The question of whether the qui tam provisions of the False Claims Act are constitutional—and whether whistleblowers may continue to litigate on behalf of the U.S. government—is now pending on appeal before the U.S. Court of Appeals for the Third Circuit.  The Third Circuit’s ultimate decision will lead to significant implications for future False Claims Act (FCA) litigants, including federal funding recipients who routinely find themselves as defendants in these expensive and high-stake cases.

The Janssen Appeal

In United States v. Janssen Prods. LP, No. 25-1818 (3rd Cir. 2025), the defendant is appealing a record $1.64 billion FCA judgment for off-label promotion of HIV drugs. Janssen has asked the Third Circuit to hold that the FCA’s qui tam provisions are unconstitutional as violating the U.S. Constitution’s Appointments Clause. Relying on a 2024 Florida federal district court’s decision in United States ex rel. Zafirov v. Florida Medical Associates, LLC, Janssen has asserted that the FCA’s qui tam provisions impermissibly allow private plaintiffs to exercise significant governmental authority over litigation—thereby circumventing the Constitutionally-mandated process for appointing federal “officers.” Since that decision, no other federal judge has followed suit in determining the FCA’s qui tam provisions should be viewed as unconstitutional.

In Zafirov, a federal district court held in September 2024—in the first ruling of its kind—that relators act as unappointed federal officers because they both (1) exercise significant authority on behalf of the United States and (2) occupy a continuing position established by law.

Background

Arguments raised by Janssen (a pharmaceutical company) represent an ongoing trend of FCA defendants seizing on the Zafirov decision. In Janssen, relators brought suit against Janssen Products, LP on behalf of the federal government, twenty-six states and the District of Columbia, alleging fifty-six counts under the federal FCA, the federal Anti-Kickback Statute, and the false claims act of various states. After the United States declined to intervene, the relators prosecuted the case on the government’s behalf.

After trial in the U.S. District Court for the District of New Jersey, the jury awarded $120 million to the United States. Janssen moved for a judgment as a matter of law or for a new trial, alleging that—among other arguments—the case must be dismissed because the FCA’s qui tam provisions are unconstitutional. In rejecting Janssen’s constitutional arguments, the district court characterized Zafirov as “a singular non-precedential and out-of-circuit court decision” and noted “every federal circuit court of appeals that has addressed this issue . . . holds that the FCA’s qui tam provisions are constitutional.” As a result, the court adopted a total damages award of approximately $1.64 billion, including treble damages and penalties under the federal FCA.

Constitutionality of Qui Tam Provisions

In a brief filed on July 14, Janssen contends the judgment must be vacated because, in addition to other arguments, the qui tam provisions violate Article II of the U.S. Constitution. Because the Third Circuit has yet to directly address this issue, Janssen asserts the court is not bound by existing precedent and should consider the issue for the first time here. Similar to Zafirov’s holding, Janssen reasons that relators satisfy the “significant authority” requirement “by developing, investigating, and bringing cases ‘in the name of the Government’” to redress injuries allegedly suffered by the United States.

Janssen also alleges that the case “presents a particularly egregious example” of the qui tam provisions’ unconstitutionality because relators (purportedly) “pursued litigation that undermines the government’s approach to HIV treatment.” According to the defendant, the U.S. Department of Health and Human Services’ (HHS) treatment guidelines for HIV support the use of the medications at issue.  Additionally, Janssen contends certain Medicare and Medicaid regulations and guidance establish liberal reimbursement policies for HIV treatment so providers can explore a broad range of treatment options with patients.  Janssen argues that relators cannot prevail on a legal theory contradictory to the federal government’s guidance and regulations if relators are supposedly “stepping into the shoes” of the U.S. government to litigate the case.

The United States has moved to intervene in Janssen to defend the FCA’s constitutionality. Further briefing before the Third Circuit is currently stayed until the Court issues an order on the United States’s motion. As a result, it is unlikely that the Third Circuit will issue a decision in this case before September.

Court Responses to Constitutional Arguments

The Janssen case is not the only instance where defendants have challenged the constitutionality of the qui tam provisions following the Zafirov holding.  In United States ex rel. Shahbabian v. Trihealth, Inc., No. 1:20-cv-67 (S.D. Ohio July 28, 2025), the U.S. District Court for the Southern District of Ohio rejected arguments that the FCA’s qui tam provisions are unconstitutional. However, the court also certified the constitutional issue for an interlocutory appeal—permitting the defendants to appeal the issue to the Sixth Circuit before resolving the rest of the case—because it found “reasonable jurists could disagree as to whether the FCA violates Article II.” This decision indicates constitutional arguments are gaining more traction, and courts may be inclined to revisit existing precedent that upheld the FCA’s constitutionality.

In 2023, three current Justices of the United States Supreme Court suggested “there are substantial arguments that the [FCA’s] qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation.” United States ex rel. Polansky v. Exec. Health Res., Inc., 559 U.S. 419, 442 (2023) (Kavanaugh, J., concurring, joined by Barrett, J.); id. at 451 (Thomas, J., dissenting). Those statements imply, if an appropriate case reaches the Supreme Court, several Justices may seek to invalidate the FCA’s qui tam provisions—or at least significantly limit the ability of private parties to utilize those provisions. Indeed, the Court in Zafirov and defendants in Janssen explicitly relied on those three Justices’ statements to argue against the qui tam provisions.

Key Takeaways

Zafirov court’s holding that the qui tam provisions are unconstitutional remains an outlier, and defendants will likely continue to face an uphill battle in seeking dismissal of relator-led FCA actions on that basis. However, the landscape may be shifting as court watchers are closely monitoring whether the Third Circuit in Janssen breaks with its sister circuits and whether the Supreme Court may ultimately take up the issue.

In the meantime, grantees and contractors should continue to follow these legal developments and, when appropriate, assert all available defenses if faced with whistleblower-initiated FCA litigation. A defendant’s case may be particularly strong if it can demonstrate, as asserted in Janssen, that a relator’s legal theory contradicts the federal government’s own prior legal positions and guidance. In Circuits that have not yet addressed the constitutional issue, this type of defense might bear fruit.

If you have any questions regarding False Claims Act investigations or litigation, please contact Feldesman partner and Enforcement Insider Editor Mindy B. Pava (mpava@feldesman.com) or call 202.466.8960.

Be sure to also check out our Enforcement Insider blog to stay up to date on the latest enforcement actions and court decisions of interest to federal grantees, federal contractors, and other recipients of federal funding.