United States Ex Rel. Jane Doe 1 v. X, Inc.

MEMORANDUM OPINION

ELLIS, District Judge.

This False Claims Act case raises the question, unresolved in this circuit, of whether a qui tam action can proceed against a defendant in bankruptcy under the police powers exception to the automatic stay 1 when the United States has not yet decided whether to intervene pursuant to 31 U.S.C. § 3730(b)(4)(B).

I. 2

In June 1998, plaintiffs, as qui tam rela-tors for the United States, filed a lawsuit against defendants alleging, inter alia, violations of the False Claims Act, 31 U.S.C. § 3729. Over a year later, in July 1999, defendants filed for protection…