Federal Court in Florida Dismisses False Claims Act Case, Challenges Whistleblower Programs

A federal court in Florida has dealt a blow to federal whistleblower programs by dismissing a False Claims Act (FCA) case against a medical practice, ruling that the qui tam provisions of the FCA are unconstitutional. U.S. District Court Judge Kathryn Kimball Mizelle, presiding over the Middle District of Florida, delivered the ruling, which marks another challenge to the widely used program aimed at exposing abuse in businesses contracting with the federal government. This includes medical practices handling Medicare and Medicaid patients, as well as suppliers to the Department of Defense.

The FCA’s qui tam provisions allow private individuals who witness violations to file lawsuits against wrongdoers on behalf of the government. If the Department of Justice decides to intervene, the whistleblower is entitled to a portion of any fines collected. In 2022, the program generated $2.2 billion for the federal government, although this figure was considered relatively low.

However, the program has faced opposition from the U.S. Chamber of Commerce and other large businesses, which argue that whistleblower provisions lead to unwarranted legal and reputational attacks. Conservative courts have occasionally sided with this view, as seen in this case, where the constitutionality of the qui tam provisions was brought into question.

Supreme Court Justice Clarence Thomas has previously expressed skepticism toward the program, stating in a dissenting opinion in a case between whistleblower Dr. Jesse Polansky and Executive Health Resources that only the executive branch should have the authority to litigate on behalf of the government. Mizelle, a former law clerk for Thomas, echoed this sentiment in her ruling on Monday, stating that the FCA’s whistleblower provisions allow “unaccountable, unsworn, private actors to exercise core executive power with substantial consequences to members of the public.”

Legal experts at Arnold & Porter, a firm that supports challenges to qui tam provisions, predicted in a blog post that the case would likely be appealed to the Supreme Court. However, Ari Yampolsky, a partner at Whistleblower Partners, which represents whistleblower clients, expressed doubt about this outcome. “More sensible appellate courts and the Supreme Court are likely to reject the challenge, as they have done before,” Yampolsky said.

He added, “Those who want to make it easier to defraud the government are celebrating because they have jeopardized a law that recovers billions of dollars stolen from taxpayers.”

The ruling marks a significant moment in the ongoing debate over the validity of whistleblower programs and their role in holding government contractors accountable.

By fLEXI tEAM