District Court finds qui tam statute (the patent one) unconstitutional on Take Care Clause grounds

by Ben Vernia | March 17th, 2011

On February 23, District Judge Dan Aaron Polster in the Northern District of Ohio granted a defendant’s motion to dismiss in a patent false marking qui tam case, brought under 25 U.S.C. ยง 292(b), after concluding that the statute violated the Take Care Clause of the Constitution.

The relator in the case alleged that the defendant violated the false marking statute by stamping its products and including in its advertisements an expired patent number. The patent law incorporates the following brief qui tam provision:

(b) Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

Judge Polster reviewed the long history of qui tam actions in the United States, and noted that the Supreme Court, in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000), had expressly declined to address the False Claims Act’s qui tam provision’s constitutionality. He then observed that in Morrison v. Olsen, 487 U.S. 654 (1988), the Court had upheld the independent counsel statute at issue there under the Appointments Clause; although the Court in Morrison had not addressed the Take Care Clause, it had identified four relevant factors to support its conclusion that the independent counsel statute did not violate separation of powers.

Judge Polster noted that other courts had upheld qui tam statutes – including the Sixth Circuit, which applied Morrison to the False Claims Act; the Fifth Circuit , which, in upholding the FCA’s relator provision had distinguished Morrison on the grounds that the FCA is civil, and not criminal; and the Eastern District of VIrginia, which had upheld the patent qui tam provision on the basis of the Fifth Circuit’s FCA decision.

Judge Polster noted, however, that the Federal Circuit, hearing an appeal on other issues in the EDVA case, stated that the patent provision is criminal and not civil in nature. On that basis, he concluded that he was bound by the Court’s framework in Morrison.
Applying that framework, Judge Polster concluded that, notwithstanding the government’s ability to intervene in patent marking qui tam suits, it lacked sufficient controls necessary for the provision to pass constitutional muster. He emphasized the “practical policy reasons” for vesting federal law enforcement decisions in the hands of the President, and warned of the “danger of this uncontrolled privatization of law enforcement”.

After Judge Polster rendered his decision, the Department of Justice moved to intervene in the case, for reconsideration of the decision, and for affirming the constitutionality of the law. On March 14, he approved the government’s intervention, vacated his prior order but then reached the same conclusion, striking down the qui tam provision once again.

Leave a Reply

Recent Posts

Recent Comments

Archives

Categories

Meta