On July 28th, 2025, the U.S. District Court for the Southern District of Ohio has stayed a False Claims Act (FCA) lawsuit while awaiting resolution of the constitutional challenge to the FCA in United States of America et al. v. TriHealth Inc. et al. Although the court rejected the defendant’s claim that the FCA violates Articles II and III of the Constitution, it certified the order for interlocutory appeal, noting that the case presents a legal question “to which there is substantial ground for difference of opinion.” The order was issued by Judge Douglas Russell Cole, a 2019 Trump appointee.
The case stems from two qui tam suits filed by whistleblowers Thomas Murphy and Dr. Set Shahbabian. The qui tam provision of the False Claims Act is one of the strongest anti-corruption laws in the United States. It allows private individuals to file lawsuits against other private individuals or organizations on behalf of the federal government. The whistleblowers claim TriHealth (a partnership between TriHealth, Inc., Bethesda Hospital, Inc., and Good Samaritan Hospital of Cincinnati, Ohio) received compensation for issuing referrals, a form of fraud covered by the False Claims Act.
In response to the two suits, TriHealth asserted that the FCA’s qui tam provisions violate the Constitution’s Article II Appointments and Take Care Clauses, and that the whistleblowers lack standing under Article III.
Under Article III of the Constitution, a party must satisfy three elements to have standing to sue: an injury in fact, causation, and redressability.
Despite TriHealth’s claims, the court ruled that Article III does not apply to the qui tam provisions of the FCA. While Murphy and Shahbabian did not personally suffer any injuries, a relator may bring a qui tam action through “partial assignment of the Government’s damages,” or on the government’s behalf.
In Vermont Agency of Natural Resources v. United States ex rel. Stevens, as referenced by Judge Cole, the Supreme Court upheld relators’ standing under the FCA, stating “the assignee of a claim has standing to assert the injury in fact suffered by the assignor.” In this case, Murphy and Shahbabian act as assignees for the United States government, the assignor.
TriHealth also turned to Article II, arguing that Murphy violated both the Appointments Clause and the Take Care Clause. Under the Constitution, the Appointments Clause “requires that either the President, a department head, or the courts” appoint an “officer.” TriHealth claims, however, that whistleblowers are “improperly appointed officers because they essentially appoint themselves.”
Furthermore, the Take Care Clause requires that the President “shall take Care that the Laws be faithfully executed.” The Defendants again claimed that the qui tam provisions of the FCA interfere with the President’s execution of the laws by granting relators the power “to enforce the law without sufficient executive oversight.”
Judge Cole denied the Defendant’s motion to dismiss the case under Article II, writing that “long-settled Sixth Circuit precedent dooms [the argument].” The court ruled that the FCA does not violate either clause of Article II. Referencing United States ex rel. Taxpayers Against Fraud v. Gen. Elec. Co., the court held that a relator is not an officer, and thereby the Appointments Clause does not pertain to the case. The court also held that the qui tam provisions do not violate the Take Care Clause because “the Executive Branch retains ‘sufficient control’ over the relator’s conduct” to ensure the President can perform their duty. Under Stevens and Taxpayers, the FCA’s constitutionality is unquestionable.
Ultimately, the District Court denied TriHealth’s claims, thereby asserting the False Claims Act’s constitutionality. The Court did, however, certify the order for interlocutory appeal to the Sixth Circuit Court, since the question of the FCA’s constitutionality was polemic enough to require the opinion of a higher court.
An interlocutory appeal is a legal decision wherein the court orders a non-final decision on the grounds that the case hinges on “a controlling question of law” with “substantial ground for difference of opinion,” such that an appeal may “advance the ultimate termination of the litigation.” Sufficing these requirements, the court permitted TriHealth to appeal to the Sixth Circuit.
Recent discourse demonstrates the unfounded interrogation of FCA’s constitutional standing. According to an article by Sarah Cummings Stewart and Selina Coleman published in ReedSmith, TriHealth marks the “third federal court of appeals” to examine the constitutionality of the qui tam provisions.
Whistleblowers are critical in exposing fraud against the government. The qui tam provisions are the sole mechanism for an individual or private organization to come forward and fight corruption. If these provisions are struck down as unconstitutional, that tool disappears—leaving fraudsters unchecked. Without whistleblower oversight, billions in taxpayer dollars could be lost, as those who exploit the system thrive when no one is watching.
It is only a “matter of time,” Stewart and Coleman warn, “before a challenge to the constitutionality of the False Claims Act results in a petition to the Supreme Court.”
