TAMPA, FL – In light of the upcoming election November 5, 2024, Michael Hiltzik, L.A. Times columnist and Pulitzer Prize-winning journalist, highlighted a recent action in the courts that could spell the end of the “qui tam system,” or the long-standing famous whistleblower laws that have protected American democracy since Washington’s time.
“A successful attack on qui tam lawsuits would mean the end of efforts that brought $53 billion in recoveries over recent decades,” Hiltzik argued, citing the Government Accountability Office. Despite federal efforts, recovered funds don’t compare to the $233 to $531 billion dollars the government still loses to fraud annually.
Hiltzik provided readers a “few words about the history of the whistleblower provisions,” stating qui tam rules were part of the False Claims Act (FCA), a Civil War-era law that was enacted in response to reports of wholesale plundering by suppliers of military goods and ammo to the War Department.”
But, according to L.A. Times, a Trump-appointed judge in Florida has just “declared a key provision of the law unconstitutional,” which concerns private litigants bringing “lawsuits on behalf of the government as well as themselves.”
District Judge Kathryn Kimball Mizelle’s decision argues historical precedence does not matter in the face of the Constitution, that “standing alone, historical patterns cannot justify contemporary violations of constitutional guarantees,” according to the ruling.
The judge asserted Clarissa Zafirov, the accused, was “essentially acting as a government officer in bringing and pursuing the case,” thus violating the “appointments clause” of Article II of the Constitution because she wasn’t appointed by the president.
Yet, Hiltzik, and many other judges and analysts, have pointed out the qui tam concept dates back to the first Congress, which “enacted numerous qui tam laws signed by President Washington” and was an “early heyday for the concept (that) came with the 1794 Slave Trade Act.”
Judge Mizelle, according to Hiltzik, was named to the bench by Trump in 2020 despite the American Bar Association deeming her “not qualified” due to her “lack of meaningful trial experience.”
However, Judge Mizelle served as law clerk for Supreme Court Justice Clarence Thomas, who was also known for questioning whistleblower laws. According to Hiltzik, she boasted a “sterling right-wing pedigree.”
Supreme Court Justice Thomas has also asserted in a 2023 opinion in U.S., ex rel. Polansky v. Executive Health Resources, that “there is good reason to suspect that Article II does not permit private relators (legal term for whistleblowers) to represent the United States’ interests in FCA suits.” He was the sole dissenter in an 8-1 decision in 2023.
“Big business have been trying to eviscerate anti-fraud laws for more than a century,” Hiltzik warned. “They may finally be in with a chance (since Mizelle’s recent ruling).”
The current qui tam case that Judge Mizelle threw out Sept. 30, after being pursued for five years, centered around physician Clarissa Zafirov, who accused her “employers and related companies of faking and inflating diagnostic codes to increase their Medicare reimbursements.”
Judge Mizelle’s ruling wasn’t the “first rodeo in the game of overturning government rules and regulations,” Hiltzik wrote. In 2022, the judge also struck down the Biden administration’s “pandemic-era mandate that travelers on planes and public transportation wear masks,” despite the Supreme Court upholding this rule three times.
Judge Mizelle was one of the “Republican-appointed regional trial judges who have taken it upon themselves to upend settled government laws and programs by declaring them illegal or unconstitutional,” the article stated.
However, the problem with Mizelle’s ruling was that “no other judge has ever found qui tam provisions to be unconstitutional” and that “even corporate defense lawyers are wary” and treat the ruling as an “outlier,” according to the column, noting Justice Thomas’ comments were all merely dissents.
“At this point, Zafirov is a district court decision without precedential value,” wrote two corporate lawyers in an analysis from The Government Contractor, adding, “Several other district courts have recently denied similar challenges to the FCA’s qui tam provisions in the wake of Justice Thomas’ Polansky dissent.”
“It will likely be appealed to the Eleventh Circuit in short order, and that court will weigh in,” the lawyers said.
Mizelle’s and Thomas’ objections to the qui tam lawsuits are not new to the “numerous federal judges at the trial and appellate level,” Hiltzik wrote, adding they’ve “rejected them every time – even after Thomas advanced the constitutionality issue.”
District Judge Donald M. Middlebrooks, cited by Hiltzik and The Government Contractor, weighed in a counterargument against Mizelle’s ruling that the violation of Article II does not even make sense considering that relators and private individuals are not “in an employment-like relationship with the United States” with “no permanent or continuing duties” to consider them government officers subjected to the clause.
In 1986, Congress even amended the FCA to encourage whistleblowers by increasing the relators’ share of recoveries and “set forth a procedure for qui tam lawsuits.”
It served to aim at “deterring defense-related fraud” and saw 85 percent of whistleblower cases involving military procurement through 2000, according to James King, a spokesman for the Anti-Fraud Coalition, a Washington watchdog group.
Since the 2000s, King said about 80 percent of cases involve accusations against providers to Medicare and Medicaid, which brings back a full circle to the current qui tam lawsuit of Clarissa Zafirov.
The 1986 amendment especially is “one of the government’s top fraud-fighting tools,” King stated.
“Without the qui tam, the federal government often would never find out about the fraud at all,” Leonardo Cuello, an expert on Medicaid at Georgetown University, wrote after Mizelle’s ruling.
Cuello added, “Ultimately, individuals or companies engaged in fraud (and the lawyers that defend them) will know they can knock out any claim brought alone by a whistleblower. It’s like the robbers finding out that all the cops are on vacation.”
“Conservatives have tried to sap the authority of Presidents and federal agencies to do their work, and conservative judges have helped them to do so,” Hiltzik argued. “When they haven’t been able to defeat government actions at the congressional level, they’ve tried to do so by challenging the authority of executive branch agencies.”
Conservatives have even challenged the “constitutionality of the Consumer Financial Protection Bureau and the National Labor Relations Board,” Hiltzik wrote in dismay, noting the latter was challenged by infamous public figure Elon Musk.
Cuello concluded in a personal interview with Hiltzik. “This fits into the broader category of defanging government so the government can’t do the things we need and want it to do.”
