In a ruling that could shake up the landscape of whistleblower litigation, a federal district court struck down a key provision of the False Claims Act as unconstitutional. The decision, which came out on September 30, 2024, in United States ex rel. Clarissa Zafirov v. Florida Medical Associates, LLC, found that the FCA’s qui tam provisions violate the Appointments Clause of the U.S. Constitution.
The ruling might come as a shock to many. Under the qui tam mechanism, private individuals—like Clarissa Zafirov—have long been able to sue on behalf of the federal government, reporting companies that defraud federal programs. In Zafirov’s case, she alleged that the Florida Medical Associates and others submitted false claims to Medicare by misrepresenting their patients’ medical conditions. The qui tam provisions of the FCA have been a heavy hitter in returning money from fraudsters to U.S. taxpayers. Take Walgreen’s recent $100 million settlement over alleged phantom prescriptions or the City of Los Angeles coughing up $38.2 million after whistleblower claims of HUD fraud.
Those cases—just the tip of the qui tam iceberg—exemplify how ordinary people have become the government’s not-so-secret weapon in recouping billions from fraudsters. It’s no wonder why Senator Chuck Grassley often calls the False Claims Act “our nation’s primary weapon against fraud.”
Court’s Key Findings
Despite the remarkable success of the FCA’s qui tam provisions, the court found that they crossed a constitutional line. Specifically, the court ruled that Zafirov’s role as a self-appointed qui tam relator—pursuing claims on behalf of the federal government without being appointed by the President, a department head, or a court—violates the Appointments Clause of Article II of the Constitution.
Under the Appointments Clause, “Officers of the United States” must be properly appointed, either by the President and Senate or directly by the President, courts, or department heads, as Congress permits. The Supreme Court’s decision in Buckley v. Valeo set the standard for determining who qualifies as an officer. In this case, the court found that qui tam relators like Zafirov wield enough authority and influence to be considered officers under Buckley. Their significant role in initiating and controlling litigation, pursuing damages, and making binding decisions for the government fits squarely within the definition. The court concluded that these powers must be exercised by properly appointed officers—not private citizens going it alone, as the FCA allows.
Impact of the Ruling
This decision could have serious ripple effects. The FCA’s qui tam provisions have long been a powerhouse in combating fraud, helping the government recover billions year after year. But now, with this ruling casting doubt on the constitutionality of allowing private citizens to act as “relators” without proper appointment, the future of the provision could be up in the air.
An appeal is almost certain, and we could see this case land in front of higher courts—and maybe even the U.S. Supreme Court—before long. This isn’t the first time the qui tam provision has raised constitutional eyebrows, either. In a case just last June, three Supreme Court justices—Thomas, Kavanaugh, and Barrett—expressed concerns about whether the FCA’s qui tam mechanism aligns with the Constitution. If this ruling stands, it could lead to a major overhaul of whistleblower litigation across the country.
