Federal Court Declares FCA’s Qui Tam Provisions Unconstitutional: A Landmark Ruling on Prosecutorial Power and the Appointments Clause

Federal Court Declares FCA’s Qui Tam Provisions Unconstitutional: A Landmark Ruling on Prosecutorial Power and the Appointments Clause

On September 30, 2024, the U.S. District Court for the Middle District of Florida ruled the qui tam provisions of the False Claims Act (FCA) unconstitutional in United States ex rel. Clarissa Zafirov v. Florida Medical Associates, LLC, Case No. 8:19-cv-01236, 2024 WL 4349242 (M.D. Fla. Sept. 30, 2024). The court criticized the broad discretion given to private relators, who were empowered to independently decide who to investigate, what charges to file, and which claims and legal theories to pursue. This unchecked prosecutorial power, without appropriate oversight or proper appointment, was viewed as a violation of the Constitution’s Appointments Clause.

The FCA, enacted in 1863 and codified at 31 U.S.C. § 3729, holds individuals liable for submitting fraudulent claims to the U.S. government. In addition to allowing the government to pursue fraud cases, the FCA enables private citizens, or “relators,” to file lawsuits on behalf of the government (called qui tam suits). This mechanism allows private individuals to share in any recovery obtained from fraudulent actors.

Judge Mizelle’s decision adopted Appointments Clause arguments raised in recent Supreme Court opinions, particularly those advanced by Justice Clarence Thomas in his dissent in United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023). Notably, the ruling in Zafirov contradicts several post-Polansky decisions that rejected similar constitutional arguments.

At the core of the Zafirov ruling, was the determination of whether qui tam relators qualify as “Officers of the United States” under the Appointments Clause. Drawing on the Supreme Court’s 2018 decision in Lucia v. SEC, 585 U.S. 237 (2018) which addressed the status of administrative law judges, the court found that qui tam relators, by enforcing public rights and engaging in civil litigation on behalf of the federal government, exercised “significant authority” under federal law, thereby making them officers who must be appointed under the Appointments Clause.

The court further concluded that FCA relators hold a “continuing position” defined by law, similar to roles like the attorney general or an independent prosecutor. Despite a relator’s involvement in only one case, the office itself is considered permanent, even as different individuals may fill the role. The court dismissed the historical precedent of qui tam provisions, asserting that constitutional mandates take precedence over past practices.

This decision contrasts with rulings from the Ninth, Fifth, Tenth, and Sixth Circuits, which previously upheld the constitutionality of qui tam provisions under the Appointments Clause.

The court’s ruling in Zafirov raises significant constitutional questions regarding the role of private relators under the FCA and the executive powers reserved to the federal government. The decision may lead to increased scrutiny of the qui tam provisions and could have a far-reaching impact on the enforcement of the False Claims Act across the U.S. legal system, potentially prompting an appeal to the Supreme Court.