The 11th Circuit has upheld the constitutionality of the False Claims Act’s qui tam provisions, joining other federal appeals courts that have decided the question and reversing a ruling that had rattled the whistleblower bar. While the constitutional fight isn’t over, the record pace of qui tam filings isn’t slowing, according to experts CCI asked. What should compliance, risk and governance leaders take from where things stand — and what would be the wrong lesson to draw from what looks to be a fairly narrow ruling?
In early September, the 11th Circuit ruled in United States ex rel. Zafirov v. Florida Medical Associates, LLC that False Claims Act (FCA) relators are not “officers of the United States” subject to the Constitution’s Appointments Clause, reversing a 2024 Florida district court decision that drew heavy interest from healthcare, defense contracting and other qui tam-exposed sectors. The panel joined the 5th, 6th, 9th and 10th Circuits in rejecting Appointments Clause challenges to qui tam relators, but it decided the case on a single, narrow ground and remanded two separate constitutional theories, under the Take Care Clause and the Vesting Clause, for the district court to consider in the first instance.
The stakes for compliance and legal functions are hard to overstate. The DOJ recovered a record $6.8 billion through the FCA in FY 2025, with more than $5.7 billion coming from healthcare alone. Relators filed 1,297 qui tam suits last year, a 32% jump over the prior record, and are on pace to eclipse that number in 2026. Meanwhile, the DOJ has openly encouraged whistleblower filings in cybersecurity, customs and tariffs and DEI, expanding the range of companies that need to think about qui tam exposure.
CCI asked two attorneys who follow this litigation closely — Noam Fischman, co-team leader of healthcare litigation and partner at Akerman, and Matthew Yelovich, partner at Cleary Gottlieb — what the ruling changes, what it doesn’t and how compliance leaders should read it.
“Zafirov is likely durable on the narrow ground the panel actually decided,” Fischman said in the written Q&A with CCI. “But Zafirov is durable precisely because it is narrow. It does not resolve the broader Article II attack.”
Yelovich agreed that the ruling should be read narrowly.
“The panel’s decision was narrow and in accordance with the decisions of all other circuits to have decided previous constitutional challenges to the qui tam provisions of the FCA,” he said. “Companies litigating these suits should continue to preserve constitutional arguments under the Appointments Clause, Vesting Clause and Take Care Clause, as this decision will not be the final word on those issues.”
CCI: The 11th Circuit reversed a previous ruling that qui tam relators are unconstitutionally appointed “officers of the United States.” In practical terms, what does the panel’s decision change today for companies currently defending qui tam suits and what does it not change?
Noam Fischman: The short answer is that nothing material has changed for companies defending FCA qui tam cases, at least for now. In Zafirov, the 11th Circuit vacated the district court’s dismissal of the qui tam action, rejecting the district court’s conclusion that FCA relators are “officers of the United States” who must be appointed under Article II. The 11th Circuit held instead that relators are not officers because they do not occupy a continuing position established by law. That said, Zafirov does not end the broader Article II debate. The 11th Circuit addressed only the Appointments Clause issue and remanded for the district court to consider the defendants’ Take Care Clause and Vesting Clause arguments in the first instance. Those arguments seem to be the more viable paths to dismantling the abuse of the False Claims Act’s qui tam provisions and certainly remain worth preserving given the Supreme Court’s recent signals that at least some justices view the FCA’s qui tam structure as raising substantial Article II questions. For the moment, the practical takeaway is really about argument preservation, not a change in day-to-day defense strategy. Companies defending qui tam cases should continue to assert traditional defenses: Rule 9(b), public disclosure/original source, materiality, scienter, causation, damages, among others. At the same time, companies should also expressly preserve any Article II objections in pleading and motions practice. The goal is to build a record — both offensively (through discovery) and defensively (through pleadings) — concerning the government’s actual role in a particular matter. These attempts will invariably draw objections from the relator and the government, but those objections may themselves help frame the continuing Article II fight for later review.
Matthew Yelovich: The decision does not change much for companies defending qui tam suits. The panel’s decision was narrow and in accordance with the decisions of all other circuits to have decided previous constitutional challenges to the qui tam provisions of the FCA. That said, companies litigating these suits should continue to preserve constitutional arguments under the Appointments Clause, Vesting Clause and Take Care Clause, as this decision will not be the final word on those issues and is limited geographically in its effect.
CCI: The panel decided the case on a single narrow ground — that relators don’t hold a “continuing” position — and expressly declined to reach both the “significant authority” prong of the Appointments Clause analysis and the defendants’ separate Take Care Clause and Vesting Clause arguments, which now go back to the district court. With no circuit split but continued signals from Justices Thomas and Kavanaugh in Polansky and Wisconsin Bell, how durable is this ruling, and what should compliance leaders and executives be watching for over the next year or two as the theories develop and the Eli Lilly petition works through the Supreme Court?
NF: Zafirov is likely durable on the narrow ground the panel actually decided. FCA relators are not “officers of the United States” because they do not occupy a continuing position established by law. That holding also aligns with other circuits that have rejected Appointments Clause challenges to FCA qui tam relators But Zafirov is durable precisely because it is narrow. It does not resolve the broader Article II attack. The 11th Circuit remanded the case to the district court to address the likely more appropriate constitutional challenges under the Take Care Clause and Vesting Clause of Article II. For now, compliance leaders and executives should note how the defense-bar roadmap reacts to direction from various courts. Counsel should be pressing the more structural Article II theories flagged by Justices Thomas, Kavanaugh and Barrett. For now, the critical takeaway is that the FCA, as previously construed and litigated, remains firmly intact. It would be a mistake at this juncture to relax compliance, disclosure, investigation or remediation programs. Over the next few years, it will be particularly interesting to learn how the government intends to explain the level of control it exhibits over relators and whether, aside from pointing to history alone, that control independently meets constitutional requirements. Finally, Eli Lilly sought Supreme Court review of these issues in a petition for certiorari filed in March 2026, which the Supreme Court denied in May 2026. It is unclear why the Supreme Court denied certiorari in that case. It is possible, although not certain, that the Supreme Court’s declination was procedural insofar as Eli Lilly had not raised the question of Article II standing until late in the appellate process. Regardless, it is also unlikely that the Eli Lilly certiorari petition will be the Supreme Court’s final opportunity to address these issues.
MY: Parties will continue to seek Supreme Court review of adverse qui tam judgments in light of several sitting justices’ writings indicating openness to scrutinizing the constitutionality of the FCA’s qui tam statutory provisions. That is true regardless of the ultimate outcome of the Zafirov case on remand or, eventually, on appeal again. In addition to the 11th Circuit, leaders tuned into these issues should be monitoring (1) the 3rd Circuit’s resolution of Janssen Products LP, a $1.6 billion qui tam judgment being challenged in part on constitutional grounds (but currently referred to a special mediator); and (2) developments in the 5th Circuit, where several judges have written separately to express skepticism of the qui tam provisions’ constitutionality. The Eli Lilly petition for writ of certiorari was denied, but it will not be the last effort of its kind. Given the judicial drumbeat across separate writings at the Supreme Court and circuit level, eventual Supreme Court resolution of these challenges seems distinctly possible, and particularly likely if a circuit split emerges.
CCI: Observers have suggested that qui tam relators typically go external only after internal reporting fails, is ignored or produces retaliation. Does the constitutional uncertainty around qui tam — win, lose or draw at the Supreme Court — change any of the fundamentals of how compliance functions should design internal reporting, investigation and non-retaliation programs?
NF: No — at this point, the constitutional uncertainty surrounding the FCA’s qui tam provisions should not change the fundamentals of a company’s compliance program. The live Article II debate is about who may prosecute FCA claims on the government’s behalf, not whether companies must maintain effective controls in the first instance. Regardless of how that issue is resolved, the government would still be able to bring direct FCA claims and seek treble damages and civil penalties, and serious fraud allegations may also create parallel criminal or regulatory exposure. Practically speaking, the risk that internal reporting failures, ignored complaints or retaliation will turn an employment issue into an enforcement and litigation problem remains very real, even if the Supreme Court ultimately (at some point in the future) limits some aspect of the qui tam mechanism. The takeaway remains continuity: A robust compliance program may look like a cost center from an accounting perspective, but it is one of the strongest tools a company has to prevent, detect, remediate and defend against fraud-and-abuse allegations.
MY: None of the current developments in qui tam litigation merit changes to corporate compliance programs, which ideally should be designed to encourage internal reporting, follow up promptly on credible reports of conduct that would potentially violate the FCA and prohibit retaliation against those who report possible misconduct. Retaliation is unlawful under the FCA, and companies benefit from providing avenues for employees to report possible misconduct that are ideally anonymous and that trigger investigations that are independent of those making employment decisions. Ultimately, even if the qui tam provisions were to be deemed unconstitutional by the Supreme Court (an outcome that does not seem imminent, irrespective of whether it is likely or not), the federal and state governments have significant resources to investigate False Claims Act and related state offenses and increasingly reward self-reporting and remediation, and good corporate compliance programs help mitigate risks and take advantage of opportunities in this space.
CCI: Healthcare still drives the largest share of FCA recoveries, but the DOJ has openly encouraged whistleblower filings in cybersecurity, customs and tariffs and DEI. Does the Zafirov ruling shift the risk calculus differently across sectors, particularly for defense contractors self-certifying under CMMC, importers navigating tariff enforcement or federal contractors making DEI-related attestations?
MY: The Zafirov ruling does not change the risk calculus across these sectors. The status quo — that qui tam relators initiate over a thousand suits per year, with the DOJ actively encouraging more across a range of administration policy objectives — shows no sign of abating unless and until the Supreme Court grants review in a case squarely presenting the constitutional challenges. The timeline for that remains uncertain, and companies in the administration’s high-priority sectors should continue to take steps to mitigate risk and document compliance in the meantime.
CCI: How should a chief compliance officer or general counsel brief the board and audit committee on where this stands? What is the wrong takeaway a board might draw from the headline “11th Circuit upholds qui tam?” What’s the right one?
NF: I would brief the board and audit committee that Zafirov is an important but narrow appellate development, not a change in the company’s FCA risk profile. The 11th Circuit held only that FCA relators are not Article II officers because they do not hold a continuing position established by law. The 11th Circuit expressly remanded the separate Take Care Clause and Vesting Clause arguments. One wrong takeaway from the headline “11th Circuit upholds qui tam” would be that the constitutional debate is over or that qui tam risk is now settled once and for all. The Supreme Court has not resolved the broader Article II questions, and Justices Thomas, Kavanaugh and Barrett have all signaled that those questions remain substantial. Nor should a board or audit committee think constitutional uncertainty creates an opportunity to relax compliance investment: the qui tam provisions remain in force, the government can still bring FCA claims directly, and FCA exposure still includes treble damages and civil penalties, among other civil and potential criminal penalties. The right takeaway is that this remains a procedural issue to monitor, not an invitation to alter a compliance structure. Compliance and legal functions should continue to focus board oversight on prevention, internal reporting, prompt investigation, documentation, remediation, non-retaliation and escalation of matters that could become FCA or parallel enforcement issues. The best protection would not be a bet on some future decision finding the qui tam provisions of the FCA to be unconstitutional. Rather, the board and audit committee should continue to strive for a demonstrably effective compliance program aligned with the DOJ’s core expectations: that a compliance program be well-designed, adequately resourced and empowered and working in practice.
MY: The board and audit committees should maintain their regular briefings related to compliance and pay particular attention to holding privileged briefings related to areas of high risk in the current FCA enforcement environment, such as inventorying and assessing DEI-related programs. Officers briefing the board and audit committee on the status of challenges to the FCA should emphasize (1) the current governing law — every circuit to have addressed these challenges has upheld the qui tam provisions’ constitutionality; (2) the limited nature of the Zafirov decision, which reversed on only one aspect of one of several constitutional challenges to the FCA; and (3) the uncertainty as to the timing and nature of future developments in this area, given that only a minority of Supreme Court justices have indicated in separate writings an openness to constitutional challenges to the law. Accordingly, while the board and audit committee should stay apprised of major related legal developments, and the general counsel should ensure that litigation positions the company takes preserve any constitutional arguments available to it, no one should take away from Zafirov a final answer on the FCA’s future or justification for reducing investment in compliance in the interim.
