Atlanta, Ga. (October 1, 2024) - In a surprising turn of events, the U.S. District Court for the Middle District of Florida recently dismissed a False Claims Act (FCA) lawsuit brought by relator Clarissa Zafirov against Florida Medical Associates, LLC, and other defendants. U.S. District Judge Kathryn Kimball Mizelle ruled that the FCA's qui tam provisions, which allow private individuals to bring lawsuits on behalf of the government, violate the Constitution's Appointments Clause.
This decision follows another unexpected ruling by U.S. District Judge Aileen Cannon in the Southern District of Florida, where the court similarly dismissed an indictment against former President Donald Trump based on the same constitutional clause.
At the heart of these rulings is the argument that FCA relators - who decide whom to sue, which legal theories to pursue, and how to proceed - exercise significant executive authority. Because they are not appointed by the President, a department head, or a court, the judges concluded that these relators hold their positions unconstitutionally. As a result, Judge Mizelle dismissed the case entirely.
This decision marks a sharp departure from longstanding precedent, in which courts have largely upheld the constitutionality of the FCA's qui tam provisions. Multiple appellate courts have previously rejected similar challenges, and the FCA has long been viewed as a critical tool for combating fraud against the federal government. The ruling in United States ex rel. Zafirov v. Florida Medical Associates, LLC, No. 8:19-cv-01236-KKM-SPF (M.D. Fla. 2024), introduces new uncertainty into the realm of FCA litigation, but it remains to be seen whether this interpretation will gain broader traction.
It is important to note that these recent rulings may be outliers. The FCA continues to generate billions of dollars in recoveries for the government, and the vast majority of FCA cases proceed without constitutional challenges under the Appointments Clause. Nevertheless, the decisions from the district courts in Florida indicate that these issues are far from settled, and much remains to be litigated at the appellate level. Defendants in FCA cases should stay informed about these developments, as the legal landscape could shift if appellate courts take up these rulings for review.
While this recent decision is certainly noteworthy, it is not yet clear whether it signals a broader trend or if it will be overturned on appeal. For companies facing FCA actions, particularly in cases where the government has declined to intervene, these rulings may present new avenues for defense, but it is still too early to know how appellate courts will react.
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