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Fla . Ruling May Undermine FCA Whistleblowers ' Authority
By Matthew Nielsen and Lily Johnson ( October 11 , 2024 , 6:10 PM EDT )
On Sept . 30 , a decision from the U . S . District Court for the Middle District of Florida in Zafirov v . Florida Medical Associates LLC struck a blow to the False Claims Act that will deprive relators of their ability to bring suits under the FCA .
The FCA prohibits fraudulent claims for payment from the U . S . and the withholding of payments owed to the U . S . and provides for both criminal and civil actions . While the FCA reaches virtually anyone who does business with the government , the majority of cases relate to healthcare , defense spending and government contracts .
U . S . District Judge Kathryn Kimball Mizelle dismissed a case against several Medicare Advantage organizations and providers on the grounds that an individual suing on behalf of the federal government under the FCA , also known as a relator , violates the Article II appointments clause of the U . S . Constitution .
Matthew Nielsen
The court held that relators must be considered officers of the government and appointed in a manner consistent with the Constitution , given relators ' ability to exercise significant authority to bring lawsuits on behalf of the U . S . government .[ 1 ]
Under the FCA , any person may file a lawsuit in the government ' s name to enforce the statute .[ 2 ] The government then has an opportunity to intervene in the lawsuit or leave it to the relator to litigate under a procedure known as a qui tam lawsuit .
Lily Johnson
The Zafirov Effect
If the individual relator proceeds with the lawsuit , they may collect an award of up to 30 % of the proceeds of the action .[ 3 ] Given this ability to collect proceeds , it is no surprise that individual relators bring the majority of FCA lawsuits .[ 4 ]
However , as the court took issue with in Zafirov , the FCA also gives the relator the ability to bind the federal government without first consulting with any officer and to pursue the litigation fully independently .[ 5 ] As the government declines to intervene in most actions , relators enjoy enormous freedom in bringing claims under the FCA .
In Zafirov , the relator Clarissa Zafirov , a board-certified family care physician , alleged that the defendants — medical providers including her former employers — mispresented patients ' medical conditions to