Skip to main content

Challenge to False Claims Act Qui Tam Provisions Fails in an Initial Attempt to Revive Long-Dormant Arguments as to Constitutionality Under Article II

This July, we detailed the Supreme Court’s surprising revival in United States ex rel. Polansky v. Exec. Health Resources, No. 21-1052 (S. Ct. June 16, 2023) of the question of whether the qui tam provisions of the False Claims Act (FCA), see 31 U.S.C. § 3730(b)(1), violate the Executive Branch’s exclusive grant of authority under Article II of the United States Constitution. In Polansky, a lengthy dissent by Justice Thomas questioned whether the FCA qui tam provisions violated the Appointments Clause and Take Care Clause of Article II of the United States Constitution, arguments that had been endorsed by the Department of Justice (DOJ) in 1989, though ultimately repudiated by DOJ just seven years later. A concurrence by Justice Kavanagh, joined by Justice Barrett, stated that “the Court should consider the competing arguments on the Article II issue in an appropriate case.” Shortly after Polansky was decided, a defendant in a declined qui tam case pending in the United States District Court for the Northern District of Alabama accepted Justice Kavanagh’s invitation, and moved to dismiss on Article II grounds. In a decision entered in November, the District Court rejected that challenge.

In United States ex rel. Wallace v. Exactech Inc., No. 7:18-cv-01010-LSC, (N.D. Ala. Nov. 20, 2023), Defendant Exactech brought a motion to dismiss and for judgment on the pleadings in a qui tam suit alleging that Exactech submitted false claims to Medicare and Medicaid. The government declined to intervene, and the whistleblowers elected to pursue the case on their own, as permitted under the FCA. Exactech argued that allowing private litigants to pursue government claims was unconstitutional. Its core argument was that the District Court lacked subject matter jurisdiction because the FCA qui tam provisions violate the Appointments Clause and Take Care Clause of Article II of the United States Constitution.

Exactech first contended that the FCA violates the Appointments Clause, which vests executive power exclusively in the President and the Executive Branch. The District Court rejected this argument, reasoning that qui tam relators are not officers under the Appointments Clause because their authorization to litigate under the FCA is not permanent. Rather, relators’ positions are “temporary and exist only for the duration of a particular lawsuit; by no means can that constitute a permanent position.” Additionally, the District Court noted that the FCA restricts relators’ powers during the course of the litigation, reserving the government’s rights to intervene, monitor and limit discovery, and settle the action without the relators’ consent.

Exactech additionally argued that the FCA violates the Take Care Clause, which directs the President to “take Care that the Laws be faithfully executed.” Exactech relied on the Supreme Court’s decision in Morrison v. Olson, 487 U.S. 654 (1988), which affirmed the constitutionality of the Ethics and Government Act. That statute authorized the appointment of an independent counsel, who could federally prosecute high-ranking government officials, subject to certain limitations, absent from the FCA, which Exactech asserted needed to be present for the FCA to be constitutional. The District Court distinguished the FCA from the Ethics and Government Act, noting that relators, unlike special prosecutors, are civil litigants with limited power. The District Court reasoned that relators “do not possess the criminal investigatory or prosecutorial powers of the independent counsel in Morrison.” The Court concluded that the FCA allows the executive branch to maintain sufficient control of relators to satisfy Article II, and that any failure to exercise that power does not invalidate the statute under the Take Care Clause.

The District Court also pointed to the long-standing history of qui tam lawsuits in the United States to support the FCA’s constitutionality. The Court explained that “[a]lthough the popularity of such statutes has ebbed and flowed, their presence has remained consistent.” Additionally, for the reasons explained above, the Court rejected Defendant’s argument that relators lack Article III standing because the FCA violates Article II, noting that the Supreme Court had previously expressly held that relators do indeed have Article III standing. See Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 778 (2000).

This is only one of the first Article II challenges to be raised and decided in the wake of Polansky. As the District Court’s decision demonstrates, because the theory advanced by Exactech is not new, but in fact was extensively litigated over twenty years ago, there is ample existing authority for rejecting an Article II challenge to the FCA qui tam provisions. It would be unsurprising to see most such challenges fail at the district court level. That said, it only takes one district court judge in a circuit where the issue remains undecided to establish a contrary precedent. And even if that does not happen, the recent appetite at the Supreme Court to revisit and overturn long settled precedent means that there is a reasonable likelihood that a persistent defendant willing to exhaust all appeals on this issue could find a congenial reception on this issue at the high court. Notably, only one justice in addition to Justices Thomas, Kavanagh, and Barrett would be necessary to grant certiorari on this question. We can expect to see this defense continue to be raised and litigated until it is addressed authoritatively by the Supreme Court.

Subscribe To Viewpoints


Kevin M. McGinty

Member / Co-chair, Class Action Practice

Kevin is a member of the firm's Health Care Enforcement Defense Group and has significant experience representing health care–related entities in a variety of litigation matters, including contract, regulatory, False Claims Act and class action lawsuits. Kevin's health care industry clients have included pharmacies, PBMs, hospitals, clinical laboratories, diagnostic imaging providers, pharmaceutical companies and managed care organizations.

Keshav Ahuja


Keshav Ahuja is an attorney at Mintz who focuses his practice on complex commercial litigation, securities litigation, class actions, and other litigation matters.