The False Claims Act (“FCA”) imposes civil and criminal liability on parties that knowingly present or cause to be presented a false or fraudulent “claim” to the government.[1] Enacted during Reconstruction in 1863, the scope of the FCA is broad, impacting persons and businesses in numerous fields.  Claims subject to the FCA include direct requests to the government for payment, reimbursement requests under federal benefits programs, and various payments made to the government pursuant to various statutory or contractual obligations.

Although civil claims under the FCA may be asserted by the Government,[2] the Act also authorizes private parties, called “Relators,” to pursue civil FCA claims on the government’s behalf (“qui tam” provision).[3] Private actions by Relators have become the primary manner in which civil FCA claims are pursued.

Under the Act, the Relator files the FCA complaint in federal court under seal.[4] At the same time, the Relator must provide the complaint and disclose the material evidence on which it is based to the Government, which has 60 days (the time for which the complaint is sealed, unless extended) to determine whether to intervene.[5]  If the Government intervenes, the case is unsealed and the Government pursues the action.[6] If the Government declines, the case is unsealed and the Relator pursues the action on the Government’s behalf and shares in any recovery. [7]

On September 30, 2024, Judge Kathryn Kimball Mizelle of the United States District Court for the Middle District of Florida, held that the qui tam provisions of the FCA are unconstitutional.  United States ex rel. Clarissa Zafirov v. Florida Med. Assocs., LLC, No. 8:19-cv-01236-KKM-SPF, (M.D. Fla. September 30, 2024).[8] Judge Mizelle held – over the Government’s objection – that the qui tam provision violates the Appointments Clause in Article II of the Constitution, requiring dismissal of the case.

Relying on Supreme Court cases such as Buckley v. Valeo, 424 U.S. 1 (1976), and Lucia v. SEC, 585 U.S. 237 (2018), Judge Mizelle first found that an FCA Relator is an “officer of the United States” for purposes of that clause.[9]  Judge Mizelle found that an FCA Relator “exercises significant authority pursuant to the laws of the United States,” given the unfettered discretion a Relator exercises over the pursuit of FCA claims on the Government’s behalf.[10] The Court also found that the Relator “occupies a continuing position established by law,” given the pre-filing duties imposed on the Relator by statute (filing under seal, providing complaint and information to Government, waiting 60 day for Government to intervene).[11]

After finding that an FCA Relator is an officer of the United States, Judge Mizelle held that the Relator is subject to the Appointments Clause in Article II.  Because the appointment of an FCA Relator is accomplished pursuant to the Act’s qui tam provision and not by a process consistent with the Appointments Clause, Judge Mizelle held that the qui tam provision is unconstitutional.

Zafirov represents only one federal district court decision, and it is not binding on any other federal or state court.  It is also likely to be appealed.   As Judge Mizelle recognized, although the United States Court of Appeals for the Eleventh Circuit had not addressed the constitutionality of the statute, including its constitutionality under the Appointments Clause, other federal courts of appeal had done so and held otherwise.[12]  Judge Mizelle also recognized that her ruling was contrary to a history of congressional amendments, as well as Supreme Court and other federal cases addressing various aspects of the FCA, including the qui tam provision.[13]

It is unclear how the Eleventh Circuit might ultimately resolve this issue, assuming an appeal.  If that court reverses, it is also unclear whether the Supreme Court would take up the issue, if asked, given the statute’s history and other appellate decisions (i.e., absence of conflict among the appellate circuits).

Judge Mizelle’s decision, however, appears to represent another example of recently appointed members of the federal judiciary taking independent views of the validity and scope of existing statutes and rules and reaching different conclusions from those reached by other courts in the past.  With the composition of the federal judiciary continually changing both at the district court and appellate levels, Judge Mizelle’s decision serves as an important reminder to litigants, particularly defendants, that all arguments in defense of a federal statutory action should be carefully considered and raised, even if other non-binding authority is to the contrary.

[1] 31 U.S.C. § 3729, et seq.

[2] 31 U.S.C. § 3730(a)(1).

[3] 31 U.S.C. § 3730(b)(1).

[4] 31 U.S.C. § 3730(b)(2).

[5] 31 U.S.C. § 3730(b)(2).

[6] 31 U.S.C. § 3730(b)(3); 31 U.S.C. § 3730(c).

[7] 31 U.S.C. § 3730(b)(3); 31 U.S.C. § 3730(d).

[8] 2024 WL 4349242.

[9] 2024 WL 4349242, at *5-6.

[10] 2024 IL 4349242, at *6-11.

[11] 2024 WL 4349242, at *11-15.

[12] 2024 WL 4349242, at *8-9; see United States ex rel. Stone v. Rockwell Int’l Corp., 282 F.3d 787 (10th Cir. 2002); Riley v. St. Luke’s Episcopal Hosp., 252 F.3d 749 (5th Cir. 2001); United States ex rel. Taxpayers Against Fraud, 41 F.3d 1032 (6th Cir. 1994); United States ex rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir. 1993).

[13] 2024 WL 4349242, at *15-18.