Supreme Court is set to rule on states’ immunity
Supreme Court is set to rule on states’ immunity
The Supreme Court last month heard two constitutional challenges to the False Claims Act. But some Court watchers predict that the more far reaching challenge, which would prohibit qui tam relators from pursuing cases where the federal government decides not to intervene, is not likely to be ruled on.
According to one observer, that constitutional issue, which was not part of the case itself, was heard largely at the insistence of one Supreme Court Justice, Antonin Scalia. That makes it likely the Court will rule instead on whether states have immunity under the 11th Amendment from FCA suits brought by qui tam relators.
Health care attorney William Saraille of Washington, DC-based Arent Fox agrees. For hospitals and other providers in an academic practice plan or affiliated with a state hospital, that is good news, argues Saraille. But he predicts the Supreme Court will not go to the statutory issue and determine whether or not the False Claims Act is inappropriate because the plaintiffs have no individual standing to bring those cases. "That would be the much wider holding and basically put whistle blowers out of business under the False Claims Act," he asserts.
Instead, he predicts the Supreme Court will rule on the case essentially as a state defendant issue. "That would be a narrower holding in terms of its effect on the False Claims Act," he says. "But I think they are going to rule on the state defendant issue only."
According to Saraille, if the Court were to come up with a holding on the issue of the whistle blower standing, there are two ways events could unfold.
"They could say that the action is forfeited in all cases, even when subsequently the government intervenes," he says. "Or they could say that ultimately the standing issue should be deferred until the government makes an intervention decision at some subsequent date." He says either of those are a possibility.
Even the narrower ruling could have a significant effect, he adds. As large as the government’s resources are, he says there are lots of cases that the government has some interest in and maybe even thinks have some merit, but chooses not to intervene because of its relative lack of resources.
"I think there would be a not insignificant number of cases that would not be able to be brought even under the narrower of those two potential holdings," concludes Seraille. "There will be more pressure on the government to intervene in more cases and even given the increasing pace of these whistle blower cases, I think it would be hard for the government to ratchet up in a very significant way given its current funding levels."
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