## Facts

- General Electric Aircraft Engines sold aircraft engines, equipment, and services to Israel’s Ministry of Defense under a foreign military financing program funded by the United States.
- Taxpayers Against Fraud (a nonprofit) and Chester L. Walsh filed a qui tam action under the False Claims Act (FCA) alleging GE submitted false or fraudulent claims to the United States connected to the program.
- The United States intervened and assumed primary responsibility for litigating the action.
- The case settled, with GE paying more than $75 million to the United States, including $59.5 million characterized as civil damages; the relator organization received an agreed share of the civil recovery.
- The relators sought attorneys’ fees and costs from GE under the FCA; the district court awarded more than $2.5 million in fees.
- GE appealed, challenging the constitutionality of the FCA’s qui tam provisions and several aspects of the fee litigation, including reliance on deposition material taken in camera that GE could not review.

## Issues

1. Whether the FCA’s qui tam provisions violate Article II by transferring executive enforcement authority to private relators.
2. Whether it was error to deny GE access to portions of an in camera deposition that the district court relied on in setting the fee award.
3. Whether the district court abused its discretion in awarding more than $2.5 million in attorneys’ fees, including the reasonableness of hours, rates, and contested components of the award.

## Decision

- The court held the FCA’s qui tam provisions are constitutional under Article II because the statute preserves substantial executive control over the litigation.
- The court reversed the district court’s refusal to provide GE access to deposition portions used to support the fee award and remanded for proceedings consistent with that ruling.
- The court largely affirmed the fee award methodology but directed reductions or reconsideration of specific components found improper under governing fee standards.
- Disposition: affirmed in part, reversed in part, and remanded.

## Legal Principles

- Qui tam enforcement under the FCA does not violate Article II where the Executive Branch retains substantial supervisory authority, including powers to intervene, seek dismissal, control settlement, and limit or manage the relator’s participation.
- For fee-shifting awards, a party against whom fees are assessed must ordinarily have a fair opportunity to examine and contest evidence the court relies upon; reliance on undisclosed in camera evidence relevant to the award is generally improper.
- Attorneys’ fees under the FCA are reviewed for abuse of discretion; the lodestar method (reasonable hours × reasonable rate) is the standard baseline, and only reasonable, necessary work may be compensated.
- Enhancements or contested additions to a lodestar-based award require careful justification; appellate courts may affirm the core award while requiring reductions of unsupported components.

## Conclusion

The Sixth Circuit upheld the FCA’s qui tam scheme against an Article II challenge because the government retains meaningful control, but required disclosure of relied-on in camera deposition material and remanded to correct discovery unfairness and to reduce specified portions of an otherwise largely affirmed attorneys’ fee award.


United States ex rel. Taxpayers Against Fraud v. Gen. Elec. Co., 41 F.3d 1032 (6th Cir. 1994)