Skip to main content
Some Major Whistleblower Decisions of 2026: A Practitioner’s Guide to FCA Qui Tam Constitutionality, Scienter, First-to-File, 340B, and Relator Fees
Table of Contents
Editorial note: This is a practitioner-focused survey, not an exhaustive list of every 2026 whistleblower decision. It is based on public court opinions, public docket reporting, and agency materials. It is for general information only and is not legal advice.
Executive Summary
2026 is already delivering major False Claims Act rulings and pending appeals that will shape qui tam practice for years. The FCA continues to generate record recoveries and record filings, yet defendants are pressing constitutional attacks on the qui tam provisions with new urgency. At the same time, appellate courts are clarifying the issues that decide real cases: scienter after SuperValu, the first-to-file bar, regulatory overlap with programs like 340B, relator fee mechanics in declined cases, and the consequences of filing weak or speculative complaints.
The numbers explain why the stakes are high. DOJ reported that FCA settlements and judgments exceeded $6.8 billion in fiscal year 2025, the highest annual total in the statute’s history, and that whistleblowers filed 1,297 qui tam lawsuits, also a record. DOJ also reported more than $85 billion in FCA recoveries since the 1986 amendments strengthened the statute. [1]
This article reviews the most significant decisions and pending matters practitioners should watch. It also explains what those developments mean for relators, defense counsel, DOJ, and potential whistleblowers deciding whether and how to come forward.
The Case Everyone Is Watching: Zafirov and the Constitutionality of FCA Qui Tam Litigation
The biggest pending issue in 2026 is whether the False Claims Act’s qui tam provisions violate the Appointments Clause and related Article II principles when a private relator litigates in the name of the United States without formal appointment as a federal officer.
In United States ex rel. Zafirov v. Florida Medical Associates, LLC, a Florida district court held the FCA’s qui tam provisions unconstitutional. The Eleventh Circuit heard argument on December 12, 2025. As of April 26, 2026, the Eleventh Circuit has not issued a decision. Reuters reported that the panel questioned both sides on whether a relator who is not paid by the government can be treated as an officer subject to the Appointments Clause, and on whether DOJ’s statutory control mechanisms provide enough executive supervision. [2]
That point matters. The defense argument is functional. A relator can file in the name of the United States, conduct discovery, seek treble damages and civil penalties, and continue litigating even when the government declines to intervene. Defendants argue that this is executive power and that a private party cannot exercise it without constitutionally proper appointment and supervision.
Speak with the Lawyers at Brown, LLC Today!
Over 100 million in judgments and settlements trials in state and federal courts. We fight for maximum damage and results.
The relator and government response is historical and structural. Qui tam actions have deep roots. The government receives the complaint under seal. DOJ may intervene. DOJ may move to dismiss. DOJ may settle subject to statutory procedures. DOJ may monitor the litigation. From that perspective, the relator is not an officer of the United States. The relator is a private party with a congressionally authorized role in enforcing a partially assigned claim.
Practitioner takeaway: The FCA has not been invalidated nationwide. Qui tam cases continue to be filed and litigated. But constitutional challenges are now part of the standard defense playbook, especially in non-intervened cases. Relator counsel should anticipate Article II motions early and build a record around the government’s statutory control: seal review, intervention rights, dismissal authority, settlement oversight, and continuing access to filings.
Zafirov Is Not Alone: Penelow, Lilly/Streck, and the Constitutional Pressure Point
Zafirov is the lead case, but it is not the only one. The Third Circuit is considering related Article II arguments in Penelow v. Janssen Products, an appeal from a District of New Jersey matter involving a very large FCA verdict. Morgan Lewis reported that the Third Circuit heard argument on March 18, 2026, on whether the FCA’s qui tam provisions violate the Appointments, Vesting, and Take Care Clauses. [4]
The Supreme Court may also be asked to weigh in soon. Reuters reported that Eli Lilly filed a petition in March 2026 asking the Supreme Court to review the constitutionality of the FCA’s qui tam provisions after a $183 million judgment in a Medicaid rebate case brought by Ronald Streck. Reuters also reported that the Seventh Circuit had upheld that verdict. [3]
In the Fifth Circuit, the issue has also gained attention through judicial writings. Judge Ho’s concurrence in Gentry v. Encompass Health called for reconsideration of existing precedent upholding qui tam actions. That does not change the law by itself. But it signals that Article II objections are no longer academic. They are litigation tools.
What to watch: if the Eleventh Circuit affirms Zafirov, Supreme Court review becomes far more likely. If the Eleventh Circuit reverses, the constitutional challenge will not disappear. Defendants will continue to raise it in non-intervened cases, and appellate courts may split on the reasoning even if they do not split on the result.
Adventist v. AbbVie: 340B, Regulatory Overlap, and FCA Liability
In Adventist Health System of West v. AbbVie Inc., the Ninth Circuit revived FCA claims alleging that drug manufacturers inflated prices in the 340B program, causing government healthcare programs to overpay. The district court had dismissed the claims as an improper attempt to enforce Section 340B through the FCA. The Ninth Circuit reversed. [5]
The core holding is important. The Ninth Circuit concluded that the absence of a private right of action under Section 340B did not categorically bar FCA claims where the relator’s theory was that the alleged misconduct caused false or inflated claims to be paid by the government. The court treated the case as one about fraud against the government, not a private attempt to collect personal losses or directly enforce the 340B statute. [5]
That distinction will matter beyond 340B. Defendants in complex regulatory cases often argue that the FCA is being used as an end-run around a regulatory statute that Congress did not make privately enforceable. Adventist gives relators a stronger response. The issue is not whether the relator can sue under the regulatory statute. The issue is whether the regulatory violation caused false, inflated, or tainted claims to federal programs.
Practitioner takeaway: Adventist is helpful for relators in drug pricing, Medicare Advantage, grant compliance, Medicaid, and other heavily regulated payment systems. But the pleading burden remains. The complaint must connect the regulatory violation to government payment. A regulatory violation in the abstract is not enough.
Sheldon v. Allergan: Scienter After SuperValu
Sheldon v. Allergan Sales, LLC is one of the most important post-SuperValu scienter decisions. The case involved Medicaid Best Price allegations. The relator alleged that the defendant failed to aggregate certain rebates and discounts when calculating Best Price, which allegedly led to underpaid Medicaid rebates. The district court dismissed. The Fourth Circuit reversed and remanded. [6]
After the Supreme Court’s decision in United States ex rel. Schutte v. SuperValu Inc., FCA scienter turns on what the defendant actually knew, believed, suspected, or consciously avoided. A defendant cannot defeat scienter merely by later identifying an objectively reasonable interpretation of an ambiguous requirement if the complaint plausibly alleges that the defendant knew or recklessly disregarded a substantial risk that its claims were false.
The Fourth Circuit applied that framework and held that the relator plausibly alleged reckless disregard. The court focused on allegations that the defendant understood CMS’s interpretation, engaged in relevant compliance and audit activity, and nevertheless continued using the challenged reporting approach. [6]
The decision is not a blank check for relators. Complex statutes still create hard falsity and scienter issues. But Sheldon is a warning against after-the-fact ambiguity defenses. If internal records show subjective awareness of risk, ignored warnings, or deliberate avoidance, scienter may survive a motion to dismiss.
Practitioner takeaway: Post-SuperValu complaints should plead subjective facts. Internal warnings matter. Agency communications matter. Compliance audits matter. Prior inconsistent positions matter. The strongest scienter allegations are not conclusions; they are documents, meetings, decisions, and warnings.
Ferguson v. Lockheed Martin: First-to-File Requires the Same Essential Scheme, Not Just a Similar Topic
The Fifth Circuit’s decision in Ferguson v. Lockheed Martin is a useful first-to-file decision for relator counsel. The district court dismissed the case on the ground that an earlier FCA action covered the same essential facts. The Fifth Circuit reversed. [7]
The appellate court held that the first-to-file bar did not apply because the later complaint alleged a different mechanism of fraud. The earlier case involved one alleged pricing scheme. The later case involved alleged inflated subcontractor cost data. In the Fifth Circuit’s view, that was not merely more detail about the same scheme; it was a different mechanism. [7]
That distinction is practical. Defendants often frame first-to-file broadly: same defendant, same contracts, same regulatory environment, same general theory of overcharging. Ferguson counsels a more precise inquiry. Did the earlier complaint give the government enough information to investigate the same essential fraudulent scheme? Or did the later relator identify a different fraud pathway?
Practitioner takeaway: relator counsel should investigate first-to-file before filing, then plead with precision. If a prior case exists, the new complaint should explain why the mechanism, time period, contracts, claims pathway, or actors are materially different. Defense counsel should compare mechanisms, not just labels.
Thrower v. Academy Mortgage: Relator Fees, Lodestar Enhancements, and Post-Judgment Interest
The Ninth Circuit issued two important same-day decisions in Thrower v. Academy Mortgage, both arising from a successful declined FCA case that settled for $38.5 million. The government declined to intervene and later moved to dismiss. The relator opposed dismissal, survived, and ultimately obtained a settlement. [8]
In No. 24-4103, the Ninth Circuit addressed attorney-fee enhancements. The district court awarded a 1.75 multiplier above the lodestar, citing the exceptional result and counsel’s investigative work. The Ninth Circuit reversed the enhanced fee award and remanded, holding that only rare and exceptional cases justify a lodestar enhancement and that the district court did not sufficiently explain why a 1.75 multiplier was warranted. [8]
That ruling does not erase the value of relator counsel’s work in declined cases. In fact, the procedural history shows how demanding those cases can be. But the opinion is clear that the lodestar often already accounts for hours, rates, skill, complexity, and investigative work. A multiplier needs specific evidence showing why the lodestar is too low and why the particular multiplier fits the gap.
In No. 24-6247, the Ninth Circuit separately addressed post-judgment interest on attorneys’ fees. It held that interest ran from the order awarding a definite amount of attorneys’ fees, not from the earlier order confirming the settlement, because the settlement confirmation did not designate the fee amount. [9]
Practitioner takeaway: relator counsel in successful declined cases should preserve fee issues carefully, document the factual basis for any enhancement, and seek prompt orders that identify definite amounts. Defense counsel should scrutinize whether claimed enhancements duplicate factors already captured by the lodestar.
Frey v. Health Management Systems: Weak FCA Cases Can Create Fee Risk
Frey v. Health Management Systems is an unpublished Fifth Circuit decision, but it is still worth reading. The court affirmed a defense fee award under 31 U.S.C. § 3730(d)(4), which allows prevailing defendants to recover fees in certain cases if the relator’s claim was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment. [10]
The Fifth Circuit concluded that the district court did not abuse its discretion in awarding fees where the relator’s claims were found clearly frivolous. The opinion discusses public-disclosure and Rule 9(b) defects, and it serves as a reminder that speculative FCA allegations can have consequences. [10]
This is not a reason to chill strong relator cases. It is a reason to vet cases hard before filing. A serious FCA complaint should not be a hope that discovery will find fraud. It should be built on a plausible, particularized account of the fraud, the claims, the defendant’s knowledge, and the government payment connection.
Practitioner takeaway: strong intake matters. Public disclosure, original source, Rule 9(b), materiality, falsity, scienter, damages, and first-to-file issues should be pressure-tested before filing. Good relator practice is not just aggressive. It is disciplined.
The 2026 FCA Decision Matrix
| Case | Court / Status | Key Issue | Practical Significance |
| Zafirov v. Florida Medical Associates | Eleventh Circuit pending | Qui tam constitutionality under Article II | Most watched FCA issue of 2026; district court held qui tam provisions unconstitutional, but Eleventh Circuit has not ruled. |
| Penelow v. Janssen Products | Third Circuit pending | Constitutionality plus major verdict | Shows the Article II challenge is spreading beyond the Eleventh Circuit. |
| Eli Lilly / Streck | Supreme Court petition | Constitutionality after Medicaid rebate judgment | Potential Supreme Court vehicle after a reported $183 million judgment. |
| Adventist v. AbbVie | Ninth Circuit | 340B / no private right of action | Stronger precedent for FCA theories tied to complex regulatory payment systems. |
| Sheldon v. Allergan | Fourth Circuit | Scienter and falsity after SuperValu | Ambiguity is not an automatic scienter defense where subjective awareness is plausibly alleged. |
| Ferguson v. Lockheed Martin | Fifth Circuit | First-to-file bar | Distinct fraudulent mechanisms may survive even when a prior case involves the same defendant or broad subject matter. |
| Thrower v. Academy Mortgage | Ninth Circuit | Relator fees, multiplier, post-judgment interest | Important mechanics for successful declined cases and fee disputes. |
| Frey v. Health Management Systems | Fifth Circuit, unpublished | Defense fees / frivolous cases | Cautionary decision on speculative complaints, public disclosure, and Rule 9(b). |
What These Decisions Mean for Relator Counsel, Defense Counsel, and DOJ
For Relator Counsel
Plead the mechanism of fraud. Courts are increasingly focused on how the fraud worked, not just whether the defendant operated in a regulated industry. The complaint should explain the claims pathway, the false statement or false certification, the money flow, the internal knowledge, and the link to government payment.
Plead subjective scienter. Sheldon shows why internal knowledge matters. Regulatory ambiguity may still be relevant, but it is not a complete answer if the relator can allege that the defendant knew, suspected, or recklessly disregarded the risk.
Anticipate constitutional motions. In declined cases, expect defendants to raise Zafirov-style arguments. The relator’s response should be prepared early, especially around DOJ control mechanisms and the historical basis for qui tam litigation.
Run public disclosure and first-to-file searches before filing. Ferguson helps relators when the mechanism is distinct. Frey shows the risk of proceeding without disciplined threshold analysis.
For Defense Counsel
Constitutional arguments now belong in the toolbox, especially in non-intervened cases. But they should not replace traditional FCA defenses. Falsity, materiality, scienter, causation, Rule 9(b), first-to-file, public disclosure, original source, damages, and excessive penalties remain the daily battleground.
Do not rely on ambiguity alone. After SuperValu and Sheldon, the better motion focuses on the actual allegations of subjective knowledge and whether the complaint plausibly pleads reckless disregard.
Use first-to-file with precision. Ferguson makes broad overlap less reliable. The strongest first-to-file arguments compare the essential fraudulent mechanisms, not just the defendant, industry, or contracts.
For DOJ
Zafirov makes government control more than a procedural issue. Intervention decisions, monitoring, settlement oversight, and dismissal authority may become part of the constitutional defense of the statute. DOJ does not need to intervene in every case, but its statutory control mechanisms matter.
At the same time, the enforcement environment still depends heavily on insiders. DOJ’s FY 2025 data shows record qui tam filings and record FCA recoveries. [1] The SEC also reported record tip volume in FY 2025, awarding approximately $60 million to 48 whistleblowers and receiving 53,753 tips, complaints, and referrals. [11]
The whistleblower model is also expanding beyond classic FCA and SEC matters. DOJ announced its first-ever antitrust whistleblower reward in January 2026. [12] FinCEN’s April 2026 proposed rule would establish incentives and protections for whistleblowers reporting violations involving the BSA, IEEPA, TWEA, and the Kingpin Act. [13]
Bottom Line for Potential Whistleblowers
For insiders, the legal landscape can look unsettled. That is true. The courts are testing the boundaries of qui tam practice. But the basic point remains unchanged: credible evidence matters. Timing matters. Strategy matters.
Do not wait for retaliation before getting advice. Do not gather evidence unlawfully. Do not assume that internal reporting is always required or always safe. Do not assume that a constitutional challenge means the FCA no longer applies. And do not assume the government already knows what you know.
Speak with experienced whistleblower counsel early. The right strategy can protect confidentiality, preserve options, reduce retaliation risk, and improve how the facts are presented to the government.
2026 is proving to be a defining year for False Claims Act practice. These decisions refine both the constitutional foundations and the day-to-day mechanics of qui tam litigation. For insiders with evidence, the message remains direct: credible information can still change a case, but professional guidance at the outset can change the outcome.
FAQ: 2026 Whistleblower Decisions
What is the biggest False Claims Act issue in 2026?
The biggest issue is the pending constitutional challenge to the FCA’s qui tam provisions in Zafirov. The district court held the qui tam provisions unconstitutional, but the Eleventh Circuit has not ruled as of April 26, 2026.
Can whistleblowers still file qui tam cases in 2026?
Yes. Qui tam cases continue to be filed and litigated nationwide. DOJ reported 1,297 qui tam filings in fiscal year 2025. [1]
What did Sheldon v. Allergan change?
Sheldon reinforced the post-SuperValu rule that scienter turns on subjective knowledge, belief, suspicion, or reckless disregard. Regulatory ambiguity alone does not automatically defeat FCA scienter.
Why does Adventist v. AbbVie matter?
Adventist matters because the Ninth Circuit allowed FCA claims tied to alleged 340B overcharges to proceed even though the 340B statute itself lacks a private right of action. The key is whether the alleged conduct caused false or inflated claims to the government.
What should a potential whistleblower do before reporting?
Start with counsel. Build a clean timeline. Identify what you know, what documents support it, who was involved, and what government money or program was affected. Do not take documents unlawfully or confront management without understanding the risks.
About the Author
Jason T. Brown is Managing Partner of Brown, LLC. He represents whistleblowers, relators, and plaintiffs in False Claims Act and related matters. This article reflects a practitioner’s review of public decisions and agency materials current through April 26, 2026.
Sources
[2] https://www.reuters.com/legal/government/appeals-court-weighs-fate-us-whistleblower-law-2025-12-12/
[5] https://law.justia.com/cases/federal/appellate-courts/ca9/24-2180/24-2180-2026-03-17.html
[6] https://law.justia.com/cases/federal/appellate-courts/ca4/24-1793/24-1793-2026-03-13.html
[7] https://law.justia.com/cases/federal/appellate-courts/ca5/24-10713/24-10713-2026-03-09.html
[8] https://law.justia.com/cases/federal/appellate-courts/ca9/24-4103/24-4103-2026-04-06.html
[9] https://law.justia.com/cases/federal/appellate-courts/ca9/24-6247/24-6247-2026-04-06.html
[10] https://www.ca5.uscourts.gov/opinions/unpub/25/25-20146.0.pdf
