What's Happening?
The U.S. Court of Appeals for the Sixth Circuit has reaffirmed the constitutionality of the False Claims Act's (FCA) qui tam provision, which allows private individuals to file lawsuits on behalf of the U.S. government. This decision came after the court
denied two petitions for interlocutory appeal in cases involving Ohio-based healthcare providers, including TriHealth, Inc. The defendants in these cases argued that the qui tam provision violated the Appointments Clause and the Take Care Clause of Article II of the U.S. Constitution. However, the Sixth Circuit maintained that existing precedent, specifically the 1994 decision in United States ex rel. Taxpayers Against Fraud v. General Electric Co., supports the constitutionality of the provision. This ruling highlights a growing divide among federal courts regarding the FCA's enforcement framework.
Why It's Important?
The Sixth Circuit's decision is significant as it maintains the status quo for FCA enforcement within its jurisdiction, which includes Kentucky, Michigan, Ohio, and Tennessee. This ruling allows whistleblowers to continue pursuing claims against entities accused of defrauding the government, thereby supporting the government's efforts to combat fraud. However, the decision also underscores a broader legal debate, as similar constitutional challenges are gaining traction in other circuits, notably the Eleventh Circuit. A potential circuit split could lead to a Supreme Court review, which would have far-reaching implications for the FCA's enforcement and the role of private individuals in federal litigation.
What's Next?
The legal landscape surrounding the FCA's qui tam provision is likely to evolve as the Eleventh Circuit considers a similar constitutional challenge in United States ex rel. Zafirov v. Florida Medical Associates, LLC. Should the Eleventh Circuit rule against the provision, it would create a circuit split, increasing the likelihood of the Supreme Court addressing the issue. This could lead to significant changes in how FCA cases are prosecuted and the role of private whistleblowers in these cases. Stakeholders, particularly in the healthcare sector, should monitor these developments closely as they could impact compliance and litigation strategies.
