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False Claims Act litigation can expose businesses to significant risk. A successful FCA claim can result in treble damages, statutory penalties, attorneys’ fees, and years of costly litigation. As a result, defendants often focus not only on the merits of the allegations but also on procedural defenses that can narrow or eliminate exposure at an early stage.
A recent Tennessee Court of Appeals decision illustrates why that approach matters. In State of Tennessee ex rel. Stephen Eimers v. Lindsay Corporation, No. M2025-01457-COA-R9-CV (Tenn. Ct. App. Oct. 22, 2026), the Court addressed whether a relator could rely on a federal tolling statute, 28 U.S.C. § 1367(d), to revive Tennessee False Claims Act claims after voluntarily dismissing a federal qui tam action. Although the case arose from allegations involving highway guardrail systems, the opinion’s broader significance lies in its treatment of procedure, limitations periods, and litigation strategy. These issues frequently determine the outcome of FCA cases before a court ever reaches the merits of the alleged fraud.
Here are five important considerations for businesses and FCA practitioners.
1. False Claims Act Cases Often Turn on Procedure, Not the Underlying Allegations
Public attention typically focuses on the alleged fraud at the center of a False Claims Act case. But many FCA cases are decided on threshold issues long before a court determines whether a false claim was actually submitted.
The Eimers decision is a prime example. The Court never addressed whether the defendants committed fraud or violated the Tennessee False Claims Act. Instead, the dispute centered on procedural questions involving dismissal, supplemental jurisdiction, tolling, and the statute of limitations.
That procedural focus is not unusual. After all, FCA defendants routinely litigate issues involving:
Lesson 1: A company defending an FCA case should carefully evaluate all available procedural defenses and mechanisms because they can be just as important as rebutting the underlying factual allegations. And in many cases, they can determine the outcome.
2. The Language of a Dismissal Order Can Matter Years Later
One of the most interesting aspects of the opinion is the Court’s close examination of the federal dismissal order. The relator argued that the federal court effectively declined supplemental jurisdiction over the state-law claims. Had the Court done so, that would have supported tolling under 28 U.S.C. § 1367(d).
The Court of Appeals rejected that position. Rather than accepting the relator’s characterization of what occurred, the Court focused on the language the federal court actually used. The dismissal order referenced the relator’s notice of voluntary dismissal and the federal government’s consent to dismissal. It did not state that the federal court declined supplemental jurisdiction. That distinction ultimately drove the outcome.
Lesson 2: Procedural orders should never be viewed as mere administrative formalities. Seemingly routine language can later become the focal point of high-stakes litigation. This applies to all types of litigation, both federal and state.
3. Statutes of Limitations Remain a Powerful FCA Defense
The decision also serves as a reminder that limitations defenses play a critical role in False Claims Act litigation because modern FCA cases often involve conduct that is alleged to have occurred years before suit was filed. Relators therefore frequently contend that various tolling doctrines preserve their claims despite the passage of time. Defendants, in turn, often challenge those positions and argue that the claims are untimely.
Here, the Court concluded that the relator could not rely on § 1367(d) to preserve the Tennessee False Claims Act claims after voluntarily dismissing the federal action. As a result, the limitations defense prevailed.
Lesson 3: Even when a relator previously filed related federal claims, defendants should carefully analyze whether those proceedings actually tolled the applicable state-law limitations period.
4. Tennessee Joined a Broader National Debate Over Federal Tolling
The decision is noteworthy beyond Tennessee because it addresses an issue that has divided courts across the country—whether a voluntary dismissal triggers tolling under 28 U.S.C. § 1367(d).
In analyzing § 1367(d), the Court examined authority from multiple jurisdictions and considered competing interpretations of the federal tolling statute. Ultimately, the Court adopted a narrower reading of the law and concluded that the statute does not toll claims that are voluntarily dismissed.
The Court emphasized Congress’s distinction between claims that are merely “dismissed” and claims that are “voluntarily dismissed.” It also relied on the longstanding principle that a voluntary dismissal generally leaves the parties as though the action had never been filed.
Lesson 4: Because FCA litigation increasingly involves parallel federal and state claims, this issue is likely to arise with greater frequency. Consequently, this opinion provides useful authority that could be used in jurisdictions beyond Tennessee where similar tolling arguments arise.
5. FCA Litigation Requires Long-Term Strategic Thinking
Perhaps the most important lesson from the decision is that False Claims Act litigation rewards strategic planning. Choices regarding forum selection, claim structure, dismissal strategy, and coordination of state and federal claims can have consequences that do not become apparent until years later. What appears to be a routine procedural decision at one stage of a case may ultimately determine whether claims survive at all.
Lesson 5: Evaluate your FCA matter holistically from the outset. Businesses facing qui tam allegations should consider not only the substance of the allegations but also the procedural defenses that may significantly reduce litigation risk. Continue to evaluate the case holistically as it progresses to account for any changes in circumstances.
The Importance of Procedure
The headline from Eimers is not about guardrails or highway safety products. It is about procedure. The Tennessee Court of Appeals’ decision highlights a reality familiar to experienced FCA practitioners. Statutes of limitations, tolling doctrines, jurisdictional questions, and dismissal mechanics often shape the outcome of False Claims Act litigation as much as the underlying allegations themselves. For companies facing FCA investigations or defending qui tam actions, the case is a timely reminder that a strong defense begins with identifying procedural opportunities early. In the right case, those issues may determine the outcome before the parties ever reach the merits.
If you have questions about this decision or need assistance defending a False Claims Act claim, please contact a member of Chartwell’s litigation team. Our national platform lets us efficiently represent clients wherever FCA allegations arise, while drawing on attorneys with experience litigating these high-stakes matters.
