Suit Dismissed Based On Granston Memo Considerations

Key Points

  • DOJ is implementing the Granston memo policy in seeking dismissal of FCA qui tam actions when it is in the government’s interest, particularly when protecting its resources, discretion and litigation priorities.
  • DOJ also recognizes the potential detrimental impact that FCA litigation may have on private companies’ willingness to enter into Cooperative Research and Development Agreements, given existing difficulties with negotiating intellectual property rights under such arrangements.

Earlier this year, the Department of Justice (DOJ) provided some relief to defendants facing abusive False Claims Act (FCA) qui tam actions when it issued the Granston memo, which provided guidance for DOJ attorneys evaluating the appropriateness of dismissal under 31 U.S.C. § 3730(c)(2)(A), as opposed to the DOJ merely declining to intervene in an action. Since the memo’s release, practitioners have closely followed the DOJ’s implementation of this policy and courts’ reaction, particularly after the DOJ formally incorporated the policy into the DOJ Justice Manual (formerly known as the United States Attorneys’ Manual) at Section 4-4.111 in September 2018.

On October 10, 2018, the United States District Court for the District of Idaho granted the DOJ’s motion to dismiss a qui tam suit, United States ex rel. Toomer v. TerraPower, LLC, No. 4:16-cv-00226-DCN, brought by a relator against TerraPower, LLC and Battelle Energy Alliance, LLC (BEA). The court accepted the DOJ’s argument that continued litigation was contrary to the government’s interests because “the benefits of terminating the suit outweigh any benefits of allowing it to go forward,” under 9th Circuit precedent that dismissal under § 3730(c)(2)(A) requires identification of a valid government purpose and a rational relation between dismissal and accomplishment of that purpose.1 This dismissal highlights the DOJ’s current emphasis on seeking to dismiss qui tam actions based on the government’s interest rather than merely declining to intervene, in accordance with Section 4-4.111.

BEA manages and operates the Idaho National Laboratory on behalf of the U.S. Department of Energy (DOE). BEA entered into Cooperative Research and Development Agreements (CRADAs) in 2011 and 2012 with TerraPower for nuclear energy and science innovation work at the laboratory. Subsequently, the relator sued TerraPower and BEA, alleging, among other things, that TerraPower failed to disclose a subject invention to the DOE as required under the CRADAs, failed to provide a sworn statement regarding the invention’s relationship to a CRADA when filing for a patent for the invention, and “improperly claimed some key Generated Information associated with the CRADAs and the Subject Inventions” as proprietary information and background intellectual property.2

The DOJ sought, and was granted, dismissal on the grounds that further litigation was not in the government’s interest because: (1) it had not lost any property rights or suffered damages, since the U.S. Patent Office rejected TerraPower’s patent application twice; (2) litigation would waste substantial government time and resources; (3) litigation would impair or delay current work with BEA and TerraPower, and discourage other contractors from collaborating with DOE in the future; and (4) the relator failed to state viable FCA claims.

Each of these reasons echoes one or more of the non-exhaustive factors for dismissal found in Section 4-4.111 of the Justice Manual. In particular, the dismissal emphasized the government’s interests in protecting its resources, the exercise of its discretion, and its litigation priorities, rather than the question of merit. Moreover, the DOJ and the court explicitly raised the potential chilling effect that the FCA litigation could have on future CRADAs with the DOE, recognizing that the specter of qui tam actions may cause private companies to further balk at entering into such contractual arrangements given that intellectual property rights, such as patent ownership and licensing, are common stumbling blocks.3

The dismissal highlights the increasingly important role of potential government dismissal of FCA qui tam suits.  Consistent with D.C. Circuit precedent, the DOJ should have unfettered discretion to dismiss FCA lawsuits that do not advance the government’s interest.  However, given 9th Circuit prior precedent, now that the Granston memo has been incorporated into the Justice Manual, the DOJ’s grounds to seek dismissal are further fortified where a court has found that the government must show a legitimate government interest in support of dismissal.


1 Since the Granston memo was issued, only a small number of cases have addressed dismissal under Section 3730(c)(2)(A). See, e.g., United States ex rel. Stovall v. Webster Univ., No. 3:15-cv-03530, 2018 WL 3756888, *1 (D.S.C. Aug. 8, 2018) (granting the government’s motion to dismiss a claim by a relator against Webster University on the grounds that further litigation would “unnecessarily expend the limited resources of the Court, the Department of Justice, and the United States Department of Veterans Affairs.”) There is an unresolved circuit split between the 9th and District of Columbia Circuits regarding the standard for dismissal; in contrast to the 9th Circuit, the D.C. Circuit has held that the government has “an unfettered right to dismiss an action.” Swift v. United States, 318 F.3d 250, 252 (D.C. Cir. 2003).

2 The relator also brought suit against BEA for employment retaliation in connection with his attempts to rectify the alleged FCA violations. The court did not dismiss the relator’s retaliation claims.

3 See Matthew W. Sagal, Gene Slowinski, Kenneth Freese, and Steven Ferguson, Intellectual Property and Other Contractual Issues in Cooperative Research and Development Agreements (CRADAs): Part I, 44(1) les Nouvelles 41 (Mar. 2009), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3338157.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions