The U.S. Court of Appeals for the Eleventh Circuit upheld the constitutionality of the False Claims Act's (FCA) qui tam provision on a narrow ground and remanded to the lower court to consider the remaining challenges. The court held that FCA relators are not "officers" of the United States subject to the Appointments Clause because they do not occupy a "continuing" position established by law. But the ruling remanded the case for the lower court to address whether relators exercise "significant authority" under the Appointments Clause or violate the Take Care Clause or Vesting Clause. The decision narrows – but does not end – the broader constitutional debate over FCA qui tam enforcement.
Background
The Eleventh Circuit's opinion vacated the Middle District of Florida's 2024 order dismissing the case in United States ex rel. Zafirov v. Florida Medical Associates, LLC, and remanded for further proceedings. The lower court's opinion is discussed in more detail in our prior alert, "Biding Time: SCOTUS Denies Cert in Lilly, but the Constitutional Threat to FCA Relators May Only Be Getting Closer".
Relevant here, in 2019, Dr. Clarissa Zafirov brought a qui tam action under the FCA on behalf of the United States against her employer and related entities, alleging that the defendants knowingly submitted false diagnosis codes to obtain more Medicare reimbursement than they were entitled to receive. After the United States declined to intervene, the relator pursued the FCA action. In February 2024, the defendants moved for judgment on the pleadings or dismissal, arguing that the qui tam provisions violate three provisions of Article II: (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 supervision and control over relators who wield executive power; and (3) the Vesting Clause, because relators have the executive power to bring civil enforcement actions on behalf of the United States. The district court ruled that relators are officers of the United States who exercise significant authority under the Appointments Clause and dismissed the case without reaching the alternative Take Care or Vesting Clause arguments.
The Eleventh Circuit's Decision and Reasoning
The Eleventh Circuit rejected the district court's Appointments Clause analysis. Citing Lucia v. SEC and related Supreme Court precedent, and assuming without deciding that Lucia's framework governs relators, the court explained that an officer of the United States must (1) exercise significant authority pursuant to federal law and (2) occupy a "continuing" position established by law. The opinion addressed only the second prong. Because relators do not occupy a continuing position, the court held that they are not officers subject to the Appointments Clause.
First, the court examined a relator's tenure and duration. A relator's role is occasional and temporary: it lasts only as long as one case; a relator may bring multiple cases in a year or none; and relators need not maintain a place of business. Although some relators litigate FCA actions for several years, the court explained that the relevant inquiry is whether the duties are permanent or "occasional and intermittent," not simply the overall length of a particular case. If the government or the court dismisses the case, or the case settles, the relator has no remaining duties.
Second, the court concluded that a relator does not receive a "continuing emolument" (i.e., payment) under Supreme Court precedent. To the extent a relator's entitlement to a portion of a successful FCA judgment or settlement qualifies as an emolument, it is a one-time award contingent on that particular case's success and paid from a portion of the recovery, not a regular appropriation. A relator faces no penalty for declining to perform beyond losing the opportunity to receive that contingent fee.
Third, the court held that a relator's duties are personal because the relator cannot be replaced. A relator assumes a duty to litigate the case the relator filed; another relator cannot assume that role. If a relator dies or goes bankrupt, a personal representative or bankruptcy trustee carries the claim forward on the relator's behalf. The Attorney General may take over when the government intervenes, but that statutory mechanism does not create a continuing position held by successive private parties.
Finally, the court rejected the defendants' attempt to characterize the FCA as creating a continuous "office of relator" and to compare relators to independent counsel and bank receivers.
Accordingly, the Eleventh Circuit held that the FCA's qui tam provisions do not violate the Appointments Clause, vacated the district court's order dismissing the case, and remanded for the district court to evaluate the defendants' Take Care Clause and Vesting Clause arguments in the first instance. But the court did not decide whether relators exercise significant authority; its Appointments Clause holding rests solely on the conclusion that relators do not occupy a continuing position established by law.
Key Takeaways
This decision does not close the door on constitutional challenges to relators' ability to pursue non-intervened qui tam cases. First, it remains to be seen whether the defendants will petition for panel rehearing or rehearing en banc and/or for certiorari to the Supreme Court. Notably, three of the nine U.S. Supreme Court Justices have previously expressed concern about the FCA's constitutionality, and four votes are required to grant certiorari. Second, the Appointments Clause challenge was just one of several constitutional arguments the defendants originally raised. The Eleventh Circuit resolved only that question; its remand permits the district court to consider the defendants' unresolved Vesting Clause and Take Care Clause challenges.
For now, defendants should continue to raise and preserve constitutional challenges, particularly when the government declines to intervene or exercises limited control over the case.
Questions about how this decision may affect your business? Please contact Thomas H. Barnard, Annie M. Kenville, Sabrina Marquez, or another member of the Baker Donelson Government Enforcement & Investigations Group.