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.
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...
An appellate court has shut the door on reviewing the constitutionality of the qui tam provisions of the False Claims Act (FCA), although two other appellate courts are reviewing this issue, with ...