The False Claims Act: The Future of Whistleblower Litigation and Circuit Splits

The False Claims Act (“FCA”) is a tool used against those who knowingly and falsely claim money from the United States government or who knowingly fail to reimburse the government. The FCA imposes treble damages and penalties and continues to be the weapon of choice when fighting health care fraud.

In fiscal year 2025 alone, settlements and judgments under the FCA exceeded $6.8 billion, which is the highest in a single year in the history of the FCA. Last year (i) whistleblowers filed 1,297 qui tam lawsuits and (ii) the government opened 401 investigations. Health care fraud remained a leading source of FCA settlements and judgments.  As in years past, the FCA was used to pursue matters involving a wide array of health care providers, goods, and services.

Although the FCA remains a critical tool to combat health care fraud, recent legal shifts may impact how effectively it continues to operate.

Constitutional Challenge to Relator Status

Whistleblowers, called “relators”, are able to file suit under the FCA on behalf of the federal government alleging fraudulent practices. In return, whistleblowers are entitled to a percentage of any recovery, with the percentage varying based on whether the federal government intervenes in the case.

Currently, the constitutionality of the FCA’s qui tam framework is pending before the Eleventh Circuit in United States ex rel. Zafirov v. Florida Medical Associates, LLC.  The pending litigation stems from a ruling that the FCA’s qui tam provision violates the “Appointments Clause” of the United States Constitution because it allows private citizens to exercise executive power by virtue of prosecuting claims on the government’s behalf. Because relators can file and continue suits without federal government intervention, the defense claims that such individuals would need to be appointed by the Executive Branch, which they most certainly are not. 

There have been decades of litigation upholding the constitutionality of whistleblower actions under the FCA, but Justice Thomas’s dissent in 2023 in United States ex rel. Polansky v. Executive Health Resources, Inc. indicated that more than a few justices would be willing to consider whether the qui tam framework is in fact constitutional.  While we are awaiting the final decision from the Eleventh Circuit, the outcome could have a major impact on the FCA’s effectiveness, possibly eliminating a relator’s ability to pursue an FCA claim without government intervention. If the defense is successful and the relator construct is deemed unconstitutional, the Department of Justice alone would be responsible for enforcement of FCA claims, reducing the overall number of FCA lawsuits.

Circuit Split for Claim Requirements

When a case is filed under the FCA, the Federal Rules of Civil Procedure (“FRCP”) requires that the complaint “state with particularity the circumstances constituting the fraud.” But there is now a split in the courts as to what that means in the context of FCA claims and how specific a relator must be about the actual false claims submitted to the government. The United States Supreme Court has had opportunities to create a uniform standard to meet this heightened pleading standard and, as of today, has not done so. As a result, lower courts vary greatly on the detail necessary to meet the relator’s burden under the FRCP.

For example, the Sixth and Eleventh Circuit have a more exacting standard where the Third Circuit is more relaxed. In the Sixth Circuit, a broad allegation of misconduct is not enough.  Similarly, in the Eleventh Circuit “a relator must allege not just a scheme, but a scheme that actually led to false claims being submitted to the government—and must do so with particularity.” In contrast, the Third Circuit takes a more “relaxed” approach and only requires the plaintiff to allege “particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.” 

This has led to forum shopping on the part of relators in certain circumstances. However, it could also lead to more dismissals of cases in favorable circuits.  As these cases progress through the system, we await the Supreme Court taking up such a case to provide a definitive and uniform pleading standard.