Sixth Circuit Rejects Interlocutory Appeal on False Claims Act Constitutionality

An appellate court has shut the door on reviewing the constitutionality of the qui tam provisions of the False Claims Act (FCA), although two other appellate courts are reviewing this issue, with one poised to rule soon.   

On January 9, 2026, a three-judge panel of the Sixth Circuit rejected two petitions for permission to file an interlocutory appeal, which would have asked the Sixth Circuit to decide whether the qui tam provisions of the FCA violate Article II of the United States Constitution. 

Had the Sixth Circuit accepted the interlocutory appeal, it would have been the third federal Court of Appeals –– joining the Eleventh and Third Circuits –– to take up the issue since a district court in Florida first held the qui tam provisions are unconstitutional in September 2024. 

We previewed the petitions for interlocutory appeal and the forthcoming decision from the Sixth Circuit in an earlier blog post.  Today, we discuss the Sixth Circuit’s reasoning for not taking up the interlocutory appeal and what lies ahead for FCA practitioners and health care companies. 

Underlying Litigation Paused for Review of FCA Constitutionality

These petitions for appeal relate to two separate actions against multiple defendants—one brought on behalf of the United States by a health system’s prior Chief Financial Officer and another filed nearly a year later by a neurosurgeon, who also sued the defendants for age discrimination. The consolidated case involves allegations that the defendants—including an integrated health care system and several hospitals and physician groups—engaged in an unlawful physician compensation scheme, violating the Stark Law, the Anti-Kickback Statute, and the FCA. 

The district court denied defendants’ motions to dismiss, including their challenge to the constitutionality of the FCA, ruling that a 1994 Sixth Circuit decision upholding the constitutionality of the qui tam provisions was controlling precedent. See U.S. ex rel. Taxpayers Against Fraud v. Gen. Elec. Co., 41 F3d 1032, 1041 (6th Cir. 1994) (holding that the qui tam provisions do not violate the Appointments Clause or the Take Care Clause). Nevertheless, the district court stayed further proceedings and certified the question of the FCA’s constitutionality for interlocutory appeal, citing the pending appeal in the Eleventh Circuit, U.S. ex rel. Zafirov v. Florida Med. Assocs., LLC, No. 24-13581 (11th Cir. filed Oct. 30, 2024), and recent dissenting and concurring opinions from several U.S. Supreme Court justices, concluding that the Taxpayers precedent notwithstanding,  reasonable jurists could disagree on the constitutionality issue. 

Sixth Circuit Rejects Appeal Certified by District Court in Light of Precedent

The Sixth Circuit rejected this appeal.  An interlocutory appeal certified by the district court may be heard by the Circuit Court if (1) the order involves a controlling question of law, (2) a substantial ground for difference of opinion exists regarding the correctness of the decision, and (3) an immediate appeal may materially advance the ultimate termination of the litigation.

In finding an interlocutory appeal inappropriate here, the Sixth Circuit reasoned that even if the first and third criteria are met, the court’s precedent leaves no substantial grounds for a difference of opinion on the constitutionality issue, as the Sixth Circuit rejected an Article II challenge to the qui tam provisions thirty years ago in Taxpayers.

In so ruling, the Sixth Circuit explained that substantial grounds for a difference of opinion exist when: (1) the issue is difficult, novel, and either a question on which there is little precedent or one whose correct resolution is not substantially guided by previous decisions; (2) the question is difficult and of first impression; (3) a difference of opinion exists within the circuit itself; or (4) there is a circuit split on a question that the Sixth Circuit  has not answered. The panel concluded that because published panel opinions are binding on later panels and a published opinion is overruled only by the court en banc, there are no substantial grounds for a difference of opinion on the constitutionality of the FCA in the Sixth Circuit.  Thus, the court denied the petition for interlocutory appeal. 

All Eyes on the Eleventh Circuit, With the Third Circuit Next in Line

Although the Sixth Circuit weighing in on the constitutionality question would have suggested this issue has gained even more traction since a Supreme Court dissent written by Justice Thomas in U.S. ex rel. Polanksy v. Executive Health Resources, Inc. in 2023 initially invited this scrutiny, two appellate courts already have the issue squarely and fully briefed before them: the Eleventh Circuit in Zafirov, and the Third Circuit in Jessica Penelow, et al. v. Janssen Products,  LP, No. 25-1818 (3d Cir. Apr. 19, 2025).  Others may well follow. 

In early December 2025, the Eleventh Circuit held oral argument in Zafirov that focused on issues of constitutional authority and historical practice.  This decision is expected to be the first to arrive and is being closely watched by FCA practitioners and the clients they may affect.  Reed Smith is closely monitoring this case and will cover the decision.

More FCA Challenges Expected

Since at least three Supreme Court justices have invited a challenge to the qui tam provisions, as we previously briefed, more litigants – and judges – may accept the invitation to scrutinize the FCA, even though the FCA is widely supported across political lines.

Certainly, if any appellate court finds the qui tam provisions unconstitutional on Article II grounds, it will no doubt return to the Supreme Court where the justices who have raised doubts about the constitutionality of the qui tam provisions could potentially upturn a vehicle available since the Civil War to challenge purported fraud on the government. 

Reed Smith is tracking these developments and new challenges that we expect will continue to be filed until the Supreme Court resolves the question of the constitutionality of the False Claims Act.   If you have any questions about these cases or aspects of the FCA, please do not hesitate to contact the authors or the Reed Smith attorneys with whom you work.