United States Court of Appeals

FOR THE EIGHTH CIRCUIT

_____________

No. 97-1940EA

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United States of America ex rel. *

Frankie Carolyn Rodgers and *

Delbert O. Lewis, *

*

Plaintiffs - Appellees; *

*

*

United States of America, *

*

Intervenor on Appeal, *

*

v. * On Appeal from the United

* States District Court

State of Arkansas and Arkansas * for the Eastern District

Department of Education, * of Arkansas.

*

Defendants - Appellants, *

*

Little Rock School District; *

Benton School District; Magnet Cove *

School District; Hope School District; *

Malvern School District; and *

Gurdon School District, *

*

Defendants. *

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Submitted: June 10, 1998

Filed: September 4, 1998

___________
The Hon. Owen M. Panner, United States District Judge for the District of

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Oregon, sitting by designation.

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Before RICHARD S. ARNOLD and MORRIS SHEPPARD ARNOLD, Circuit

Judges, and PANNER, District Judge. 1

___________

RICHARD S. ARNOLD, Circuit Judge.

Two Arkansas residents brought this qui tam action against the State of Arkansas

and the Arkansas Department of Education for allegedly obtaining federal education

funding by filing false claims of compliance with federal civil-rights laws, in violation

of the False Claims Act, 31 U.S.C. §§ 3729 - 3733 (1994). The State and its

Department of Education moved to dismiss the claim, asserting that it is barred by the

Eleventh Amendment to the United States Constitution. The District Court denied the

motion, and this appeal followed. We affirm.

I.

Arkansas residents Frankie Carolyn Rodgers, a former public school teacher and

counselor, and Delbert O. Lewis, a former employee of the Arkansas Division of

Rehabilitation Services, undertook an investigation into whether the State, its

Department of Education, and several Arkansas school districts were in compliance

with federal civil-rights laws. Rodgers and Lewis allege that the defendants have

falsely claimed compliance with § 504 of the Rehabilitation Act of 1973, as amended,

29 U.S.C. § 794 (1994), and Titles I and II of the Americans with Disabilities Act, 42

U.S.C. §§ 12101-12213 (1994). Assurance of compliance is a prerequisite to the

continued receipt of certain federal funds. Acting on their belief that the State,

including legislators and auditors, and several school districts have misrepresented

compliance with the laws since 1985, Rodgers and Lewis brought suit as qui tam
The Hon. William R. Wilson, Jr., United States District Judge for the Eastern 2

District of Arkansas.

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relators under the Federal Claims Act. As permitted by the statute, 31 U.S.C. §

3730(b)(4)(B), the United States allowed the relators to prosecute the case and did not

itself become a party.

Asserting immunity from suit under the Eleventh Amendment, the State and the

Department moved to dismiss the complaint. The District Court determined that the 2

State does not enjoy Eleventh Amendment immunity from False Claims Act suits by

qui tam relators, and denied the motion to dismiss. The State and the Department

appeal from the denial of the motion to dismiss, and the District Court stayed the

proceeding pending the outcome here. We have jurisdiction because denials of motions

to dismiss on Eleventh Amendment immunity grounds are immediately appealable.

Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147

(1993). 

II.

On appeal, the State acknowledges that the United States is not subject to the

Eleventh Amendment prohibition on federal jurisdiction over “commence[ment] or

prosecut[ion] [of a suit] against one of the United States by Citizens of another

State . . .,” or over a suit against a State by one of its own citizens. U.S. Const. amend.

XI; Mancuso v. New York State Thruway Auth., 86 F.3d 289 (2d Cir.), cert. denied,

117 S. Ct. 481 (1996). See also United States v. Mississippi, 380 U.S. 128, 138-41

(1965). They contend that when the United States declines to prosecute a violation of

the False Claims Act, the suit is not brought by the United States for Eleventh

Amendment purposes. Under this reasoning, the qui tam relator is characterized as a

citizen, and the Eleventh Amendment bars the suit against the state.
Qui tam is short for the Latin phrase, “qui tam pro domino rege quam pro se

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ipso in hac parte sequitur:” “who sues in this case on behalf of our lord the King as well

as on his behalf.”

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Section 3729 of the False Claims Act provides, in pertinent part:

(a) Liability for certain acts.--Any person who--

(1) 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;

(2) knowingly makes, uses, or causes to be made or used, a false

record or statement to get a false or fraudulent claim paid or approved by

the Government;

(3) conspires to defraud the Government by getting a false or

fraudulent claim allowed or paid; . . .

is liable to the United States Government for a civil penalty . . . plus 3

times the amount of damages which the Government sustains because of

the act of that person . . .. 

Section 3730, the qui tam provision of the False Claims Act, states in pertinent 3

part:

(b) Actions by Private Persons.--(1) A person may bring a civil action

for a violation of section 3729 for the person and for the United States

Government. The action shall be brought in the name of the Government.

The action may be dismissed only if the court and the Attorney General

give written consent to the dismissal and their reasons for consenting.
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A great deal of Section 3730 establishes as superior the role of the government

in the prosecution of qui tam suits. For example, the government may intervene in the

action, and in the event that it elects not to do so within an initial 60-day period, it may,

for good cause, intervene at a later date. 31 U.S.C. §§ 3730(b)(5) and (c)(3).

Additionally, “[i]f the Government proceeds with the action, it . . . shall not be bound

by an act of the person bringing the action.” 31 U.S.C. § 3730(c)(1). The Government

also has the power to “dismiss [or settle] the action notwithstanding the objections of

the person initiating the action . . .,” subject only to notice and a hearing for the qui tam

relator. The government will collect the bulk of any damages awarded, and in no case

less than 70%, regardless of who prosecutes the suit. 31 U.S.C. §§ 3730(c)(2)(A) and

3730(c)(2)(B).

We hold that a qui tam action under this Act is a suit by the United States for

Eleventh Amendment immunity purposes. The focus of the Act is on exposing fraud

on the government and recovering resulting government losses. The qui tam provisions

facilitate this process, but they do not alter the underlying character of the action as one

for the aggrieved party as defined by the statute. See Marvin v. Trout, 199 U.S. 212,

224-26 (1905). The qui tam mechanism exists to motivate individuals to further the

interest of the government in remaining free from frauds perpetrated against it.

Confronting the same question before us, the Fourth Circuit stated, and we agree, that

“the structure of the qui tam procedure, the extensive benefit flowing to the government

from any recovery, and the extensive power the government has to control the litigation

weigh heavily against [the defendant].” United States ex rel. Milam v. University of

Texas M.D. Anderson Cancer Ctr., 961 F.2d 46, 49 (4th Cir. 1992). 

Other circuits have held similarly. “Qui tam relators cannot and do not sue for

FCA violations on their own behalf. Rather, they sue on behalf of the government as

agents of the government, which is always the real party in interest.” United States ex

rel. Hyatt v. Northrop Corp., 91 F.3d 1211, 1217 n.8 (9th Cir. 1996) (citing United

States ex rel. Killingsworth v. Northrop Corp., 25 F.3d 715, 720 (9th Cir. 1994)
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(citations omitted). See also United States v. ex rel. Hall v. Tribal Dev. Corp. 49 F. 3d

1208, 1213 (7th Cir. 1995). Many of our sister circuits have rejected challenges to a

qui tam relator’s action on similar reasoning. “In a qui tam action, the plaintiff sues on

behalf of and in the name of the government and invokes the standing of the

government resulting from the fraud injury.” United States ex rel. Kreindler &

Kreindler v. United Technologies Corp., 985 F. 2d 1148, 1154 (2d Cir.), cert. denied,

508 U.S. 973 (1993) (citations omitted). In so stating, the Second Circuit drew from

an earlier case in which it stated “although qui tam actions allow individual citizens to

initiate enforcement against wrongdoers who cause injury to the public at large, the

Government remains the real party in interest.” Minotti v. Lensink, 895 F.2d 100, 104

(2d Cir. 1990). In a similar vein, the Fourth Circuit in Milam stated “[w]e could not

lightly conclude that the party upon whose standing the justiciability of the case

depends is not the real party in interest.” 961 F.2d at 49. 

Finally, we address the State’s and the Department’s argument that our recent

decision in Moad v. Arkansas State Police Department, 111 F.3d 585 (8th Cir. 1997),

is dispositive of an outcome in their favor. In Moad, we held that the Eleventh

Amendment is a bar to a suit against a state for violations of the Fair Labor Standards

Act. Our decision was required by that of the Supreme Court in Seminole Tribe of

Florida v. Florida, 517 U.S. 44 (1996), that the Interstate Commerce Clause is an

impermissible basis for the abrogation of state immunity under the Eleventh

Amendment. Moad is not controlling. There, the real party in interest was a private

person. Here, it is the United States. The State and its agencies are not entitled to

Eleventh Amendment immunity.

The judgment is affirmed.
The United States has intervened in this appeal for the limited purpose of

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defending the constitutionality of the False Claims Act. See Motion of United States

to Intervene as of Right Under 28 U.S.C. § 2403. The United States has not intervened

in the underlying action pursuant to 31 U.S.C. § 3730.

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PANNER, District Judge, dissenting.

The Eleventh Amendment provides that:

The Judicial power of the United States shall not be

construed to extend to any suit in law or equity, commenced

or prosecuted against one of the United States by Citizens

of another State, or by Citizens or Subjects of any Foreign

State.

(Emphasis added.) This action was commenced, and is being prosecuted, by two

private citizens. The United States was not consulted before this action was filed. It

did not screen the claims before filing to ensure that prosecution was warranted, and

it has since declined to prosecute this action in its own right. If the United States

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intervenes, it is not bound by anything the relators have done. 31 U.S.C. § 3730(c)(1).

Unless it intervenes, the United States is not liable for any costs or attorney fees

awarded to the defendants. 31 U.S.C. § 3730(f) and (g) (distinguishing between

actions brought by the relator and those filed by the “United States”). The United

States has little control over the conduct of this litigation, unless it intervenes as a party

or by moving to dismiss the action. See generally 31 U.S.C. § 3730.

Based upon the decisions cited in the majority opinion, the majority

understandably concludes that this action against a state is not barred by the Eleventh

Amendment. However, those cases primarily involve issues of standing, or are

premised upon other decisions that involve standing. They speak in terms of the “real

party in interest.”
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United States ex rel. Kelly v. Boeing Co., 9 F.3d 743 (8th Cir. 1993), discusses

the relationship between the United States and the relator in an action under the False

Claims Act:

[T]he FCA effectively assigns the government’s claims to

qui tam plaintiffs such as Kelly, who then may sue based

upon an injury to the federal treasury. Under this theory of

standing, the FCA’s qui tam provisions operate as an

enforceable unilateral contract. The terms and conditions of

the contract are accepted by the relator upon filing suit. If

the government declines to prosecute the alleged wrongdoer,

the qui tam plaintiff effectively stands in the shoes of the

government.

Id. at 748. Others have likened the relationship to an assignment of a contract or chose

in action, or a collection agency, bounty hunter, or contingency fee relationship. See,

e.g., United States ex rel. Milam v. University of Texas M.D. Anderson Cancer

Center, 961 F.2d 946, 949 (4th Cir. 1992) (endorsing contingency fee analysis).

“Standing in the shoes of the assignor” may suffice to confer standing to sue or

to overcome a contractual defense, but only the United States itself should be able to

pierce a state’s sovereign immunity, not its collection agencies, assignees, bounty

hunters, or delegees. Milam’s answer was that:

Congress has let loose a posse of ad hoc deputies to uncover

and prosecute frauds against the government. States and

state agencies . . . may prefer the dignity of being chased

only by the regular troops; if so, they must seek relief from

Congress.
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Id. at 49. That misses the mark. It is not a question of “dignity” but of whether the

limited waiver of sovereign immunity, that is inherent in the design of the Constitution,

extends to self-appointed “ad hoc deputies” who are largely beyond the supervision of

the United States and for whose actions the United States is not accountable. “The

consent, ‘inherent in the convention,’ to suit by the United States -- at the instance and

under the control of responsible federal officers -- is not consent to suit by anyone

whom the United States might select; and even consent to suit by the United States for

a particular person’s benefit is not consent to suit by that person himself.” Blatchford

v. Native Village of Noatak, 501 U.S. 775, 785-86 (1991).

The only case cited by the majority that is directly in point is Milam, supra.

While that decision is well written by Judge Hall, it does not persuade me that the

Eleventh Amendment can be overcome so easily.

The Supreme Court has expressed reservations about limiting the Eleventh

Amendment in other types of cases. See Seminole Tribe of Florida v. Florida, 517

U.S. 44 (1996) and Blatchford, supra.

The present action is distinguishable from United States ex rel. Zissler v.

Regents of the University of Minnesota, No. 97-4099MN, also decided today. In

Zissler, the United States has intervened and is prosecuting that action at the instance,

and under the control, of responsible federal officials. The same cannot be said of the

claims here. I therefore respectfully dissent.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.