A January Department of Justice memorandum directs prosecutors to more seriously consider dismissing certain qui tam actions brought pursuant to the False Claims Act. While the memorandum's practical effect on pending and future qui tam actions remains to be seen, its substance provides some interesting and timely insights into a heretofore unresolved constitutional question: whether the FCA's qui tam provisions run afoul of the Constitution's Article II Take Care Clause.
Pursuant to the False Claims Act, private whistleblowers may initiate civil actions and collect a portion of any judgment issued against entities found to have submitted false claims to the U.S. government. The Justice Department retains certain rights under the statute for these actions, including the ability to intervene and proceed with relator-initiated cases, as well as the right to move to dismiss an action.
These dismissal rights were the subject of the recently leaked "Granston memo," which offers guidance to federal attorneys regarding when to seek dismissal under 31 U.S.C. [section] 3730(c)(2)(A). Describing the problems that could arise if relators were permitted to pursue certain claims, the memo lays out seven factors federal attorneys should consider as grounds for moving to dismiss qui tam actions, and expressly admonishes them to consider doing so in appropriate cases.
On their face, these factors suggest that one of the memo's primary goals was to curb scenarios where qui tam litigation threatens the department's ability to effectively control enforcement of the False Claims Act.
These issues have constitutional implications. In Vermont Agency of Natural Resources v. Stevens, the Supreme Court expressly reserved the question of whether the FCA's qui tam provisions violate the Take Care Clause. Recent litigation has revisited the otherwise dormant question, with the Granston memo providing important insights into how the current state of qui tam bears on the constitutionality issue.
The question turns on whether the qui tam scheme has diverted a constitutionally impermissible quantum of control from the executive to relators. In Morrison v. Olson, the Supreme Court held that in order to avoid a violation of the Take Care Clause, a statute divesting the executive of prosecutorial discretion must "give the executive branch sufficient control... to ensure that the president is able to perform his constitutionally assigned duties." In the context of a...