Don’t Close the Compliance Manual Yet: The Eleventh Circuit Breathes New Life Into FCA Qui Tam Actions

The qui tam provisions of the federal False Claims Act (FCA) live to see another day. On Sept. 1, 2026, the U.S. Court of Appeals for the Eleventh Circuit vacated a Florida district court’s ruling that held the qui tam provisions of the FCA unconstitutional under the appointments clause. See Zafirov v. Florida Medical Associates, No. 24-13581, slip op. at 8-9 (11th Cir. Sept. 1, 2026).

The FCA imposes civil liability on individuals and entities who knowingly submit false or fraudulent claims for payment to the U.S. government. The act uniquely allows private individuals, known as “relators,” to file suit on behalf of the government in what are known as qui tam actions. Relators are often company employees or insiders who have unique company knowledge and information. Qui tam actions are initially sealed for 60 days while the government investigates and determines whether to intervene and pursue the matter. If the government opts not to intervene, the relator may proceed with the lawsuit on the government’s behalf. Companies can face significant penalties for civil FCA claims, including damages three times the amount fraudulently obtained and substantial penalties for each violation of the Act. In very serious cases, the government can pursue criminal charges under the criminal provisions of the FCA. Relators who prevail may receive up to thirty percent of the recovery. This powerful incentive means private individuals are responsible for the majority of qui tam lawsuits.

Background—Middle District of Florida Decision

On Sept. 1, 2024, in Zafirov, Judge Kathryn Kimball Mizelle issued the first court decision in the country to hold the FCA’s qui tam provisions unconstitutional as a violation of the appointments clause of Article II of the Constitution, which requires the president to appoint Officers of the United States. See U.S. Const. art. II, Section 2, cl. 2. A government employee who occupies a continuing position established by law and exercises significant authority pursuant to the laws of the United States is an “officer.”

Dr. Clarissa Zafirov brought a qui tam action on behalf of the United States against her employer and related entities, alleging the defendants knowingly made false statements about patient medical conditions to receive more money than they were entitled from Medicare. The defendants argued the case should be dismissed because the qui tam provisions violated the Constitution’s appointments clause, take care clause, and vesting clause. Judge Mizelle ruled only on the appointments clause, finding that the provisions violate the appointments clause because relators exercise significant authority pursuant to United States law given that they can initiate suits and conduct them on the government’s behalf with few restrictions, and because relators occupy a continuing position.

The Eleventh Circuit Concludes the Qui Tam Provisions Do Not Violate the Appointments Clause

A year later, the Eleventh Circuit disagreed and vacated Judge Mizelle’s decision. In doing so, the Eleventh Circuit joined the Fifth, Sixth, Ninth, and Tenth Circuits in rejecting appointments clause challenges to the FCA’s qui tam provisions.

On appeal to the Eleventh Circuit, the plaintiff, joined by the United States for the limited purpose of defending the constitutionality of the qui tam provisions, argued that relators do not exercise executive power because they are private parties pursuing private interests, do not exercise significant authority, and do not occupy a continuing position. The Eleventh Circuit agreed that relators do not occupy a continuing position and therefore cannot be officers. Accordingly, the Eleventh Circuit saw no need to reach any other argument. In reaching its conclusion, the Eleventh Circuit focused on the temporary nature of the relator’s role—the duration of the claim only. It saw no merit in the argument that qui tam cases can last years or that a relator can bring more than one case. It also found no continuation of the role, rejecting the argument that continuation existed because of another’s ability to step into the shoes of a relator on that relator’s behalf if the relator is unable to continue prosecuting a claim because of death or bankruptcy. Additionally, the Eleventh Circuit considered that a relator’s duties end when a case concludes. Further, relators do not receive a salary (they are eligible to share only a percentage of any recovery), meaning they do not receive a continuing emolument. The Eleventh Circuit also concluded no hypothetical “office of relator” exists, waiting to be filled by an individual, and firmly rejected the district court’s contention otherwise.

Remaining Constitutional Challenges

The Eleventh Circuit did not address whether the FCA’s qui tam provisions violate the take care clause or the vesting clause, remanding those issues to the district court. Accordingly, the constitutionality of qui tam actions by relators under those clauses remains open. Under Article II, “only persons who are ‘Officers of the United States’” may exercise the “significant authority” to “conduct … civil litigation in the courts of the United States for vindicating public rights.” As set forth in the Vesting and take care clauses of Article II, all executive power shall be “vested” in the president of the United States, and the president shall “take care that the laws be faithfully executed.” Together, these provisions give the President authority to bring legal actions on behalf of the United States to enforce federal law.

Thus, arguably, allowing private individuals to initiate qui tam actions under the FCA undermines the President’s exclusive authority to ensure that laws are faithfully executed. Relators are allowed to pursue litigation and seek substantial penalties on behalf of the government without any meaningful oversight from the Executive Branch. It remains to be seen whether the qui tam provisions can withstand further Article II challenges in the Eleventh Circuit. Similar constitutional arguments under the appointments clause, take care clause, and vesting clause are pending in the Fifth Circuit and the Third Circuit.

Implications for Employers

This decision signifies the end to one of the more successful challenges to constitutionality, at least in the Eleventh Circuit. The year 2025 saw a record number of FCA qui tam actions, with 1,297 filed, and more than 780 qui tam complaints filed in the first half of 2026, a record pace. Healthcare-related claims accounted for approximately 80% of FCA qui tam cases in 2025, but cybersecurity, customs and trade enforcement, and diversity, equity, and inclusion (DEI) (an area of particular interest in the Trump administration) are emerging areas for FCA qui tam claims. Data mining is also driving up the number of qui tam actions, and in April 2026, the administration launched the fraud oversight through careful use of statistics (FOCUS) initiative, which is addressing the issue.

To avoid and prepare for FCA claims, companies should be proactive in ensuring their compliance house is in order by taking steps including:

• Foster a speak-up culture from the top. A speak-up culture helps allow companies to solve problems internally and avoid surprises.
• Establish and promote strong internal reporting mechanisms, including hotlines, clear policies, and open access to human resources, compliance departments, and executives.
• Promote and enforce nonretaliation policies.
• Conduct internal reviews and audits of compliance programs to identify potential problems.
• Ensure that internal reports are promptly reviewed and investigated.
• Maintain a robust investigation program, whether you use internal or external investigators, and train internal investigators to conduct thorough, detailed, and well-documented investigations.
• Train executives and managers to listen to employees’ concerns in order to identify potential subjects of whistleblowing complaints and address them early.
• Review certifications in government contracts to ensure they are accurate and current.
• Deploy sound data analytics to avoid surprises by data miners.

When a report implicates possible FCA issues, companies should partner with legal to prepare by preserving data and documents, setting reserves, and assessing witness preparedness. Additionally, companies should strategize regarding defenses, including constitutional defenses and the heightened pleadings standard for fraud under the Federal Rules of Civil Procedure.

Companies should assume qui tam FCA litigation remains a significant enforcement risk and continue to emphasize compliance, internal reporting mechanisms, and prompt investigations of whistleblowing and fraud concerns.

Holly Robbins and Meredith Schramm-Strosser are shareholders with Littler Mendelson. They serve as co-chairs of the whistleblowing, compliance and investigations practice group. Rachel Frey is of counsel with the firm. She focuses her practice on counseling and representing management clients on labor and employment law matters.

Reprinted with permission from the November 5, 2026, edition of Corporate Counsel © 2026 ALM Global Properties, LLC, trading as Centellic. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.”