With a new administration and fallout from prior years’ rulings, 2025 promises to be an interesting year for developments in False Claims Act (“FCA”) enforcement and litigation. One area of particular interest is the constitutionality of the qui tam provisions in the FCA in light of the Zafirov case.

On September 30, 2024, federal Judge Kathryn Kimball Mizelle (Middle District of Florida) issued her much-anticipated ruling in the case of U.S. ex rel. Zafirov v. Florida Medical Associates. The relator, Zafirov, sued her employer and other defendants under the FCA for allegedly misrepresenting patients’ medical conditions to Medicare. The government did not intervene in the case, meaning that Zafirov, a private citizen, proceeded to litigate the case on behalf of the “real party in interest,” the United States. Defendants moved for judgment on the pleadings, challenging the constitutionality of the FCA’s qui tam provisions—and Zafirov’s authority to proceed with the case. Following extensive briefing by the parties and amici, Judge Mizelle agreed with Defendants, holding the FCA’s qui tam provisions to be unconstitutional under the Article II Appointments Clause. As the court observed at the outset, “Zafirov has determined which defendants to sue, which theories to raise, which motions to file, and which evidence to obtain. If the action proceeds to an appeal, Zafirov will decide which arguments to preserve…" despite the fact that "no one—not the President, not a department head, and not a court of law—appointed Zafirov to the office of relator.”

In her detailed opinion, Judge Mizelle reasoned that a qui tam relator under the FCA acts as an unappointed officer of the United States, exercising vast authority with virtually no accountability, contrary to the framers’ intent and other precedents involving executive authority under Article II. This ruling is currently on appeal to the 11th Circuit, and FCA practitioners expect the case to proceed to the Supreme Court. Three Supreme Court Justices are already on record, in a dissent in the 2023 case of U.S. ex rel. Polansky v. Executive Health Resources Inc., challenging the constitutionality of the FCA’s qui tam provisions. If the Supreme Court takes the case and affirms the ruling in Zafirov, it is unclear whether any of the qui tam provisions of the FCA will remain; at a minimum, private relators would no longer be able to pursue cases without Government intervention. This would likely increase the burden on the government, leading to a decrease in recoveries, and delays in those cases the government elects to pursue. If Congress gets involved, we may see the FCA evolve to preserve whistleblower rewards and the incentive such rewards create for insider reporting. For now, the focus will be on the 11th Circuit, and whether other federal courts follow Judge Mizelle’s lead. We are already seeing FCA defendants in other federal district courts around the country advance the argument. Another open question is whether the Department of Justice under the new administration will continue to defend the FCA’s qui tam provisions, and whether there will be any significant change in DOJ’s approach to FCA enforcement actions more broadly. We will continue to closely monitor developments in this area of the law.