91pornPartner Gordon Schnell Quoted in Bloomberg and Law360 On Zafirov Appeal of False Claims Act Constitutionality
By the 91pornWhistleblower Team
Last Friday, the Eleventh Circuit Court of Appeals held argument on the Constitutionality of the whistleblower (or qui tam) provisions of the False Claims Act.听 These are the provisions of the Civil War era statute that authorizes private parties to bring lawsuits on behalf of the Government against those that defraud the Government.听 Over the past few decades, the Government has recovered roughly $80 billion under the statute, with whistleblowers originating about 70% of the cases.
What Is the Current Constitutional Challenge to the False Claims Act?
Despite the overwhelming success of the statute and the critical role whistleblowers have played in enforcing it, there has been a recent corporate push to cut whistleblowers out of the equation by arguing the qui tam provisions are unconstitutional.听 It follows the invitation by Justice Clarence Thomas in his 2023 dissenting opinion in United States ex rel. Polansky v. Executive Health Resources Inc.[1] (with a nod of accord by Justices Brett Kavanaugh and Amy Coney Barrett) where he raised concerns about whether whistleblowers have proper Article II authority to bring these suits in the name of the Government.
Since then, scores of False Claims Act defendants have taken up Justice Thomas鈥� invitation and moved to dismiss the cases against them based on Justice Thomas鈥� Article II concerns.听 District court after district court have uniformly rejected these challenges, pointing to the long history of this whistleblower statute, the decisions of the numerous courts that have addressed the question, and the ultimate control the Department of Justice (DOJ) maintains over these actions.
What Was the Question Before the Eleventh Circuit?
Except for one.听 The only court to embrace Justice Thomas鈥� Constitutionality concerns is that of Judge Kathryn Kimball Mizelle of the Middle District of Florida who (perhaps not surprisingly) is a former law clerk to Justice Thomas.听 Last year, in United States ex. rel. Zafirov v. Florida Medical Associates LLC,[2] she dismissed a qui tam case finding the statute鈥檚 appointment of whistleblowers to sue on behalf of the Government unconstitutional under Article II.听 The appeal of this dismissal is what was argued before the Eleventh Circuit last Friday.
Which Way is the Eleventh Circuit Leaning?
The three-judge panel, led by Judge Robert Luck, asked hard-hitting questions to the lawyers on both sides of the argument with no clear indication of where they were leaning.听 Attorneys listening in on the argument were fairly uniform in their view that the judges (which also included Judges Elizabeth Branch and Federico Moreno) seemed to go out of their way to appear they were not taking sides.
91pornwhistleblower partner Gordon Schnell was quoted in Bloomberg and Law360 for his views on how the argument went and where he expected the decision to go.
Here is the relevant language in the Bloomberg piece[3]:
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- Gordon Schnell, who represents FCA whistleblowers with 91porn, said he sensed the panel was leaning toward finding the qui tam provisions Constitutional, 鈥渨ith the statute鈥檚 long history playing a big part.鈥� But the judges were struggling to reconcile with Thomas鈥� concerns expressed in Polansky, he said.听 One path to a reversal based on Judge Luck鈥檚 statements, Schnell said, is finding that whistleblowers don鈥檛 occupy a continuing position but instead 鈥減lay a role that begins and ends鈥� with a particular case.
And here is the relevant language in the Law360 piece[4]:
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- Gordon Schnell, a partner at 91pornwho specializes in representing whistleblowers, said Judge Luck’s questions “seemed to take special pains to find a path to support Constitutionality without outright rejecting Thomas’ views.” The panel’s questioning on the whole was balanced with “no clear indication” of how the judges will rule, he said.听 “My sense is they were leaning towards finding the qui tam provisions Constitutional (thus reversing the district court decision) – with the statute’s long history playing a big part – but were struggling a bit to reach that decision in a way that could be reconciled with Thomas’ concerns expressed in Polansky,” the 2023 case.
What Happens Next With the Constitutionality Question?
It remains to be seen where the panel will land.听 Whether it affirms or reverses Judge Mizelle鈥檚 dismissal, that decision likely will be put to the entire Eleventh Circuit panel of judges for en banc review.听 If the ultimate ruling is an affirmance, there will be a split among several circuit courts on the Constitutionality question and the Supreme Court likely will take it up (especially given the expressed interest of Justices Thomas, Kavanaugh, and Coney Barrett).
If the 11th Circuit rejects the Constitutional challenge and reverses Judge Mizelle, there will be uniformity among the circuit courts with no reason for the Supreme Court to weigh in.听 However, other circuits — especially the Third, Fifth, and Sixth Circuits — may soon be addressing the question as similar Constitutional challenges are heading towards appeal.听 So, many believe that either way, it seems likely it will reach the Supreme Court.
Schnell is not so sure.听 鈥淚t鈥檚 certainly possible a circuit split will arise,鈥� he says.听 On the other hand he notes, 鈥済iven the statute鈥檚 long history and success and the strong line of district and circuit court precedent supporting Constitutionality, it is possible that Judge Mizelle鈥檚 decision could be a one and done result.鈥�
Schnell also points to the strong bi-partisan and DOJ backing of the whistleblower provisions.听 In fact, DOJ took lead at last Friday鈥檚 hearing in arguing the Constitutionality of the provisions.听 鈥淕iven this ultimately comes down to whether whistleblowers improperly usurp Executive authority,鈥� Schnell stresses, 鈥渉aving the Executive Branch vigorously argue whistleblowers remain firmly under their control and direction has to carry a great deal of force.鈥�
If you would like to learn more about these issues, the False Claims Act, or what it means to be a False Claims Act whistleblower more broadly, please do not hesitate to contact us.听 We will connect you with an experienced member of our whistleblower team for a free and confidential consultation.
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Sources:
[1] 听See .
[2] 听See .
[3] 听See .
[4]听 See .
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