Insights

Washington – June 20, 2024:  In a rare 8-1 decision, the U.S. Supreme Court decided U.S. v. Rahimi today in favor of restricting access to firearms for domestic violence abusers. The higher court held that: “An individual found by a court to pose a credible threat to the physical safety of another may be temporarily disarmed consistent with the Second Amendment.”

False Claims Act (FCA) settlements and judgments hit record highs yet again in FY 2025, surpassing the previous record by over $1 billion and setting a new high-water mark for the number of new FCA cases filed.  These records were built both on existing enforcement priorities such as pandemic-related fraud and healthcare enforcement actions and new guidance from the Executive Branch instructing the Department of Justice to enforce its 2025 priorities including Diversity, Equity, and Inclusion (DEI), civil rights, and customs issues.  Procurement fraud, cybersecurity issues, and small business fraud also remained focal points, with significant settlements in each of those areas.  In the courts, an Eleventh Circuit decision expanded relators’ ability to use discovery to avoid dismissal under Rule 9(b), and a Ninth Circuit ruling clarified a number of customs fraud issues while applying the Supreme Court’s Schutte scienter test.  Debate over the qui tam provisions’ constitutionality continued to grow, with arguments made in multiple circuits, including an Eleventh Circuit oral argument in the appeal of the Middle District of Florida’s Zafirov decision that helped to spark the recent wave of challenges.  Crowell FCA attorneys explain these developments, trends, and what’s next for the FCA in a “Feature Comment” published in The Government Contractor.

On the morning of December 12, 2025, the Eleventh Circuit heard argument in United States ex rel. Zafirov v. Florida Medical Associates, LLC, et al., No. 24-13581 (11th Cir. 2025). This case concerns the constitutionality of the False Claims Act (FCA) qui tam provisions and a groundbreaking September 2024 opinion in which the United States District Court for the Middle District of Florida held that the FCA’s qui tam provisions were unconstitutional under Article II. See United States ex rel. Zafirov v. Fla. Med. Assocs., LLC, 751 F. Supp. 3d 1293 (M.D. Fla. 2024). That decision, penned by District Judge Kathryn Kimball Mizelle, was the first success story for a legal theory that has been gaining steam ever since Justices Thomas, Barrett, and Kavanaugh indicated they would be willing to consider arguments about the constitutionality of the qui tam provisions in U.S. ex rel. Polansky v. Exec. Health Res., 599 U.S. 419 (2023). In her opinion, Judge Mizelle held (1) qui tam relators are officers of the U.S. who must be appointed under the Appointments Clause; and (2) historical practice treating qui tam and similar relators as less than “officers” for constitutional purposes was not enough to save the qui tam provisions from the fundamental Article II infirmity the court identified. That ruling was appealed and, after full briefing, including by the government and a bevy of amici, the litigants stepped up to the plate this morning for oral argument.

On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future.

The federal government has identified purported ‘waste, fraud, and abuse’ in small business programs as a major focus of its current enforcement efforts. As it relates to federal procurement, we have seen audits and investigations rolled out not only of active participants in the Small Business Administration’s 8(a) Business Development Program but also reviews of various types of small business contracts (such as 8(a) sole source and set-aside awards, preference-based awards, and small business set-aside awards over particular values). Join Crowell & Moring as we discuss what aspects of contract performance and teaming arrangements are being scrutinized (e.g., size/status eligibility, limitations on subcontracting compliance, reasonableness of market rates, etc.) and how these considerations can impact both small government contractors holding the prime contracts under review and their subcontractors. 

Please join Crowell & Moring’s Government Contracts Group on Wednesday, February 8, 2023 at 1:00 p.m. ET for a webinar on the National Defense Authorization Act for Fiscal Year 2023. 

In the second installment of Crowell & Moring’s webinar series, our Government Contracts attorneys will discuss the impacts of the current and expected supply chain issues on federal government contractors and their compliance responsibilities. Our panelists will discuss contract clauses that may be at risk as the supply chain delays continue, including requirements for domestic preferences, prohibitions on counterfeit parts, and protecting national security interests.  This panel will also cover the expected Government enforcement of supply chain-related compliance violations, including False Claims Act liability.

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