A US Court of Appeals for the Third Circuit panel heard oral argument on March 18, 2026 in an appeal of a 2025 District of New Jersey decision upholding a jury verdict in favor of qui tam relators, presenting an opportunity for the Circuit to weigh in on the closely watched question of whether the qui tam provisions of the False Claims Act are unconstitutional under Article II’s Appointments, Vesting, and Take Care Clauses. The Third Circuit’s potential resolution of the question is much anticipated, as is the Eleventh Circuit’s forthcoming decision on the same question.
In the underlying decision in United States ex rel. Penelow, the US District Court for the District of New Jersey gave short shrift to the Article II question, declining to follow what it referred to as the “singular non-precedential and out-of-circuit court decision” underlying the current US Court of Appeals for the Eleventh Circuit appeal, United States ex rel. Zafirov. [1] Instead, the District Court purported to follow “every federal circuit court of appeals that has addressed this issue,” referring to five decisions now over two decades old. [2] The District Court did not acknowledge the recent comments by three US Supreme Court justices that the qui tam provisions raise “substantial” Article II questions, which reignited this constitutional question. [3]
In the appellate briefing, the defendant thoroughly analyzed these substantial questions, while the relators devoted only approximately one page to...
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