Eleventh Circuit Rules Qui Tam Provision of the False Claims Act Does Not Violate Appointments Clause

The qui tam provision of the False Claims Act (FCA) survived a constitutional challenge, for now. 

The U.S. Court of Appeals for the Eleventh Circuit on Sept. 1 issued its long-awaited opinion in the case of United States ex rel. Zafirov v. Florida Medical Assocs., LLC, et al., et al. ruling that the qui tam provision of the FCA does not violate the Appointments Clause of Article II of the U.S. Constitution. 

The much-anticipated ruling reversed a decision by a federal district court judge in Florida and remanded the case to consider the other constitutional arguments raised by the defendants, including whether the qui tam provision violates the Take Care Clause and the Vesting Clause of Article II. The Eleventh Circuit’s decision matches decisions on the question of the FCA’s qui tam provision’s constitutionality reached by other federal appeals courts in recent years.

This is not the end of the line for constitutional challenges to the qui tam provision, nor potentially for this particular case. Given the genesis of this line of argument in the first place (which came from a dissent by Justice Clarence Thomas in an unrelated case), it is likely that this decision will be appealed to the U.S. Supreme Court, despite the fact that the Eleventh Circuit opinion does not split with other appeals courts.  And in the meantime, other challenges are pending to the qui tam provision in other courts of appeals. 

Constitutionality of the Qui Tam Provision of the FCA

We have covered aspects of the Zafirov case in prior blog posts, including one analyzing the oral arguments held by the Eleventh Circuit panel in December. Today’s opinion arises from an FCA case in the U.S. District Court for the Middle District of Florida alleging fraud and upcoding in the Medicare Advantage context. The case was brought originally by a physician whistleblower.

In 2024, Judge Kathryn Kimball Mizelle ruled for the defendants and determined that the FCA’s provisions that permit a private citizen to bring a claim in the absence of intervention by the federal government are unconstitutional because they established a mechanism whereby “unaccountable, unsworn, private actors” are permitted “to exercise core executive power with substantial consequences to members of the public.” Judge Mizelle, who clerked for Justice Thomas, cited to the Justice’s 2023 dissent in United States ex rel. Polansky v. Executive Health Resources, Inc. (599 U.S. 419) when reaching her decision.

Eleventh Circuit Finds no Appointment Clause Violation

In reviewing the decision, the Eleventh Circuit disagreed with Judge Mizelle and found no violation of the Appointments Clause. Instead, the appeals court agreed with the relator and the Department of Justice, which had argued that relators in qui tam cases did not need to be appointed by the executive as they were private parties pursuing private matters, did not exercise significant authority, and did not occupy a continuing position.

It was this last point on which the Eleventh Circuit focused in its decision. The court found that “while the length of any given FCA case is uncertain and variable, relators have temporary tenure and duration, no continuing emolument, and personal duties, so they do not occupy a continuing position.” Additionally, the court noted that the personal nature of a relators’ claims are not defeated by the death of a relator, since the relator is not then replaced by another party, but is instead continued to be represented by a personal representative or estate representative in the case.

Because the Eleventh Circuit concluded that relators do not occupy a continuing position, that was sufficient to resolve the Appointments Clause argument, and accordingly, the Eleventh Circuit did not reach any of the parties’ remaining arguments regarding the Appointments Clause. 

Case Returns to District Court and Perhaps Reaches the Supreme Court

The Eleventh Circuit’s decision specifically identified that its ruling only addresses the Appointments Clause claim brought by the defendants in this opinion. At the district court level, the defendants also challenged the qui tam provisions of the FCA under the Take Care Clause and the Vesting Clause of the Constitution.

In remanding the case back to the District Court, the Eleventh Circuit instructed the district court to further consider those grounds. But, because a currently active Justice on the Supreme Court seemed to invite this reading of the statute in an earlier dissent, and other current Justices have raised an interest in considering the constitutionality of the qui tam provision in later opinions, it is possible that the defendants will also seek Supreme Court review of the matter.

What the Supreme Court may do with the case is another matter. Without a circuit split, it is generally hard to see the Court taking up such a controversial matter, especially when other constitutional questions remain to be addressed by the lower courts. However, the possibility of settling the constitutionality of aspects of Lincoln’s Law—a law which has had broad bipartisan support and is a key tool to fight fraud in government programs—may argue in favor of Supreme Court review. 

On balance, however, the Supreme Court will likely decline to take up this particular decision this time, and allow the other constitutional challenges to be evaluated by the district court, as well as other courts of appeals, before deciding whether to take up this issue at some later point.

Reed Smith will continue to track developments related to this case in particular and the FCA in general. If you have any questions about this case or about FCA litigation, please don’t hesitate to reach out to the authors of this post or to the attorneys at Reed Smith.