This past summer, in United States v. Booker, a North Carolina district court ruled against a challenge to the constitutionality of Congress’s delegation of authority to promulgate safe harbors to the Anti-Kickback Statute (AKS). In filing a motion for acquittal, Defendant Donald Booker argued the AKS “Safe Harbor Provision,” which grants the Secretary of Health and Human Services (HHS) the authority to exempt certain conduct from the “illegal remuneration” prohibitions of the AKS, violates the nondelegation doctrine. While Booker’s argument may appear paradoxical as, if successful, he would be prosecuted under the AKS without the protection of this safe harbor, the case raises an interesting example of a constitutional challenge to the AKS, which we may see more to come directly or with the FCA in the new year.
Booker’s Nondelegation Doctrine Argument
In May 2023, Booker filed a motion for acquittal after his conviction for conspiracy to defraud the United States, money laundering, and multiple violations of the AKS. Even though the safe harbors are defenses against potential violations of the AKS, Booker argued that the AKS Safe Harbor Provision violates the nondelegation doctrine. The nondelegation doctrine restricts Congress from transferring its legislative power to another government branch without setting forth an “intelligible principle” guiding the exercise of authority. Booker asserted that the AKS Safe Harbor Provision’s delegation of the ability to remove certain conduct from the scope of the statute’s offense to the Secretary of HHS is a delegation of legislative power and therefore a violation of the nondelegation doctrine. However, Booker’s argument would seemingly come at a steep price: if the Safe Harbor was ruled unconstitutional, due to the nondelegation doctrine, Booker would have lost his defenses (unless this led the court to invalidate the AKS entirely) and been subject to prosecution under the AKS without any Safe Harbor protections (which he did not successfully raise in his prosecution).
The District Court’s Rejection
The court disagreed with Booker’s reasoning and instead held that the Safe Harbor Provision is constitutional because Congress gave HHS a sufficiently intelligible principle. The statutory Safe Harbor provides HHS with nine factors to consider when creating exemptions to the AKS. These factors direct HHS to consider whether adding a safe harbor would achieve a public health goal such as improving quality of healthcare, increasing access to services, or reducing incentives for doctors to overutilize healthcare services. Because the nondelegation doctrine’s requirement of an “intelligible principle” is not an exacting standard, the district court stated that the Supreme Court has upheld far more general directives in the face of nondelegation challenges. Much of Booker’s arguments focused on the ninth factor that allows HHS to consider “any other factors the Secretary deems appropriate in the interest of preventing fraud and abuse.” In denying the defendant’s motion for acquittal, the district court held the catchall phrase, even standing alone, to be more stringent a directive than the Supreme Court has upheld in the past, and therefore not a violation of the nondelegation doctrine.
Booker marks the second recent case to make a nondelegation doctrine argument in an attempt to dismantle HHS authority to promulgate Safe Harbors, and the Ninth Circuit reached the same holding in United States v. Motamedi. In Motamedi, the Circuit Court’s concurrence goes further to suggest that even assuming the catchall phrase provides no ‘intelligible principle,’ the ninth factor is easily severable from the AKS. Given that the safe harbors are removing, not creating, criminal conduct from the scope of the AKS, the circuit court opined that it is unlikely that Congress would have chosen to discard the entire AKS if it could not also include the catchall provision establishing safe harbors.
Notwithstanding at least two opinions against this argument, more non-delegation doctrine-based arguments may expand into other challenges of government authority: Booker’s motion cited to the Supreme Court’s recent decision to grant cert in the case of Loper-Bright Enterprises v. Raimondo where the Court will consider whether the Chevron deference doctrine should be overruled or clarified. Further, we expect future defendants may continue to challenge delegation, hoping the Safe Harbor delegation would not be severable from the rest of the statute. It is possible, as well, such challenges may also focus on Justice Thomas’ recent FCA concurrence questioning whether the qui tam provisions are constitutional. Though it is unclear whether these doctrinal challenges to constitutional authority will persuade any courts, they present an interesting argument for law school professors and legal professionals alike, and hold open a possibility for criminal defendants prosecuted/convicted under the AKS.
The authors thank McGuireWoods summer associate Donald Kwasigroch for assistance preparing this legal alert. He is not licensed to practice law.