Constitutional Challenges to False Claims Act Qui Tam Provisions Gain New Momentum

Federal contractors and grant recipients face significant liability under the False Claims Act (FCA), which imposes severe penalties for submitting false claims for government payment. Violations can result in treble damages and penalties ranging from $13,946 to $28,619 per false claim.

What many companies may not realize is that the majority of these cases aren’t initiated by the government itself. Nearly two-thirds of all FCA actions filed between 2014 and 2024 were brought by private individuals known as “relators” through the law’s qui tam provisions, which allow them to sue on behalf of the federal government.

Even when the Department of Justice declines to intervene in these cases, relators can proceed independently. However, defendants now have renewed hope in an old defense strategy: challenging the constitutional legitimacy of relators’ authority to litigate on behalf of the United States.

The constitutional questions surrounding qui tam provisions have ebbed and flowed over decades, but recent Supreme Court comments have breathed new life into these challenges, potentially offering defendants a powerful tool in FCA litigation.

The earliest significant wave of constitutional challenges culminated in the 1999 Fifth Circuit case, Riley v. St. Luke’s Episcopal Hospital. Initially, a three-judge panel found the qui tam provisions violated Article II’s Take Care Clause and the separation of powers doctrine by allowing private citizens to sue on behalf of the government against the Attorney General’s judgment.

The panel noted that qui tam provisions “significantly limit the government’s ability to control the litigation” and the government lacks “power to remove the relator from the litigation under any circumstances.” This ruling was short-lived, however, as the full Fifth Circuit reversed the decision en banc.

The full court determined that while the Take Care Clause requires the Executive to ensure laws are “faithfully executed,” it doesn’t mandate that litigation by the Executive branch be the exclusive means of enforcing federal law. The court also emphasized that the Executive retains significant control over qui tam cases, including the ability to settle over relators’ objections under certain conditions.

The Fifth Circuit additionally rejected arguments that relators are “officers of the United States” subject to the Appointments Clause, concluding they lack the “continuing and formalized relationship of employment with the United States Government” required to be considered officers.

After this reversal, constitutional challenges to qui tam provisions largely faded from prominence—until Justice Clarence Thomas’s forceful dissent in the 2023 case US ex rel. Polansky v. Executive Health Resources.

Justice Thomas argued that executive power “belongs to the President alone” and that conducting civil litigation to vindicate the government’s rights is an “executive function that may be discharged only by persons who are ‘Officers of the United States’ under the Appointments Clause.” Therefore, he concluded, “Congress cannot authorize a private relator to wield executive authority to represent the United States’ interest in civil litigation.”

Significantly, Justice Brett Kavanaugh, joined by Justice Amy Coney Barrett, wrote a concurrence acknowledging the “substantial arguments that the qui tam device is inconsistent with Article II” and urged the Court to address this constitutional question in an appropriate case. Less than two years later, Justice Kavanaugh, again joined by Justice Thomas, repeated this call.

These Supreme Court justices aren’t alone in their constitutional doubts. Fifth Circuit Judges Stuart Kyle Duncan and James Ho have authored concurrences in recent cases expressing similar concerns. Judge Duncan argued that the Take Care Clause gives the President an “exclusive prerogative” that prohibits Congress from outsourcing prosecutorial power to private citizens, while Judge Ho worried that qui tam relators “are neither appointed by, nor accountable to, the President.”

In the wake of Justice Thomas’s 2023 dissent, more than ten pending FCA suits now feature constitutional challenges to the qui tam mechanism. A federal district court in Florida has already determined that qui tam provisions violate the Appointments Clause—a decision now being appealed to the Eleventh Circuit.

The Justice Department has vigorously defended the constitutionality of qui tam provisions in various court filings, arguing that “relators possess none of the indicia of officeholders within the meaning of the Appointments Clause” and that Article II does not make Executive litigation the exclusive means of protecting government interests.

While constitutional challenges to qui tam provisions aren’t new, the current legal landscape offers defendants a potentially more receptive audience for these arguments. With three Supreme Court justices and multiple influential appellate judges expressing skepticism about the constitutionality of qui tam provisions, this defense strategy carries renewed potency for companies facing FCA litigation.

The outcome of these constitutional challenges could fundamentally reshape the enforcement landscape for the False Claims Act, potentially eliminating a major source of FCA litigation that has proven costly for healthcare providers, defense contractors, and other federal contractors for decades.