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For 160 years, federal courts have endorsed the constitutionality of the FCA. But in September 2024, a U.S. District Court Judge for the Middle District of Florida held in Zafirov v. Florida Medical Associates, 751 F. Supp. 3d 1293 (S.D. Fla. 2024) that relators function as “improperly appointed” officers of the United States and thus violate the Appointments Clause within Article II of the U.S. Constitution. Before Zafirov, FCA defendants and amici had on occasion challenged the act’s constitutionality, but the Zafirov ruling is the only federal court opinion declaring the FCA unconstitutional under Article II. This blog post will explore the contours of the Appointments Clause challenges to the FCA and the primary arguments against the interpretations advanced in these challenges.
Interpreting the Appointments Clause
The Appointments Clause, which prescribes the two-track process for appointing principal and inferior officers, states that the President
“shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.”U.S. Const. art. II, § 2, cl. 2.
The Constitution does not provide explicit guidance on who qualifies as an officer for purposes of the Appointments Clause. Broad understandings of the clause read “officer” and “inferior officer” to include a wide range of federal employees, who must then be appointed by the President and confirmed by the Senate, or in the case of inferior officers, appointed by the President alone, a court, or a department head. The breadth of the term “officer” ties into debates about presidential power because officers are answerable to the President, while mere employees tend to enjoy more insulation from politics. See, e.g., Jennifer L. Mascott, Who Are “Officers of the United States”? 70 Stan. L. Rev. 443 (2018).
Drawing from precedent dating back to the 19th century, the Supreme Court has established a two-part test for determining which positions qualify as officer positions, which it solidified in the 2018 case Lucia v. SEC, 585 U.S. 237. First, officers must occupy a “continuing” position, characterized by “tenure, duration, emolument and duties.” Lucia 585 U.S., at 245 (quoting United States v. Germaine, 99 U.S. 508, 511 (1879)); United States v. Hartwell, 73 U.S. 385, 385 (1867). If the position is temporary, some case law suggests that it can still satisfy the “continuing” prong if the position is not personal in nature. See United States v. Maurice, 26 F. Cas. 1211 (C.C.D. Va. 1823) (Marshall, J.); United States v. Donziger, 38 F.4th 290, 294 (2d Cir. 2022). Second, an individual must “exercis[e] significant authority pursuant to the laws of the United States.” Id. at 245 (quoting Buckley v. Valeo, 424 U.S. 1, 126 (1976)). This second prong deals with “the extent of power an individual wields in carrying out his assigned functions.” Id. Both prongs of the test must be satisfied for a position to require officer appointment. Additional questions direct the inquiry into whether an officer is principal or inferior, but this dimension of the Appointments Clause is less relevant to the current challenges to the FCA.
The Holding in Zafirov
In the Zafirov litigation, the federal government advocated for an additional threshold question to accompany the two-part officer test. According to the government, only federal employees should be able to qualify as officers. Or to put it differently, someone working entirely outside of the government could not be considered as an officer. The Office of Legal Counsel, an arm of the Department of Justice, has also employed this interpretation in a recent memo. See The Test for Determining “Officer” Status Under the Appointments Clause, 49 Op. O.L.C. __ (Jan. 16, 2025). While the government has put forward this theory in its most recent brief in Zafirov, the theory has yet to be addressed head on by a court in the Zafirov litigation.
In Zafirov, relator, Clarissa Zafirov, filed a qui tam complaint against her former employer, Florida Medical Associates, alleging that it overbilled Medicare by misrepresenting patients’ medical conditions. After defendants moved for judgment on the pleadings, asserting that the qui tam provisions of the FCA contravene Article II, the district court applied the two-part officer test and articulated a novel theory that relators qualify as officers. Despite the fact that there is no “continually filled” office of the relator, Zafirov held that relators occupy a “continuing position.” The opinion reaches this conclusion because according to the district court, the duration and non-personal nature of a relator’s role “mirrors” the roles of a bank receiver or special prosecutor, two examples of officers.
The district court then found that relators pass the “significant authority” test because they possess civil enforcement authority when they sue in the name of the government. Because this holding is novel, the district court mainly cited concurrences and dissents to bolster these conclusions. In particular, the court relied on Thomas’s dissent from United States, ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419 (2023), which casts doubt on the constitutionality of the FCA under Article II. Going beyond the Supreme Court’s officer test, the district court acknowledged and confronted the fact that the FCA has a long historical pedigree in the United States and English common law. However, the court decided that this history was not enough to save the constitutionality of the FCA because the historical practice was not “unambiguous and unbroken.” The FCA does not provide for the appointment of relators in any form, so the district court did not need to consider whether a relator qualifies as a principal or inferior officer.
Why Every Other District Court has Reached a Contrary Conclusion
The set of assertions the district court made in Zafirov is unprecedented. The Supreme Court has never squarely considered whether the FCA contravenes Article II. But every lower federal court to consider the issue has affirmed the constitutionality of the FCA. There are good reasons for these affirmations. To begin with, no other court has discarded the history of the FCA and qui tam actions in the way that the Zafirov court did. Qui tam actions developed through the English common law tradition and were adopted by the American colonists. Once the United States Constitution was ratified, the First Congress enacted many informer statutes. Within twenty-five years of the Constitutional Convention, every state had enacted qui tam legislation.
See Zafirov, Brief of Legal History Scholars James Pfander, Diego Zambrano, and Jared Lucky as Amici Curiae in Support of Neither Party. And the FCA itself has been on the books since 1863. As one district court put it, “It is unlikely that the framers would have written a Constitution that outlawed [qui tam actions], and then immediately passed several qui tam laws that unconstitutionally encroached on Executive Branch power before the ink on the Constitution was even dry.” Pequignot v. Solo Cup Co., 640 F. Supp. 2d 714, 726 (E.D. Va. 2009).
Beyond history, courts have repeatedly held that relators are not officers under the Supreme Court’s two-part Appointments Clause test. The Tenth Circuit, discussing the “continuing” requirement, notes, “There is no legislatively created office of informer or relator under the FCA” and relators lack continuing positions with “tenure, duration, emolument and duties.” U.S. ex rel Stone v. Rockwell Int'l Corp., 282 F.3d 787, 805 (10th Cir. 2002) (quoting Germaine, 99 U.S. at 511-12). Moreover, an FCA qui tam case is personal to the relator. For example, if a relator dies while their case is pending, their estate must file a motion under Federal Rule of Civil Procedure 25 to substitute as the relator’s personal representative.
Analyzing the “significant authority” prong, the Ninth Circuit has held “The fact that relators sue in the name of the government does not vest them with any governmental powers; they conduct litigation under the FCA with only the resources of private plaintiffs.” U.S. ex rel. Kelly v. Boeing Co., 9 F.3d 743, 758 (9th Cir. 1993). In fact, the government possesses extensive control over relators at every stage of the litigation. Without governmental power, relators do not exercise “significant authority.” In FCA cases in which the government intervenes and takes over the litigation, unlike in Zafirov, the relator has even less authority.
Finally, relators are not employed by the federal government. If their case is successful, relators receive a share of the government’s recovery. But a whistleblower receiving a contingent award is distinct from a government employee, who is on the federal government’s payroll.
Given the history of qui tam actions, the non-continuing nature of relators, and the fact that relators neither exercise significant authority nor are employed by the federal government, it’s not surprising that every court other than the Zafirov district court has found that the FCA’s qui tam provisions are consistent with the Appointments Clause. The relators in Zafirov appealed the district court ruling, and the case is currently pending in the 11th Circuit. The district court decision is not binding in any other districts.
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