11th Circuit Weighs the Fate of the False Claims Act

The future of the False Claims Act (FCA) hangs in the balance after a pivotal oral argument (before Judges Luck, Branch, Moreno) in the Eleventh Circuit Court of Appeals this past Friday.

In United States ex. rel. Zafirov v. Florida Medical Associates LLC, a three-judge panel grappled with a challenge that strikes at the very heart of the statute: Do the FCA’s qui tam provisions, which allow private whistleblowers to sue on behalf of the government, violate the U.S. Constitution?

The oral argument offered a fascinating glimpse into the judicial tug-of-war between centuries of legal tradition and evolving theories on executive power. Here are the key takeaways from the arguments.

The appeal stems from a first-of-its-kind ruling by U.S. District Judge Kathryn Kimball Mizelle, who declared the qui tam system unconstitutional earlier this year. Her reasoning—echoing concerns raised recently by Supreme Court Justice Clarence Thomas—was that private relators exercise significant executive power without being properly appointed as officers of the United States, a violation of the Appointments Clause.

On Friday, the Eleventh Circuit panel appeared torn between two competing narratives: the text of the Constitution versus the long history of the American legal system.

Judge Robert J. Luck’s questioning suggested a hesitation to overturn a system that has existed since the nation’s founding. He repeatedly pressed defense counsel to explain why qui tam actions should be deemed unconstitutional now, given that they have been present in the U.S. for roughly 250 years.

Judge Luck noted that historical records imply President George Washington and other founders did not view qui tam litigation as conflicting with executive powers. "It looks like some of this was sort of contemplated by some of our founders, was it not?" he asked, searching for any Supreme Court precedent that strictly requires executive appointment for non-government relators.

Judge Elizabeth L. Branch pushed back against the DOJ’s reliance on past circuit court consensus. When the government argued that courts have routinely upheld the FCA for decades, Judge Branch interjected, noting that those decisions are dated.

"It's been about 25 years, and we have some recent statements from the U.S. Supreme Court," she said, alluding to the 2023 opinion in Polansky where Justices Thomas, Kavanaugh, and Barrett signaled interest in revisiting the constitutionality of the whistleblower system.

The oral argument highlighted the stark difference in how each side views the role of a whistleblower:

• The Defense (Challenging the FCA): Kannon K. Shanmugam, representing the defendants, argued that the modern FCA (strengthened in 1986) is a different beast from early American statutes. He contended that today's relators hold the power of an "unaccountable office," forcing the government to expend resources and seeking massive penalties without executive oversight.

• The Relator/DOJ (Defending the FCA): Counsel for the whistleblower and the DOJ argued that relators are simply private litigants, not government officers. Tejinder Singh, representing the whistleblower, emphasized that relators lack true state power: "No one's handing them a windbreaker and a gun... They're litigating in the same way that a private fraud litigant would litigate."

If the Eleventh Circuit affirms Judge Mizelle’s ruling, it would create a circuit split and almost certainly fast-track the issue to the Supreme Court.