For decades, the False Claims Act (FCA) has been one of the government’s most potent weapons against fraud, driven largely by “qui tam” provisions that allow private whistleblowers (relators) to sue on the government’s behalf. However, a series of recent legal challenges as to the constitutionality of “qui tam” actions has brought these provisions into question.
With the U.S. Court of Appeals for the Eleventh Circuit now reviewing these critical questions, the landscape of healthcare and government contracting litigation may be on the verge of a seismic shift.
The Catalyst: Zafirov v. Florida Medical Associates
In late 2024, U.S. District Judge Kathryn Kimball Mizelle issued a landmark ruling in Zafirov v. Florida Medical Associates LLC. For the first time, a federal court held that the FCA’s qui tam provisions are unconstitutional.
Judge Mizelle’s reasoning focused on the Appointments Clause of Article II:
- Self-Appointment: She argued that because relators exercise “significant authority” under U.S. law—such as deciding whom to sue and which legal theories to pursue—they are acting as “officers of the United States”.
- Lack of Oversight: Under the Constitution, such officers must be appointed by the President or a department head. Because relators essentially “appoint themselves” to these roles, Judge Mizelle ruled the practice unconstitutional, and therefore invalid.
A Growing Judicial Divide
While Zafirov is the most prominent ruling, it is not the only one. Other courts and judges have begun to weigh in, creating a complex legal map for defendants and whistleblowers alike:
| Case/Court | Status/Perspective |
|---|---|
| Ninth Circuit (Kelly v. Boeing) | Previously held that relators are not officers because they lack “primary responsibility” for enforcement. |
| Fifth & Sixth Circuits | Multiple circuit judges have recently penned concurrences questioning the constitutionality of the qui tam model, signaling a willingness to revisit the issue. |
| Supreme Court | Justice Kavanaugh and Justice Thomas have both indicated that the Court should eventually address these “substantial constitutional questions”. |
What This Means for FCA Litigation
If the Eleventh Circuit upholds the Zafirov ruling, or if the Supreme Court eventually strikes down the qui tam provisions, the impact would be profound:
Shift in Enforcement: The Department of Justice (DOJ) would become solely responsible for initiating and pursuing FCA cases. No more private whistleblowers.
Decreased Case Volume: Historically, qui tam filings outnumber government-initiated cases by at least 2-to-1. Without private relators, the total number of fraud investigations could drop significantly.
Resource Reallocation: Conversely, the government might devote significantly more resources to internal enforcement to make up for the loss of whistleblower leads. However, under current governmental trends, this seems unlikely and there is potential simply for more fraud to persist.
What's Next for FCA Litigation After Zafirov Decision
The DOJ continues to defend the constitutionality of the FCA, noting that the program recovered over \$2.4 billion in fiscal year 2024 alone. However, with oral arguments scheduled and a petition for certiorari to the Supreme Court seen as “inevitable,” the legal community is bracing for a definitive answer.
For businesses and healthcare providers, this means the era of “ordinary” FCA litigation may be coming to an end. For now, industries and litigators alike will just have to wait and see if the FCA will stand as is, change, or be completely invalidated. Depending on the outcome, whistleblower actions will change drastically for all parties involved.