A Continuing Question: Eleventh Circuit Reverses Zafirov Holding That FCA Is Unconstitutional But Leaves Much Unsettled

Nearly two years after Judge Mizelle of the U.S. District Court for the Middle District of Florida broke new ground by holding that the False Claims Act (FCA) qui tam provision violates the Constitution’s Appointments Clause and nine months after oral argument in the Eleventh Circuit, the court of appeals has vacated that decision.

As Qui Notes readers will recall, Judge Mizelle’s opinion held that FCA relators are officers of the United States who must be appointed consistent with the Appointments Clause, and that the qui tam mechanism is unconstitutional because relators are not so appointed. Today, the court held that a relator’s position is not sufficiently continuing to qualify a relator as an officer of the United States. Under Lucia v. SEC, 585 U.S. 237, 245 (2018), a person is an officer of the United States if she “exercise[s] significant authority pursuant to the laws of the United States” and “occup[ies] a ‘continuing’ position established by law.” Reaching only the second part of that test, the Eleventh Circuit vacated and remanded.

The Eleventh Circuit’s opinion first analogizes to cases in which the Supreme Court has held that appointments to “intermittent” or “occasional[]” positions need not comply with the Appointments Clause. In the Eleventh Circuit’s view, because a relator’s work might decrease or end altogether based on how her case progresses, a relator’s role is likewise intermittent. The court rejected the defendants’ arguments that the duration for which a relator holds her position — often throughout a yearslong litigation — can overcome the intermittent nature of the role. In the court’s view, this factor must be “analyzed … in tandem” with the non-permanent functions a relator performs. In the absence of permanent tenure, the court was not persuaded by the fact that for many relators, the role lasts quite a long time.

The court next addresses the fact that a relator stands to receive only a single payment for her work, not “continuing” payments. The Eleventh Circuit explained that this too was a factor the Supreme Court has addressed in prior cases, holding, for example, that a surgeon who was paid on a per-examination basis for examining pension claimants was not an officer because, among other reasons, his payment came only on an intermittent basis. Finally, the court held that a relator’s role is personal to herself; not one that can be assumed by someone else (other than the Attorney General) if she leaves her post. Even when a relator dies or goes bankrupt, the court explained, a personal representative or trustee represents the relator as the case continues, but does not actually fill that position.

Having determined that the arguments in favor of constitutionality were persuasive, the court explained why it believed the counterarguments fell short. The court distinguished relators from the independent counsels who existed in the late 20th century because those positions were continuing — if one independent counsel resigned, another could be appointed to pick up where he left off. The court explained that relators are more similar to long-ago customs inspectors who were hired on a case-by-case basis where they had expertise — and whom the Supreme Court held are not covered by the Appointments Clause. The court also rejected the argument that there is an “office of relator” that exists continuously, even if it is not continuously filled, calling that framing “fictional” because no law in fact creates such an office.

But importantly, the Eleventh Circuit’s opinion rejected only one of the bases for unconstitutionality that the defendants had raised. Because the district court had not addressed the other two grounds — that the qui tam device violates the Take Care Clause because relators are not accountable to the president, or that it violates the Vesting Clause because the entire executive power (including to bring enforcement suits on behalf of the United States) rests with the president alone — the Eleventh Circuit did not address them either. Those arguments will be left for Judge Mizelle to address on remand.

Exactly what’s next remains to be seen. At least three Supreme Court justices have expressed interest in this issue, but we’ll have to wait and see whether there would be the requisite four votes to grant a cert petition in this case, especially since the Eleventh Circuit’s decision restores the status quo. If the case returns to Judge Mizelle, we will of course continue to monitor closely whether this case breaks further ground with another constitutional ruling on one of the defendants’ other arguments. While today’s decision is yet another challenge to litigants pressing the constitutional concerns those justices raised, the Eleventh Circuit’s decision rests on narrow grounds and leaves several avenues to be explored.