Eleventh Circuit Narrowly Upholds Whistleblower Provisions of False Claims Act – At Least for Now

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This week, the U.S. Court of Appeals for the Eleventh Circuit issued its long-awaited decision in United States ex rel. Zafirov v. Florida Medical Associates, LLC, No. 24-13581, vacating the district court’s landmark ruling that the False Claims Act’s (“FCA”) qui tam provisions violate the Appointments Clause of Article II of the U.S. Constitution, and remanding to the district court for further consideration of arguments under the Takings Clause and Vesting Clause.  The Appointments Clause requires that the President appoint all “officers” of the United States.  The Eleventh Circuit held that qui tam relators do not occupy a “continuing position established by law”—one of two requirements for officer status under Lucia v. SEC, 585 U.S. 237 (2018)—and therefore are not “officers of the United States” subject to the Appointments Clause.

The FCA remains the federal government’s most powerful anti-fraud enforcement tool, with whistleblower-initiated actions accounting for over $6.8 billion of settlements and judgments last fiscal year alone. The Eleventh Circuit’s ruling preserves the viability of non-intervened qui tam actions for now, and it aligns the Eleventh Circuit with every other circuit to have addressed the Appointments Clause question, including the Fifth, Sixth, Ninth, and Tenth Circuits.

The Broader Legal Context

The constitutional debate over qui tam provisions gained renewed prominence following the Supreme Court’s 2023 decision in Polansky v. Executive Health Resources, Inc. In a concurrence joined by Justice Barrett, Justice Kavanaugh urged the Court to consider “substantial arguments” that qui tam provisions to the FCA are inconsistent with Article II. In his dissent, Justice Thomas directly expressed his view that the FCA’s qui tam provisions inhabit “something of a constitutional twilight zone,” warning “there is good reason to suspect that Article II does not permit private relators to represent the United States’ interests in FCA suits.”   These concurring and dissenting opinions fueled a wave of constitutional challenges under the Appointments, Take Care, and Vesting Clauses in district courts across the country.

The District Court Case

In 2019, Dr. Clarissa Zafirov brought a qui tam action against her employer and related entities, alleging the defendants knowingly submitted false diagnosis codes to receive inflated Medicare Advantage payments. After years of litigation—during which the United States declined to intervene—the defendants moved in February 2024 for judgment on the pleadings, arguing that the FCA’s qui tam provisions (which allow private citizens, known as “relators” to initiate and potentially pursue FCA claims on behalf of the government) violate three provisions of Article II: the Appointments Clause, the Take Care Clause, and the Vesting Clause.  The United States subsequently intervened for the limited purpose of defending the constitutionality of the qui tam provisions.

On September 30, 2024, Judge Kathryn Kimball Mizelle of the Middle District of Florida became the first federal judge in the wake of Polansky to hold the FCA’s qui tam provisions unconstitutional in the under the Appointments Clause. Applying the two-prong test from Lucia, the district court concluded that qui tam relators: (1) exercise “significant authority pursuant to the laws of the United States,” and (2) occupy a “continuing position established by law.” Because relators are not appointed by the President, a department head, or a court of law, the district court held that the qui tam provisions are unconstitutional and dismissed the case.

Eleventh Circuit’s Opinion

The Eleventh Circuit panel unanimously vacated the district court’s order striking down the qui tam provisions under the Appointments Clause and remanded the case back to the district court. The court held that qui tam relators are not “officers of the United States” because they do not occupy a “continuing position established by law.” Its holding rested on the following conclusions:

• A relator’s tenure is “occasional and temporary.” The court found that relators’ tenure is “occasional and temporary” because their involvement lasts only for the duration of a single case; relators may bring multiple cases in a given year or none at all; and relators are not required to maintain a place of business or hold themselves out in any ongoing governmental capacity. This intermittent, nonpermanent tenure, the panel concluded, weighs against officer status.
• Relators do not hold a continuing position. The defendants argued that because some FCA cases span many years, the relator’s role is effectively “continuing.” The Eleventh Circuit rejected this argument, reasoning that the Supreme Court has never focused on the overall time spent fulfilling duties as determinative. Rather, the inquiry turns on whether the duties are “permanent” or “occasional and intermittent.” Because relators’ duties do not persist beyond the particular litigation, the panel held relators do not hold a continuing position.
• Relators do not receive a “continuing emolument.”  The panel found that a relator’s contingent fee—up to 30 percent of any recovery—is not a “continuing emolument” of the kind that characterizes an officer. Drawing on the Supreme Court’s analysis in United States v. Germaine, the court observed that a relator receives only a one-time, contingent payment, receives no regular appropriation from Congress, works intermittently, and faces no penalty for failure to perform other than the loss of the potential fee.
• A relator’s duties are inherently personal and cannot be assumed by a successor. When a relator dies or enters bankruptcy, a personal representative or trustee may carry forward the case on behalf of the relator’s estate—but the relator is not “replaced” in any meaningful sense. The position does not have an existence independent of the individual who fills it.
• The FCA does not create a continuous, independent “office of relator.” The Eleventh Circuit reached this holding on three grounds: (1) the term “office of relator” does not appear in the FCA or any federal statute; (2) the proper constitutional inquiry is whether an individual occupies a continuing position—not whether an abstract “office” could theoretically be defined; and (3) no precedent has looked at an unfilled position and concluded that because it could be filled, the individual who fills it thereby occupies a continuing position.

Key Takeaways

• Healthcare Companies and Government Contractors Must Still Be Diligent About FCA Whistleblower Claims. The Eleventh Circuit’s decision means that the FCA’s substantive prohibitions for knowingly submitting false claims remain intact in every circuit when the government declines to intervene. Accordingly, it is important that businesses engaged in healthcare, government contracting, and other high-risk areas vigilantly continue to focus on their compliance programs including regular auditing and procedures for encouraging internal reporting and avoiding retaliation.
• Litigants Should Still Preserve Constitutional Questions About the FCA. The Eleventh Circuit’s remand for consideration of the Take Care Clause and Vesting Clause arguments ensures that the constitutional debate over the FCA’s qui tam provision is not yet fully resolved. These arguments—which focus on whether private relators may exercise the executive power of the United States without adequate presidential supervision—present distinct and potentially more challenging questions. Practitioners should closely monitor the case including the remand proceedings. While the current circuit consensus weighs against certiorari on the Appointments Clause question, the strong signals from three justices in Polansky suggest the Supreme Court retains an interest in the broader Article II questions surrounding qui tam If a circuit split develops on the Take Care or Vesting Clause issues, or if a circuit were to break ranks on the Appointments Clause, Supreme Court review would become substantially more likely. For now, defendants facing qui tam litigation should continue to raise and preserve constitutional challenges, especially when the government declines intervention.