Today’s first blog mentioned the DOJ’s use of the False Claims Act to target tariff evasion. With its draconian penalties and the ability of private plaintiffs to assert qui tam claims on the government’s behalf, the False Claims Act has long been a formidable weapon in the DOJ’s arsenal. However, recent federal court decisions have called into question the constitutionality of the statute’s qui tam provisions.

Last year, in Zafirov v. Florida Medical Associates (MD. Fla. 10/24), Judge Kathryn Mizelle held that the FCA’s qui tam mechanism allowing violated the Appointments Clause because it allowed private plaintiffs to exercise executive power on behalf of the United States without being properly appointed. This recent Polsinelli memo says that a concurring opinion in a recent 5th Cir. decision endorsed Judge Mizelle’s conclusion:

Notably, in a concurring opinion, Judge James C. Ho. . . urged the court to revisit “serious constitutional problems” with the qui tam provisions. The Fifth Circuit previously affirmed the constitutionality of the FCA’s qui tam structure in Riley v. St. Luke’s Episcopal Hosp. Nonetheless, Judge Ho called on the Fifth Circuit to reconsider Riley. Judge Ho reiterated Judge Mizelle’s reasoning in Zafirov and emphasized that relators exercise executive authority on behalf of the U.S. without appointment or accountability to the President, raising separation-of-powers concerns under Article II.

Judge Ho’s opinion echoed Justice Thomas’s dissent and Justice Kavanaugh’s concurrence (joined by Justice Barrett) in United States ex rel. Polansky v. Executive Health Res., Inc., which questioned whether allowing private relators to litigate on behalf of the country is consistent with the Constitution’s separation of powers.

The memo notes that if these views continue to gain traction among federal courts, the implications for government contractors would be significant, because the vast majority of FCA recoveries arise from qui tam actions. That outcome would be music to the ears of the US Chamber of Commerce, which has filed amicus briefs challenging the constitutionality of qui tam actions under the US and state constitutions in several recent cases.

– John Jenkins