False Claims Act Whistleblower Suits Survive Constitutional Challenge

By John Harris, Michael Anderson, and David Levintow

Whistleblower lawsuits remain a powerful tool for enforcing the False Claims Act (“FCA”), and a closely watched federal appeals court decision has rejected a constitutional challenge that could have significantly curtailed their use.

In United States ex rel. Zafirov v. Florida Medical Associates, LLC, the U.S. Court of Appeals for the Eleventh Circuit upheld the FCA’s qui tam mechanism, which allows private individuals, known as relators, to bring fraud claims on behalf of the federal government and potentially share in any recovery. The court reversed a significant district court ruling that had found the mechanism unconstitutional under the Appointments Clause.

For healthcare providers, government contractors, and other entities that receive federal funds, the practical takeaway is significant: qui tam enforcement remains firmly in play at a time when whistleblower filings are already at record levels.

The FCA

Often called the “Lincoln Law,” the FCA was enacted during the Civil War to combat widespread fraud by military suppliers. The FCA imposes civil liability on persons who knowingly submit false or fraudulent claims to the federal government. Although the Attorney General can bring an FCA action directly, the statute also contains a distinctive enforcement mechanism, a qui tam provision, which permits private parties (called relators) to bring actions in the name of the United States. When a relator does so, the federal government is required to investigate and then must decide whether to intervene. If the government does not intervene, the relator can continue to litigate the case and, if ultimately successful, receive a portion (up to 30%) of the government’s recovery. This statutory design and financial incentive has made qui tam suits a considerable driver of FCA enforcement: a record 1,297 qui tam lawsuits were filed during fiscal year 2025, a more than 30% increase over the 980 such cases filed in 2024 (which was itself a record).

Zafirov

In 2019, Dr. Clarissa Zafirov, a physician, filed a qui tam action against her employer, Florida Medical Associates. She alleged the company knowingly submitted false Medicare Advantage diagnostic codes to obtain more money from Medicare than they were entitled to receive. The United States initially declined to intervene.

The defendant later moved to dismiss the case on constitutional grounds, arguing that the FCA’s qui tam provisions violated three provisions of Article II of the Constitution: (1) the Appointments Clause, because relators exercise significant federal authority in a continuing position without presidential appointment; (2) the Take Care Clause, because the President lacks sufficient supervisory control over relators; and (3) the Vesting Clause, because relators exercise executive power that is vested in the President alone. The United States then intervened in the lawsuit for the limited purpose of defending the FCA’s constitutionality.

The district court agreed with the defendant on the Appointments Clause theory, holding that FCA relators are “officers of the United States,” that they occupy a “continuing position” established by law, and that because a relator is not presidentially appointed, the qui tam mechanism was unconstitutional. Because the United States only intervened to defend the FCA, not to prosecute the action, the court dismissed the case. Dr. Zafirov and the United States appealed.

On appeal, the Eleventh Circuit (covering Florida, Georgia, and Alabama) disagreed with the district court. The court resolved the case only on the basis that relators do not occupy a “continuing position” established by law, reasoning that:

• A relator’s tenure is “occasional and temporary” because it lasts only the length of one case and a relator may bring multiple cases or none;
• A relator’s compensation, a one-time award contingent on success in a given case, does not constitute a “continuing emolument”; and
• A relator’s role is “personal” and cannot be “assumed by anybody else.”

Because relators do not occupy a continuing position, the Eleventh Circuit concluded that they are not officers of the United States subject to the Appointments Clause and the qui tam provisions do not violate the Constitution. The Eleventh Circuit vacated the dismissal order and revived the case.

Key Takeaways 

1. Qui tam enforcement is alive and well (for now). After Zafirov, FCA qui tam suits remain fully viable. The brief window of uncertainty created by the district court’s ruling has closed for now. Companies should anticipate that the pace of relator-initiated actions will only increase, particularly in the age of artificial intelligence. Whistleblowers are now using advanced AI to analyze vast public government datasets—such as Medicare, customs, Paycheck Protection Program, and procurement records—to identify patterns of potential fraud and file lawsuits. The DOJ has encouraged these “data miners,” writing recently that all “342 million American citizens play an important role” in combatting fraud against the government.
2. A strong circuit consensus has emerged, but Supreme Court review remains possible. Zavirov has been closely watched in part because of the potential for a circuit split that might lead to review by the U.S. Supreme Court in short order. With several circuits now aligned in rejecting an Appointments Clause challenge, however, the prospect of a circuit split has diminished. But a constitutional challenge to the qui tam mechanism remains pending in the Third Circuit (covering Pennsylvania, New Jersey, and Delaware), and several Supreme Court justices have signaled interest in addressing the constitutionality of qui tam Zafirov will likely not be the last word on the matter.
3. Other constitutional arguments remain in play. The Eleventh Circuit only resolved the Appointments Clause challenge; it did not address the Take Care Clause and Vesting Clause challenges. The defendants in Zafirov will likely continue to press those theories. And given the narrow ruling from the Eleventh Circuit, defendants in FCA cases should continue to assess whether to advance constitutional arguments, including under the Appointments Clause, the Excessive Fines Clause, and others.
4. Compliance is the best defense. Benjamin Franklin once famously advised that an “ounce of prevention is worth a pound of cure.” That sentiment remains true in the context of the FCA, which carries some of the most severe financial penalties in federal civil law. To effectively mitigate exposure, companies should proactively evaluate their FCA risk and implement (or update) their compliance programs. FCA compliance programs should include tailored written policies, regular training, monitoring, guidelines for prompt internal investigations, and provisions for disclosures to the government.

We will continue to monitor developments as Zafirov returns to the district court and as constitutional challenges proceed in other courts. For more information about this decision and its implications for your FCA matters or ongoing compliance policies, please contact John Harris, Michael Anderson, David Levintow, or your regular Smith Anderson lawyer.