Labor & Employment Law Daily Wrap Up, SUPREME COURT NEWS—Eli Lilly challenges constitutionality of FCA qui tam provisions in Supreme Court petition, (Apr 1, 2026)

By Sheila Lynch-Afryl, J.D., M.A.

According to Eli Lilly, the qui tam “structure—unaccountable and uncontrollable private prosecutors pursuing their own ends in the name of the United States—is fundamentally incompatible with our Constitution.”

Eli Lilly filed a Supreme Court petition challenging the constitutionality of the False Claims Act’s (FCA) qui tam provisions. The company, seeking to overturn the Seventh Circuit’s decision affirming a $183 million jury verdict, argued that the relator is “a private bounty hunter who is not appointed by, removable by, or accountable to the President in any way, and who is (by Congress’s design) motivated far more by personal profit than by any desire for regulatory clarity.” While three Supreme Court justices have recently questioned the constitutionality of the qui tam device, the petition faces an uphill battle, as the Seventh Circuit did not rule on this issue and noted in its order denying rehearing en banc that Eli Lilly “forfeited if not waived its constitutional argument” (U.S. ex rel. Streck v. Eli Lilly & Co., No. 25-1126 (U.S. March 23, 2026)).

For decades, courts consistently rejected arguments that the qui tam statute violates the Appointments Clause (U.S. Const. art. II, § 2). However, the tide started shifting in June 2023 with Justice Thomas’s dissent in U.S. ex rel. Polansky v. Executive Health Resources, Inc., which argued, “There are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation.” Justice Kavanaugh, joined by Justice Barrett, made similar points in a concurring opinion.

In September 2024, Justice Thomas’s former clerk, relying on his dissenting opinion, ruled in U.S. ex rel. Zafirov v. Florida Medical Associates LLC that the qui tam statute violates the Appointments Clause. The Zafirov case (Nos. 24-13581, 24-13583) is currently pending before the Eleventh Circuit, which heard oral arguments in December. This issue is also pending before the Third Circuit in U.S. ex rel. Penelow v. Janssen Products LP (No. 25-1818), which heard oral arguments March 18, and two Fifth Circuit judges called precedent into question in recent concurring opinions. On January 9 the Sixth Circuit denied motions for interlocutory appeal on this issue, citing controlling circuit precedent.

Eli Lilly’s petition also challenged the Seventh Circuit’s approach to the issue of “objective unreasonableness” under the FCA. The relator’s response to the petition is due April 27.

The case is No. 25-1126.

Companies: Eli Lilly and Co.

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