The Motivation to Vacate
Often the parties in a hotly contested case want to settle, but the removal of a negative opinion affecting one side or the other is even more important than the money involved. This can be true for defendants who want to remove a bad precedent on a merits or a plaintiff/relator who wants to remove a decision containing a criticism of the Relator or a bad decision on something which could bar future cases, like a public disclosure bar or a seal breach.
The answer to the question of whether an issued opinion can be vacated upon request of the parties is that although the Court has discretion to vacate a previously issued decision, this discretion is rarely exercised. If exercised, it is limited to very few circumstances, and vacation of opinions is frowned upon by numerous appellate courts (e.g. the 7th, 10th, 2nd, and District of Columbia Circuits), as well as most district courts who have considered the issue.
The Court Has the Discretion to Vacate, But it Can Only be Exercised in Exceptional Circumstances
In In re Aden, 2013 WL 4513838, at *1 (D. Idaho Aug. 23, 2013) the Court stated: “A court may vacate an earlier decision if the parties settle, but it is not required to do so.”. Of course, that does not mean that courts should vacate previously-issued opinions; indeed, “mootness by reason of settlement does not justify vacatur ‘absent exceptional circumstances.” Amaefule v. Exxonmobil Oil Corp., 630 F. Supp. 2d 42, 43 (D.D.C. 2009) (quoting U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18, 26 (1994)).
The Factors a Court Must Consider in Deciding Whether or Not to Vacate Upon the Parties’ Request
While courts recognize the importance of settlement agreements, the clear weight of authority counsels against vacatur of a previously-issued opinion to facilitate a settlement agreement. Courts consider a variety of factors, including (1) the adverse effect on the public interest if a court agrees to a vacate a decision to facilitate an agreement between private parties and (2) whether the decision that the parties seek to vacate addresses significant or novel legal issues. Moreover, courts have rejected an argument that vacatur is appropriate simply to facilitate a settlement agreement, i.e. that the important interests promoted by a settlement agreement necessarily outweigh the adverse effects of vacating a decision. Overall, the weight of authority has found that vacatur of a previously-issued decision is inappropriate.
In False Claims Act Cases, the Public Interest in the Government Not Paying for False or Fraudulent Claims is Always Present, and the Government Must Approve the Settlement
In Fed. Ins. Co. v. Hanover Ins. Co., 2013 WL 6403189 (N.D. Tex. Nov. 27, 2013), a district court explained that “[i]n connection with the parties’ settlement of this lawsuit, they have filed a . . . motion to withdraw opinion, in which they request that the court withdraw its . . . memorandum opinion and order.” The court agreed with the request: “Although the court is not obligated to withdraw an opinion, it has done so to facilitate settlement and where matters of public interest were not involved.” Id. at *1 (emphasis added).
Where there is a qui tam case, the public interest is always involved because such cases are concerned with public funds and the improper payment of same due to fraud of some type. False Claims Act cases implicate matters of public interest even more than a case with private litigants. Thus withdrawal of an opinion of the court could almost never be appropriate. Another reason vacation of an opinion is particularly improper and unlikely in a qui tam case is because ultimately the case, whether the government has intervened or not, belongs to the government, and any settlement requires the government’s approval. It is highly unlikely that the government would consent to a settlement which would contain a term agreeing that a court should withdraw its opinion.
PART II: TO COME……
Part II will describe in more detail the factors applied by the Court in deciding whether to exercise its discretion to vacate an already released decision. Part II will set forth the key cases and their reasoning not to allow vacatur of a court’s opinion in order to facilitate a settlement.