The qui tam provisions of the False Claims Act allow individuals to file suit on behalf of the United States and to receive a share of the resulting financial settlement or judgment. Filing a qui tam case is not just a formal means of advising the Government of presenting a whistleblower complaint. Even when the Government chooses not to participate in a qui tam case, the False Claims Act itself gives the individual plaintiff authority to pursue it on their own.
The procedures for handling qui tam litigation are well developed and widely used. According to Department of Justice statistics, qui tam cases were filed 712 times in fiscal year 2023 and were the source of more than 85 percent of the Government’s FY 2023 False Claims Act recoveries.
Despite this background, a recent Florida federal court decision concludes that the qui tam provisions of the False Claims Act are unconstitutional. In United States ex rel. Zafirov v. Florida Medical Associates, No. 8:19-CV-01236-KKM-SPF (M.D. Fla. Sept. 30, 2024), the relator alleged that the defendant committed Medicare fraud by misrepresenting its patients’ medical conditions. After the government declined to intervene, the court granted the defendant’s motion to dismiss. Citing Justice Clarence Thomas’s dissenting opinion in United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023), the court held that the qui tam provisions of the False Claims Act violate the Appointments Clause of Article II of the United States Constitution because it permits relators to act as “officers of the United States” without being properly appointed to that role.
The full effects of Zafirov are not yet clear. There are many other reported decisions holding that the qui tam provisions of the False Claims Act do not violate the Appointments Clause. A list of such cases appears in our firm’s client alert on the Zafirov decision. The Government has appealed the district court decision in Zafirov. The question may be headed to the Supreme Court, and Congress may step in with revisions to the statute itself.
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