RESPONDENT: United States ex rel. Stevens
LOCATION: Hawaii Office of Elections
DOCKET NO.: 98-1828
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Second Circuit
CITATION: 529 US 765 (2000)
ARGUED: Nov 29, 1999
DECIDED: May 22, 2000
Edwin S. Kneedler - Department of Justice, argued the cause for the respondent United States
J. Wallace Malley, Jr. - Montpelier, Vermont, argued the cause for the petitioner
Theodore B. Olson - on behalf of Respondent Stevens
Facts of the case
Jonathan Stevens, a former attorney for the Vermont Agency of Natural Resources, filed suit against his former employer, the agency, alleging that it had submitted false claims to the Environmental Protection Agency (EPA) in order to induce the EPA to disburse more grant money than it was entitled to receive. Stevens filed suit under the False Calms Act (FCA), which provides for a private person to bring a qui tam civil action "in the name of the [Federal] Government," against "any person" who "knowingly presents...to...the...Government...a false or fraudulent claim for payment." The State of Vermont moved to dismiss the suit, 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. Vermont then filed an interlocutory appeal. Thereupon, the court stayed its proceedings and the United States intervened in the appeal in support of Stevens. The Court of Appeals affirmed.
May a private individual bring suit in federal court on behalf of the United States against a state or state agency under the False Claims Act?
Media for Vermont Agency of Natural Resources v. United States ex rel. StevensAudio Transcription for Oral Argument - November 29, 1999 in Vermont Agency of Natural Resources v. United States ex rel. Stevens
Audio Transcription for Opinion Announcement - May 22, 2000 in Vermont Agency of Natural Resources v. United States ex rel. Stevens
William H. Rehnquist:
The opinion of the Court in No. 98-1828, Vermont Agency of Natural Resources versus United States, will be announced by Justice Scalia.
This case comes to us on Writ of Certiorari to the United States Court of Appeals for the Second Circuit.
Under the False Claims Act, a private person known as the relator may bring a civil action “in the name of the government” against “any person” who among other things knowingly presents to the government a false or fraudulent claim for payment.
The relator receives a share of the proceeds from the action where the remainder of course going to the government.
Such actions brought by private persons on behalf of the government are known as qui tam action, Latin name with which the pleadings used to begin.
Respondent Stevens brought this qui tam action against petitioner, a Vermont State Agency alleging that it had submitted false claims to the environmental protection agency in connection with various federal grant programs administered by that agency.
Petitioner moved to dismiss making two arguments: First, that a State or a state agency is not a person subject to liability under the False Claims Act; and second, that a qui tam action in Federal Court against the State is barred by the Eleventh Amendment, which generally prohibits private suits against the State by citizens of other states in Federal Court.
The District Court denied the motion and petitioner, the State, filed an interlocutory appeal.
Respondent, United States intervened in the appeal in support of respondent Stevens, the Second Circuit affirmed.
As a preliminary matter, we conclude that Stevens has a standing to bring this suit.
Stevens meets all of the requirements necessary to establish standing under Article III of the Constitution.
In particular he has demonstrated injury in fact that is a harm, which is concrete, actual and imminent, not conjectural or hypothetical.
We agree with Vermont that the interest that Stevens has in the outcome of the suit, namely 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.
It is not compensating him for any injury.
Stevens relies, however, upon the 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.
We conclude that an adequate basis for Stevens standing is to be found in the doctrine that an assignee of a claim has standing to assert the injury, in fact suffered by the assignor.
The False Claims Act can reasonably be regarded as affecting a partial assignment of the government’s damages claim.
This conclusion is confirmed by the long tradition of qui tam actions in England and the American colonies, which demonstrates that such actions were cases and controversies of this sort traditionally amendable to and resolved by judicial process.
We express no view on the question whether qui tam suits violate Article II of the Constitution as oppose to Article III in particularly the Appointments Clause of Section 2 and the “take Care” Clause of Section 3.
Turning to the merits of the matter, we find it unnecessary to reach the Eleventh Amendment question.
We conclude that the False Claims Act does not by its terms subject to state or a state agency to liability because of the longstanding interpretive presumption that the statutory term, ‘person’ does not include the sovereign, although that is not a hard and fast rule of exclusion.
The presumption may be disregarded only upon some affirmative showing of statutory intent to the contrary.
Various features of the False Claims Act both has originally enacted and as amended far from providing the requisite affirmative indications that the term ‘person’ includes states indicate quite the contrary.
This conclusion is buttressed by two additional considerations.
The 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, and the doctrine that Statute should be construed so as to avoid difficult constitutional questions, in this case the Eleventh Amendment question.
Justice Breyer has filed a concurring statement; Justice Ginsburg has filed an opinion concurring in the judgment in which Justice Breyer has joined; Justice Stevens has filed a dissenting opinion in which Justice Souter has joined.