Tick-tock, the Court Starts the Clock: Deconflicting the FCA and Rule 4(m) of the FRCP

In keeping with the trend of increased attention on the False Claims Act's ("FCA") qui tam provisions, the Second Circuit recently weighed in on a seeming conflict between the statute and the relator's obligations under the Federal Rules of Civil Procedure ("FCRP"). Under Rule 4(m) of the FRCP, the court generally must dismiss a complaint if the plaintiff fails to serve the defendant with a complaint and summons within 90 days of filing. Fed. R. Civ. P. 4(m). But a relator bringing suit under the qui tam provisions of the FCA may not serve a defendant until the complaint is unsealed and "until the court so orders." 31 U.S.C. § 3730(b)(2). In cases brought under the qui tam provisions of the FCA, this creates the potential for questions regarding when the Rule 4(m) service-of-process clock begins to tick.

These questions seldom arise because courts ordinarily unseal a relator's complaint and simultaneously order the relator to serve the defendant. In which case, the express order to serve the defendant plainly triggers the service-of-process clock under Rule 4(m). But what if the court unseals the relator's complaint and then delays (or never issues) the order to serve the defendant? This was the question before the Second Circuit last month in U.S. ex rel. Weiner v. Siemens AG, No. 22-2656, 2023 WL 8227913, at 3 (2d Cir. Nov. 28, 2023).

In Weiner, the Plaintiff-Relator's initial February 2012 action alleged that Siemens AG fraudulently induced more than $234 million in government contracts in violation of the FCA and its state-law analogues. U.S. ex rel. Weiner v. Siemens AG, 2021 WL 3544718 (S.D.N.Y. 2021). After the United States declined to intervene, the district court maintained a lengthy seal on the federal action while the City and State of New York pursued parallel state-law claims. The district court finally unsealed Weiner's FCA complaint in August 2019-approximately seven-and-a-half years after initial filing-but never issued an express order that Weiner serve Siemens AG with the summons and complaint.

More than a year later, and after additional delays, Siemens AG moved to dismiss Weiner's complaint for insufficient service of process under Rule 4(m) and failure to prosecute his claim under Rule 41(b). Because Siemens AG still had not been served with a complaint or summons, the district court granted the motion on the basis of Rule 4(m) without deciding whether (or when) the time limit for service begins in a case brought under the FCA's qui tam provisions. Weiner, 2021 WL 3544718, at 5 (S.D.N.Y. 2021) ("[T]o date Relator still has not served Defendants, so there is no way for this Court to determine that service was not untimely in this action.").

On appeal, the Second Circuit addressed the service-of-process question head on. Weiner argued that under section 3730(b)(2) of the FCA, he could not serve Siemens in the absence of a court order, and thus dismissal under Rule 4(m) was inappropriate. U.S. ex rel. Weiner v. Siemens AG, No. 22-2656, 2023 WL 8227913, at 3 (2d Cir. Nov. 28, 2023) ("Because the district court never issued such an order, Relator reasons, the service clock has not yet started."). In contrast, Siemens AG argued that under section 3730(b)(3), the time for service of process begins automatically when a district court unseals the complaint. See id. ("Because the complaint was unsealed in 2019, they maintain, the service period has long since lapsed.").

In ruling for Weiner, the Second Circuit expressed discomfort with the defendant's reading of section 3730(b)(3) because it seemed to nullify the command at section 3730(b)(2) that the relator serve the defendant only after receiving an express order by the court. Id. at 3 (2d Cir. Nov. 28, 2023) ("Indeed, such a reading would render the plain language of Section 3730(b)(2) superfluous."). Accordingly, the Weiner court held that, for qui tam suits, "the Rule 4(m) period begins only after a court expressly orders service, and a defendant is not required to respond to a complaint until 20 days after the complaint is served in accordance with these rules." Id.

To be clear, the Second Circuit resolution of the Rule 4(m) issue did not relieve relators of the responsibility to diligently pursue their claims. For example, the case did not disturb a defendant's right to seek dismissal under other procedural rules when relators dawdle or cause undue delay. Indeed, the Second Circuit emphasized that "[Weiner's] extreme delay in pursuing this action could have justified the district court's dismissal of the complaint under Rule 41(b)." 2023 WL 8227913, at 5 (2d Cir. Nov. 28, 2023) (discussing Weiner's alleged failure to prosecute his case and Fed. R. Civ. P. 41(b)).

Finally, it bears repeating both that this is an unusual fact pattern and that other courts considering the service-of-process issue as a matter of first impression may elect to resolve the conflict differently. For example, a court considering similar facts might reasonably conclude that the balance of equities and primary intent of Rule 4(m) both favor a stricter approach to the relator's service of process obligations or otherwise accept the Second Circuit's invitation to scrutinize a plaintiff's failure to prosecute under Rule 41(b).

Homer La Rue contributed to this blog post. As of the date of this blog post, Mr. La Rue is admitted to practice law in the state of Maryland and his application to the Bar of the District of Columbia is pending. He is supervised by principals of Covington & Burling LLP.