“The [False Claim Act’s] qui tam provisions have long inhabited something of a constitutional twilight zone,” Supreme Court Justice Clarence Thomas wrote in his 2023 dissent in U.S. ex rel. Polansky v. Executive Health Resources Inc. “There are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation.”[1]
Last week, a Florida federal judge stepped into this “twilight zone,” dismissing a Medicare Advantage fraud case on the grounds that the qui tam provision of the False Claims Act (FCA) is unconstitutional—a decision that, if followed, could weaken a pivotal tool for fighting fraud involving government funds.
Understanding Qui Tam and the False Claims Act (FCA)
In qui tam suits, a “relator” brings a legal action against another entity on the government’s behalf. The FCA authorizes these actions against parties defrauding the federal government and allows the relator to receive up to 30% of the government’s award. In 2023 alone, the Department of Justice recovered $2.33 billion through FCA qui tam settlements and judgements, making the provision an essential tool in the fight against fraud. However, the Florida ruling challenges this tool directly.
The Constitutional Standing of FCA Relators
In United States ex rel. Zafirov v. Florida Medical Associates, LLC, the relator sued her employer for billing Medicare for unnecessary medical services. After the government declined to intervene, she pursued litigation on her own. Five years later, the defendants challenged the FCA’s qui tam provision under Article II of the Constitution, specifically invoking the Take Care and Appointments clauses. The court ultimately sided with the defendants, dismissing the case on three grounds:
- 1. The relator acts as an unauthorized officer of the state.
The court found that the relator is considered an officer because she exercises significant authority and occupies a continuous position established by law.[2] Specifically, the relator’s ability to initiate civil litigation on behalf of the United States intrudes upon the executive branch’s “exclusive authority and absolute discretion” to decide whether to prosecute.[3] Additionally, her capacity to pursue subsequent legal actions infringes upon the executive branch’s power to determine “how to prioritize and how aggressively to pursue legal actions against defendants who violate the law.”[4] - 2. The relator was not constitutionally appointed.
The court concluded that “[b]ecause Zafirov is an officer, there is no question that she is improperly appointed.”[5] She cannot “self-appoint” to initiate an action on behalf of the government—there are constitutional procedures for the appointment of officers.[6] Thus, the relator’s ability to initiate actions on behalf of the government without proper appointment violates the Appointments Clause. - 3. The historical precedent of qui tam actions is unpersuasive.
The relator suggested that because qui tam actions date back to the Civil War, they are an accepted practice. However, the court declined to accept her historical analysis. Earlier cases upholding the provision did not clearly distinguish between private and public proceedings or address constitutional limits. Further, the court emphasized that while qui tam actions have historical roots, long-standing practice cannot override constitutional concerns: “When the Constitution is clear, no amount of countervailing history overcomes what the States ratified.”[7]
What This Means for Future Whistleblower Claims
The Florida court’s decision could signal challenges for future FCA relators, as it calls into question their standing to pursue claims on behalf of the government. However, this is only the first ruling against the FCA qui tam provision’s constitutionality. Every court to have considered the matter thus far has unanimously upheld the provision—including the Supreme Court.In Polansky, the qui tam case that came before the Justices, a relator alleged that his employer enabled Medicare overbilling through improper inpatient admissions. The government initially declined to participate, but later intervened to dismiss the case in the interest of not participating in extensive discovery for a likely unsuccessful suit. When challenged in court, the majority upheld the dismissal, ruling that the government can intervene in a whistleblower’s suit at any point in litigation, “so long as it shows good cause to do so.”[8] This decision underscores the government’s retained authority over qui tam actions, potentially weakening constitutional challenges like the one raised in Zafirov.
Defendants across the country will likely be inspired to raise the same constitutional challenge in other FCA qui tam cases. A wave of challenges could follow, potentially clogging courts and stalling or dismissing whistleblower cases on procedural grounds.
If relators are increasingly limited in bringing such cases, the burden will fall more heavily on the government. The DOJ would be forced to handle more fraud cases themselves, leading to fewer cases being pursued overall, as the strength of the qui tam provision is that it allows the government to recover fraudulent funds that they otherwise would not have the resources to pursue. This could seriously compromise the government’s ability to recover billions of dollars through qui tam cases. Should this constitutional challenge become precedent elsewhere, whistleblowers would remain crucial to the government’s anti-fraud effort, but their role may evolve to focus primarily on cases where the government decides to intervene.
As for the case at hand, Zafirov will be appealed to the Eleventh Circuit, and potentially even the Supreme Court—a process that takes many years. Should the matter reach the Supreme Court, Justice Thomas is not the only one who opined that the FCA qui tam provision may be unconstitutional—Justice Amy Barrett and Justice Brett Kavanaugh concurred in Polansky. Thus, the matter is likely to be divisive, and the outcome is uncertain. In the meantime, however, FCA whistleblowers remain crucial in the government’s fight against fraud.
Sanford Heisler Sharp McKnight remains steadfast in our commitment to protecting and defending whistleblowers’ rights. The qui tam provision is a crucial tool in the fight against fraud, ensuring that every person is empowered to expose corporate wrongdoing. Regardless of the legal landscape ahead, we will continue to support whistleblowers and the important role they play in upholding justice and accountability.
If you have questions regarding your potential whistleblower claims and qui tam actions, please fill out our online intake form to contact a whistleblower attorney at Sanford Heisler Sharp McKnight today.
[1] United States, ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419, 143 S. Ct. 1720, 216 L. Ed. 2d 370 (2023).
[2] Buckley v. Valeo, 424 U.S. 1 (1976).
[3] United States v. Nixon, 418 U.S. 683, 693 (1974).
[4] United States v. Texas, 599 U.S. 670, 678 (2023).
[5] United States ex rel. Clarissa Zafirov v. Florida Medical Associates, LLC, No. 8:19-cv-01236 (M.D. Fla. Sept. 30, 2024).
[6] Ibid.
[7] Ibid.
[8] United States, ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419, S. Ct. 1720, 216 L. Ed. 2d 370 (2023).