Recent Developments in False Claims Act Constitutionality
Though qui tam constitutionality has been challenged for decades, two cases, Polansky and Zafirov, are setting the tone for the modern debate.
In June 2023, the Supreme Court issued a decision in U.S. ex rel. Polansky v. Executive Health Resources, Inc. The case reached the Supreme Court after the circuit court affirmed the district court’s decision to grant the government’s motion to dismiss the qui tam case, finding that the government can dismiss a qui tam case even if it declines to intervene during the seal period, as long as it intervenes at some later point. The case highlighted splits in circuit courts’ opinions of the proper way to dismiss a relator’s case.
The Supreme Court held that the government has the right to intervene for good cause at any point in a FCA case, including after declination, and, once the government has intervened, it may then move to dismiss the case, granting government control over cases brought by private citizens. This holding grants the Executive Branch greater control over a case, as it may intervene and dismiss a relator’s suit at any point, even late in the case. A potential impact from this decision is lower levels of government intervention at the start of a case because there is less incentive for early intervention. However, high levels of relator activity are still expected.
Notably, Justice Thomas questioned the constitutionality of qui tam provisions in a dissenting opinion that has now been cited by opponents of the provisions in cases like U.S. ex rel. Zafirov v. Florida Medical Associates, LLC., a case pending in the Middle District of Florida.
Zafirov is a case filed by a physician, who alleged that her employers were violating the False Claims Act. The case quickly garnered attention as the defense questioned relators’ right to bring suits on behalf of the government. The defense specifically asked whether qui tam cases are constitutional under Article II’s Take Care, Vesting, and Appointments Clauses. The defendants in Zafirov were particularly concerned that “the qui tam provisions improperly shift executive authority to private parties,” calling relators “bounty hunters” and framing them as having selfish motivations. The defendants clearly disagree with proponents of the qui tam provisions who see private relators as enhancing the Executive Branch’s powers.
The U.S. Chamber of Commerce joined the fray when it submitted an amicus brief in Zafirov, asserting that the FCA is unconstitutional. The brief argues that the qui tam provisions violate the Take Care Clause, Vesting Clause, and Appointments Clause of the Constitution, echoing familiar refrains from FCA opponents. However, the amicus also responded to the court’s request for briefing on the history of the qui tam provisions. The Chamber stated that “history cannot salvage the qui tam provisions’ affront to Article II’s text,” and the historical use of qui tam provisions is not sufficient to overcome their alleged constitutional weaknesses. Further, the Chamber argued, the differences between historical and modern uses of qui tam statutes undermine historical precedent.
TAF submitted an amicus brief that stood in opposition to that of the Chamber. In addition to emphasizing the traditional arguments for qui tam constitutionality, TAF highlighted the historical approval of whistleblower suits under the FCA from all three branches of government, including the Executive Branch, for over 200 years.
On September 30, the Zafirov court issued its ruling, finding the qui tam provision of the FCA unconstitutional under the Appointments Clause. The Zafirov court is the first case to find that the qui tam provision is unconstitutional under Article II.
The Zafirov decision stands in stark contrast with prevailing case law and precedent across the country. Consider another case from the Southern District of Florida where the judge flatly rejected the defendant’s constitutionality arguments, finding that the qui tam provision was constitutional. U.S. ex rel. Butler v. Mazin Shikara, et al. The court noted, “the FCA guarantees that the United States maintains significant control over this public-interest litigation, even despite the fact that it has elected not to intervene in this action.”
The government and the relator filed appeals in Zafirov on October 29. The Eleventh Circuit has an opportunity to ensure that one of the main tools in the government’s fight against fraud is protected. As TAF Coalition has reported, whistleblower cases account for nearly $53 billion of the $75 billion recovered under the law. Whistleblowers are crucial to the government’s fraud fighting efforts and the success of a vital public-private partnership.
TAF Coalition will keep a close eye as courts continue to consider constitutionality.
Rosie Tomiak is the Public Interest Advocacy Fellow of The Anti-Fraud Coalition
