As we noted in our recent Insight, at least eight decisions from district courts around the country have rejected the reasoning in the September 30, 2024, opinion of District Judge Kathryn Kimball Mizelle from the U.S. District Court for the Middle District of Florida—holding that the qui tam provisions in the False Claims Act (“FCA”) violate the Appointments Clause of Article II of the U.S. Constitution.
Every other Court of Appeals to address the question has ruled similarly.
At the start of oral arguments on December 12 in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., Daniel Winik—representing the U.S. government—urged the U.S. Court of Appeals for the Eleventh Circuit to “join that consensus.”
Yet the three-judge panel consisting of Circuit Judge Elizabeth L. Branch, Circuit Judge Robert J. Luck, and Senior Judge Federico A. Moreno appeared not to agree so readily—at least not before devoting some thought to the matter.
Judge Branch suggested that it might be time for an appellate court to revisit the question in light of statements from Supreme Court justices in recent years, including Justice Clarence Thomas in his 2023 dissent in U.S. ex rel. Polansky v. Executive Health Resources. In fact, the Eleventh Circuit appeared willing to reconsider the argument that history—and the founders in all three branches of government—have typically viewed qui tam actions as noncontroversial.
Application of the “Officer of the United States” Test to Qui Tam Relators
Judge Branch sought the government’s position on whether courts should apply the Appointments Clause test to determine if qui tam relators are effectively “officers of the United States.” Indeed, Judge Luck asked if the Supreme Court—or any other federal appellate court—has ever applied the Appointments Clause to someone who was not paid by the government through either an employment or independent contractor relationship. The attorneys were not aware of such a case.
Winik clarified that it is no longer the government’s position that private persons outside the government cannot be subject to an Appointments Clause analysis, but rather that, when applying the test, qui tam relators do not qualify as “officers of the United States.”
In applying the test, Judge Luck asked Winik and Tejinder Singh—counsel for relator Dr. Clarissa Zafirov—whether initiating a lawsuit on behalf of the government and directing the government on how to utilize its investigatory authority could be considered “significant authority being exercised under the laws of the United States.”
Winik argued that “the only unilateral power the relator has under [the False Claims Act] is to file a complaint under seal and allow the government to decide whether it can proceed.” The government retains the power to intervene and take over a relator’s case, to intervene and dismiss it at the outset, or to make the “affirmative choice” to allow the relator to proceed; so, the “unilateral power” of a qui tam relator is very limited.
However, the reality, as Judge Moreno pointed out, is that more than 80 percent of the time, the government steps away from qui tam cases. The tacit result of this approach is leaving significant authority in the hands of relators to make strategic and other litigation decisions in a case where the real party in interest is the United States often benefitted by the results of a pre-service government investigation, which non-governmental actors have no authority to conduct.
“This may create chaos…” Judge Moreno said on the significant authority question. “But sometimes the Constitution creates chaos.”
That said, the government urged the court to resolve the Appointments Clause issue on the point that relators do not occupy a continuing position established by law—and to stop there.
‘Constitutional Twilight Zone’
In 2024, Judge Mizelle decided the Appointments Clause issue by concluding that “Zafirov exercises significant authority, indeed core executive power, under the continuing position of relator but lacks proper appointment under the Constitution.”
Holding that an FCA relator is an “officer of the United States” who is not constitutionally appointed, Judge Mizelle did not address the other Article II argument, asserted by some, that the FCA qui tam provisions also violate the Constitution’s Vesting and Take Care clauses. It is possible that the Eleventh Circuit may address all three clauses, as Kannon Shanmugam argued for the appellees.
If the Eleventh Circuit affirms, the government and relator’s counsel will almost certainly petition the Supreme Court for a writ of certiorari. Though Justice Clarence Thomas may have precipitated this line of cases with his 2023 dissenting remarks in Polansky—calling the qui tam provisions of the FCA a “constitutional Twilight Zone”—it is uncertain whether a majority of the Supreme Court would agree.
Takeaways
A decision to limit the ability of relators to pursue qui tam cases could be problematic for the government, given its historically strong reliance on qui tam relators to enforce the FCA. In July, the Trump Administration announced a revamped FCA Working Group—a reflection of the government’s reliance on the FCA and qui tam relators as a revenue generator for the government, especially in the health care context.
Even if the Supreme Court were to ultimately affirm Judge Mizelle’s ruling, the government may devote—and continue to reroute—significant resources and attorneys toward FCA enforcement to ensure that the statute continues to serve as an effective tool. Meanwhile, judges may continue to evaluate or revisit other aspects of the constitutionality questions—meaning that the “constitutional Twilight Zone” is likely to continue, at least for now. We will keep you posted.
Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.
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