Last fall, U.S. District Court Judge Kathryn Mizelle of the Middle District of Florida ruled that the False Claims Act's (FCA) qui tam provision is unconstitutional in United States ex rel Zafirov v. Florida Medical Associates, LLC, et al. This provision permits "relators" i.e., whistleblowers, to bring FCA cases on behalf of the federal government against private parties.
Zafirov held that the FCA's qui tam provision violated the "Appointments Clause" of Article II of the Constitution, which requires certain "officers" of the United States to be appointed by the President and confirmed by the Senate, although Congress "may vest the appointment of such inferior officers . . . in the President alone, in the Courts of Law, or in the Heads of Departments." Zafirov found that by prosecuting a qui tam on behalf of the United States, the relator impermissibly functioned as a self-appointed officer of the United States, who exercised the Executive Branch's "core powers."
Zafirov is currently on appeal to the U.S. Court of Appeals for the Eleventh Circuit. The briefs and numerous amicus briefs for and against the FCA's qui tam provision have been filed, and the Eleventh Circuit will soon set it for oral argument. In determining whether the FCA's qui tam provision is constitutional, the early history of qui tams and their historical significance has become a central question.
Though the FCA's qui tam provision was enacted during the Civil War and revised substantially in 1986, qui tam statutes that permitted an informer to bring a claim on behalf of a state or the federal government have a long history, dating back long before the Republic. Qui tams were among the first statutes passed by the first Congresses. The most notable qui tam statute was the federal Slave Trade Act of 1794. It imposed stiff penalties on slave ship owners and operators, including forfeiture of the vessel, and provided that one half of the recovery for this qui tam went to the United States and the other to informer.
As a result of this history, the question arises in Zafirov: how does the Founding Fathers' and early Congresses' acceptance of qui tam statutes impact how Article II's Appointments and "Take care that the laws be faithfully executed" (Take Care) clauses were understood then and are to be interpreted today? Those supporting the constitutionality of the FCA's qui tam provision and those opposing it clash over whether and how the early history of qui tams may be used to determine whether it complies with Article II's Appointments and Take Care clauses.
The U.S. Supreme Court previously highlighted the importance of history in evaluating the constitutionality of the FCA's qui tam provision in Vermont Agency of Natural Resources v. Stevens, 529 U.S. 765 (2000). Even though relators bringing qui tams do not suffer a statutory injury or have a private right of action to vindicate an injury to them, the Supreme Court found that relators nevertheless have standing to bring a qui tam suit on behalf of the federal government because the qui tam statute essentially assigns a portion of the government's claim for damages to the qui tam relator.
In deciding Stevens¸ the Supreme Court found the history of qui tams to be crucial: "Qui tam actions appear to have been as prevalent in America as in England, at least in the period immediately before and after the framing of the Constitution. . . . Moreover, immediately after the framing, the First Congress enacted a considerable number of informer statutes. . . .We think this history well nigh conclusive with respect to the question before us here: whether qui tam actions were 'cases and controversies of the sort traditionally amenable to, and resolved by, the judicial process.'" Stevens, however, did not address whether Appointments and Take Care clauses violated Article II.
Despite Stevens and its reliance on history, the District Court in Zafirov found that the relator's historical evidence about founding era qui tam statutes and practice was insufficient to overcome what it labeled as the Supreme Court's "well settled Article II jurisprudence" precluding FCA qui tams. Citing an article by originalist constitutional scholar William Baude and employing his methods, the District Court found that the history and use of qui tam statutes did not "liquidate" or reflect a "constitutional settlement reconciling the qui tam device with Article II."
With Zafirov now before the Eleventh Circuit, the battle over the history of qui tams and its constitutional significance is being contested with even more detail than in the District Court, primarily through the 14 amicus briefs filed.
For example, several legal historians have submitted amicus disputing the District Court's historical rendering about qui tams and their constitutionality under Article II. One key amicus in favor of the constitutionality of qui tams stands out. The "legal history scholars" James Pfander, Diego Zambrano, and Jared Lucky submitted an amicus in part "to correct the district court's misstatement of the historical record and mischaracterization of their work." "[Q]ui tam litigation," they observed, "was ubiquitous in the Founding Era," and there was "nothing unusual about that mode of enforcement" including among the states. "Every state in the union enacted qui tam legislation in the 25 years following the Constitutional Convention," and the Constitution's "[f]ramers carried their familiarity with qui tam from colonial and state assemblies into the federal government."
In fact, "Congress," they found, "deployed informer actions to implement nearly every one of its constitutionally enumerated powers . . ." "Far from a medieval relic or a legislative curiosity," they concluded that the historical evidence showed that "qui tam was a foundational tool of governance which remained in heavy use after the Constitution was ratified." Overall, they observed that the "vitality of qui tam as a regulatory tool in the founding era, the extensive debates it occasioned, make clear that conventional qui tam enforcement is compatible with Article II as originally understood."
In contrast, an amicus submitted by the Washington Legal Foundation (WLF) argues that "there is nothing consistently or relevantly similar to the FCA in history." Without any settled course of historical practice," the WLF claims, the historical arguments favoring the constitutionality of the FCA qui tam statute "simply do not hang together." Applying Professor Baude's test to determine whether a constitutional interpretation or application has been "liquidated" or settled, the WLF argues that "no course of deliberate practice or evidence [shows] that [qui tams'] constitutionality was seriously considered" in the founding era.
According to the WLF, the historical record does not reflect any serious consideration or debate among the Founders or the first Congress about the constitutionality of qui tam statutes such that their constitutionality was "settled." Without "evidence that constitutionality of these statutes was ever seriously considered in our nascent republic," the WLF contends that there are no historical lessons about the constitutionality of qui tams to be drawn from such history.
Moreover, the WLF asserts that FCA's qui tam provision is not a proper historical analogy because it differed substantially from qui tam statutes in the founding era. Founding-era qui tams, the WLF argues, were considered to be a form of private property and a dispute about discrete property rights, even the property rights of the government. The WLF cites the example of a early qui tam statute whereby an informer had the right to collect on the forfeiture of a bond posted by a public official. In contrast, the FCA's qui tam provision, says the WLF, does not "concern alienable property" such as forfeiting an existing bond, but constitutes "a bare right to sue for damages sounding in fraud" and to recover statutory penalties.
The Eleventh Circuit's decision will address whether the FCA qui tam statute is a historically recognized constitutional device for the Executive Branch to extend its enforcement efforts or an unconstitutional usurpation of the Executive Branch's responsibility to appoint officers and "take care" that laws will be faithfully executed. Regardless of the outcome, an appeal to the Supreme Court is anticipated, whether the historical and constitutional arguments will be further scrutinized.
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