In a groundbreaking opinion issued on September 30, 2024, Judge Kathryn Kimball Mizelle of the U.S. District Court for the Middle District of Florida dismissed a False Claims Act (FCA) lawsuit, holding that the qui tam provision of the FCA violates the Appointments Clause of the U.S. Constitution.1 The decision could have significant implications for this widely used provision that has allowed whistleblowers to bring actions under the FCA.
Traditionally, the FCA has been enforced by the U.S. Department of Justice or by private whistleblowers—also known as qui tam relators—who are often company insiders and receive a share of the government’s recovery, which creates unique incentives for current and former employees and service providers to report perceived wrongdoing. Judge Mizelle’s ruling could upend this key FCA enforcement mechanism.
Quoting Seila Law LLC v. CFPB and other Supreme Court precedent, Judge Mizelle explained that under the Constitution, the executive power is vested in the president; central to that power is the exclusive authority and absolute discretion to determine whom to investigate and which charges to prosecute; and the power to seek daunting monetary penalties against private parties on behalf of the United States in federal court is a quintessentially executive power.2 Judge Mizelle further explained that to ensure accountability in the executive branch, the Appointments Clause of the Constitution requires “Officers of the United States” to be appointed by the president, and that anyone who exercises significant authority pursuant to the laws of the United States and who occupies a continuing position established by law qualifies as such an officer.3 In dismissing the case, Judge Mizelle concluded that a qui tam relator “exercises significant authority, indeed core executive power, under the continuing position of relator but lacks proper appointment under the Constitution.”4
Notably, Judge Mizelle relied on a recent dissent by Justice Clarence Thomas (for whom she clerked) in which he called into question whether the qui tam provision is constitutional.5 While Judge Mizelle’s ruling will likely be appealed, and other courts have taken a different view of the constitutionality of the qui tam provision (and will likely continue to do so in some cases under binding circuit precedent), Judge Mizelle’s ruling provides a vehicle to test the receptivity of the Supreme Court justices to taking up these issues—and the Court is where this issue may ultimately be headed.
Our team of experienced FCA litigators and counselors will continue to monitor the case and legal developments in this area.
