This week, the Ninth Circuit addresses the employment status of job applicants made to take drug tests and the availability of an award of attorney’s fees under Federal Rule of Civil Procedure 41(d).JOHNSON V. WINCO FOODSThe Court holds that job applicants to supermarket chain were not employees at the time of mandatory pre-employment drug test, and therefore not entitled to compensation for the taking the test.Panel: Judges Schroeder, Thomas, and Bea, with Judge Schroeder writing the opinion.

Stipulated Dismissal Pursuant to Fed. R. Civ. P. 41(a)(1) Divests the Court of Subject Matter Jurisdiction 09-1047 June 26, 2009 Decision Last Month at the Federal Circuit - July 2009Judges: Michel, Lourie (author), Prost [Appealed from: N.D. Ill., Judge Castillo] In Garber v. Chicago Mercantile Exchange, Nos. 09-1047, -1384 (Fed. Cir. June 26, 2009), the Federal Circuit reversed the district court’s denial of Howard Garber’s Fed. R. Civ. P. 60(b)(4)motion, holding that the stipulation for dismissal without prejudice was filed pursuant to Fed. R. Civ. P. 41(a)(1) and therefore divested the district court of subject matter jurisdiction. Garber filed a patent infringement complaint against the Chicago Mercantile Exchange and the Chicago Board of Trade (collectively “CME”), among others.

In United States ex rel. Polansky v. Executive Health Resources, Inc., the U.S. Supreme Court recently resolved a circuit split by holding that in a False Claims Act (“FCA”) action (1) the Government may seek dismissal of a qui tam case that the government initially declined to intervene in over the relator’s objection so long as it later intervened in the litigation, and (2) that in considering such a motion, district courts should apply the rule generally governing voluntary dismissal of suits: Federal Rule of Civil Procedure 41(a). Under Rule 41(a), the Court explained that the Government has broad latitude to seek dismissal; although that discretion is not unfettered, such “motions will satisfy Rule 41 in all but the most exceptional cases.” The decision is an important one for the government and FCA defendants. But perhaps as important as the Court’s central holding in the Polansky case (and certainly more surprising), was the view expressed by Justice Thomas in dissent (and echoed by Justice Kavanaugh in a concurring opinion joined by Justice Barrett) that the FCA’s qui tam provision permitting a private citizen to litigate a case on behalf of the United States may be unconstitutional.The FCA authorizes private parties (known as relators) to file civil actions “in the name of the government.” When a relator files a complaint, they do so under seal and initially serve it only on the Attorney General. DOJ then has 60 days as an initial opportunity (often subject to multiple extensions for longer periods) to in

Imagine this scenario: after years of litigation in federal court, your client reaches a settlement agreement with the opposing party. The lawsuit is dismissed pursuant to the settlement agreement and Federal Rule of Civil Procedure 41(a)(1). When the opposing party breaches the settlement agreement, you promptly file a motion to compel enforcement – only to have your motion denied for lack of jurisdiction.

The Court held that the government maintains authority, with good cause shown, to intervene and move to dismiss an FCA suit even when it initially declined to intervene. The Court further reasoned that a district court facing a government's motion to dismiss should apply Federal Rule of Civil Procedure 41(a), which governs voluntary dismissals in civil litigation.BackgroundEnacted during the Civil War, the FCA empowers private citizens to file suit on behalf of the government against those alleged to have defrauded the government. If successful, these actions, known as qui tam suits, entitle private citizens (known as "relators") up to 30 percent of the recovery.When a relator files a qui tam complaint, the statute provides the government 60 days — which, in practice, is often further extended — to investigate the allegations while the complaint is under seal. After this period, the government may either take over the action or allow the relator to conduct the action on its behalf. If the government declines to intervene, the "person who initiated the action shall have the right to conduct the action"and the government can later seek leave from the court to intervene "upon a showing of good cause." "The Government may dismiss the action notwithstanding the objections of the person initiat

In Samake, plaintiff Sekouba Samake filed suit in federal court against his former employer alleging violations of the FLSA and other laws. The employer moved to compel arbitration, and Samake promptly filed a notice of unilateral voluntary dismissal without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i). The district court entered an order retaining jurisdiction over the case pursuant to Cheeks, in which the Second Circuit held that any FLSA settlement must be reviewed by the district court before the parties may dismiss a case by joint stipulation pursuant to Rule 41(a)(1)(A)(ii).

So far, the Supreme Court has declined to step in, denying certiorari in April 2020 in United States ex rel. Schneider v. JP Morgan Chase Bank on the question of whether the government’s dismissal decisions constitute an “unreviewable exercise of prosecutorial authority.” Now, however, the Seventh Circuit has articulated a new standard, relying on Federal Rule of Civil Procedure 41(a) governing voluntary dismissals by plaintiffs.The CIMZNHCA DecisionThe relator in CIMZNHCA was one of several companies formed for the purpose of prosecuting 11 qui tam actions alleging defendants violated the Anti-Kickback Act by providing free education services and assistance with completing insurance paperwork to doctors who prescribed Cimzia to patients.

Federal Signal demanded that plaintiffs dismiss the case and threatened to seek fees and costs for the alleged failure of plaintiffs’ counsel to do sufficient pre-suit diligence. Plaintiffs then filed a notice of voluntary dismissal without prejudice, purportedly under Federal Rule of Civil Procedure 41(a)(1), which was ineffective since all defendants had already answered the Complaint.The District Court ultimately entered an order assessing $127, 823.47 in costs and fees under Rule 41(a)(2).

A recently filed petition for certiorari asks the U.S. Supreme Court to clarify the procedural requirements for ending private causes of action under the Fair Labor Standards Act (“FLSA”). Specifically, petitioner Dorian Cheeks is asking the Supreme Court to review a decision from the U.S. Court of Appeals for the Second Circuit holding that Federal Rule of Civil Procedure 41 (“FRCP 41”) prohibits the dismissal of FLSA claims through private, stipulated settlement agreements absent approval from either a federal district court or the U.S. Department of Labor (“DOL”). The Second Circuit’s ruling in Cheeks v. Freeport Pancake House Inc., et al., 796 F.3d 199 (2d Cir. 2015), contributes to an existing circuit split concerning the role of the federal district courts in overseeing private FLSA settlements.

But rather than provide oral approval, Judge Wolson told the parties that they do not necessarily need it.Judge Wolson advised the parties that they could take one of two paths. They could seek and brief court approval of their settlement, which would ensure that the waiver of FLSA claims would be valid against any future claims, or they could opt to voluntarily dismiss the case under Federal Rule of Civil Procedure 41(a)(1)(A), without having to explain to the court why the settlement is fair and reasonable and, critically, without having to publicly file their settlement terms.Judge Wolson reasoned that he and other judges do not necessarily know what is best for the parties and therefore judges do not need to approve settlements in order for FLSA cases to be resolved.