A judge’s gavel rests on a law book.

Michael Hiltzik, tribune news service

Since 1986, whistleblowers have been at the forefront of the government’s war on fraud, accounting for $53 billion, or more than 70%, of the $75 billion recovered from fraudsters in defense, Medicare and defense contracts. from other federal programs. There’s no debate about what’s driving this record: It’s a 1986 federal law that gives whistleblowers up to 30% of the recovery. For the federal government, this is a bargain. Without the law, the government may never find out about most of the $75 billion in fraud that was discovered. That makes the law “one of the government’s primary anti-fraud tools,” says James King, spokesman for the Anti-Fraud Coalition, a Washington watchdog group.

So perhaps it’s not surprising that a Trump-appointed judge in Florida just ruled a key provision of the law unconstitutional. The provision refers to so-called qui tam actions, in which private litigants file lawsuits on behalf of the government and themselves. (The Latin term came to us through old English law). The ruling came from federal Judge Kathryn Kimball Mizelle, whom Trump appointed to the bench in 2020 despite being labeled “unqualified” by the American Bar Association due to her “lack of competence.” of significant trial experience.” However, he did have an excellent right-wing legal pedigree, including serving as a law clerk to Supreme Court Justice Clarence Thomas. Mizelle is one of a group of regional trial judges appointed by the Republicans who have taken it upon themselves to repeal established laws and government programs, declaring them illegal or unconstitutional.

They include Trump appointee Matthew Kaczmaryk of Amarillo, Texas, who has attempted to remove the abortion drug mifepristone from the market (though initially unsuccessful, he is getting a second chance to fix the problem) and Reed O’Connor of Fort Worth, a George W. Bush Appointee who attempted to declare the entire Affordable Care Act unconstitutional, only to be struck down by the Supreme Court. Together they form a cabal armed with life terms and capable of imposing reactionary policies on the American people long after Trump himself has left the stage. The current qui tam case, in which physician Clarissa Zafirov accused her employers and related companies of falsifying and inflating diagnostic codes to increase her Medicare reimbursements, is not Mizelle’s first detour in the game of overturning government rules and regulations. . In 2022, he overturned the Biden administration’s pandemic-era mandate that travelers on planes and public transportation wear masks, even though the Supreme Court had upheld the rule three times.

A few words on the history of whistleblowing provisions. The qui tam rules are part of the False Claims Act, a Civil War-era law that was enacted in response to reports of widespread looting by suppliers of military goods and ammunition to the War Department. From its inception, the FCA was enforced through a “public-private scheme,” as Supreme Court Justice Elena Kagan wrote in a 2023 decision upholding the law. However, the qui tam concept is older than that. It dates back to the first Congress, which enacted numerous qui tam laws signed by President George Washington. One of the first heydays of the concept came with the Slave Trade Act of 1794, which provided for the payment of a reward to private citizens who sued slave traders found violating a law prohibiting the modification of vessels to transport slaves. slaves.

Payments came from seizures of slave ships and fines to their owners, and the profits were split 50-50 between the government and the litigants. The latter did not have to prove that they had suffered any harm from the activities of slaveholders, making the 18th century rules “virtually a viv viva for the qui tam provisions of the FCA,” as the government stated in a brief in the Zafirov. case. Abolitionists made good use of the provision to harass slave traders. In 1986, Congress amended the False Claims Act to encourage whistleblowers (or “relators,” as they are known in the law). The amendment increased the share of recoveries that fall to relators and established a procedure for qui tam claims. Here’s how it works: Complainants must file their initial complaints under seal, notifying the government, but not the recipients, of their case. The government then has 60 days to decide whether to intervene in the case.

If he intervenes, he takes charge of managing the process even if the rapporteur remains a party; the latter can receive between 15% and 25% of any recovery. If denied, complainants can pursue lawsuits on their own, bearing the cost of investigating their charges but being eligible to receive 25% to 30% more of any recovery. Either way, the government keeps the balance of the recovered funds. The government refuses to intervene in most qui tam cases. It’s “purely a resource issue,” King told me: The feds simply don’t have the money or manpower to investigate every case of fraud in their programs, so they rely on whistleblowers to pursue charges.

The 1986 amendment was primarily intended to deter defense-related fraud; Until 2000, King says, more than 85% of whistleblower cases involved military procurement. But since then, about 80% of cases involve allegations against Medicare and Medicaid providers. A good example was the pharmaceutical company Biogen, which paid $900 million to the federal and state governments in 2022 to settle a qui tam lawsuit in which a former employee alleged that the company had paid kickbacks to doctors to encourage them to prescribe. your multiple sclerosis medications. . (The company did not admit guilt in the agreement.) The government declined to intervene in the lawsuit, but praised the relator for having “diligently pursued this matter on behalf of the United States” for a decade. The whistleblower collected about $250,000, or about 30% of the federal government’s portion of the settlement. This brings us back to the starting point of the Zafirov case. The doctor filed her lawsuit in 2019. The government refused to intervene. So for the next five years, Zafirov pursued him, until Mizelle abandoned him on September 30.

Mizelle claimed that Zafirov was essentially acting as a government official in bringing and pursuing the case. After all, Mizelle wrote, the doctor “has determined which defendants to sue, what theories to raise, what motions to file, and what evidence to obtain.” But because Zafirov had not been appointed by the president, her role violated the “appointments clause” of Article II of the Constitution. A few things about this argument. First, it closely follows the most notable published objection to the qui tam system. That came from Judge Thomas, Mizelle’s mentor. He stated in a 2023 opinion that “there is good reason to suspect that Article II does not permit private relators to represent United States interests in FCA lawsuits.” In that case, Thomas was the lone dissenter in an 8-1 decision. He did not outright claim that the qui tam provision is unconstitutional, only suggesting that it would be a ripe topic for some other lawsuit.

Still, corporate lawyers representing companies likely to face qui tam lawsuits were heartened by his expression of doubt, as well as comments by Justices Brett Kavanaugh and Amy Coney Barrett, in concurring opinions in the same case, that they would be open to considering the issue “in the appropriate case”. That creates a possible three-judge anti-qui tam bloc, which is a start.