Constitutional Challenges to False Claims Act’s Qui Tam Provision Gain Momentum

One year after the landmark Zafirov ruling, defendants across the nation are increasingly challenging the constitutionality of the False Claims Act’s qui tam provision, which allows private citizens to file lawsuits on behalf of the government against those who allegedly defraud federal programs.

While no federal court has yet followed Judge Kathryn Kimball Mizelle’s controversial decision in Zafirov that declared the provision unconstitutional, the legal arguments underpinning her ruling are gaining traction in judicial circles.

In a notable counterpoint, Judge Lynn Adelman of the Eastern District of Wisconsin recently upheld the qui tam structure in US ex rel. Heath v. Wisconsin Bell, Inc. Judge Adelman’s decision carries particular significance as the Seventh Circuit has not previously addressed the constitutionality of qui tam provisions, giving him latitude to consider the issue without being bound by circuit precedent.

The Wisconsin Bell case arrived in Judge Adelman’s court after being remanded by the Supreme Court, which had ruled that claims related to the Education-Rate Program fall within the FCA’s scope. In a telling development, Justices Thomas and Kavanaugh wrote a concurring opinion urging the Supreme Court to address “substantial constitutional questions under Article II” raised by qui tam provisions.

Despite these concerns from two Supreme Court justices, Judge Adelman concluded that the qui tam mechanism remains constitutional. His ruling centered on two key findings.

First, he determined that a relator (the private party bringing the suit) does not qualify as an “Officer of the United States” under the Constitution’s Appointments Clause. Judge Adelman reasoned that relators lack both “significant authority” and a “continuing and permanent” position. He emphasized that relators operate under numerous constraints: they must notify the government of FCA claims; the government can investigate and decide whether to intervene; the government may take over or dismiss cases; and authorities can monitor proceedings even without formal intervention.

Second, Judge Adelman found that the qui tam provision does not violate the Take Care Clause because the government maintains ultimate control over lawsuits, regardless of intervention status. He also highlighted America’s long tradition of qui tam actions dating back to the First Congress.

However, Judge Mizelle’s position has found support among some federal judges, particularly in the Fifth Circuit. Judges Stuart Kyle Duncan and James C. Ho have authored concurrences questioning the constitutionality of the qui tam mechanism.

Judge Duncan, drawing on Justice Thomas’s dissent in Polansky, argued that qui tam provisions violate the Appointments Clause because relators perform functions reserved for properly appointed officers and occupy a “continuing position.” He further contended that the mechanism violates the Take Care Clause by permitting private individuals to enforce federal law—a core executive function.

Similarly, Judge Ho criticized relators as “neither appointed by, nor accountable to, the President” and suggested revisiting the constitutionality of qui tam provisions in an appropriate case. Nevertheless, the Fifth Circuit’s 2001 precedent upholding these provisions remains binding unless overturned en banc or by the Supreme Court.

These judicial statements have energized constitutional challenges to qui tam actions. In US ex rel. Penelow v. Janssen Products L.P., a declined qui tam case resulted in a record-breaking $1.64 billion judgment following a 2024 jury trial. On appeal to the Third Circuit, Janssen, supported by pharmaceutical industry amici, argued that giving relators such “sweeping and unchecked executive authority” threatens to disrupt government reimbursement systems and patient care.

The Department of Justice intervened to defend against these constitutional arguments while simultaneously rejecting the relator’s theory of liability. Janssen highlighted this dissonance as evidence of the “stark conflict between Article II and the FCA’s qui tam device,” noting that relators secured a billion-dollar judgment based on a legal theory the government explicitly rejected.

Legal observers anticipate that until the Supreme Court definitively resolves this issue, Janssen-type challenges will continue. The Eleventh Circuit is scheduled to hear oral arguments in the Zafirov appeal on December 12, with the government defending the constitutionality of qui tam provisions. Should the Eleventh Circuit affirm Judge Mizelle’s reasoning, the resulting circuit split would significantly increase the likelihood of Supreme Court review.