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| [1] | SUPREME COURT OF THE UNITED STATES |
| [2] | No. 98-1828 |
| [3] | 2000.SCT.0042103 <http://www.versuslaw.com> |
| [4] | May 22, 2000 |
| [5] | VERMONT AGENCY OF NATURAL RESOURCES, PETITIONER v. UNITED STATES EX REL. STEVENS |
| [6] | SYLLABUS BY THE COURT |
| [7] | OCTOBER TERM, 1999 |
| [8] | VERMONT AGENCY OF NATURAL RESOURCES v.UNITED STATES ex rel. STEVENS |
| [9] | SUPREME COURT OF THE UNITED STATES |
| [10] | VERMONT AGENCY OF NATURAL RESOURCES v. UNITED STATES ex rel. STEVENS |
| [11] | Certiorari To The United States Court Of Appeals For The Second Circuit |
| [12] | No. 98-1828. |
| [13] | Argued November 29, 1999 |
| [14] | Decided May 22, 2000 |
| [15] | Under the False Claims Act (FCA), a private person (the "relator")
may bring a qui tam civil action "in the name of the [Federal] Government,"
31 U. S. C. §3730(b)(1), against "[a]ny person" who, inter alia,
"knowingly presents ... to ... the ... Government ... a false or fraudulent
claim for payment," §3729(a). The relator receives a share of any proceeds
from the action. §§3730(d)(1)-(2). Respondent Stevens brought such an action
against petitioner state agency, alleging that it had submitted false claims
to the Environmental Protection Agency in connection with federal grant
programs the EPA administered. Petitioner moved to dismiss, arguing that
a State (or state agency) is not a "person" subject to FCA liability
and that a qui tam action in federal court against a State is barred by
the Eleventh Amendment. The District Court denied the motion, and petitioner
filed an interlocutory appeal. Respondent United States intervened in the
appeal in support of respondent Stevens. The Second Circuit affirmed. |
| [16] | Held: A private individual may not bring suit in federal court on behalf
of the United States against a State (or state agency) under the FCA. Pp.
4-21. |
| [17] | (a) A private individual has standing to bring suit in federal court on
behalf of the United States under the FCA. Stevens meets the requirements
necessary to establish Article III standing. In particular, he has demonstrated
"injury in fact" -- a harm that is both "concrete" and
"actual or imminent, not conjectural or hypothetical." Whitmore
v. Arkansas, 495 U. S. 149, 155. He contends he is suing to remedy injury
in fact suffered by the United States -- both the injury to its sovereignty
arising from violation of its laws and the proprietary injury resulting
from the alleged fraud. The concrete private interest that Stevens has in
the outcome of his suit, in the form of the bounty he will receive if the
suit is successful, is insufficient to confer standing, since that interest
does not consist of obtaining compensation for, or preventing, the violation
of a legally protected right. An adequate basis for Stevens' standing, however,
is found in the doctrine that the assignee of a claim has standing to assert
the injury in fact suffered by the assignor. Because the FCA can reasonably
be regarded as effecting a partial assignment of the Government's damages
claim, the United States' injury in fact suffices to confer standing on
Stevens. This conclusion is confirmed by the long tradition of qui tam actions
in England and the American Colonies, which conclusively demonstrates that
such actions were "cases and controversies of the sort traditionally
amenable to, and resolved by, the judicial process." Steel Co. v. Citizens
for Better Environment, 523 U. S. 83, 102. Pp. 4-11. |
| [18] | (b) The FCA does not subject a State (or state agency) to liability in
a federal-court suit by a private individual on behalf of the United States.
Such a State or agency is not a "person" subject to qui tam liability
under §3729(a). The Court's longstanding interpretive presumption that "person"
does not include the sovereign applies to the text of §3729(a). Although
not a hard and fast rule of exclusion, the presumption may be disregarded
only upon some affirmative showing of statutory intent to the contrary.
As the historical context makes clear, various features of the FCA, both
as originally enacted and as amended, far from providing the requisite affirmative
indications that the term "person" included States for purposes
of qui tam liability, indicate quite the contrary. This conclusion is buttressed
by the ordinary rule of statutory construction that if Congress intends
to alter the usual constitutional balance between States and the Federal
Government, it must make its intention to do so unmistakably clear in the
statute's language, and by the doctrine that statutes should be construed
so as to avoid difficult constitutional questions. The Court expresses no
view as to whether an action in federal court by a qui tam relator against
a State would run afoul of the Eleventh Amendment, but notes that there
is "a serious doubt" on that score. Ashwander v. TVA, 297 U. S.
288, 348. Pp. 11-21. |
| [19] | 162 F. 3d 195, reversed. |
| [20] | Scalia, J., delivered the opinion of the Court, in which Rehnquist, C.
J., and O'Connor, Kennedy, Thomas, and Breyer, JJ., joined. Breyer, J.,
filed a concurring statement. Ginsburg, J., filed an opinion concurring
in the judgment, in which Breyer, J., joined. Stevens, J., filed a dissenting
opinion, in which Souter, J., joined. |
| [21] | Court Below: 162 F. 3d 195 |
| [22] | The opinion of the court was delivered by: Justice Scalia |
| [23] | Opinion of the Court |
| [24] | On Writ Of Certiorari To The United States Court Of Appeals For The Second
Circuit |
| [25] | This case presents the question whether a private individual may bring
suit in federal court on behalf of the United States against a State (or
state agency) under the False Claims Act, 31 U. S. C. §§3729-3733. |
| [26] | I. |
| [27] | Originally enacted in 1863, the False Claims Act (FCA) is the most frequently
used of a handful of extant laws creating a form of civil action known as
qui tam.*fn1
As amended, the FCA imposes civil liability upon "[a]ny person"
who, inter alia, "knowingly presents, or causes to be presented, to
an officer or employee of the United States Government ... a false or fraudulent
claim for payment or approval." 31 U. S. C. §3729(a). The defendant
is liable for up to treble damages and a civil penalty of up to $10,000
per claim. Ibid. An FCA action may be commenced in one of two ways. First,
the Government itself may bring a civil action against the alleged false
claimant. §3730(a). Second, as is relevant here, a private person (the "relator")
may bring a qui tam civil action "for the person and for the United
States Government" against the alleged false claimant, "in the
name of the Government." §3730(b)(1). |
| [28] | If a relator initiates the FCA action, he must deliver a copy of the complaint,
and any supporting evidence, to the Government, §3730(b)(2), which then
has 60 days to intervene in the action, §§3730(b)(2), (4). If it does so,
it assumes primary responsibility for prosecuting the action, §3730(c)(1),
though the relator may continue to participate in the litigation and is
entitled to a hearing before voluntary dismissal and to a court determination
of reasonableness before settlement, §3730(c)(2). If the Government declines
to intervene within the 60-day period, the relator has the exclusive right
to conduct the action, §3730(b)(4), and the Government may subsequently
intervene only on a showing of "good cause," §3730(c)(3). The
relator receives a share of any proceeds from the action -- generally ranging
from 15 to 25 percent if the Government intervenes (depending upon the relator's
contribution to the prosecution), and from 25 to 30 percent if it does not
(depending upon the court's assessment of what is reasonable) -- plus attorney's
fees and costs. §§3730(d)(1)-(2). |
| [29] | Respondent Jonathan Stevens brought this qui tam action in the United
States District Court for the District of Vermont against petitioner Vermont
Agency of Natural Resources, his former employer, alleging that it had submitted
false claims to the Environmental Protection Agency (EPA) in connection
with various federal grant programs administered by the EPA. Specifically,
he claimed that petitioner had overstated the amount of time spent by its
employees on the federally funded projects, thereby inducing the Government
to disburse more grant money than petitioner was entitled to receive. The
United States declined to intervene in the action. Petitioner then moved
to dismiss, arguing that a State (or state agency) is not a "person"
subject to liability under the FCA and that a qui tam action in federal
court against a State is barred by the Eleventh Amendment. The District
Court denied the motion in an unpublished order. App. to Pet. for Cert.
86-87. Petitioner then filed an interlocutory appeal,*fn2
and the District Court stayed proceedings pending its outcome. Respondent
United States intervened in the appeal in support of respondent Stevens.
A divided panel of the Second Circuit affirmed, 162 F. 3d 195 (1998), and
we granted certiorari, 527 U. S. 1034 (1999). |
| [30] | II. |
| [31] | We first address the jurisdictional question whether respondent Stevens
has standing under Article III of the Constitution to maintain this suit.
See Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 93-102 (1998). |
| [32] | As we have frequently explained, a plaintiff must meet three requirements
in order to establish Article III standing. See, e.g., Friends of Earth,
Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U. S. ___, ___ (2000)
(slip op., at 9). First, he must demonstrate "injury in fact"
-- a harm that is both "concrete" and "actual or imminent,
not conjectural or hypothetical." Whitmore v. Arkansas, 495 U. S. 149,
155 (1990) (internal quotation marks and citation omitted). Second, he must
establish causation -- a "fairly ... trace[able]" connection between
the alleged injury in fact and the alleged conduct of the defendant. Simon
v. Eastern Ky. Welfare Rights Organization, 426 U. S. 26, 41 (1976). And
third, he must demonstrate redressability -- a "substantial likelihood"
that the requested relief will remedy the alleged injury in fact. Id., at
45. These requirements together constitute the "irreducible constitutional
minimum" of standing, Lujan v. Defenders of Wildlife, 504 U. S. 555,
560 (1992), which is an "essential and unchanging part" of Article
III's case-or-controversy requirement, ibid., and a key factor in dividing
the power of government between the courts and the two political branches,
see id., at 559-560. |
| [33] | Respondent Stevens contends that he is suing to remedy an injury in fact
suffered by the United States. It is beyond doubt that the complaint asserts
an injury to the United States -- both the injury to its sovereignty arising
from violation of its laws (which suffices to support a criminal lawsuit
by the Government) and the proprietary injury resulting from the alleged
fraud. But "[t]he Art. III judicial power exists only to redress or
otherwise to protect against injury to the complaining party." Warth
v. Seldin, 422 U. S. 490, 499 (1975) (emphasis added); see also Sierra Club
v. Morton, 405 U. S. 727, 734-735 (1972). It would perhaps suffice to say
that the relator here is simply the statutorily designated agent of the
United States, in whose name (as the statute provides, see 31 U. S. C. §3730(b))
the suit is brought -- and that the relator's bounty is simply the fee he
receives out of the United States' recovery for filing and/or prosecuting
a successful action on behalf of the Government. This analysis is precluded,
however, by the fact that the statute gives the relator himself an interest
in the lawsuit, and not merely the right to retain a fee out of the recovery.
Thus, it provides that "[a] person may bring a civil action for a violation
of section 3729 for the person and for the United States Government,"
§3730(b) (emphasis added); gives the relator "the right to continue
as a party to the action" even when the Government itself has assumed
"primary responsibility" for prosecuting it, §3730(c)(1); entitles
the relator to a hearing before the Government's voluntary dismissal of
the suit, §3730(c)(2)(A); and prohibits the Government from settling the
suit over the relator's objection without a judicial determination of "fair[ness],
adequa[cy] and reasonable[ness]," §3730(c)(2)(B). For the portion of
the recovery retained by the relator, therefore, some explanation of standing
other than agency for the Government must be identified. |
| [34] | There is no doubt, of course, that as to this portion of the recovery
--the bounty he will receive if the suit is successful -- a qui tam relator
has a "concrete private interest in the outcome of [the] suit."
Lujan, supra, at 573. But the same might be said of someone who has placed
a wager upon the outcome. An interest unrelated to injury in fact is insufficient
to give a plaintiff standing. See Valley Forge Christian College v. Americans
United for Separation of Church and State, Inc., 454 U. S. 464, 486 (1982);
Sierra Club, supra, at 734-735. The interest must consist of obtaining compensation
for, or preventing, the violation of a legally protected right. See Lujan,
supra, at 560-561. A qui tam relator has suffered no such invasion -- indeed,
the "right" he seeks to vindicate does not even fully materialize
until the litigation is completed and the relator prevails.*fn3
This is not to suggest that Congress cannot define new legal rights, which
in turn will confer standing to vindicate an injury caused to the claimant.
See Warth, supra, at 500. As we have held in another context, however, an
interest that is merely a "byproduct" of the suit itself cannot
give rise to a cognizable injury in fact for Article III standing purposes.
See Steel Co., supra, at 107 ("[A] plaintiff cannot achieve standing
to litigate a substantive issue by bringing suit for the cost of bringing
suit"); see also Diamond v. Charles, 476 U. S. 54, 69-71 (1986) (holding
that assessment of attorney's fees against a party does not confer standing
to pursue the action on appeal). |
| [35] | We believe, however, that adequate basis for the relator's suit for his
bounty is to be found in the doctrine that the assignee of a claim has standing
to assert the injury in fact suffered by the assignor. The FCA can reasonably
be regarded as effecting a partial assignment of the Government's damages
claim.*fn4
Although we have never expressly recognized "representational standing"
on the part of assignees, we have routinely entertained their suits, see,
e.g., Poller v. Columbia Broadcasting System, Inc., 368 U. S. 464, 465 (1962);
Automatic Radio Mfg. Co. v. Hazeltine Research, Inc., 339 U. S. 827, 829
(1950); Hubbard v. Tod, 171 U. S. 474, 475 (1898) -- and also suits by subrogees,
who have been described as "equitable assign[ees]," L. Simpson,
Law of Suretyship 205 (1950), see, e.g., Vimar Seguros y Reaseguros, S.
A. v. M/V Sky Reefer, 515 U. S. 528, 531 (1995); Musick, Peeler & Garrett
v. Employers Ins. of Wausau, 508 U. S. 286, 288 (1993). We conclude, therefore,
that the United States' injury in fact suffices to confer standing on respondent
Stevens. |
| [36] | We are confirmed in this conclusion by the long tradition of qui tam actions
in England and the American Colonies. That history is particularly relevant
to the constitutional standing inquiry since, as we have said elsewhere,
Article III's restriction of the judicial power to "Cases" and
"Controversies" is properly understood to mean "cases and
controversies of the sort traditionally amenable to, and resolved by, the
judicial process." Steel Co., 523 U. S., at 102; see also Coleman v.
Miller, 307 U. S. 433, 460 (1939) (opinion of Frankfurter, J.) (the Constitution
established that "[j]udicial power could come into play only in matters
that were the traditional concern of the courts at Westminster and only
if they arose in ways that to the expert feel of lawyers constituted `Cases'
or `Controversies' "). |
| [37] | Qui tam actions appear to have originated around the end of the 13th century,
when private individuals who had suffered injury began bringing actions
in the royal courts on both their own and the Crown's behalf. See, e.g.,
Prior of Lewes v. De Holt (1300), reprinted in 48 Selden Society 198 (1931).
Suit in this dual capacity was a device for getting their private claims
into the respected royal courts, which generally entertained only matters
involving the Crown's interests. See Milsom, Trespass from Henry III to
Edward III, Part III: More Special Writs and Conclusions, 74 L. Q. Rev.
561, 585 (1958). Starting in the 14th century, as the royal courts began
to extend jurisdiction to suits involving wholly private wrongs, the common-law
qui tam action gradually fell into disuse, although it seems to have remained
technically available for several centuries. See 2 W. Hawkins, Pleas of
the Crown 369 (8th ed. 1824). |
| [38] | At about the same time, however, Parliament began enacting statutes that
explicitly provided for qui tam suits. These were of two types: those that
allowed injured parties to sue in vindication of their own interests (as
well as the Crown's), see, e.g., Statute Providing a Remedy for Him Who
Is Wrongfully Pursued in the Court of Admiralty, 2 Hen. IV, ch. 11 (1400),
and -- more relevant here -- those that allowed informers to obtain a portion
of the penalty as a bounty for their information, even if they had not suffered
an injury themselves, see, e.g., Statute Prohibiting the Sale of Wares After
the Close of Fair, 5 Edw. III, ch. 5 (1331); see generally Common Informers
Act, 14 & 15 Geo. VI, ch. 39, sched. (1951) (listing informer statutes).
Most, though not all, of the informer statutes expressly gave the informer
a cause of action, typically by bill, plaint, information, or action of
debt. See, e.g., Bill for Leases of Hospitals, Colleges, and Other Corporations,
33 Hen. VIII, ch. 27 (1541); Act to Avoid Horse-Stealing, 31 Eliz. I, ch.
12, §2 (1589); Act to Prevent the Over-Charge of the People by Stewards
of Court-Leets and Court-Barons, 2 Jac. I, ch. 5 (1604). |
| [39] | For obvious reasons, the informer statutes were highly subject to abuse,
see M. Davies, The Enforcement of English Apprenticeship 58-61 (1956) --particularly
those relating to obsolete offenses, see generally 3 E. Coke, Institutes
of the Laws of England 191 (4th ed. 1797) (informer prosecutions under obsolete
statutes had been used to "vex and entangle the subject"). Thus,
many of the old enactments were repealed, see Act for Continuing and Reviving
of Divers Statutes and Repeal of Divers Others, 21 Jac. I, ch. 28, §11 (1623),
and statutes were passed deterring and penalizing vexatious informers, limiting
the locations in which informer suits could be brought, and subjecting such
suits to relatively short statutes of limitation, see Act to Redress Disorders
in Common Informers, 18 Eliz. I, ch. 5 (1576); Act Concerning Informers,
31 Eliz. I, ch. 5 (1589); see generally Davies, supra, at 63-76. Nevertheless,
laws allowing qui tam suits by informers continued to exist in England until
1951, when all of the remaining ones were repealed. See Note, The History
and Development of Qui Tam, 1972 Wash. U. L. Q. 81, 88, and n. 44 (citing
Common Informers Act, 14 & 15 Geo. VI, ch. 39 (1951)). |
| [40] | Qui tam actions appear to have been as prevalent in America as in England,
at least in the period immediately before and after the framing of the Constitution.
Although there is no evidence that the Colonies allowed common-law qui tam
actions (which, as we have noted, were dying out in England by that time),
they did pass several informer statutes expressly authorizing qui tam suits.
See, e.g., Act for the Restraining and Punishing of Privateers and Pirates,
1st Assembly, 4th Sess. (N. Y. 1692), reprinted in 1 Colonial Laws of New
York 279, 281 (1894) (allowing informers to sue for, and receive share of,
fine imposed upon officers who neglect their duty to pursue privateers and
pirates). Moreover, immediately after the framing, the First Congress enacted
a considerable number of informer statutes.*fn5
Like their English counterparts, some of them provided both a bounty and
an express cause of action;*fn6
others provided a bounty only.*fn7 |
| [41] | We think this history well nigh conclusive with respect to the question
before us here: whether qui tam actions were "cases and controversies
of the sort traditionally amenable to, and resolved by, the judicial process."
Steel Co., 523 U. S., at 102. When combined with the theoretical justification
for relator standing discussed earlier, it leaves no room for doubt that
a qui tam relator under the FCA has Article III standing.*fn8
We turn, then, to the merits. |
| [42] | III. |
| [43] | Petitioner makes two contentions: (1) that a State (or state agency) is
not a "person" subject to qui tam liability under the FCA; and
(2) that if it is, the Eleventh Amendment bars such a suit. The Courts of
Appeals have disagreed as to the order in which these statutory and Eleventh
Amendment immunity questions should be addressed. Compare United States
ex rel. Long v. SCS Business & Technical Institute, Inc., 173 F. 3d
890, 893-898 (CADC 1999) (statutory question first), with United States
ex rel. Foulds v. Texas Tech Univ., 171 F. 3d 279, 285-288 (CA5 1999) (Eleventh
Amendment immunity question first). |
| [44] | Questions of jurisdiction, of course, should be given priority -- since
if there is no jurisdiction there is no authority to sit in judgment of
anything else. See Steel Co., supra, at 93-102. "Jurisdiction is power
to declare the law, and when it ceases to exist, the only function remaining
to the court is that of announcing the fact and dismissing the cause."
Ex parte McCardle, 7 Wall. 506, 514 (1869). Even jurisdiction over the person
(as opposed to subject-matter jurisdiction) "is `an essential element
of the jurisdiction of a district . . . court,' without which the court
is `powerless to proceed to an adjudication.' " Ruhrgas AG v. Marathon
Oil Co., 526 U. S. 574, 584 (1999) (quoting Employers Reinsurance Corp.
v. Bryant, 299 U. S. 374, 382 (1937)). |
| [45] | We nonetheless have routinely addressed before the question whether the
Eleventh Amendment forbids a particular statutory cause of action to be
asserted against States, the question whether the statute itself permits
the cause of action it creates to be asserted against States (which it can
do only by clearly expressing such an intent). See, e.g., Kimel v. Florida
Bd. of Regents, 528 U. S. ___, ___ (2000) (slip op., at 8-13); Seminole
Tribe of Fla. v. Florida, 517 U. S. 44, 55-57 (1996); cf. Hafer v. Melo,
502 U. S. 21, 25-31 (1991); Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.
S. 274, 277-281 (1977). When these two questions are at issue, not only
is the statutory question "logically antecedent to the existence of
" the Eleventh Amendment question, Amchem Products, Inc. v. Windsor,
521 U. S. 591, 612 (1997), but also there is no realistic possibility that
addressing the statutory question will expand the Court's power beyond the
limits that the jurisdictional restriction has imposed. The question whether
the statute provides for suits against the States (as opposed, for example,
to the broader question whether the statute creates any private cause of
action whatever, or the question whether the facts alleged make out a "false
claim" under the statute) does not, as a practical matter, permit the
court to pronounce upon any issue, or upon the rights of any person, beyond
the issues and persons that would be reached under the Eleventh Amendment
inquiry anyway. The ultimate issue in the statutory inquiry is whether States
can be sued under this statute; and the ultimate issue in the Eleventh Amendment
inquiry is whether unconsenting States can be sued under this statute. This
combination of logical priority and virtual coincidence of scope makes it
possible, and indeed appropriate, to decide the statutory issue first. We
therefore begin (and will end) with the statutory question. |
| [46] | The relevant provision of the FCA, 31 U. S. C. §3729(a), subjects to liability
"[a]ny person" who, inter alia, "knowingly presents, or causes
to be presented, to an officer or employee of the United States Government
... a false or fraudulent claim for payment or approval." We must apply
to this text our longstanding interpretive presumption that "person"
does not include the sovereign. See United States v. Cooper Corp., 312 U.
S. 600, 604 (1941); United States v. Mine Workers, 330 U. S. 258, 275 (1947).*fn9
The presumption is "particularly applicable where it is claimed that
Congress has subjected the States to liability to which they had not been
subject before." Will v. Michigan Dept. of State Police, 491 U. S.
58, 64 (1989); Wilson v. Omaha Tribe, 442 U. S. 653, 667 (1979). The presumption
is, of course, not a "hard and fast rule of exclusion," Cooper
Corp., supra, at 604-605, but it may be disregarded only upon some affirmative
showing of statutory intent to the contrary. See International Primate Protection
League v. Administrators of Tulane Ed. Fund, 500 U. S. 72, 83 (1991). |
| [47] | As the historical context makes clear, and as we have often observed,
the FCA was enacted in 1863 with the principal goal of "stopping the
massive frauds perpetrated by large [private] contractors during the Civil
War." United States v. Bornstein, 423 U. S. 303, 309 (1976); see also
United States ex rel. Marcus v. Hess, 317 U. S. 537, 547 (1943).*fn10
Its liability provision -- the precursor to today's §3729(a) -- bore no
indication that States were subject to its penalties. Indeed, far from indicating
that States were covered, it did not even make clear that private corporations
were, since it applied only to "any person not in the military or naval
forces of the United States, nor in the militia called into or actually
employed in the service of the United States," and imposed criminal
penalties that included imprisonment.*fn11
Act of Mar. 2, 1863, ch. 67, §3, 12 Stat. 698. We do not suggest that these
features directed only at natural persons cast doubt upon the courts' assumption
that §3729(a) extends to corporations, see, e.g., United States ex rel.
Woodard v. Country View Care Center, Inc., 797 F. 2d 888, 890 (CA10 1986)
-- but that is because the presumption with regard to corporations is just
the opposite of the one governing here: they are presumptively covered by
the term "person," see 1 U. S. C. §1. But the text of the original
statute does less than nothing to overcome the presumption that States are
not covered. |
| [48] | Although the liability provision of the original FCA has undergone various
changes, none of them suggests a broadening of the term "person"
to include States. In 1982, Congress made a housekeeping change, replacing
the phrase "any person not in the military or naval forces of the United
States, nor in the militia called into or actually employed in the service
of the United States" with the phrase "[a] person not a member
of an armed force of the United States," thereby incorporating the
term of art "member of an armed force" used throughout Title 10
of the United States Code. 31 U. S. C. §3729 (1982 ed.). And in 1986, Congress
eliminated the blanket exemption for members of the Armed Forces, replacing
the phrase "[a] person not a member of an armed force of the United
States" with the current "[a]ny person." 31 U. S. C. §3729(a).*fn12 |
| [49] | Several features of the current statutory scheme further support the conclusion
that States are not subject to qui tam liability. First, another section
of the FCA, 31 U. S. C. §3733, which enables the Attorney General to issue
civil investigative demands to "any person ... possessi[ng] information
relevant to a false claims law investigation," §3733(a)(1), contains
a provision expressly defining "person," "[f]or purposes
of this section," to include States, §3733(l)(4).*fn13
The presence of such a definitional provision in §3733, together with the
absence of such a provision from the definitional provisions contained in
§3729, see §§3729(b)-(c), suggests that States are not "persons"
for purposes of qui tam liability under §3729.*fn14 |
| [50] | Second, the current version of the FCA imposes damages that are essentially
punitive in nature, which would be inconsistent with state qui tam liability
in light of the presumption against imposition of punitive damages on governmental
entities. See, e.g., Newport v. Fact Concerts, Inc., 453 U. S. 247, 262-263
(1981).*fn15
Although this Court suggested that damages under an earlier version of the
FCA were remedial rather than punitive, see Bornstein, 423 U. S., at 315;
but see Smith v. Wade, 461 U. S. 30, 85 (1983) (Rehnquist, J., dissenting),
that version of the statute imposed only double damages and a civil penalty
of $2,000 per claim, see 31 U. S. C. §231 (1976 ed.); the current version,
by contrast, generally imposes treble damages and a civil penalty of up
to $10,000 per claim, see 31 U. S. C. §3729(a).*fn16
Cf. Marcus, 317 U. S., at 550 (noting that double damages in original FCA
were not punitive, but suggesting that treble damages, such as those in
the antitrust laws, would have been). "The very idea of treble damages
reveals an intent to punish past, and to deter future, unlawful conduct,
not to ameliorate the liability of wrongdoers." Texas Industries, Inc.
v. Radcliff Materials, Inc., 451 U. S. 630, 639 (1981). |
| [51] | Third, the Program Fraud Civil Remedies Act of 1986 (PFCRA), a sister
scheme creating administrative remedies for false claims -- and enacted
just before the FCA was amended in 1986 -- contains (unlike the FCA) a definition
of "persons" subject to liability, and that definition does not
include States. See 31 U. S. C. §3801(a)(6) (defining "person"
as "any individual, partnership, corporation, association, or private
organization"). It would be most peculiar to subject States to treble
damages and civil penalties in qui tam actions under the FCA, but exempt
them from the relatively smaller damages provided under the PFCRA. See §3802(a)(1).*fn17 |
| [52] | In sum, we believe that various features of the FCA, both as originally
enacted and as amended, far from providing the requisite affirmative indications
that the term "person" included States for purposes of qui tam
liability, indicate quite the contrary. Our conclusion is buttressed by
two other considerations that we think it unnecessary to discuss at any
length: first, "the ordinary rule of statutory construction" that
"if Congress intends to alter the usual constitutional balance between
States and the Federal Government, it must make its intention to do so unmistakably
clear in the language of the statute," Will, 491 U. S., at 65 (internal
quotation marks and citation omitted); see also Gregory v. Ashcroft, 501
U. S. 452, 460-461 (1991); United States v. Bass, 404 U. S. 336, 349 (1971),
and second, the doctrine that statutes should be construed so as to avoid
difficult constitutional questions. We of course express no view on the
question whether an action in federal court by a qui tam relator against
a State would run afoul of the Eleventh Amendment, but we note that there
is "a serious doubt" on that score. Ashwander v. TVA, 297 U. S.
288, 348 (1936) (Brandeis, J., concurring) (internal quotation marks and
citation omitted).*fn18 |
| [53] | We hold that a private individual has standing to bring suit in federal
court on behalf of the United States under the False Claims Act, 31 U. S.
C. §§3729-3733, but that the False Claims Act does not subject a State (or
state agency) to liability in such actions. The judgment of the Second Circuit
is reversed. |
| [54] | It is so ordered. |
| [55] | Breyer, J., concurring |
| [56] | Justice Breyer, concurring. |
| [57] | I join the opinion of the Court in full. I also join the opinion of Justice
Ginsburg. |
| [58] | Ginsburg, J., concurring |
| [59] | Justice Ginsburg, with whom Justice Breyer joins, concurring in the judgment. |
| [60] | I join the Court's judgment and here state the extent to which I subscribe
to the Court's opinion. |
| [61] | I agree with the Court that the qui tam relator is properly regarded as
an assignee of a portion of the Government's claim for damages. See ante,
at 6. And I agree, most vitally, that "Article III's restriction of
the judicial power to `Cases' and `Controversies' is properly understood
to mean `cases and controversies of the sort traditionally amenable to,
and resolved by, the judicial process.' " Ante, at 7. On that key matter,
I again agree that history's pages place the qui tam suit safely within
the "case" or "controversy" category. See ante, at 7-11. |
| [62] | In Steel Co. v. Citizens for Better Environment, 523 U. S. 83 (1998),
I reasoned that if Congress did not authorize a citizen suit, a court should
dismiss the citizen suitor's complaint without opining "on the constitutionality
of what Congress might have done, but did not do." Id., at 134 (opinion
concurring in judgment). I therefore agree that the Court properly turns
first to the statutory question here presented: Did Congress authorize qui
tam suits against the States. Concluding that Congress did not authorize
such suits, the Court has no cause to engage in an Eleventh Amendment inquiry,
and appropriately leaves that issue open. |
| [63] | I do not find in the False Claims Act any clear statement subjecting the
States to qui tam suits brought by private parties, and therefore concur
in the Court's resolution of the statutory question. See ante, at 21. I
note, however, that the clear statement rule applied to private suits against
a State has not been applied when the United States is the plaintiff. See,
e.g., Sims v. United States, 359 U. S. 108, 112 (1959) (state agency ranks
as a "person" subject to suit by the United States under federal
tax levy provision); United States v. California, 297 U. S. 175, 186-187
(1936) (state-owned railway ranks as a "common carrier" under
Federal Safety Appliance Act subject suit for penalties by the United States).
I read the Court's decision to leave open the question whether the word
"person" encompasses States when the United States itself sues
under the False Claims Act. |
| [64] | Stevens, J., dissenting |
| [65] | Justice Stevens, with whom Justice Souter joins, dissenting. |
| [66] | In 1986, Congress amended the False Claims Act (FCA or Act) to create
a new procedure known as a "civil investigative demand," which
allows the Attorney General to obtain documentary evidence "for the
purpose of ascertaining whether any person is or has been engaged in"
a violation of the Act -- including a violation of 31 U. S. C. §3729. The
1986 amendments also declare that a "person" who could engage
in a violation of §3729 --thereby triggering the civil investigative demand
provision -- includes "any State or political subdivision of a State."
See §6(a), 100 Stat. 3168 (codified at 31 U. S. C. §§3733(l)(1)(A), (2),
(4)). In my view, this statutory text makes it perfectly clear that Congress
intended the term "person" in §3729 to include States. This understanding
is supported by the legislative history of the 1986 amendments, and is fully
consistent with this Court's construction of federal statutes in cases decided
before those amendments were enacted. |
| [67] | Since the FCA was amended in 1986, however, the Court has decided a series
of cases that cloak the States with an increasingly protective mantle of
"sovereign immunity" from liability for violating federal laws.
It is through the lens of those post-1986 cases that the Court has chosen
to construe the statute at issue in this case. To explain my disagreement
with the Court, I shall comment on pre-1986 cases, the legislative history
of the 1986 amendments, and the statutory text of the FCA -- all of which
support the view that Congress understood States to be included within the
meaning of the word "person" in §3729. I shall then briefly explain
why the State's constitutional defenses fail, even under the Court's post-1986
construction of the doctrine of sovereign immunity. |
| [68] | I. |
| [69] | Cases decided before 1986 uniformly support the proposition that the broad
language used in the False Claims Act means what it says. Although general
statutory references to "persons" are not normally construed to
apply to the enacting sovereign, United States v. Mine Workers, 330 U. S.
258, 275 (1947), when Congress uses that word in federal statutes enforceable
by the Federal Government or by a federal agency, it applies to States and
state agencies as well as to private individuals and corporations. Thus,
for example, the word "person" in the Sherman Act does not include
the sovereign that enacted the statute (the Federal Government), United
States v. Cooper Corp., 312 U. S. 600 (1941), but it does include the States,
Georgia v. Evans, 316 U. S. 159 (1942). Similarly, States are subject to
regulation as a "person" within the meaning of the Shipping Act
of 1916, California v. United States, 320 U. S. 577 (1944), and as a "common
carrier" within the meaning of the Safety Appliance Act, United States
v. California, 297 U. S. 175 (1936). In the latter case, the State of California
"invoke[d] the canon of construction that a sovereign is presumptively
not intended to be bound" by a statute unless the act expressly declares
that to be the case. Id., at 186. We rejected the applicability of that
canon, stating: |
| [70] | "We can perceive no reason for extending it so as to exempt a business
carried on by a state from the otherwise applicable provisions of an act
of Congress, all-embracing in scope and national in its purpose, which is
as capable of being obstructed by state as by individual action. Language
and objectives so plain are not to be thwarted by resort to a rule of construction
whose purpose is but to resolve doubts, and whose application in the circumstances
would be highly artificial." Id., at 186-187.*fn19 |
| [71] | The False Claims Act is also all-embracing in scope, national in its purpose,
and as capable of being violated by state as by individual action.*fn20
It was enacted during the Civil War, shortly after a congressional committee
had decried the "fraud and peculation" by state officials in connection
with the procurement of military supplies and Government contracts -- specifically
mentioning the purchases of supplies by the States of Illinois, Indiana,
New York, and Ohio. See H. R. Rep. No. 2, 37th Cong., 2d Sess., pt. ii-a,
pp. xxxviii-xxxix (1862). Although the FCA was not enacted until the following
year, the Court of Appeals for the Second Circuit correctly observed that
"it is difficult to suppose that when Congress considered the bills
leading to the 1863 Act a year later it either meant to exclude the States
from the `persons' who were to be liable for the presentation of false claims
to the federal government or had forgotten the results of this extensive
investigation." 162 F. 3d 195, 206 (1998). That observation is faithful
to the broad construction of the Act that this Court consistently endorsed
in cases decided before 1986 (and hardly requires any "suspension of
disbelief" as the majority supposes, ante, at 16, n. 12). |
| [72] | Thus, in United States v. Neifert&nbhyph;White Co., 390 U. S. 228,
232 (1968), after noting that the Act was passed as a result of investigations
of the fraudulent use of federal funds during the Civil War, we inferred
"that the Act was intended to reach all types of fraud, without qualification,
that might result in financial loss to the Government." See also Rainwater
v. United States, 356 U. S. 590, 592 (1958) ("It seems quite clear
that the objective of Congress [in the FCA] was broadly to protect the funds
and property of the Government from fraudulent claims"); H. R. Rep.
No. 99-660, p. 18 (1986) ("[T]he False Claims Act is used as ... the
primary vehicle by the Government for recouping losses suffered through
fraud"). Indeed, the fact that Congress has authorized qui tam actions
by private individuals to supplement the remedies available to the Federal
Government provides additional evidence of its intent to reach all types
of fraud that cause financial loss to the Federal Government. Finally, the
breadth of the "claims" to which the FCA applies *fn21
only confirms the notion that the law was intended to cover the full range
of fraudulent acts, including those perpetrated by States.*fn22 |
| [73] | The legislative history of the 1986 amendments discloses that both federal
and state officials understood that States were "persons" within
the meaning of the statute. Thus, in a section of the 1986 Senate Report
describing the history of the Act, the committee unequivocally stated that
the Act reaches all parties who may submit false claims and that "[t]he
term `person' is used in its broad sense to include partnerships, associations,
and corporations . . . as well as States and political subdivisions thereof."
S. Rep. No. 99-345, pp. 8-9.*fn23 |
| [74] | Indeed, a few federal courts had accepted jurisdiction in qui tam cases
brought by the States -- thus indicating their view that States were included
among the "persons" who may bring qui tam actions as relators
under §3730(b)(1). See United States ex rel. Woodard v. Country View Care
Center, Inc., 797 F. 2d 888 (CA10 1986); United States ex rel. Wisconsin
v. Dean, 729 F. 2d 1100 (CA7 1984); see also United States ex rel. Hartigan
v. Palumbo Bros., Inc., 797 F. Supp. 624 (ND Ill. 1992). Not only do these
cases express the view of those federal judges who thought a State could
be a "person" under §3730(b)(1), but the cases also demonstrate
that the States considered themselves to be statutory "persons."
In fact, in the Dean case, the United States filed a statement with the
court explicitly stating its view that "[t]he State is a proper relator."
729 F. 2d, at 1103, n. 2. And when the Seventh Circuit in that case dismissed
Wisconsin's qui tam claim on grounds unrelated to the definition of the
word "person," the National Association of Attorneys General adopted
a resolution urging Congress to make it easier for States to be relators.*fn24
When Congress amended the FCA in 1986 -- and enacted the word "person"
in §3729 at issue here -- it had all of this information before it, i.e.,
that federal judges had accepted States as relators (and hence as "persons");
that the States considered themselves to be statutory "persons"
and wanted greater freedom to be "persons" who could sue under
the Act; and that the United States had taken a like position. See S. Rep.
No. 99-345, at 12-13. |
| [75] | In sum, it is quite clear that when the 1986 amendments were adopted,
there was a general understanding that States and state agencies were "persons"
within the meaning of the Act. |
| [76] | II. |
| [77] | The text of the 1986 amendments confirms the pre-existing understanding.
The most significant part of the amendments is the enactment of a new §3733
granting authority to the Attorney General to issue a civil investigative
demand (CID) before commencing a civil proceeding on behalf of the United
States. A series of interwoven definitions in §3733 unambiguously demonstrates
that a State is a "person" who can violate §3729. |
| [78] | Section 3733 authorizes the Attorney General to issue a CID when she is
conducting a "false claims law investigatio[n]." §3733(a). A "false
claims law investigation" is defined as an investigation conducted
"for the purpose of ascertaining whether any person is or has been
engaged in any violation of a false claims law." §3733(l)(2) (emphasis
added). And a "false claims law" includes §3729 -- the provision
at issue in this case. §3733(l)(1)(A). Quite plainly, these provisions contemplate
that any "person" may be engaged in a violation of §3729. Finally,
a "person" is defined to include "any State or political
subdivision of a State." §3733(l)(4). Hence, the CID provisions clearly
state that a "person" who may be "engaged in any violation
of a false claims law," including §3729, includes a "State or
a political subdivision of a State."*fn25
These CID provisions thus unmistakably express Congress' understanding that
a State may be a "person" who can violate §3729. |
| [79] | Elsewhere in the False Claims Act the term "person" includes
States as well. For example, §3730 of the Act -- both before and after the
1986 amendments -- uses the word "person" twice. First, subsection
(a) of §3730 directs the Attorney General to investigate violations of §3729,
and provides that if she "finds that a person has violated or is violating"
that section, she may bring a civil action "under this section against
the person." (Emphases added.) Second, subsection (b) of §3730 also
uses the word "person," though for a different purpose; in that
subsection the word is used to describe the plaintiffs who may bring qui
tam actions on behalf of themselves and the United States. |
| [80] | Quite clearly, a State is a "person" against whom the Attorney
General may proceed under §3730(a).*fn26
And as I noted earlier, see supra, at 6, before 1986 States were considered
"persons" who could bring a qui tam action as a relator under
§3730(b) -- and the Court offers nothing to question that understanding.
See ante, at 21, n. 18. Moreover, when a qui tam relator brings an action
on behalf of the United States, he or she is, in effect, authorized to act
as an assignee of the Federal Government's claim. See ante, at 6. Given
that understanding, combined with the fact that §3730(a) does not make any
distinction between possible defendants against whom the Attorney General
may bring an action, the most normal inference to draw is that qui tam actions
may be brought by relators against the same category of "persons"
that may be sued by the Attorney General. |
| [81] | To recapitulate, it is undisputed that (under the CID provision) a State
is a "person" who may violate §3729; that a State is a "person"
who may be named as a defendant in an action brought by the Attorney General;
and that a State is a "person" who may bring a qui tam action
on behalf of the United States. It therefore seems most natural to read
the adjacent uses of the term "person" in §§3729, 3730(a), 3730(b),
and 3733 to cover the same category of defendants. See United States v.
Cooper Corp., 312 U. S., at 606 ("It is hardly credible that Congress
used the term `person' in different senses in the same sentence").
And it seems even more natural to read the single word "person"
(describing who may commit a violation under §3729) to have one consistent
meaning regardless of whether the action against that violator is brought
under §3730(a) or under §3730(b). See Ratzlaf v. United States, 510 U. S.
135, 143 (1994) ("A term appearing in several places in a statutory
text is generally read the same way each time it appears. We have even stronger
cause to construe a single formulation ... the same way each time it is
called into play"). Absent powerful arguments to the contrary, it should
follow that a State may be named as a defendant in an action brought by
an assignee of the United States. Rather than pointing to any such powerful
arguments, however, the Court comes to a contrary conclusion on the basis
of an inapplicable presumption and rather strained inferences drawn from
three different statutory provisions. |
| [82] | The Court's principal argument relies on "our longstanding interpretive
presumption that `person' does not include the sovereign." Ante, at
13. As discussed earlier, that "presumption" does not quite do
the heavy lifting the Court would like it to do. What's more, the doctrinal
origins of that "presumption" meant only that the enacting sovereign
was not normally thought to be a statutory "person." See, e.g.,
United States v. California, 297 U. S., at 186 ("[T]he canon of construction
that a sovereign is presumptively not intended to be bound by its own statute
unless named in it ... has its historical basis in the English doctrine
that the Crown is unaffected by acts of Parliament not specifically directed
against it. The presumption is an aid to consistent construction of statutes
of the enacting sovereign when their purpose is in doubt" (emphasis
added)); see also United States v. Mine Workers, 330 U. S., at 275; United
States v. Fox, 94 U. S. 315, 321 (1877); Will v. Michigan Dept. of State
Police, 491 U. S. 58, 73 (1989) (Brennan, J., dissenting). The reason for
presuming that an enacting sovereign does not intend to authorize litigation
against itself simply does not apply to federal statutes that apply equally
to state agencies and private entities. Finally, the "affirmative showing"
the Court would require to demonstrate that the word "person"
includes States, ante, at 14, is plainly found in the statutory text discussed
above. |
| [83] | The Court's first textual argument is based on the fact that the definition
of the term "person" included in §3733's CID provision expressly
includes States. "The presence of such a definitional provision in
§3733," the Court argues, "together with the absence of such a
provision from the definitional provisions contained in §3729 ... suggests
that States are not `persons' for purposes of qui tam liability under §3729."
Ante, at 17. Leaving aside the fact that §3733's definition actually cuts
in the opposite direction, see supra, at 7-8, this argument might carry
some weight if the definitional provisions in §3729 included some definition
of "person" but simply neglected to mention States. But the definitional
provisions in §3729 do not include any definition of "person"
at all. The negative inference drawn by the Court, if taken seriously, would
therefore prove too much. The definition of "person" in §3733
includes not only States, but also "any natural person, partnership,
corporation, association, or other legal entity." §3733(l)(4). If the
premise of the Court's argument were correct -- that the inclusion of certain
items as a "person" in §3733 implies their exclusion as a "person"
in §3729 -- then there would be absolutely no one left to be a "person"
under §3729.*fn27
It is far more reasonable to assume that Congress simply saw no need to
add a definition of "person" in §3729 because (as both the legislative
history, see supra, at 3-7, and the definitions in the CID provisions demonstrate)
the meaning of the term "person" was already well understood.
Congress likely thought it unnecessary to include a definition in §3729
itself. |
| [84] | The Court also relies on the definition of "person" in a separate,
but similar, statute, the Program Fraud Civil Remedies Act of 1986 (PFCRA).
Ante, at 19-20. The definition of "person" found in that law includes
"any individual, partnership, corporation, association, or private
organization." 31 U. S. C. §3801(a)(6). It is first worth pointing
out the obvious: Although the PFCRA sits next to the False Claims Act in
the United States Code, they are separate statutes. It is therefore not
altogether clear why the former has much bearing on the latter.*fn28
Regardless, the Court's whole argument about the PFCRA rests entirely on
the premise that its definition of "person" does not include States.
That premise, in turn, relies upon the fact that §3801(a)(6) in the PFCRA
defines a "person" to include "any individual, partnership,
corporation, association, or private organization," but does not mention
States. We have, however, interpreted similar definitions of "person,"
which included corporations, partnerships, and associations, to include
States as well, even though States were not expressly mentioned in the statutory
definition. See California v. United States, 320 U. S., at 585; Georgia
v. Evans, 316 U. S., at 160. (I draw no definitive conclusions as to whether
States are subject to suit under the PFCRA; I only mean to suggest that
the Court's premise is not as obvious as it presumes it to be.) In any event,
the ultimate relevant question is whether the text and legislative history
of the False Claims Act make it clear that §3729's use of the word "person"
includes States. Because they do, nothing in any other piece of legislation
narrows the meaning of that term. |
| [85] | Finally, the Court relies on the fact that the current version of the
FCA includes a treble damages remedy that is "essentially punitive
in nature." Ante, at 18. Citing Newport v. Fact Concerts, Inc., 453
U. S. 247, 262-263 (1981), the Court invokes the "presumption against
imposition of punitive damages on governmental entities." Ante, at
18. But as Newport explains, "courts vie[w] punitive damages [against
governmental bodies] as contrary to sound public policy, because such awards
would burden the very taxpayers and citizens for whose benefit the wrongdoer
was being chastised." 453 U. S., at 263. That rationale is inapplicable
here. The taxpaying "citizens for whose benefit" the False Claims
Act is designed are the citizens of the United States, not the citizens
of any individual State that might violate the Act. It is true, of course,
that the taxpayers of a State that violates the FCA will ultimately bear
the burden of paying the treble damages. It is not the coffers of the State
(and hence state taxpayers), however, that the FCA is designed to protect,
but the coffers of the National Government (and hence the federal taxpayers).
Accordingly, a treble damages remedy against a State does not "burden
the very taxpayers" the statute was designed to protect.*fn29 |
| [86] | III. |
| [87] | Each of the constitutional issues identified in the Court's opinion requires
only a brief comment. The historical evidence summarized by the Court, ante,
at 7-10, is obviously sufficient to demonstrate that qui tam actions are
"cases" or "controversies" within the meaning of Article
III. That evidence, together with the evidence that private prosecutions
were commonplace in the 19th century, see Steel Co. v. Citizens for Better
Environment, 523 U. S. 83, 127-128, and nn. 24-25 (1998) (Stevens, J., concurring
in judgment), is also sufficient to resolve the Article II question that
the Court has introduced sua sponte, ante, at 11, n. 8. |
| [88] | As for the State's "Eleventh Amendment" sovereign immunity defense,
I adhere to the view that Seminole Tribe of Fla. v. Florida, 517 U. S. 44
(1996), was wrongly decided. See Kimel v. Florida Bd. of Regents, 528 U.
S. __, __ (2000) (Stevens, J., dissenting) (slip op., at 6-7); Seminole
Tribe, 517 U. S., at 100-185 (Souter, J., dissenting). Accordingly, Congress'
clear intention to subject States to qui tam actions is also sufficient
to abrogate any common-law defense of sovereign immunity. Moreover, even
if one accepts Seminole Tribe as controlling, the State's immunity claim
would still fail. Given the facts that (1) respondent is, in effect, suing
as an assignee of the United States, ante, at 6; (2) the Eleventh Amendment
does not provide the States with a defense to claims asserted by the United
States, see, e.g., United States v. Mississippi, 380 U. S. 128, 140 (1965)
("[N]othing in [the Eleventh Amendment] or any other provision of the
Constitution prevents or has ever been seriously supposed to prevent a State's
being sued by the United States"); and (3) the Attorney General retains
significant control over a relator's action, see 162 F. 3d, at 199-201 (case
below), the Court of Appeals correctly affirmed the District Court's order
denying petitioner's motion to dismiss. Compare New Hampshire v. Louisiana,
108 U. S. 76 (1883), with South Dakota v. North Carolina, 192 U. S 286 (1904).*fn30
I would, accordingly, affirm the judgment of the Court of Appeals. |
|
|
|
| Opinion Footnotes | |
|
|
|
| [89] | *fn1
Qui tam is short for the Latin phrase qui tam pro domino rege Guam pro se
ipso in hac parte sequitur, which means "who pursues this action on
our Lord the King's behalf as well as his own." The phrase dates from
at least the time of Blackstone. See 3 W. Blackstone, Commentaries *160.
Three other qui tam statutes, all also enacted over a hundred years ago,
remain on the books. See 25 U. S. C. §81 (providing cause of action and
share of recovery against a person contracting with Indians in an unlawful
manner); §201 (providing cause of action and share of recovery against a
person violating Indian protection laws); 35 U. S. C. §292(b) (providing
cause of action and share of recovery against a person falsely marking patented
articles); cf. 18 U. S. C. §962 (providing for forfeiture to informer of
share of vessels privately armed against friendly nations, but not expressly
authorizing suit by informer); 46 U. S. C. §723 (providing for forfeiture
to informer of share of vessels removing undersea treasure from the Florida
coast to foreign nations, but not expressly authorizing suit by informer). |
| [90] | *fn2
The denial of a motion to dismiss based on a claim of Eleventh Amendment
immunity is immediately appealable. See Puerto Rico Aqueduct and Sewer Authority
v. Metcalf & Eddy, Inc., 506 U. S. 139 (1993). The Second Circuit exercised
pendent appellate jurisdiction over the statutory question. See Swint v.
Chambers County Comm'n, 514 U. S. 35, 50-51 (1995). |
| [91] | *fn3
Blackstone noted, with regard to English qui tam actions, that "no
particular person, A or B, has any right, claim or demand, in or upon [the
bounty], till after action brought," and that the bounty constituted
an "inchoate imperfect degree of property ... [which] is not consummated
till judgment." 2 W. Blackstone, Commentaries *437. |
| [92] | *fn4
In addressing the Eleventh Amendment issue that we leave open today, the
dissent suggests that we are asserting that a qui tam relator "is,
in effect, suing as an assignee of the United States." Post, at 14;
see also post, at 8-9 (same). More precisely, we are asserting that a qui
tam relator is, in effect, suing as a partial assignee of the United States. |
| [93] | *fn5
In addition, the First Congress passed one statute allowing injured parties
to sue for damages on both their own and the United States' behalf. See
Act of May 31, 1790, ch. 15, §2, 1 Stat. 124-125 (allowing author or proprietor
to sue for and receive half of penalty for violation of copyright); cf.
Act of Mar. 1, 1790, ch. 2, §6, 1 Stat. 103 (allowing census taker to sue
for and receive half of penalty for failure to cooperate in census); Act
of July 5, 1790, ch. 25, §1, 1 Stat. 129 (extending same to Rhode Island). |
| [94] | *fn6
See Act of Mar. 1, 1790, ch. 2, §3, 1 Stat. 102 (allowing informer to sue
for, and receive half of fine for, failure to file census return); Act of
July 5, 1790, ch. 25, §1, 1 Stat. 129 (extending same to Rhode Island);
Act of July 20, 1790, ch. 29, §§1, 4, 1 Stat. 131, 133 (allowing private
individual to sue for, and receive half of fine for, carriage of seamen
without contract or illegal harboring of runaway seamen); Act of July 22,
1790, ch. 33, §3, 1 Stat. 137-138 (allowing private individual to sue for,
and receive half of goods forfeited for, unlicensed trading with Indian
tribes); Act of Mar. 3, 1791, ch. 15, §44, 1 Stat. 209 (allowing person
who discovers violation of spirits duties, or officer who seizes contraband
spirits, to sue for and receive half of penalty and forfeiture, along with
costs, in action of debt); cf. Act of Apr. 30, 1790, ch. 9, §§16, 17, 1
Stat. 116 (allowing informer to conduct prosecution, and receive half of
fine, for criminal larceny or receipt of stolen goods). |
| [95] | *fn7
See Act of July 31, 1789, ch. 5, §29, 1 Stat. 44-45 (giving informer full
penalty paid by customs official for failing to post fee schedule); Act
of Aug. 4, 1790, ch. 35, §55, 1 Stat. 173 (same); Act of July 31, 1789,
ch. 5, §38, 1 Stat. 48 (giving informer quarter of penalties, fines, and
forfeitures authorized under a customs law); Act of Sept. 1, 1789, ch. 11,
§21, 1 Stat. 60 (same under a maritime law); Act of Aug. 4, 1790, ch. 35,
§69, 1 Stat. 177 (same under another customs law); Act of Sept. 2, 1789,
ch. 12, §8, 1 Stat. 67 (providing informer half of penalty upon conviction
for violation of conflict-of-interest and bribery provisions in Act establishing
Treasury Department); Act of Mar. 3, 1791, ch. 8, §1, 1 Stat. 215 (extending
same to additional Treasury employees); Act of Feb. 25, 1791, ch. 10, §§8,
9, 1 Stat. 195-196 (providing informer half or fifth of fines resulting
from improper trading or lending by agents of Bank of United States); cf.
Act of Aug. 4, 1790, ch. 35, §4, 1 Stat. 153 (apportioning half of penalty
for failing to deposit ship manifest to official who should have received
manifest, and half to collector in port of destination). We have suggested,
in dictum, that "[s]tatutes providing for a reward to informers which
do not specifically either authorize or forbid the informer to institute
the action are construed to authorize him to sue." United States ex
rel. Marcus v. Hess, 317 U. S. 537, 541, n. 4 (1943). |
| [96] | *fn8
In so concluding, we express no view on the question whether qui tam suits
violate Article II, in particular the Appointments Clause of §2 and the
"take Care" Clause of §3. Petitioner does not challenge the qui
tam mechanism under either of those provisions, nor is the validity of qui
tam suits under those provisions a jurisdictional issue that we must resolve
here. See Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 102,
n. 4 (1998) ("[O]ur standing jurisprudence, ... though it may sometimes
have an impact on Presidential powers, derives from Article III and not
Article II"); see also Lujan v. Defenders of Wildlife, 504 U. S. 555,
576-578 (1992). The dissent implicitly attacks us for "introduce[ing]
[this question] sua sponte." Post, at 14. We raise the question, however,
only to make clear that it is not at issue in this case. It is only the
dissent that proceeds to volunteer an answer. See post, at 13-14. |
| [97] | *fn9
The dissent claims that, "[a]lthough general statutory references to
`persons' are not normally construed to apply to the enacting sovereign,
when Congress uses that word in federal statutes enforceable by the Federal
Government or by a federal agency, it applies to States and state agencies
as well as to private individuals and corporations." Post, at 2 (citation
omitted). The dissent cites three cases in support of this assertion. None
of them, however, involved a statutory provision authorizing private suit
against a State. California v. United States, 320 U. S. 577 (1944), disregarded
the presumption in a case brought against a State by the Federal Government
(and under a statutory provision authorizing suit only by the Federal Government).
See id., at 585-586. United States v. California, 297 U. S. 175 (1936),
found the presumption overcome in similar circumstances -- and with regard
to a statute that used not the word "person," but rather the phrase
"common carrier." See id., at 186-187. And Georgia v. Evans, 316
U. S. 159 (1942), held that the presumption was overcome when, if a State
were not regarded as a "person" for purposes of bringing an action
under §7 of the Sherman Act, it would be left "without any redress
for injuries resulting from practices outlawed by that Act." Id., at
162. The dissent contends that "[t]he reason for presuming that an
enacting sovereign does not intend to authorize litigation against itself
simply does not apply to federal statutes that apply equally to state agencies
and private entities." Post, at 10. That is true enough, but in the
American system there is a different reason, equally valid. While the States
do not have the immunity against federally authorized suit that international
law has traditionally accorded foreign sovereigns, see National City Bank
of N. Y. v. Republic of China, 348 U. S. 356, 358-359 (1955), they are sovereigns
nonetheless, and both comity and respect for our federal system demand that
something more than mere use of the word "person" demonstrate
the federal intent to authorize unconsented private suit against them. In
any event, Justice Stevens fought and lost this battle in Will v. Michigan
Dept. of State Police, 491 U. S. 58 (1989), in which the Court applied the
presumption to a federal statute when the "person" at issue was
a State. See id., at 64; but see id., at 73 (Brennan, J., dissenting, joined
by Marshall, Blackmun, and Stevens, JJ.). Moreover, Justice Stevens actually
joined the Court's opinion in Wilson v. Omaha Tribe, 442 U. S. 653 (1979),
in which the Court likewise applied the presumption to a federal statute
in a case involving a State. See id., at 667. (Wilson is omitted from the
dissent's discussion of "[c]ases decided before 1986," which it
claims "uniformly support" its reading of the statute. Post, at
2.) |
| [98] | *fn10
The dissent contends that the FCA was "intended to cover the full range
of fraudulent acts, including those perpetrated by States." Post, at
4-5, and n. 2 (quoting United States v. Neifert&nbhyph;White Co., 390
U. S. 228, 232 (1968); Rainwater v. United States, 356 U. S. 590, 592 (1958);
H. R. Rep. No. 99-660, p. 18 (1985)). The sources the dissent quotes, however,
support its contention only as far as the comma. They stand for the unobjectionable
proposition (codified in §3729(c)) that the FCA was intended to cover all
types of fraud, not for the additional proposition that the FCA was intended
to cover all types of fraudsters, including States. |
| [99] | *fn11
The criminal provision remains on the books and is currently codified separately,
as amended, at 18 U. S. C. §287. |
| [100] | *fn12
The dissent claims that "[t]he term `person' in §3729(a) that we are
interpreting today was enacted by the 1986 Congress, not by the 1863 Congress."
Post, at 6, n. 5. But the term "person" has remained in the statute
unchanged since 1863; the 1986 amendment merely changed the modifier "[a]"
to "[a]ny." This no more caused the word "person" to
include States than did the replacement of the word "any" with
"[a]" four years earlier. The dissent's sole basis for giving
the change from "[a]" to "[a]ny" this precise and unusual
consequence is a single sentence of legislative history from the 1986 Congress.
That would be unequal to the task in any event, but as it happens the sentence
was not even describing the consequence of the proposed revision, but was
setting forth a Senate Committee's (erroneous) understanding of the meaning
of the statutory term enacted some 123 years earlier. The paragraph in which
the sentence appears discusses the FCA "[i]n its present," i.e.,
pre-1986, "form." S. Rep. No. 99-345, p. 8 (1986). The dissent
contradicts its contention that the "intent" of the 1986 Congress,
rather than that of the 1863 Congress, controls here, by relying heavily
on a House Committee Report from 1862. Post, at 3-4 (citing H. R. Rep. No.
2, 37th Cong., 2d Sess., pt. ii-a, pp. xxxviii-xxxix (1862)). Even for those
disposed to allow the meaning of a statute to be determined by a single
committee, that Report is utterly irrelevant, since it was not prepared
in connection with the 1863 Act, or indeed in connection with any proposed
false claims legislation. In repeating the Second Circuit's unsupported
assertion that Congress must have had this Report in mind a year later when
it enacted the FCA, the dissent asks us to indulge even a greater suspension
of disbelief than legislative history normally requires. And finally, this
irrelevant committee Report does not provide the promised support for the
view that "[t]he False Claims Act is ... as capable of being violated
by State as by individual action," post, at 3. The cited portion details
a single incident of fraud by a state official against a State, not an incident
of fraud by a State against the Federal Government. |
| [101] | *fn13
The dissent points out that the definition of "person" in §3733(l)(4)
also applies to §3733(l)(2), a definitional provision which defines the
phrase "false claims law investigation" as "any inquiry conducted
by any false claims law investigator for the purpose of ascertaining whether
any person is or has been engaged in any violation of a false claims law."
See post, at 1, 7-8. But the effect of assuming a State to be a "person"
for purposes of that definitional section is not to embrace investigations
of States within the definition. A "false claims investigation"
will still not include an investigation of a State, since whether a "person"
(however broadly defined) "is or has been engaged in any violation
of a false claims law" depends on whether that person is subject to
the "false claims law," which refers us back to §3729, to which
§3733(l)(4)'s definition of "person" is explicitly made inapplicable.
What the application of §3733(l)(4) to §3733(l)(2) does achieve is to subject
States, not to qui tam liability, but to civil investigative demands. That
is entirely appropriate, since States will often be able to provide useful
evidence in investigations of private contractors. |
| [102] | *fn14
The dissent contends that our argument "prove[s] too much," since
the definition of "person" in §3733(l)(4) includes not just States,
but also "any natural person, partnership, corporation, association,
or other legal entity"; under our reasoning, it contends, all of those
entities would also be excluded from the definition of "person"
under §3729. Post, at 11. That is not so. Unlike States, all of those entities
are presumptively covered by the term "person." See 1 U. S. C.
§1. The addition of States to 31 U. S. C. §3733, and the failure to add
States to §3729, suggests that States are not subject to qui tam liability
under §3729. The dissent attempts to explain the absence of a definitional
provision in §3729 by suggesting that Congress "simply saw no need
to add a definition of `person' in §3729 because ... the meaning of the
term `person' was already well understood." Post, at 11. If that were
so, and if the "understanding" included States, there would have
been no need to include a definition of "person" in §3733. |
| [103] | *fn15
The dissent attempts to distinguish Newport on the basis of a single sentence
in that opinion stating that "courts vie[w] punitive damages [against
governmental bodies] as contrary to sound public policy, because such awards
would burden the very taxpayers and citizens for whose benefit the wrongdoer
was being chastised." Newport v. Fact Concerts, Inc., 453 U. S. 247,
263 (1981). The dissent contends that Newport is inapplicable where, as
here, "[t]he taxpaying `citizens for whose benefit' the [statute] is
designed are the citizens of the United States, not the citizens of any
individual State that might violate the [statute]." Post, at 13. The
problem with this is that 42 U. S. C. §1983 -- the statute at issue in Newport
-- is, like the FCA, a federal law designed to benefit "the citizens
of the United States, not the citizens of any individual State that might
violate the [statute]." A better reading of Newport is that we were
concerned with imposing punitive damages on taxpayers under any circumstances.
" `[Punitive damages], being evidently vindictive, cannot, in our opinion,
be sanctioned by this court, as they are to be borne by widows, orphans,
aged men and women, and strangers, who, admitting that they must repair
the injury inflicted by the Mayor on the plaintiff, cannot be bound beyond
that amount, which will be sufficient for her indemnification.' " Newport,
supra, at 261 (quoting McGary v. President & Council of City of Lafayette,
12 Rob. 668, 677 (La. 1846)). |
| [104] | *fn16
As the dissent correctly points out, see post, at 13, n. 11, treble damages
may be reduced to double damages in certain cases, see §3729(a). This exception,
however, applies only in some of those (presumably few) cases involving
defendants who provide information concerning the violation before they
have knowledge that an investigation is underway. See ibid. |
| [105] | *fn17
The dissent attempts to distinguish the PFCRA on the ground that it is a
separate and subsequently enacted statute. See post, at 11-12, and n. 10.
But it is well established that a court can, and should, interpret the text
of one statute in the light of text of surrounding statutes, even those
subsequently enacted. See FDA v. Brown & Williamson Tobacco Corp., 529
U. S. ___, ___ (2000) (slip op., at 9-10); United States v. Fausto, 484
U. S. 439, 453 (1988). Moreover, there is no question that the PFCRA was
designed to operate in tandem with the FCA. Not only was it enacted at virtually
the same time as the FCA was amended in 1986, but its scope is virtually
identical to that of the FCA. Compare §3729(a) (FCA) ("Any person who
... knowingly presents, or causes to be presented, to an officer or employee
of the United States Government ... a false or fraudulent claim for payment
or approval ... ") with §3802(a)(1) (PFCRA) ("Any person who makes,
presents, or submits, or causes to be made, presented, or submitted, a claim
that the person knows or has reason to know ... is false, fictitious, or
fraudulent ... "). The dissent would, in any event, subject States
to suit under the PFCRA no less than under the FCA -- despite its detailed
definition of "person" that does not include States. In justification
of this the dissent again cites California v. United States, 320 U. S.,
at 585, and Evans, 316 U. S., at 160. In addition to being inapposite because
they did not authorize suits against States by private parties, see n. 9,
supra, the definitions of "person" in the statutes at issue in
those cases were not as detailed as that of the PFCRA, and set forth what
the term "person" included, rather than, as the PFCRA does, what
the term "person" "means," see 31 U. S. C. §3801(a)(6)
(emphasis added). |
| [106] | *fn18
Although the dissent concludes that States can be "persons" for
purposes of commencing an FCA qui tam action under §3730(b), see post, at
6-7, we need not resolve that question here, and therefore leave it open. |
| [107] | *fn19
The difference between the post-1986 lens through which the Court views
sovereign immunity issues, on the one hand, and the actual intent of Congress
in statutes like the one before us today, on the other hand, is well illustrated
by the congressional rejection of the holdings in Hoffman v. Connecticut
Dept. of Income Maintenance, 492 U. S. 96 (1989), and United States v. Nordic
Village, Inc., 503 U. S. 30 (1992). In those cases, the Court refused to
find the necessary unequivocal waiver of sovereign immunity against both
the States and the Federal Government in §106(c) of the Bankruptcy Code.
Congress, however, thought differently: "In enacting section 106(c),
Congress intended ... to make the States subject to a money judgment. But
the Supreme Court in Hoffman v. Connecticut Department of Income Maintenance,
492 U. S. 96 (1989), held [otherwise.] In using such a narrow construction,
the Court . . . did not find in the text of the statute an `unmistakenly
clear' intent of Congress to waive sovereign immunity ... . The Court applied
this reasoning in United States v. Nordic Village, Inc." See 140 Cong.
Rec. 27693 (1994). Congress therefore overruled both of those decisions
by enacting the current version of 11 U. S. C. §106. |
| [108] | *fn20
It is thus at the opposite pole from the statute construed in Wilson v.
Omaha Tribe, 442 U. S. 653 (1979), which held that the term "white
person" did not include the State of Iowa because "it is apparent
that in adopting §22 Congress had in mind only disputes arising in Indian
country, disputes that would not arise in or involve any of the States."
Id., at 668. |
| [109] | *fn21
Title 31 U. S. C. §3729(c) reads: "For purposes of this section, `claim'
includes any request or demand, whether under contract or otherwise, for
money or property which is made to a contractor, grantee, or other recipient
if the United States Government provides any portion of the money or property
which is requested or demanded, or if the Government will reimburse such
contractor, grantee, or other recipient for any portion of the money or
property which is requested or demanded." |
| [110] | *fn22
When Congress amended the FCA in 1986, it noted that "[e]vidence of
fraud in Government programs and procurement is on a steady rise."
H. R. Rep. No. 99-660, at 18. And at that time, federal grants to state
and local governments had totaled over $108 billion. See U. S. Dept. of
Commerce National Data Book and Guide to Sources, Statistical Abstract of
the United States 301 (108th ed. 1988) (compiling data from 1986). It is
therefore difficult to believe, as the Court contends, that Congress intended
"to cover all types of fraud, [but not] all types of fraudsters,"
ante, at 15, n. 10, a conclusion that would exclude from coverage such a
large share of potential fraud. |
| [111] | *fn23
Petitioner argues that the Senate Report's statement was simply inaccurate,
because the three cases to which the Report cited for support did not interpret
the meaning of the word "person" in the False Claims Act. Brief
for Petitioner 25-26. The cases stand for the proposition that the statutory
term "person" may include States and local governments -- exactly
the proposition I have discussed above. See supra, at 2-3. Petitioner's
observation that none of the cases cited is directly on point only indicates
that the Senate's understanding was based on an analogy rather than on controlling
precedent. Petitioner further argues that the text of the FCA as it was
originally enacted in 1863 could not have included States as "persons,"
and therefore the Senate's understanding of the pre-1986 Act was erroneous.
See also ante, at 14-15. Assuming for argument's sake that the Senate incorrectly
ascertained what Congress meant in 1863, petitioner's argument is beside
the point. The term "person" in §3729(a) that we are interpreting
today was enacted by the 1986 Congress, not by the 1863 Congress. See 100
Stat. 3153 (deleting entirely the previously existing introductory clause
in §3729, including the phrase "[a] person not a member of an armed
force of the United States" and replacing it with the new phrase "[a]ny
person"). Therefore, even if the 1986 Congress were mistaken about
what a previous Legislature had meant by the word "person," it
clearly expressed its own view that when the 1986 Congress itself enacted
the word "person" (and not merely the word "any" as
the Court insists, ante, at 16, n. 12), it meant the reference to include
States. There is not the least bit of contradiction (as the Court suggests,
ibid.) in one Congress informing itself of the general understanding of
a statutory term it enacts based on its own (perhaps erroneous) understanding
of what a past Congress thought the term meant. |
| [112] | *fn24
Congress adopted the suggestion of the Attorneys General in §3730(e)(4)(A). |
| [113] | *fn25
Because this concatenation of definitions expressly references and incorporates
§3729, it is no answer that the definitions listed in §3733 apply, by their
terms, "[f]or the purposes of" §3733. |
| [114] | *fn26
Justice Ginsburg, who joins in the Court's judgment, is careful to point
out that the Court does not disagree with this reading of §3730(a). Ante,
at 2. |
| [115] | *fn27
Not so, the Court says, because natural persons and other entities, unlike
States, are presumed to be included within the term "person."
Ante, at 17-18, n. 14. In other words, this supposedly independent textual
argument does nothing on its own without relying entirely on the presumption
already discussed. See supra, at 9-10; ante, at 13-15. The negative inference
adds nothing on its own. |
| [116] | *fn28
Indeed, reliance on the PFCRA seems to contradict the Court's central premise
-- that in 1863 the word "person" did not include States and that
scattered intervening amendments have done nothing to change that. Ante,
at 14-16. If that were so, the relevant meaning of the word "person"
would be the meaning adopted by the 1863 Congress, not the 1986 Congress.
And on that premise, why should it matter what a different Congress, in
a different century, did in a separate statute? Of course, as described
earlier, see n. 5, supra, I believe it is the 1986 Congress' understanding
of the word "person" that controls, because it is that word as
enacted by the 1986 Congress that we are interpreting in this case. But
on the Court's premise, it is the 1863 Congress' understanding that controls
and the PFCRA should be irrelevant. |
| [117] | *fn29
It is also worth mentioning that treble damages may be reduced to double
damages if the court makes the requisite findings under §§3729(a)(7)(A)-(C). |
| [118] | *fn30
The State argues that this is essentially an "end run" around
the Eleventh Amendment. Brief for Petitioner 33. It is not at all clear
to me, though, why a qui tam action would be considered an "end run"
around that Amendment, yet precisely the same form of action is not an "end
run" around Articles II and III. |
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