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Is the qui tam provision of the False Claims Act unconstitutional?

The False Claims Act seeks to protect the federal fisc from fraud.  Under the Act, the government may sue alleged violators, but private persons (known as "relators") may sue as well under the Act's qui tam provision.  In these latter actions, relators sue "in the name of the Government."

This public-private enforcement mechanism has existed since the Act was enacted in 1863.  But does it pass constitutional muster?  Maybe not.

Just last term, three justices of the Supreme Court raised questions about the constitutionality of the qui tam provision.  (Only four votes are needed to grant cert.)  In United States ex rel. Polansky v. Executive Health Resources, Inc., Justice Thomas penned a dissent in which he observed that "[t]here are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation."  According to Justice Thomas, "[t]he entire 'executive Power' belongs to the President alone," which can be exercised only by "the President and those acting under him."  Justice Thomas continued:  Conducting civil litigation to vindicate public rights (as relators purport to do) is an "executive function" that "may be discharged only by persons who are [appointed] 'Officers of the United States'" under Article II.  And because relators have not been so appointed, Justice Thomas concluded, it would seem "to follow that Congress cannot authorize a private relator to wield executive authority to represent the United States' interests in civil litigation."

Justice Kavanaugh and Justice Barrett agreed with Justice Thomas, adding that "the Court should consider the competing arguments on the Article II issue in an appropriate case."

What might "an appropriate case" look like?  Two observations.  First, it would be one in which the constitutional issue is well briefed, well argued, and well developed.  For those who find themselves defending against such an action, it could be your case.  Second, it need not be a False Claims Act case.  Many federal and state laws mirror the Act's public-private enforcement mechanism, allowing private persons to act as private attorneys general.  A challenge to one of those laws could very well transform False Claims Act litigation as we know it.

Tags

regulatory & investigations, false claims act, managed care, lshi, life sciences