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.

Photo of Michael Wagner Michael Wagner

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Combining deep regulatory knowledge with extensive investigations experience, Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government…

Mike Wagner helps government contractors navigate high-stakes enforcement matters and complex regulatory regimes.

Combining deep regulatory knowledge with extensive investigations experience, Mr. Wagner works closely with contractors across a range of industries to achieve the efficient resolution of regulatory enforcement actions and government investigations, including False Claims Act cases. He has particular expertise representing individuals and companies in suspension and debarment proceedings, and he has successfully resolved numerous such matters at both the agency and district court level. He also routinely conducts internal investigations of potential compliance issues and advises clients on voluntary and mandatory disclosures to federal agencies.

In his contract disputes and advisory work, Mr. Wagner helps government contractors resolve complex issues arising at all stages of the public procurement process. As lead counsel, he has successfully litigated disputes at the Armed Services Board of Contract Appeals, and he regularly assists contractors in preparing and pursuing contract claims. In his counseling practice, Mr. Wagner advises clients on best practices for managing a host of compliance obligations, including domestic sourcing requirements under the Buy American Act and Trade Agreements Act, safeguarding and reporting requirements under cybersecurity regulations, and pricing obligations under the GSA Schedules program. And he routinely assists contractors in navigating issues and disputes that arise during negotiations over teaming agreements and subcontracts.

Photo of Stephanie Barna Stephanie Barna

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior…

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior leader on Capitol Hill and in the U.S. Department of Defense (DoD). Most recently, she was General Counsel of the Senate Armed Services Committee, where she was responsible for the annual $740 billion National Defense Authorization Act (NDAA). Additionally, she managed the Senate confirmation of three- and four-star military officers and civilians nominated by the President for appointment to senior political positions in DoD and the Department of Energy’s national security nuclear enterprise, and was the Committee’s lead for investigations.

Previously, as a senior executive in the Office of the Army General Counsel, Stephanie served as a legal advisor to three Army Secretaries. In 2014, Secretary of Defense Chuck Hagel appointed her to be the Principal Deputy Assistant Secretary of Defense for Manpower and Reserve Affairs. In that role, she was a principal advisor to the Secretary of Defense on all matters relating to civilian and military personnel, reserve integration, military community and family policy, and Total Force manpower and resources. Stephanie was later appointed by Secretary of Defense Jim Mattis to perform the duties of the Under Secretary of Defense for Personnel and Readiness, responsible for programs and funding of more than $35 billion.

Stephanie was also previously the Deputy General Counsel for Operations and Personnel in the Office of the Army General Counsel. She led a team of senior lawyers in resolving the full spectrum of issues arising from Army wartime operations and the life cycle of Army military and civilian personnel. Stephanie was also a personal advisor to the Army Secretary on his institutional reorganization and business transformation initiatives and acted for the Secretary in investigating irregularities in fielding of the Multiple Launch Rocket System and classified contracts. She also played a key role in a number of high-profile personnel investigations, including the WikiLeaks breach. Prior to her appointment as Deputy, she was Associate Deputy General Counsel (Operations and Personnel) and Acting Deputy General Counsel.

Stephanie is a retired Colonel in the U.S. Army and served in the U.S. Army Judge Advocate General’s Corps as an Assistant to the General Counsel, Office of the Army General Counsel; Deputy Staff Judge Advocate, U.S. Army Special Forces Command (Airborne); Special Assistant to the Assistant Secretary of the Army (Manpower & Reserve Affairs); and General Law Attorney, Administrative Law Division.

Stephanie was selected by the National Academy of Public Administration for inclusion in its 2022 Class of Academy Fellows, in recognition of her years of public administration service and expertise.

Photo of Evan R. Sherwood Evan R. Sherwood

Evan Sherwood helps government contractors to resolve disputes with the federal government, prime and subcontractors, and contractor employees. He has helped clients to successfully navigate large federal contract claims, cost/pricing audits, contract terminations, and related litigation and investigations. He looks for constructive solutions…

Evan Sherwood helps government contractors to resolve disputes with the federal government, prime and subcontractors, and contractor employees. He has helped clients to successfully navigate large federal contract claims, cost/pricing audits, contract terminations, and related litigation and investigations. He looks for constructive solutions to disputes between contractors and their customers/business partners, so that companies can achieve their strategic goals.

Photo of Paul Rowley Paul Rowley

Paul Rowley is an associate in the firm’s Washington, DC office. As a member of the Government Contracts Practice Group, Paul advises clients on a broad range of matters, including mergers and acquisitions involving government contractors, regulatory requirements regarding small business, intellectual property…

Paul Rowley is an associate in the firm’s Washington, DC office. As a member of the Government Contracts Practice Group, Paul advises clients on a broad range of matters, including mergers and acquisitions involving government contractors, regulatory requirements regarding small business, intellectual property, and non-traditional contracting issues, government investigations, bid protests, and other litigation matters. In addition, he counsels clients on risk mitigation strategies, including the process of obtaining SAFETY Act protection.

Paul works with a wide range of clients, including:

  • Traditional defense contractors;
  • Small businesses with limited government contracting experience; and
  • Private equity firms operating in the government contracting industry.

Paul also maintains an active pro bono practice, focusing on estate planning for low-income residents of Washington, DC.