New Hope Emerges for Constitutional Challenges to Relator Suits

All companies receiving federal funds should be wary of the False Claims Act, which prohibits, among other things, submitting knowingly false claims for government payment. Violators face severe consequences: trebled damages and a penalty ranging from $13,946 to $28,619 for each false claim.

Yet the government doesn’t initiate most FCA suits. Relators, private litigants purporting to stand in the shoes of the federal government, employ the statute’s qui tam mechanism to launch the vast majority of actions—almost two-thirds of all FCA suits from 2014 to 2024.

Once a relator files, the federal government may intervene or decline to intervene. Even if the government declines, relators can proceed with their actions. Defendants facing declined FCA qui tams should note the option to leverage an old tool with new potential: the dubious constitutionality of the relator’s role.

Past as Prologue

The first wave of constitutional challenges to FCA qui tams culminated in 1999 in Riley v. St. Luke’s Episcopal Hospital. There, the Fifth Circuit questioned whether the qui tam provisions violate Article II’s Take Care Clause and the separation of powers doctrine.

To answer that question, the court considered “the extent to which the provisions reduce the Executive’s control of litigation on the government’s behalf.” The court observed that the “provisions permit a private citizen to sue on behalf of the government, even though the Attorney General . . . has decided not to pursue the claim.”

Further, the court explained, by affording relators certain powers in litigating FCA actions, the qui tam “provisions significantly limit the government’s ability to control the litigation”—and the government has no “power to remove the relator from the litigation under any circumstances.”

So allowing qui tam actions to proceed when the government doesn’t intervene would “impermissibly undermine the President’s exercise of his constitutionally assigned duties and thereby violate the separation of powers doctrine,” the court said.

Having thus decided the issue via the Take Care Clause and the separation of powers doctrine, the court declined to reach the defendants’ other constitutional argument—that a qui tam relator is an “officer of the United States” who “has not been appointed in conformity with Article II’s Appointments Clause.” The decision was short-lived. En banc, the Fifth Circuit reversed, finding that though the Take Care Clause “states that the Executive must ‘take Care that the Laws be faithfully executed,’ it does not require Congress to prescribe litigation by the Executive as the exclusive means of enforcing federal law.”

Besides, “the Executive retains significant control over litigation pursued under the FCA by a qui tam relator.” For example, the government may settle the case over the relator’s objections (where certain conditions are satisfied). In short, the court concluded, any intrusion by the qui tam relator in the Executive’s Article II power is comparatively modest.

As for the Appointments Clause, the Fifth Circuit observed that the Supreme Court “established that the constitutional definition of an ‘officer’ encompasses, at a minimum, a continuing and formalized relationship of employment with the United States Government.”

No such relationship exists with qui tam relators, the court found, “and they therefore are not subject to either the benefits or the requirements associated with officers of the United States.”

Revitalized Potential

After the Riley reversal, the debate over the constitutionality of the relator’s role largely lay dormant. Then came Justice Clarence Thomas’s 2023 dissent in US ex rel. Polansky v. Executive Health Resources. The same arguments animating Riley more than 20 years earlier undergirded the dissent.

Executive power, Justice Thomas wrote, “belongs to the President alone.” Conducting civil litigation to vindicate the US’ public rights is an “executive function that may be discharged only by persons who are ‘Officers of the United States’ under the Appointments Clause.”

“It thus appears to follow that Congress cannot authorize a private relator to wield executive authority to represent the United States’ interest in civil litigation,” Justice Thomas wrote.

Significantly, Justice Brett Kavanaugh, joined by Justice Amy Coney Barrett, wrote a concurrence noting the “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.” Justice Kavanaugh went so far as to urge that the Supreme Court “consider the competing arguments on the Article II issue in an appropriate case.”

Less than two years later, Justice Kavanaugh penned another concurrence, joined by Justice Thomas, to urge the high court again to address the constitutional issue.

Justices Barrett, Kavanaugh, and Thomas aren’t the only influential jurists doubting the constitutionality of qui tams. Fifth Circuit Judge Stuart Kyle Duncan’s concurrence this past March in U.S. ex rel. Montcrief v. Peripheral Vascular Associates echoed Justice Thomas’s contentions.

The Take Care Clause affords the President an “exclusive prerogative,” Judge Duncan wrote, noting that the Constitution prohibits Congress from outsourcing prosecutorial power to private citizens. Meanwhile, the Appointments Clause empowers the President to appoint “officers”—and relators qualify as officers. Yet the President doesn’t appoint them.

In a separate qui tam, another Fifth Circuit Judge, James Ho, authored a concurrence that expressly joined Judge Duncan’s discussion in Montcrief and referred back to the Riley saga. Judge Ho expressed concern that qui tam relators “are neither appointed by, nor accountable to, the President.”

Pending Challenges

In the wake of Justice Thomas’s 2023 dissent, more than 10 pending FCA suits feature constitutional challenges to the qui tam mechanism. In one, the US District Court for the Middle District of Florida has determined that the qui tam provisions violate the Appointments Clause. That decision has been appealed to the Eleventh Circuit.

The Justice Department has vigorously defended the constitutionality of qui tams. In an amicus brief filed with the Third Circuit earlier this year, the Justice Department contended that “relators possess none of the indicia of officeholders within the meaning of the Appointments Clause.”

And as to the Take Care Clause issue, the Justice Department quoted the Fifth Circuit’s second Riley opinion for the idea that Article II “‘does not require Congress to prescribe litigation by the Executive as the exclusive means of’ protecting the government’s interests.”

Raising constitutional challenges to the relator’s role is nothing novel. Yet with three receptive Supreme Court justices, among other influential jurists, that old maneuver may have new potency.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Joseph LoCascio is a senior managing associate at Sidley Austin who focuses on large, complex False Claims Act suits and investigations, especially involving healthcare and life sciences companies and with a particular emphasis on the Anti-Kickback Statute.

Jaime Jones is a member of Sidley Austin’s executive committee and global co-leader of the firm’s healthcare practice.

Jennifer Saulino is a partner at Sidley Austin and global co-leader of the firm’s product liability practice.

Scott Stein of Sidley Austin contributed to this article.

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