What Happened
On September 30, 2024, Judge Kathryn Kimball Mizelle of the Middle District of Florida held that the False Claims Act’s (“FCA”) qui tam provision—which permits a private plaintiff to prosecute claims on behalf of the United States—violates the US Constitution’s Appointments Clause. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 2024 WL 4349242 (M.D. Fla. Sept. 30, 2024). This decision may have profound ramifications for future FCA litigation.
Analysis
The FCA
The FCA imposes liability on those who “knowingly present . . . a false or fraudulent claim [to the United States] for payment or approval” or knowingly withhold payments owed to the United States. 31 U.S.C. § 3729(a)-(b). To facilitate enforcement of the statute, the FCA permits private entities (“relators”) to bring qui tam lawsuits on behalf of the United States against defendants believed to have violated the FCA. The United States will then investigate the relator’s claims and either intervene and prosecute the FCA claims as a full-party plaintiff, or decline intervention leaving the relator to prosecute the action on the United States’ behalf. In either scenario, the relator is entitled to a percentage of the suit’s recovery, as well as their attorney’s fees. In limited circumstances, the United States may intervene to dismiss the relator’s action over the relator’s objection (for example, if the action threatens national security interests). Id. § 3730(c)(2). If the United States...
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