Standing to sue under the Federal False Claim Act: the Supreme Court declines to take the whistle away from whistleblowers.

• Author: Nolan, Kenneth J.

Unless you haven't been paying attention, then you have heard and read about qui tam actions. Technically, what lawyers and scholars are talking and writing about is the qui tam provision of the Federal False Claim Act.[1] To review, the qui tam provisions of the Federal False Claim Act permit any citizen who has knowledge of a fraud against the government to initiate a civil action in federal district court in the name of the United States against the perpetrators of the fraud.[2] Numerous articles have discussed the specific requirements and parameters of a qui tam action.[3] Despite the intricate and puzzling terms and requirements of the Federal False Claim Act, since the 1986 amendments to the act qui tam lawsuits have been remarkably successful. According to the Department of Justice, recoveries for the government in qui tam actions amount to almost $3 billion, since 1986.[4] The growth of qui tam lawsuits has been explosive. In 1987, 33 qui tam lawsuits were filed under the Federal False Claims Act, while in 1998, 471 qui tam lawsuits were filed.[5] In 1987, $200,000 was returned to the U.S. Treasury due ,to qui tam lawsuits, and in 1998, $331 million was recovered.[6] These kinds of statistics are revealing for two reasons. First, despite all of the political rhetoric and posturing, fraud upon the government does not seem to be going away soon. Second, absent qui tam lawsuits, a significant amount of fraud upon the government would remain unremedied.

Considering the obvious effectiveness of qui tam lawsuits, why would the Supreme Court of the United States, on its own initiative, jump in and question the constitutionality of qui tam lawsuits? This is exactly what the Supreme Court has done in the case of State of Vermont Agency of Natural Resources v. United States ex rel. Stevens, 162 F.3d 195 (5th Cir. 1998). The issue accepted by the Supreme Court for certiorari review in this case was whether a state can be sued for a violation of the Federal False Claim Act. Additionally, the Supreme Court has now become concerned with the question of whether a private citizen plaintiff, or relator under the act, has standing to sue in federal court under the qui tam provisions of the act.[7] This is a critical question.

Since the original version of the Federal False Claim Act was enacted in 1863 to curb fraud upon the government during the Civil War, the standing of private citizens to bring qui tam lawsuits has not been questioned by the Supreme Court.[8] No doubt the plaintiff-friendly 1986 amendments to the act increased the use of the act. In addition, perhaps the Fifth Circuit Court of Appeals decision in Riley v. St. Lukes Episcopal Hospital et al., 196 F.3d 561 (5th Cir. 1999), "red flagged" this issue for the Supreme Court. The Riley court ruled that the relator, absent government intervention, did have standing to sue under Article III of the United States Constitution.[9] However, the court went on to hold that a relator-only qui tam lawsuit was unconstitutional in that such a prosecution violated the separation of powers doctrine and the Take-Care Clause in Article II section 3 of the United...