Dirt Diggers Digest - Whistleblowers file their case on behalf of the federal government, and then one of two things will happen. The Justice Department can decide to take over the prosecution of the case, and the whistleblower receives a portion of any damages or settlement paid by the defendant. If the DOJ declines to intervene, the whistleblower can choose to pursue the lawsuit independently. Any financial recovery is then shared with Uncle Sam.
Both of those options may be in jeopardy. In 2023 the Supreme Court ruled 8-1 that the DOJ could choose to dismiss a qui tam case even if it initially decided not to intervene in the matter. The dissenting vote was cast by Justice Clarence Thomas, who used his dissent to question the constitutionality of the entire qui tam system.
Now an appellate court judge is seeking to make that view a reality. Judge James Ho of the 5th Circuit Court of Appeals has issued a concurring opinion in a ruling that dismissed a qui tam case against Encompass Health Corp. for allegedly submitting false claims to Medicare.
Ho, appointed by Trump during his first term, urged his colleagues to revisit the constitutionality of qui tam by making the MAGA-style argument that whistleblowers should not be able to bring cases, given that they “are neither appointed by, not accountable to, the President.”
It is unclear whether Ho’s colleagues will go along with his suggestion, but it is troubling to think that other jurists will take up the call to abolish qui tam. Whistleblower lawsuits have played a major role in lawsuits exposing and punishing corporate fraud against the government and thus the public.
A substantial portion of the 3,000 False Claims Act cases we document in Violation Tracker were initiated by whistleblowers and taken over by the DOJ. When the DOJ declines to intervene, most qui tam cases collapse for lack of resources. Yet we document about two dozen that sur
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