Whistleblowers and their advocates are asking an appeals court to protect an age-old whistleblower law by reversing a lower court that held it to be unconstitutional.
The 11th U.S. Circuit Court of Appeals in the coming months will take up the matter, which could significantly influence whistleblowers’ ability to help the federal government root out fraud.
The background
The False Claims Act, which dates back to Civil War times, says government contractors that knowingly defraud the government are liable for three times the government’s damages plus a penalty tied to inflation. Whistleblowers who bring original information that leads to a successful prosecution may be eligible for 15 percent to 30 percent of those recoveries.
The U.S. government can pursue these perpetrators, but the law also allows individual whistleblowers (a.k.a. “relators”) to file qui tam lawsuits on behalf of the government. Those qui tam lawsuits make up a huge chunk of recoveries — in fiscal 2024, more than $2.4 billion of the $2.9 billion in recoveries came from cases that began under the False Claims Act’s qui tam mechanism.
And that’s the key piece.
On Sept. 30, 2024 the Middle District of Florida ruled that the qui tam provision of the False Claims Act was unconstitutional.
What’s next
That court was the first ever to find the qui tam provision unconstitutional, and seems to be a response to musings about it by Justice Clarence Thomas in a 2023 dissent in a Supreme Court opinion that failed to attract a majority of the other justices to his views.
The current case, United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., was filed under seal in 2019. Dr. Clarissa Zafirov (the relator), a family care physician, sued her employer and other defendants, saying they misrepresented patients’ medical conditions in order to get higher reimbursements from Medicare Advantage, also known as Medicare Part C.
Following the Middle District ruling, many of the briefs filed with the appeals court have pointed to decades of historical precedent and enforcement success. The Anti-Fraud Coalition, TAF, was among the parties who filed amicus briefs; Keller Grover actively supports TAF, a public interest, non-profit organization dedicated to defending and empowering whistleblowers who expose fraud on the government and the financial markets.
On March 10, defendants responded by emphasizing the unconstitutionality argument and urging the appeals court to uphold the prior ruling. Subsequent briefs filed by parties such as business groups made similar points.
Oral arguments are likely in summer or fall, Reuters reports.
Notably, a February Supreme Court opinion in a separate False Claims Act case upheld qui tam provisions, but in a short concurring opinion, Thomas and Justice Brett Kavanaugh again raised questions about the constitutionality of the qui tam provisions — even though it hadn’t been at issue in that case. The other justices did not join that opinion or otherwise express any views on the constitutionality issue presented in Zafirov.
Keller Grover will continue watching this case; we have a long history of helping whistleblowers expose wrongdoing and make sure public and private money gets to its intended beneficiaries.
If you’ve observed fraud against the federal government, contact us for a confidential, free consultation. We advise potential whistleblowers about the best path forward from the very beginning. Our 30-plus-year experience litigating both fraud and employment law uniquely equips us to represent whistleblowers.