Source: https://www.scribd.com/document/59015103/USA-Brief-in-Wham-O
Timestamp: 2016-10-27 15:30:20
Document Index: 521241041

Matched Legal Cases: ['§ 3', '§ 2', '§ 3', '§ 15', '§ 1', '§ 1', '§ 3', '§ 44', '§ 25', '§ 5', '§ 12', '§ 2', '§ 18', '§ 18', '§ 3', '§ 4', '§ 10', '§ 3', '§ 6', '§ 1', '§ 1691', '§ 1540', '§ 1326', '§ 962', '§ 3571', '§ 3571', '§ 3571', '§ 3571', '§ 3571', '§ 3571', '§ 81', '§ 201', '§ 305', '§ 305', '§7341', '§ 517', '§ 518', '§ 594', '§ 1295', '§ 2403', '§ 3729', '§ 3730', '§ 3730', '§ 1319', '§1365', '§ 290', '§ 292', '§ 292', '§ 1983', '§ 711', '§ 723', '§ 80103', '§ 2403', '§ 292', '§ 292', '§ 292', '§ 1295', '§ 292', '§ 3', '§ 1', '§ 1', '§ 3', '§ 44', '§ 5', '§ 3730', '§ 25', '§ 12', '§ 2', '§ 18', '§ 18', '§ 3', '§ 4', '§ 10', '§ 3', '§ 6', '§ 201', '§ 962', '§ 80103', '§ 7341', '§ 1326', '§ 1', '§ 533', '§ 723', '§ 80103', '§ 81', '§ 3', '§3', '§ 1983', '§ 1365', '§ 1540', '§ 1983', '§ 1691', '§ 305', '§ 711', '§ 3729', '§ 3730', '§ 292', '§ 292', '§ 3571', '§ 3571', '§ 292', '§ 292', 'sui generis', '§ 594', '§ 3', '§ 290', '§ 517', '§ 2', '§2']

BrowseBrowseInterestsBiography & MemoirBusiness & LeadershipFiction & LiteraturePolitics & EconomyHealth & WellnessSociety & CultureHappiness & Self-HelpMystery, Thriller & CrimeHistoryYoung AdultBrowse byBooksAudiobooksComicsSheet MusicBrowse allUploadSign inJoinBooksAudiobooksComicsSheet MusicNo.2011-1067 IN THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT FLFMC, LLC, Plaintiff-Appellant, v. WHAM-O, INC., Defendant-Appellee, v. UNITED STATES, Intervenor. Appeal from the United States District Court For the Western District of Pennsylvania in case no. 10-CV-0435, Judge Arthur J. Schwab BRIEF FOR THE INTERVENOR UNITED STATES TONY WEST Assistant Attorney General MICHAEL F. HERTZ Deputy Assistant Attorney General DOUGLAS N. LETTER (202) 514-3602 Appellate Litigation Counsel Civil Division, Room 7513 Department of Justice 950 Pennsylvania Ave., N.W. Washington, D.C. 20530
TABLE OF CONTENTS Page INTRODUCTION AND INTERESTS OF THE UNITED STATES. ...................... 1 ARGUMENT. ............................................................................................................... 7 I. THE PURPOSE AND HISTORY OF THE GOVERNING STATUTORY SCHEME IN SECTION 292 STRONGLY SUPPORT ITS CONSTITUTIONALITY. ............................................ 8 A. Qui Tam Provisions Like Section 292(b) Have a Sterling Pedigree in the Law of the United States. ...................... 9 The History of Qui Tam Statutes in the United States Confirms the Constitutionality of Section 292(b). .................... 16
THE QUI TAM MECHANISM IN SECTION 292 DOES NOT FACIALLY VIOLATE CONSTITUTIONAL SEPARATION OF POWERS PRINCIPLES. ...................................... 23 A. History and Practice Demonstrate that Section 292(b) Does Not Prevent the President from Accomplishing His Constitutionally Assigned Functions. .................................. 24 Section 292(b) Does Not Impermissibly Interfere with the President's Duties.......................................................... 29 Morrison is Readily Distinguishable............................................. 45 The Facial Constitutionality of Section 292(b) is Not Squarely Presented. .............................................................. 48
THE QUI TAM MECHANISM IN SECTION 292(b) DOES NOT VIOLATE THE APPOINTMENTS CLAUSE. .......................... 51
CONCLUSION. ......................................................................................................... 56
CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE WITH RULE 32(a) OF THE FEDERAL RULES OF APPELLATE PROCEDURE
Arcadia Mach. & Tool, Inc. v. Sturm, Ruger & Co., 786 F.2d 1124 (Fed. Cir. 1986). ........................................................................... 41 Auffmordt v. Hedden, 137 U.S. 310 (1890). ............................................................................................. 54 Blodgett v. Holden, 275 U. S. 142 (1927). .............................................................................................. 7 Bolling v. Sharpe, 347 U.S. 497 (1954). ............................................................................................. 22 Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989). ............................................................................................... 8 Bowsher v. Synar, 478 U.S. 714 (1986). ................................................................................. 17, 23, 48 Boyd v. Schildkraut Giftware Corp., 936 F.2d 76 (2d Cir. 1991). .................................................................................. 41 Brose v. Sears, Roebuck & Co., 455 F.2d 763 (5th Cir. 1972). ......................................................................... 16, 43 Buckley v. Valeo, 424 U.S. 1. ........................................................................................... 52, 53, 54, 55 Butte City Water Co. v. Baker, 196 U.S. 119 (1905). ............................................................................................. 35 C.J. Hendrey Co. v. Moore, 318 U.S. 133 (1943). ............................................................................................. 10
Channel Master Corp. v. JFD Electronics Corp., 260 F. Supp. 568 (E.D.N.Y. 1966)........................................................................ 41 Clinton v. Jones, 520 U.S. 681 (1997). ............................................................................................. 24 Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347 (Fed. Cir. 2005). ....................................................................... 9, 41 Davis v. Passman, 442 U.S. 228 (1979). ....................................................................................... 29, 39 Dunlop v. Bachowski, 421 U.S. 560 (1975). ............................................................................................ 38 Filmon Process Corp. v. Spell-Right Corp., 404 F.2d 1351 (D.C. Cir. 1968). .................................................................... 41, 43 Fish v. Manning, 31 F. 340 (S.D.N.Y. 1887)..................................................................................... 41 Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009). ................................................................. 8, 39, 40 Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 130 S. Ct. 3138 (2010). ......................................................................................... 34 G. LeBlanc Corp. v. H. & A. Selmer, Inc., 310 F.2d 449 (7th Cir. 1962). ......................................................................... 41, 43 Hawloetz v. Kass, 25 F 765 (CCD NY 1885)..................................................................................... 41 Heckler v. Chaney, 470 U.S. 821 (1985). ............................................................................................. 38
Hooper v. California, 155 U.S. 648 (1895). ............................................................................................. 50 Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939 (1997). ....................................................................................... 26, 33 Humphrey's Executor v. United States, 295 U.S. 602 (1935). ............................................................................................. 49 In re BP Lubricants USA Inc., --- F.3d ----, 2011 WL 873147 (Fed. Cir. 2011). ..................................................... 41 In re International Business Machines Corp., 687 F.2d 591 (2d Cir. 1982). ................................................................................ 38 Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524 (1838). ................................................................................ 38 Kingsley Books, Inc. v. Brown, 354 U.S. 436 (1957). ................................................................................. 14, 26, 42 Lear, Inc. v. Adkins, 395 U.S. 653 (1969). ............................................................................................... 9 Lithographic Co. v. Sarony, 111 U.S. 53 (1884). ............................................................................................... 18 London v. Everett H. Dunbar Corp., 179 F. 506 (1st Cir. 1910). .................................................................................... 15 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). .................................................................... 18, 22, 25, 32, 47 Luka v. Procter & Gamble, Co., Case No. 10-cv-2511 (N.D. Ill. Mar. 28, 2011). ...................................................... 5
Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803)................................................................................ 17 Marsh v. Chambers, 463 U.S. 783 (1983). ............................................................................................. 17 Marvin v. Trout, 199 U.S. 212 (1905). ....................................................................................... 10, 26 Mayview Corp. v. Rodstein, 620 F.2d 1347 (9th Cir. 1980). ............................................................................. 43 McCulloch v. Maryland, 17 U.S. 316 (1819). ............................................................................................... 16 Memphis Community School District v. Stachura, 477 U.S. 299 (1986). ............................................................................................. 30 Mistretta v. United States, 488 U.S. 361 (1989). ............................................................................. 7, 16, 18, 23 Morrison v. Olson, 487 U.S. 654 (1988). .................................................. 19, 22, 24, 27, 35, 39, 46, 47 Myers v. United States, 264 U.S. 95 (1924). ............................................................................................... 44 Myers v. United States, 272 U.S. 52 (1926). ......................................................................................... 17, 24 Newman-Green Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989). ............................................................................................. 45 Nichols v. Newell, 18 F. Cas. 199 (C.C.D. Mass. 1853). .................................................................... 15
Nixon v. Administrator of General Services, 433 U.S. 425 (1977)........................................................................................ 24, 27 Nixon v. Fitzgerald, 457 U.S. 731 (1982). ............................................................................................. 47 Osborn v. United States, 91 U.S. 474 (1875). ............................................................................................... 51 Pequignot v. Solo Cup Co., 608 F.3d 1356 (Fed. Cir. 2010). ......................................................... 40, 41, 42, 55 Pequignot v. Solo Cup Co., 640 F. Supp. 2d 714 (E.D.Va. 2009). ..................................................................... 4 Pub. Patent Found., Inc. v. Glaxo Smith Kline Consumer Healthcare, L.P., Case. No. 2:09-cv-05881 (S.D.N.Y. Mar. 22, 2001)................................................ 5 Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749 (5th Cir. 2001). ................................................ 20, 28, 29, 37, 53, 54 Schick v. United States, 195 U.S. 65 (1904). ............................................................................................... 25 Shizzle Pop, LLC v. Wham-O, Inc., Case No. CV 10-3491 PA, 2010 WL 3063066 (C.D. Cal., Aug. 2, 2010)..................................................... 4, 5 Sippit Cups, Inc. v. Michael's Creations, Inc., , 180 F. Supp. 58 (E.D.N.Y. 1960).............................................................. 15, 16, 41 Skilling v. United States, 130 S.Ct. 2896 (2009). .......................................................................................... 51 Smith v. Wade, 461 U.S. 30 (1983). ............................................................................................... 30
St. Louis, Iron Mountain, & S. Rwy. Co. v. Taylor, 210 U.S. 281 (1908). ............................................................................................. 35 Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321 (Fed. Cir. 2010). .......................................... 2, 8, 19, 20, 32, 33, 50 The Laura, 114 U.S. 411 (1885). ....................................................................................... 17, 18 The Nassau, 71 U.S. (4 Wall.) 634 (1866). ................................................................................ 11 The Pocket Veto Case, 279 U.S. 655 (1929). ............................................................................................. 16 The Sally, 12 U.S. (8 Cranch) 382 (1814). ............................................................................ 11 Thomas v. Union Carbide Agric. Products Co., 473 U.S. 568 (1985). ............................................................................................. 35 Tigner v. Texas, 310 U.S. 141 (1940). ....................................................................................... 14, 26 Townsend v. Sain, 372 U.S. 293 (1963). ............................................................................................. 37 Trabon Engineering Corp. v. Eaton Mfg. Co., 37 F.R.D. 51 (N.D. Ohio 1964)............................................................................ 41 Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc., Case No. 5:10-CV-1912, 2011 WL 924341 (N.D. Ohio March 14, 2011), appeal docketed, No. 2011-1254 (Fed. Cir. Mar. 16, 2011)...................................... 5
United States ex rel. A+ Homecare, Inc. v. Medshares Management Group, Inc., 400 F.3d 428 (6th Cir. 2005). ............................................................................... 32 United States ex rel. Eisenstein v. City of New York, 129 S. Ct. 2230 (2009). ......................................................................................... 36 United States ex rel. Jennings v. Ragen, 358 U.S. 276 (1959). ............................................................................................. 37 United States ex rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir. 1993). ............................................................................. 28, 54 United States ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148 (2d Cir. 1993). .............................................................................. 28 United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943). .......................................................... 4, 10, 14, 26, 27, 40, 43 United States ex rel. Ridenour v. Kaiser-Hill Co., L.L.C., 397 F.3d 925 (10th Cr. 2005). ........................................................................ 29, 51 United States ex rel. Stone v. Rockwell Int'l Corp., 282 F.3d 787 (10th Cir. 2002). ....................................................................... 29, 54 United States ex rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032 (6th Cir. 1994). ......................................................................... 28, 54 United States v. Cox, 342 F.2d 167 (5th Cir. 1965). ............................................................................... 38 United States v. Curtiss-Wright Export Corp., 299 U.S. 304 (1936). ....................................................................................... 18, 23 United States v. Germaine, 99 U.S. (9 Otto) 508 (1879). ................................................................................. 53
United States v. Halper, 490 U.S. 435 (1989), overruled by Hudson v. United States, 522 U.S. 93 (1997). ...................................... 44 United States v. Hartwell, 73 U.S. 385 (1867). ............................................................................................... 53 Vermont Agency of Nat. Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000). .......................................................... 3, 10, 11, 12, 14, 18, 19 20, 21, 25, 28, 29, 32, 33, 36 Winne v. Snow, 19 F. 507 (D. N.Y. 1884)....................................................................................... 15 Wisconsin v. Pelican Ins. Co., 127 U.S. 265 (1888). ............................................................................................. 17 Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787 (1987). ................................................................................. 18, 34, 45 Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952). ............................................................................................. 16 Constitution: U.S. Const., Art. I, Sec. 8, cl. 11 . ............................................................................... 11 U.S. Const., Art. II, § 3........................................................................................ 24, 47 U.S. Const. Art. II, § 2, cl. 2. ...................................................................................... 52 Statutes: Act of Mar. 1, 1790, ch. 2, § 3, 1 Stat. 102. ............................................................... 12 Act of April 30, 1790, ch. 9, § 15, 1 Stat. 116. .......................................................... 22
Act of July 5, 1790, ch. 25, § 1, 1 Stat. 129. ............................................................... 12 Act of July 20, 1790, ch. 29, §§ 1, 4, 1 Stat. 131, 133. .............................................. 12 Act of July 22, 1790, ch. 33, § 3, 1 Stat. 137-138....................................................... 12 Act of Mar. 3, 1791, ch. 15, § 44, 1 Stat. 209. ........................................................... 12 Act of February 20, 1792, ch. 7, § 25, 1 Stat. 232, 239. ............................................ 13 Act of May 8, 1792, ch. 36, § 5, 1 Stat. 277-278. ....................................................... 13 Act of March 1, 1793, ch. 19, § 12, 1 Stat. 329, 331. ................................................ 13 Act of March 22, 1794, ch. 11, §§ 2, 4, 1 Stat. 347, 349. .......................................... 13 Act of May 19, 1796, ch. 30, § 18, 1 Stat. 469, 474................................................... 13 Act of April 2, 1802, ch. 13, § 18, 2 Stat. 139, 145. .................................................. 13 Act of April 29, 1802, ch. 36, §§ 3-4, 2 Stat. 171, 172. ............................................. 13 Act of May 3, 1802, ch. 48, § 4, 2 stat. 189......................................................... 13, 21 Act of March 26, 1804, ch. 38, § 10, 2 Stat. 283, 286. .............................................. 13 Act of March 2, 1807, ch. 22, § 3, 2 stat. 426. ........................................................... 13 5 Stat. 543, 544............................................................................................................ 13 12 Stat. 696.................................................................................................................. 13 Act of March 2, 1863, ch. 67, § 6, 12 Stat. 698. ........................................................ 14 Act of July 19, 1952, ch 950, § 1, 66 Stat. 814........................................................... 15 P.L. 103-465, 108 Stat. 4990. ...................................................................................... 15
15 U.S.C. § 1691e(b)................................................................................................... 31 16 U.S.C. § 1540(g)..................................................................................................... 30 17 U.S.C. § 1326......................................................................................................... 15 18 U.S.C. § 962........................................................................................................... 14 18 U.S.C. § 3571......................................................................................................... 43 18 U.S.C. § 3571(b)(2). ............................................................................................... 43 18 U.S.C. § 3571(b)(7). ............................................................................................... 43 18 U.S.C. § 3571(c)(2). ............................................................................................... 43 18 U.S.C. § 3571(c)(7). ............................................................................................... 43 18 U.S.C. § 3571(d). ................................................................................................... 43 25 U.S.C. § 81 ............................................................................................................ 15 25 U.S.C. § 201........................................................................................................... 14 25 U.S.C. § 305e(b)..................................................................................................... 31 25 U.S.C. § 305e(c). .................................................................................................... 31 26 U.S.C. §7341.......................................................................................................... 15 28 U.S.C. § 517........................................................................................................... 50 28 U.S.C. § 518........................................................................................................... 50 28 U.S.C. § 594(a)....................................................................................................... 46 28 U.S.C. § 1295(a)....................................................................................................... 7
28 U.S.C. § 2403(a)....................................................................................................... 1 31 U.S.C. § 3729......................................................................................................... 32 31 U.S.C. § 3730(b). ................................................................................................... 13 31 U.S.C. § 3730(b)(1). ............................................................................................... 37 33 U.S.C. § 1319(d). ................................................................................................... 30 33 U.S.C. §1365(a)(1). ................................................................................................ 30 35 U.S.C. § 290........................................................................................................... 50 35 U.S.C. § 292(a).............................................................................................. 2, 8, 43 35 U.S.C. § 292(b). ...................................................................................... 1, 2, 42, 43 42 U.S.C. § 1983......................................................................................................... 30 45 U.S.C. § 711(j). ...................................................................................................... 31 46 U.S.C. § 723........................................................................................................... 15 46 U.S.C. § 80103(b). ................................................................................................. 15 Rules: Fed. R. App. P. 44(a). .................................................................................................... 1 Fed. R. Civ. P. 24(a)(2). ............................................................................................... 50 Fed. R. Civ. P. 24(b). ................................................................................................... 50 Fed. R. Civ. P. 26(c)..................................................................................................... 50 Fed. R. Civ. P. 41(a)(1)(A)(ii)....................................................................................... 50
Legislative Materials: S. Rep. 82-1979............................................................................................................ 42 Other Authorities: 1 Annals of Cong. 463 (1789) (J. Madison)................................................................ 34 3 W. Blackstone, Commentaries on the Laws of England..................................... 3, 10 A Dictionary of American & English Law with Definitions of the Technical Terms of the Canon and Civil Laws (1888) (S. Rapalje & R. Lawrence eds.). ................................................................................. 42 Black’s Law Dictionary (9th ed. 2009). ....................................................................... 43 H. Black, Dictionary of Law Containing Definitions of the Terms and Phrases of American and English Jurisprudence, Ancient and Modern (1891). ...................................................................................... 42 H. Krent, Executive Control Over Criminal Law Enforcement: Some Lessons from History, 38 Am. U. L. Rev. 275 (1989).............................................. 13, 22, 42 John Salmond, Jurisprudence (Glanville L. Williams ed., 10th ed. 1947). ........ 43, 44 L. Lessig & C. Sunstein, The President and the Administration, 94 Colum. L. Rev. 1 (1994). ........................................................................... 12, 21 Note, The History and Development of Qui Tam, 1972 Wash. U. L.Q. 81.......................................................................................... 11 William M. Lile et al., Brief Making and the Use of Law Books (3d ed. 1914). ......................................................................................................... 44
STATEMENT OF RELATED CASES To our knowledge, no other appeal in, or from, the present civil action has previously been before this or any other appellate court. We are aware of one other case pending before this Court involving the same constitutional Article II issues being raised in this appeal, Unique Product Solutions, Ltd. v. HyGrade Valve, Inc., No. 20111254. Notices of appeal have been filed by the United States and by the private party plaintiff in that case. Pursuant to Federal Circuit Rule 47.5(b), we note that there are other cases involving the same constitutional issues as this one pending in scattered district courts around the United States. Presumably, a ruling by this Court on this issue will directly affect those various cases in the district courts.
No. 2011-1067 IN THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT FLFMC, LLC, Plaintiff-Appellant, v. WHAM-O, INC., Defendant-Appellee, v. UNITED STATES, Intervenor. Appeal from the United States District Court For the Western District of Pennsylvania in case no. 10-CV-0435, Judge Arthur J. Schwab BRIEF FOR THE INTERVENOR UNITED STATES INTRODUCTION AND INTERESTS OF THE UNITED STATES The United States exercised its statutory right to intervene in this case under 28 U.S.C. § 2403(a), because the defendant-appellee Wham-O Inc. filed a notice under Fed. R. App. P. 44(a), stating its intention to challenge the constitutionality of an Act of Congress: the qui tam provision of the patent mismarking statute in 35 U.S.C. § 292(b) (“Section 292(b)”).
In this case, plaintiff FLFMC sued Wham-O for allegedly violating Section 292 by affixing expired and non-applicable patents on certain of its products for the purpose of deceiving the public. FLFMC is proceeding under the qui tam provision of Section 292, which permits private persons (“relators”) to sue for misuse of patent markings: Section 292(a) prohibits such false marking and provides for a fine of “not more than $500 for every such offense.” 35 U.S.C. § 292(a). And Section 292(b) permits any person to “sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.” § 292(b). Wham-O moved to dismiss, urging, inter alia, that the statute is unconstitutional because it does not contain an adequate mechanism for Executive Branch oversight and control of the litigation, as supposedly required by the Take Care and Appointments Clauses of Article II of the U.S. Constitution. The district court did not rule on these Article II constitutional arguments; it instead dismissed the case on the ground that relator FLFMC could not establish Article III constitutional standing to bring this action against Wham-O because the relator had not individually been injured by the alleged patent mismarking. See A2-17; A2 n.2. This Court subsequently rejected the Article III standing rationale on which the district court had relied. See Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321 (Fed. Cir. 2010). Wham-O concedes that the Stauffer decision is binding on this panel.
Defendant’s Brief (“Def. Br.”) 8. The company, however, in its appellee brief requests that this Court affirm the judgment of dismissal on the alternative ground that Section 292(b) violates the Take Care and Appointments Clauses because the statute assertedly fails to provide the necessary Executive Branch control over a qui tam plaintiff. The United States has an interest in the validity of the Section 292(b) qui tam provision, embodying a regulatory tool that Congress has repeatedly used. As we explain in this brief, the substantial history of qui tam actions and an understanding of how qui tam suits operate requires the conclusion that this Court should reject Wham-O’s constitutional attack. The Government will address solely Wham-O’s constitutional arguments and takes no view on the ultimate merits of relator’s claim of patent mismarking. It is important to understand that a qui tam case is a hybrid form of suit having significant characteristics of both a private and a public action. On the one hand, a qui tam relator is similar in substantial respects to a plaintiff in a private civil action. The relator does not hold a position within the United States Government. In his
The term “qui tam” is an abbreviation of the Latin phrase “qui tam pro domino rege quam 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.” See Vermont Agency of Nat. Resources v. United States ex rel. Stevens, 529 U.S. 765, 768, n.1 (2000) (citing 3 W. Blackstone, Commentaries on the Laws of England *160 ).
conduct of a qui tam case, the relator does not owe primary allegiance to the Government. And, unlike a public official conducting litigation on behalf of the United States, a relator has a personal financial stake in the suit.
On the other hand, a qui tam suit is an action created primarily to advance the public interest. A qui tam complaint does not allege that a relator was personally injured by the defendant’s unlawful conduct; rather, the gravamen of a qui tam suit is an allegation of wrong done to the Federal Government or a failure to abide by regulatory requirements. And, because the Government is generally entitled to at least half of any recovery in such actions, qui tam litigation can immensely benefit the United States financially, as well as provide a deterrent to impermissible conduct. Accordingly, as we explain in this brief, the qui tam provision in Section 292(b) in no way facially violates the constitutional separation of powers doctrine. Every district court but one that has addressed these issues is in agreement. See, e.g., Pequignot v. Solo Cup Co., 640 F. Supp. 2d 714, 724-28 (E.D.Va. 2009); Shizzle Pop, LLC v.
Indeed, the premise behind the qui tam mechanism is that a plaintiff will be motivated in substantial part by the desire to further his own private interest. See United States ex rel. Marcus v. Hess, 317 U.S. 537, 541 n.5 (1943) (“[Qui tam statutes are] passed upon the theory, based on experience as old as modern civilization, that one of the least expensive and most effective means of preventing frauds on the treasury is to make the perpetrators of them liable to actions by private persons acting, if you please, under the strong stimulus of personal ill will or the hope of gain.”).
Wham-O, Inc., Case No. CV 10-3491 PA, 2010 WL 3063066, at *3 (C.D. Cal., Aug. 2, 2010); Pub. Patent Found., Inc. v. Glaxo Smith Kline Consumer Healthcare, L.P., Case. No. 2:09-cv-05881, slip. op., at 5-7 (S.D.N.Y. Mar. 22, 2001); Luka v. Procter & Gamble, Co., Case No. 10-cv-2511, slip. op., at 9-16 (N.D. Ill. Mar. 28, 2011); but see Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc., Case No. 5:10-CV-1912, 2011 WL 924341, at *2*4 (N.D. Ohio March 14, 2011), appeal docketed, No. 2011-1254 (Fed. Cir. Mar. 16, 2011). Qui tam statutes have a lengthy pedigree in England and Colonial America. And the earliest congressional sessions – which included many of the Framers of the Constitution – enacted numerous qui tam statutes. Critically for the constitutional issue before this Court today, most or all of these statutes were like Section 292(b), in that they did not include the measure of Executive Branch litigation control that Wham-O now contends is constitutionally required. Further, contrary to Wham-O’s position, the Executive’s prosecutorial discretion does not, as a constitutional mandate, include the power to bar other parties from filing their own suits under statutory schemes that permit enforcement through both governmental and private actions.
Given that the Government has no t attempted in any way to take over and dismiss or otherwise restrict or limit relator FLFMC’s action in this case, the only separation of powers issue actually posed here is whether a relator by merely filing suit impermissibly impinges on the Executive’s prosecutorial discretion. A qui tam suit initiated by a relator pursuant to Section 292(b) could impinge on the Executive’s constitutionally assigned functions only if the Constitution categorically forbids the qui tam mechanism or requires affirmative authorization from the Executive Branch before the suit can proceed. As we demonstrate below, the Constitution does neither of those things. The thrust of Wham-O’s argument is that Section 292(b) is unconstitutional because it provides no express mechanism by which the Executive Branch can intervene in a qui tam suit or bring it to a close. We assume for present purposes that the absence of such authority would present additional constitutional considerations. But not only has the Government no t sought to terminate this civil action, it also has not sought to intervene on the merits of the FLFMC’s claim. The possibility that a substantial constitutional issue might be raised in a hypothetical future suit is no reason to declare Section 292(b) invalid on its face, or as applied here. If the Government seeks to intervene in a future suit brought under Section 292(b) or to have such a suit terminated, a court might still avoid any
constitutional difficulty by construing other relevant statutory and Federal Rule provisions to allow the Government to achieve its objective. But it is both unnecessary and inappropriate for the Court in this case to try to resolve those hypothetical statutory and constitutional issues here where the Government has not sought (and failed) to intervene in or terminate this Section 292(b) case. Although the district court here did not rule on Wham-O’s Article II claims, we urge this Court to reach them now. These identical issues are pending in many district courts around the United States, all of which are within the appellate jurisdiction of this Court. See 28 U.S.C. § 1295(a). Thus, by ruling on these strictly legal issues now, this Court will save considerable judicial resources nationwide by making it unnecessary for the many district courts to wrestle with them. ARGUMENT Judging the constitutionality of an Act of Congress is “the gravest and most delicate duty that [a] Court is called on to perform.” Blodgett v. Holden, 275 U. S. 142, 147-148 (1927) (Holmes, J., concurring). Thus, when a court “is asked to invalidate a statutory provision that has been approved by both Houses of the Congress and signed by the President, * * * it should only do so for the most compelling constitutional reasons.” Mistretta v. United States, 488 U.S. 361, 384 (1989) (internal quotation marks omitted). As described herein, Wham-O has not met this burden.
THE PURPOSE AND HISTORY OF THE GOVERNING STATUTORY SCHEME IN SECTION 292 STRONGLY SUPPORT ITS CONSTITUTIONALITY As noted above, 35 U.S.C. § 292(a) provides that any person who commits
specified acts, such as affixing to a product a mark that falsely asserts that the item is patented, with the intent to deceive the public, “[s]hall be fined not more than $500 for every such offense.” The current appeal revolves around the qui tam provision in Section 292(b), which states that “[a]ny person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.” This qui tam provision sprang from Congress’ judgment that “deceptive patent mismarking * * * is harmful and should be prohibited.” Stauffer, 619 F.3d at 1325. “Congress’ interest in preventing false marking was so great that it enacted a statute which sought to encourage third parties to bring qui tam suits to enforce the statute.” Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295, 1303 (Fed. Cir. 2009). The rationale behind the statutory prohibition against false marking of patents is that a properly marked patented article provides the public with “a ready means of discerning the status of the intellectual property embodied in an article of manufacture or design.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 162 (1989). This rationale is consistent with federal patent policy, which recognizes an “important
public interest in permitting full and free competition in the use of ideas which are in reality a part of the public domain.” Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969). False marking harms the public interest because it “misleads the public into believing that a patentee controls the article in question (as well as like articles), externalizes the risk of error in the determination, placing it on the public rather than the manufacturer or seller of the article, and increases the cost to the public of ascertaining whether a patentee in fact controls the intellectual property embodied in an article.” Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347, 1356-57 (Fed. Cir. 2005) (footnote omitted). A. Qui Tam Provisions Like Section 292(b) Have a Sterling Pedigree in the Law of the United States.
The essence of the qui tam mechanism is that a private party may bring suit because of a wrong done to the public, and is entitled to a share of the judgment if the action is successful. Several centuries ago Blackstone explained that: these forfeitures created by statute are given at large, to any common informer; or, in other words, to any such person or persons as will sue for the same; and hence such actions are called popular actions, because they are given to the people in general. Sometimes one part is given to the king, to the poor, or to some public use, and the other part to the informer or prosecutor. * * * But if anyone hath begun action, no other person can pursue it * * *.
3 W. Blackstone, Commentaries *160. Central to the Constitutional defense of qui tam provisions is the Supreme Court’s observation that “[s]tatutes providing for actions by a common informer, who himself had no interest whatever in the controversy other than that given by statute, have been in existence for hundreds of years in England, and in this country ever since the foundation of our government.” United States ex rel. Marcus, 317 U.S., at 541 n.4; accord Marvin v. Trout, 199 U.S. 212, 225 (1905). As the Supreme Court explained in Vermont Agency, the qui tam mechanism developed in England in the 13 century, as a common law device, and soon became a standard enforcement mechanism in various statutory schemes. 529 U.S. at 774-76. This mechanism was adopted by the American colonies and enforced in colonial and pre-Constitution courts. See, e.g., C.J. Hendrey Co. v. Moore, 318 U.S. 133, 145-48 (1943).
In C.J. Hendrey Co., 318 U.S. 133, the Supreme Court discussed the development in England of the use of qui tam procedures for seizures and forfeitures to the Crown of ships or articles used in violation of the law, whereby a qui tam relator brought a civil action and received a share of the forfeiture proceeds. In that opinion, the Court cited and discussed several qui tam cases of this type decided by colonial and pre-Constitution courts in America. Id., at 145-48 (citing and discussing Hammond qui tam v. Sloop Carolina, a 1735 case in New York, six other New York qui tam cases between 1752 and 1772, and Phile qui tam v. The Ship Anna, a 1787 Pennsylvania case).
By the time the Constitution was ratified, statutes authorizing qui tam suits were well known in England for several hundred years and also had been utilized by the colonial legislatures. See Note, The History and Development of Qui Tam, 1972 Wash. U. L.Q. 81, 83. The Supreme Court in Vermont Agency recognized that “[q]ui 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.” 529 U.S., at 776. Indeed, the Constitution itself provided the basis for early Congresses to create causes of action in a way closely related to the type of qui tam action brought here by relator FLFMC. Pursuant to Congress’ power to “grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water” (U.S. Const., Art. I, Sec. 8, cl. 11), these Congresses authorized the President to commission private ships (known as “privateers”) to capture enemy vessels and vessels engaged in illegal trade with our enemies. Under the prize statutes, the captor could bring the captured vessel into the jurisdiction of the United States and file an action against the ship in federal court. If the vessel was condemned, the captor was entitled to the ship or its value. See, e.g., The Sally, 12 U.S. (8 Cranch) 382, 384 (1814) (Story, J.); see also The Nassau, 71 U.S. (4 Wall.) 634, 640-642 (1866). As with the idea behind Section 292(b), the premise of these prize statutes was that important sovereign purposes could be
furthered by assigning to private persons the task of attacking enemy shipping, and making this system succeed through the offer of a bounty collected through an action in federal court. As the Supreme Court has noted, “immediately after the framing, the First Congress enacted a considerable number of informer statutes.” Vermont Agency, 529 U.S., at 776. Significantly, at least five of these statutes hewed closely to the model described by Blackstone, and were like Section 292(b); i.e., they provided for a division of any recovery between the informer and the Government, authorized the informer to file his own suit, placed no restrictions on the class of persons who could serve as relators, and – important in light of Wham-O’s argument – provided no mechanisms for the Executive to control the litigation. See Vermont Agency, 529 U.S. at 777 n.6 (listing and describing such statutes).
Indeed, the first Congress diffused responsibility for litigation to vindicate public interests, vesting the responsibility in “some federal officers not subject to direct presidential control,” state officials clearly beyond federal, Executive Branch control, and “private individuals wholly outside the executive’s control.” L. Lessig & C. Sunstein, The President and the Administration, 94 Colum. L. Rev. 1, 18-20 (1994).
See Act of Mar. 1, 1790, ch. 2, § 3, 1 Stat. 102 (census taking); Act of July 5, 1790, ch. 25, § 1, 1 Stat. 129 (extending census provisions to Rhode Island); Act of July 20, 1790, ch. 29, §§ 1, 4, 1 Stat. 131, 133 (regulation of seamen); Act of July 22, 1790, ch. 33, § 3, 1 Stat. 137-138 (trade with Indians); Act of Mar. 3, 1791, ch. 15, § 44, 1 Stat. 209 (duties on liquor).
Subsequent Congresses and Presidents continued to employ the remedial qui tam mechanism as a way of achieving important governmental goals.
See H. Krent,
Executive Control Over Criminal Law Enforcement: Some Lessons from History, 38 Am. U. L. Rev. 275, 296-300 (1989) (describing early Congressional use of qui tam statutes, and their effect). Indeed, the qui tam mechanism was such a well-established feature of federal statutory law that the Second Congress passed a general provision to provide broadly for the award of costs in such cases. See Act of May 8, 1792, ch. 36, § 5, 1 Stat. 277-278. Qui tam suits were firmly entrenched in American law by the time Congress enacted what is now Section 292(b) in 1842 (5 Stat. 543, 544), and the False Claims Act in 1863 (12 Stat. 696, currently codified at 31 U.S.C. § 3730(b)). In its original version, the False Claims Act authorized qui tam suits to be brought and carried on by any person for both himself and the United States; notably, the original False Claims
See Act of February 20, 1792, ch. 7, § 25, 1 Stat. 232, 239 (2d Cong.; Post Office); Act of March 1, 1793, ch. 19, § 12, 1 Stat. 329, 331 (2d Cong.; trading with Indians); Act of March 22, 1794, ch. 11, §§ 2, 4, 1 Stat. 347, 349 (3d Cong.; foreign slave trade); Act of May 19, 1796, ch. 30, § 18, 1 Stat. 469, 474 (4th Cong.; trading with Indians); Act of April 2, 1802, ch. 13, § 18, 2 Stat. 139, 145 (7th Cong.; trading with Indians); Act of April 29, 1802, ch. 36, §§ 3-4, 2 Stat. 171, 172 (7th Cong.; copyright); Act of May 3, 1802, ch. 48, § 4, 2 stat. 189, 191 (7th Cong.; mail carriers); Act of March 26, 1804, ch. 38, § 10, 2 Stat. 283, 286 (8th Cong.; Louisiana slave trade); Act of March 2, 1807, ch. 22, § 3, 2 stat. 426 (9th Cong.; slave trade).
Act – like Section 292(b) – made no provision for intervention or control by the Executive Branch over a relator’s suit. See Act of March 2, 1863, at ch. 67, § 6, 12 Stat. 698. By the twentieth century, qui tam actions had become so ingrained in the menu of regulatory devices that the Supreme Court casually remarked that “Congress has power to choose this method[.]” United States ex rel. Marcus, 317 U.S., at 542; see also Kingsley Books, Inc. v. Brown, 354 U.S. 436, 441 (1957) (“Whether proscribed conduct is to be visited by a criminal prosecution or by a qui tam action or by an injunction or by some or all of these remedies in combination, is a matter within the legislature’s range of choice”); Tigner v. Texas, 310 U.S. 141, 148 (1940) (“Whether proscribed conduct is to be deterred by qui tam action or triple damages or injunction, or by criminal prosecution, or merely by defense to actions in contract, or by some, or all, of these remedies in combination, is a matter within the legislature’s range of choice.”). There are currently several qui tam provisions in the United States Code in addition to Section 292(b) and the False Claims Act. In Vermont Agency, the Supreme Court identified several that had been enacted prior to 1900, but were still in existence. See 529 U.S., at 768 n.1 (discussing 25 U.S.C. § 201 (penalties for violation of laws protecting commercial interests of Native Americans); 18 U.S.C. § 962 (forfeitures of
vessels privately armed against friendly nations); 46 U.S.C. § 80103(b) (forfeiture of vessels taking undersea treasure from the Florida coast)). Congress has also enacted qui tam statutes of more recent vintage that remain on the books. See 26 U.S.C. § 7341 (forfeiture of sums paid for property sold to avoid tax); 17 U.S.C. § 1326 (penalty for false marking of copyright of vessel designs). Moreover, Section 292(b) and its antecedents have not simply constituted a historical artifact. Congress has revisited and amended this statute on more than one occasion. See Act of July 19, 1952, ch 950, § 1, 66 Stat. 814; Act of Dec. 8, 1994, P.L. 103-465, Title V, Subtitle C, § 533(b)(6), 108 Stat. 4990. And the statute has been used by qui tam relators in various reported decisions through its 169 years of existence. The earliest reported qui tam case under the statute that we have located is Nichols v. Newell, 18 F. Cas. 199 (C.C.D. Mass. 1853), and other reported decisions demonstrate its continued use. See, e.g., Winne v. Snow, 19 F. 507 (D. N.Y. 1884); London v. Everett H. Dunbar Corp. 179 F. 506 (1st Cir. 1910); Sippit Cups, Inc. v. Michael’s Creations, Inc.,
The previous cite for this statute was 46 U.S.C. § 723. This statute is now found at 46 U.S.C. § 80103(b).
Vermont Agency also identified 25 U.S.C. § 81 (providing a cause of action and share of recovery for contracting with Native Americans in an unlawful manner) as being on the books at the time of that decision; however, the qui tam provisions of that statute were repealed when Section 81 was amended in 2000.
180 F. Supp. 58 (E.D.N.Y. 1960); Brose v. Sears, Roebuck & Co., 455 F.2d 763 (5th Cir. 1972). B. The History of Qui Tam Statutes in the United States Confirms the Constitutionality of Section 292(b).
We have recounted in some detail the history and continuing practice of Congress legislating, and the courts enforcing, qui tam provisions not simply to provide background for the constitutional analysis required by Wham-O’s challenge to Section 292(b). Rather, this history and practice is constitutionally significant in its own right. As the Supreme Court repeatedly has instructed, the way that constitutional provisions have been applied and understood over a lengthy period give those constitutional provisions meaning. See, e.g., Mistretta, 488 U.S., at 401 (“traditional ways of conducting government * * * give meaning to the constitution”) (quoting Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 610 (1952) (Frankfurter, J., concurring) (internal quotation marks omitted); The Pocket Veto Case, 279 U.S. 655, 689 (1929) (“Long settled and established practice is a consideration of great weight” in constitutional adjudication); McCulloch v. Maryland, 17 U.S. 316, 401 (1819) (constitutional issues “if not put at rest by the practice of the government, ought to receive a considerable impression from that practice”).
As the Supreme Court has explained, legislation “passed by the first [C]ongress assembled under the [C]onstitution, many of whose members had taken part in framing that instrument, * * * is contemporaneous and weighty evidence of its true meaning.” Wisconsin v. Pelican Ins. Co., 127 U.S. 265, 297 (1888). The Court “has repeatedly laid down the principle that a contemporaneous legislative exposition of the Constitution, when the founders of our Government and framers of our Constitution were actively participating in public affairs, acquiesced in for a long term of years, fixes the construction to be given its provisions.” Myers v. United States, 272 U.S. 52, 175 (1926); accord Marsh v. Chambers, 463 U.S. 783, 790 (1983); Bowsher v. Synar, 478 U.S. 714, 723-24 (1986). We recognize that there are limits to the use of history alone in interpreting the Constitution. For example, the First Congress also passed the statute struck down by the Supreme Court in Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803). But, in this instance, as demonstrated already, the historical evidence from long English practice, the American colonial experience, and the early sessions of Congress repeatedly utilizing the qui tam mechanism is overwhelming. Moreover, not only did the early Congresses understand qui tam actions to be compatible with Article II, but the ongoing “practice and acquiescence” by all three branches throughout our nation’s history should lay “the question * * * at rest.” The
Laura, 114 U.S. 411, 416 (1885); see Lithographic Co. v. Sarony, 111 U.S. 53, 57 (1884) (while the “[t]he construction placed upon the Constitution” by early Congresses “is of itself entitled to very great weight,” when “the rights thus established have not been disputed during a period of nearly a century, it is almost conclusive”); see also United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 328 (1936) (“[T]he practical construction of the Constitution, as given by so many acts of Congress, and embracing almost the entire period of our national existence, should not be overruled, unless upon a conviction that such legislation was clearly incompatible with the supreme law of the land.”). Historical evidence and practice is especially compelling when analyzing the Constitution’s separation of powers, a concept that “depends largely upon common understanding of what activities are appropriate to legislatures, to executives, and to courts.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-60 (1992); see, e.g., Vermont Agency, 529 U.S., at 774 (“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.’”); Mistretta, 488 U.S., at 401 (relying on a “200-year tradition” to determine whether separation of powers has been offended); cf. Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787, 793, 795-96 & n.7, 799-800 (1987) (reviewing the long history of contempt proceedings to
conclude that courts have “authority” to appoint private attorneys to “prosecute contempt,” and such actions are not “an execution of the criminal law in which only the Executive Branch may engage”). Indeed, in Morrison v. Olson, 487 U.S. 654 (1988), concerning the validity of the Independent Counsel statutory scheme, the Supreme Court’s analysis of Executive Branch control was necessary because “[t]here [was] no real dispute that the functions performed by the independent counsel are ‘executive’ in the sense that they are law enforcement functions that typically have been undertaken by officials within the Executive Branch.” 487 U.S., at 691 (emphasis added). That is not the case for qui tam actions. Thus, when the Supreme Court held that a federal court’s hearing a qui tam case does not exceed the Article III judicial power, it is not at all surprising that it looked to “the long tradition of qui tam actions in England and the American Colonies,” which the Court examined in some detail. 529 U.S., at 774-78. The Court found “this history well nigh conclusive with respect to the [Article III] question.” 529 U.S., at 777. Similarly, this Court, in its recent Stauffer ruling recognized and relied upon the Supreme Court’s focus on history in Vermont Agency. In concluding that qui tam plaintiffs under Section 292(b) have standing, this Court looked to examples of early qui tam statutes (619 F.3d, at 1326-27), and explained that, given the Supreme Court’s
“heavy reliance upon that historical underpinning, * * * the question [is] decided, that the United States may assign even a purely sovereign interest.” 619 F.3d, at 1327, n.3. Although the Supreme Court in Vermont Agency expressed no view as to whether qui tam suits violate Article II (529 U.S. at 778 n.8), the same historical pedigree that the Supreme Court found conclusive on the issue of Article III standing also establishes that qui tam provisions are permitted under Article II. As the en banc Fifth Circuit reasoned, with regard to the False Claims Act qui tam provision, it “is logically inescapable that the same history that was conclusive on the Article III question * * * is similarly conclusive with respect to the Article II question.” Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749, 752 (5th Cir. 2001) (en banc). And, indeed, although the Supreme Court in Vermont Agency expressed no opinion regarding the role of history in evaluating the Article II issues, two Justices noted that the long, unbroken history “is also sufficient to resolve the Article II question.” 529 U.S., at 801 (Stevens, J., dissenting). Wham-O suggests “the folly of placing emphasis on the history” of qui tam actions by pointing to two particular statutes passed in the first decades of the Republic, which in Wham-O’s view are surely not constitutional. Def. Br. 45. To be clear, we do not argue that every statute passed by early Congresses was constitutional.
See supra at 17. Rather we argue that a broad and longstanding consensus, amongst both the Constitution’s Framers and subsequent generations, is strong evidence that the qui tam device is constitutional. Wham-O’s two examples do not alter the fact that qui tam actions generally were understood not to infringe on core Executive powers, even if, as discussed below, some were constitutionally problematic. Wham-O’s examples, moreover, do not stand for much when analyzing Section 292(b) because neither one appears to create the same type of classic qui tam action that any person may bring. And each statute raises constitutional issues not present here. One example (which Wham-O never suggests would violate Article II) created a penalty for “employment of other than a ‘free white person’ in the postal service,” Def. Br. 46 (quoting 2 Stat. 189, 191), and provided that half of that penalty would go to “the person who shall sue for, and prosecute, the same.” 2 Stat. 191. It is not apparent whether this statute, like Section 292(b), authorized any person to sue, or instead merely provided financial compensation to parties that alleged a direct injury or state prosecutors who pursued the case in an era before centralized, full-time U.S. Attorneys (see Lessig & Sunstein, supra, at 18-20); or it may have “provided a bounty only,” that informers could collect once the fine was assessed. Vermont Agency, 529 U.S., at 777. Regardless, this provision would have raised constitutional issues not present here because, as Wham-O notes (see Def. Br. 46), the statute certainly would violate
federal due process and equal protection guarantees (see Bolling v. Sharpe, 347 U.S. 497 (1954)). Moreover, if Wham-O is correct that this statute authorized any person to sue, the statute may have raised additional constitutional concerns not relevant to Section 292(b) by authorizing private parties directly to interfere in the conduct of an Executive department, the Postal Service. See Morrison, 487 U.S., at 662-63 (describing the Independent Counsel’s power to investigate Executive Branch officials and force the Executive Branch to halt its own investigations); cf. Lujan, 504 U.S., at 577 (suggesting that if Congress creates a civil action to compel action by Executive Branch officers, it would interfere with the President’s “duty, to ‘take Care that the Laws be faithfully executed,’ Art. II, § 3 ”).
Finally, it bears repeating that even if Wham-O can produce constitutionally problematic examples, a few bad apples in a 220-year history obviously do not disprove Wham-O’s other example was a prohibition against theft and embezzlement of, inter alia, military supplies and spoils belonging to the United States and goods from “places under the sole and exclusive Jurisdiction of the United States.” 1 Stat. 116. The statute provided that “on conviction,” the perpetrator would be fined four times the value of the stolen property with one half of that fine going to “the informer and Prosecutor.” Ibid. The statute might not have created a qui tam action that any person could bring. And even if it did, despite Wham-O’s query whether “the relator was entitled to administer half of the blows when a convict was ‘publicly whipped” (Def. Br. 45-46) – a proposition that the statute’s text does not support (see 1 Stat. 116) – the statute did not “surely run afoul of the Article II requirements,” (Def. Br. 46). Indeed, it resembled early versions of the False Claims Act that the Supreme Court never called into question.
that there is a long pedigree of qui tam statutes and that this pedigree places a tremendous burden on Wham-O to show that all three branches of government have been getting it so wrong for so long. In short, the qui tam method for achieving public goals was well known to the Framers of the Constitution and the Members of the first sessions of Congress. They viewed qui tam actions as perfectly permissible and did not believe, as Wham-O urges, that the Constitution requires direct Executive Branch control over qui tam plaintiffs and lawsuits. Two centuries of judgments, made by Congresses and Presidents, reaffirm that understanding that qui tam actions are perfectly constitutional. “[T]he practical construction of the Constitution, as given by so many acts of Congress, and embracing almost the entire period of our national existence,” should, in and of itself, resolve this case. Curtiss-Wright, 299 U.S., at 327-328. II. THE QUI TAM MECHANISM IN SECTION 292 DOES NOT FACIALLY VIOLATE CONSTITUTIONAL SEPARATION OF POWERS PRINCIPLES. This case does not involve the paradigmatic disruption to the separation of powers about which courts must remain“vigilan[t]”: encroachment or aggrandizement. See Mistretta, 488 U.S., at 382. By creating qui tam actions, Congress has not usurped the President’s power or injected itself into the execution of its laws. See, e.g., Bowsher,
478 U.S., at 726-27; Myers, 272 U.S., at 161. Instead, Wham-O alleges that for 220 years, Congress has impermissibly undermined the role of the Executive Branch by using qui tam actions to “preven[t] the Executive Branch from accomplishing its constitutionally assigned functions.” Morrison, 487 U.S. at 695 (quoting Nixon v. Administrator of General Services, 433 U.S. 425, 443 (1977)); see also Clinton v. Jones, 520 U.S. 681, 701 (1997) (“[T]he separation-of-powers doctrine requires that a branch not impair another in the performance of its constitutional duties”). Both the history of qui tam actions and a common sense understanding of how they operate demonstrate that this is not the case. A. History and Practice Demonstrate that Section 292(b) Does Not Prevent the President from Accomplishing His Constitutionally Assigned Functions.
As we have shown, the long history and established practice of qui tam actions is highly instructive here. The Constitution does not define what it means for a
President to “take Care” that “the Laws be faithfully executed” (U.S. Const., Art. II, §3), or what constitutes an impermissible interference with that duty. In theory, one could argue that any private cause of action that vindicates some public purpose is a usurpation of the President’s responsibility to execute the laws. But in reality, the requirements of the Take Care Clause necessarily turn on the “common understanding” of the President’s exclusive responsibilities and thus of what sorts of
litigation can be conducted by private parties to vindicate public interests. Lujan, 504 U.S., at 559-60. The pre-constitutional history of qui tam actions, the many such provisions passed by Congress and signed by the President, and the Supreme Court’s application of such provisions in numerous cases, demonstrate that understanding. The Executive Power and Take Care Clauses of the Constitution, like any ambiguous constitutional language, “could not be understood without reference to the * * * common law, the principles and history of which were familiarly known to the framers of the Constitution.” Schick v. United States, 195 U.S. 65, 69 (1904); cf. Vermont Agency, 529 U.S., at 774 (“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.’”). And as we have explained, neither clause could be understood to prohibit the qui tam method for achieving public goals, a method that was well known to the Framers of the Constitution and the Members of the first sessions of Congress, and was obviously viewed by them as fully consistent with the new constitutional scheme they were creating. It would have been quite odd for the individuals who had just spent immense effort molding a new governmental structure to have enacted immediately thereafter not simply one, but a score of statutes violating that very structure. There is no evidence that early Congresses and Presidents were troubled by the qui tam mechanism
or feared that it posed a threat to the new system of government. As already discussed, these considerations must be highly influential for this Court today. Thus, the Supreme Court has on numerous occasions enforced qui tam provisions without raising doubts about their constitutionality. See, e.g., Marvin, 199 U.S., at 225; United States ex rel. Marcus, 317 U.S., at 541; Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 949 (1997). And the Court has stated that it views qui tam mechanisms as merely one of various legitimate regulatory devices: “Whether proscribed conduct is to be deterred by qui tam action or triple damages or injunction, or by criminal prosecution, or merely by defense to actions in contract, or by some, or all, of these remedies in combination, is a matter within the legislature’s range of choice.” Tigner, 310 U.S., at 148; accord Kingsley Books, Inc., 354 U.S., at 441. The Supreme Court’s decision in United States ex rel. Marcus is particularly revealing. The Court was asked to interpret the False Claims Act’s qui tam provision and determine whether a qui tam relator could sue on the basis of information learned from a criminal indictment. At a time when the False Claims Act provided for no Executive intervention into qui tam suits, the Government asked the Court to interpret the qui tam action narrowly, arguing that once the Government is aware of the wrongful conduct, control of litigation should be “left to the Attorney General” (317 U.S., at
547). The Court rejected that argument because it was “addressed to the wrong forum” and is a matter for Congress to decide. Ibid. The underlying premise of the Marcus Court’s ruling is that it was open to Congress to create qui tam actions if it so desired, and it was also open to Congress to determine the terms under which qui tam suits could proceed. The Court did not engage in any Article II analysis because the Government did no t argue that the Constitution limits to the Executive the right to initiate litigation to vindicate the interests of the United States. It is noteworthy, however, that the Court adopted a construction of the False Claims Act that increased the scope of cases that a qui tam plaintiff could bring over the objections of the Government – a construction that, according to Wham-O, would create constitutional infirmities. It is difficult to imagine that despite this centuries-long pedigree, all this time Congress has been“prevent[ing] the Executive Branch from accomplishing its constitutionally assigned functions.” Morrison, 487 U.S., at 695 (quoting Nixon v. Administrator of General Services, 433 U.S. 425, 443 (1977)). It is true, as Wham-O notes, that when several courts of appeals have rejected Take Care Clause challenges to the False Claims Act, they did not find the history – in and of itself – to be dispositive. Not much can be gleaned, however, from these courts’ functional analysis. There are multiple arguments in support of the False
Claims Act qui tam. See Riley, 252 F.3d, at 752-53. The selection of one argument does not imply a rejection of another. It is noteworthy, however, that the courts that engaged in a more functional analysis did so before the Supreme Court’s decision in Vermont Agency. Before that ruling, three courts of appeal relied primarily on the controls provided by the False Claims Act in its current form over a relator’s conduct of litigation. See United States ex rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032, 1041 (6th Cir. 1994); United States ex rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir. 1993); United States ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148 (2d Cir. 1993). Subsequent to those decisions, the Supreme Court announced that the long history of qui tam laws was “well nigh conclusive” on the issue of Article III judicial power, and two Justices opined that this history was similarly conclusive on the Article II question. Thus, after Vermont Agency, eleven judges on the Fifth Circuit, sitting en banc, reasoned that it “is logically inescapable that the same history that was conclusive on the Article III question in Vermont Agency with respect to qui tam lawsuits initiated under the FCA is similarly conclusive with respect to the Article II question concerning this statute.” Riley, 252 F.3d, at 752. “[H]istory,” the court explained “although not the sole definitive argument supporting the view that the FCA’s qui tam provisions do not
violate Article II, is certainly a ‘touchstone illuminating’ their constitutionality.” Id., at 753.
Section 292(b) Does Not Impermissibly Interfere with the President’s Duties
Wholly aside from the long history of qui tam actions, for the reasons explained below, Section 292(b) does not violate the separation of powers doctrine by unduly interfering with the President’s constitutional duties. 1. The Constitution permits Congress to create private rights for the purpose of vindicating public interests. And as the Supreme Court’s approach to Article III standing for qui tam plaintiffs makes clear, a relator does not sue as the United States, but instead sues as a private person, even though his suit helps accomplish public goals. See Davis v. Passman, 442 U.S. 228, 241 (1979) (“Statutory rights and obligations are established by Congress, and it is entirely appropriate for Congress, in creating these
Since Vermont Agency, one Circuit has addressed the issue narrowly. In United States ex rel. Stone v. Rockwell Int’l Corp., 282 F.3d 787 (10th Cir. 2002), the Government initially declined to intervene in the qui tam action, but later did so. Given that the Government intervened and was “a full and active participant in the litigation as it jointly prosecuted the case,” the court was “unconvinced * * * that the presence of a qui tam relator * * * so hindered the Government's prosecutorial discretion as to deprive the Government of its ability to perform its constitutionally assigned responsibilities.” Id. at 806; see also United States ex rel. Ridenour v. Kaiser-Hill Co., L.L.C., 397 F.3d 925 (10th Cr. 2005).
rights and obligations, to determine in addition, who may enforce them and in what manner.”) Federal law frequently permits private parties to vindicate public interests through litigation. In many federal statutes, such as Title VII of the Civil Rights Act, 42 U.S.C. § 1983, and the Sherman Antitrust Act, Congress has provided a private right of action by which aggrieved parties may both vindicate their rights under federal law and help achieve public objectives such as adherence to antidiscrimination or antitrust laws. Many federal regulatory schemes contain provisions for “citizen suits” that allow private citizens to bring lawsuits, and even seek monetary penalties, primarily for the purposes of vindicating public interests. See, e.g., Clean Water Act (33 U.S.C. §§ 1365(a)(1), 1319(d)); Endangered Species Act (16 U.S.C. § 1540(g)). Congress may, moreover, authorize remedies such as punitive damages to be awarded to private parties, even though such damages serve no compensatory function, but are instead designed to advance the public interest in deterrence and punishment. See, e.g., Smith v. Wade, 461 U.S. 30, 51 (1983) (punitive damages may be awarded under 42 U.S.C. § 1983 for “intentional violations of federal law”); Memphis Community School District v. Stachura, 477 U.S. 299, 306, n.9 (1986) (“[t]he purpose of punitive
damages is to punish the defendant for his willful or malicious conduct and to deter others from similar behavior”).
All of these provisions vindicate a societal interest in deterring and punishing violations of federal law, and they do so by enlisting private plaintiffs. Moreover, they frequently permit private parties to file lawsuits, even if governmental officials believe that no violation has occurred. Such common provisions raise no separation of powers concerns. Congress also has given the Executive Branch authority to enforce most or all of these statutes, including through litigation that might in many respects parallel suits brought by private parties. The fact that Congress has provided these alternative means of law enforcement does not raise separation of powers problems, even though the private causes of action may, in many applications, obstruct or conflict with the preferred strategy of the Executive (including the litigation strategy). As these statutes demonstrate, the fact that a private person can pursue litigation to enforce federal statutes in no way violates the President’s constitutionally assigned functions. Similarly, in Section 292(b), Congress created a cause of action whereby private individuals, seeking a personal benefit, would serve the function of deterring unlawful
For examples of federal statutes expressly authorizing the award of punitive damages, see, e.g., 15 U.S.C. § 1691e(b); 25 U.S.C. § 305e(b) & (c); 45 U.S.C. § 711(j).
conduct. As it has in many statutes, “Congress has created a concrete private interest in the outcome of a suit against a private party for the Government’s benefit, by providing a cash bounty for the victorious plaintiff.” Lujan, 504 U.S., at 572-573; see also Stauffer, 619 F.3d, at 1326. As the Supreme Court observed in Vermont Agency, “[t]here is no doubt” that a qui tam plaintiff has his own “concrete private interest” that he seeks to vindicate. 529 U.S., at 772. This interest is not merely that of “statutorily designated agent of the United States.” Ibid. Rather, it is the plaintiff’s own interest, created by statute. See id., at 773-74.
Like a plaintiff in a citizen suit or a party seeking punitive damages, a qui tam plaintiff is not merely engaging in law enforcement for its own sake, but is pursuing his own interests even while also benefitting the public. Thus, although Congress intended
One of Wham-O’s amici argues that a private action under Section 292(b) is different from a private action under the False Claims Act because the former vindicates only the “Government’s sovereign interest” whereas the latter addressees both “proprietary” and “sovereign” injuries. Brief for the Cato Institute and Walter Olson as Amicus Curiae 19-21. Even if that framework of public interests, which this Court declined to rely on in Stauffer (619 F.3d, at 1326), is sound, false patent marking is not so easily categorized. Like a company that obtains fraudulent payments from the Government, a company that engages in false marking not only harms the public but also takes from the Government what is not theirs: the imprimatur of the Government’s stamp of novelty and inventiveness. Indeed, a False Claims Act suit is not always so easily categorized either. Under that Act, a plaintiff need not prove that the Government suffered a financial loss. See 31 U.S.C. § 3729; see, e.g., United States ex rel. A+ Homecare, Inc. v. Medshares Management Group, Inc., 400 F.3d 428, 446 (6th Cir. 2005).
for qui tam suits to serve public interests, the Supreme Court has recognized that the relator’s primary purpose in filing the suit is to acquire money for himself. See Hughes Aircraft Co., 520 U.S., at 949 (“As a class of plaintiffs, qui tam relators are different in kind than the Government. They are motivated primarily by prospects of monetary reward rather than the public good”). One might argue that the nature of that private interest deprives the plaintiff of Article III standing – an argument that the Supreme Court and this Court have rejected, see Vermont Agency, 529 U.S., at 778; Stauffer, 619 F.3d, at 1325. But a concrete private interest created by a qui tam statute has no greater effect on the President’s control of core executive powers than any other interest created by statute. If a plaintiff who goes to the store and buys a frisbee can sue for false marking and collect substantial statutory penalties without offense to Article II – a claim that is indistinguishable from citizen suits or punitive damages – then it makes no sense to say that Article II is violated if a plaintiff without a frisbee initiates a proceeding. 2. Wham-O’s attack on Section 292(b) proceeds from the assumption that the Constitution requires Congress to empower the Executive, and o nly the Executive, to file and litigate civil suits that vindicate public interests. Wham-O asserts that because this function is constitutionally assigned exclusively to the Executive, Congress may not empower private persons to bring such suits. That position is incorrect. Private
enforcement suits are a supplementary method of enforcement to the unitary and plenary power of government prosecution residing in the Executive Branch. If the Constitution vested the responsibility for bringing a particular suit (e.g., to enforce Title VII or the antitrust laws) exclusively in an official of the United States Government (as, for example, the Constitution vests the pardon power exclusively in the President), then serious constitutional questions would be raised by any Congressional attempt to vest part or all of that authority in private persons outside the Executive Branch. But the Constitution imposes no such requirement. In other words, to say that a function must be performed by the Executive Branch if the Government is to perform it at all does not answer the question whether the Constitution requires that the function be performed exclusively by the Government. Article II enshrines “the basic principle” that “‘those who are employed in the execution of the law” will be answerable to the President, “because Article II makes a single President responsible for the actions of the Executive Branch.” Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 130 S. Ct. 3138, 3155, 3154 (2010) (quoting 1 Annals of Cong. 463, 499 (1789) (J. Madison) (emphasis added)) (internal quotation marks omitted). But it does not speak to Presidential control over private persons who in pursuing private interests also promote public goals. See Young, 481 U.S., at 816 (Scalia, J., concurring) (reasoning that “the implementation of the laws *
* * is — at least to the extent that it is publicly exercised – executive power”) (emphasis added); see also Morrison, 487 U.S., at 706 (Scalia, J., dissenting) (“In what other sense can one identify ‘the executive Power’ that is supposed to be vested in the President (unless it includes everything the Executive Branch is given to do) except by reference to what has always and everywhere – if conducted by government at all – been conducted never by the legislature, never by the courts, and always by the executive.”) (emphasis added). Thus, in analogous contexts, the Supreme Court has on occasion rejected arguments that Congress cannot authorize private persons to exercise power that would, if assigned exclusively to the Government, be carried out by a particular branch. For example, the Supreme Court has approved a statute assigning to a private railroad industry group the power to impose safety codes that were binding on the industry and private individuals. St. Louis, Iron Mountain, & S. Rwy. Co. v. Taylor, 210 U.S. 281, 28587 (1908). The Court found that Congress could validly provide authority to groups of private miners to set binding rules governing mining claims. Butte City Water Co. v. Baker, 196 U.S. 119, 126-27 (1905). And the Court has upheld delegation to private arbitrators. Thomas v. Union Carbide Agric. Products Co., 473 U.S. 568 (1985).
A qui tam plaintiff does not act as the United States. Significantly for this discussion, the Supreme Court in Vermont Agency declined to rely on a theory that a qui tam relator has standing simply because he is the “statutorily designated agent of the United States * * *.” 529 U.S., at 772. Rather, the Court found that a qui tam plaintiff has a “concrete, private interest” in the outcome of a case. Ibid. In other words, a qui tam plaintiff is not the Government itself, and is not a legal representative of the Government. In litigation, a relator does not appear — and is not reasonably understood to appear — as the United States. Cf. United States ex rel. Eisenstein v. City of New York, 129 S. Ct. 2230, 2235 (2009) (In False Claims Act qui tam litigation, the United States is not a “party” if it has declined to intervene in the case). A qui tam plaintiff — like any other private litigant — must deal with the Government as a third party, for example, in the context of discovery requests. And, if choices in the litigation must be made relating to governmental privileges (e.g., state secrets or executive privilege), those choices are for the Government alone, and not for a qui tam relator. Although the judgment ultimately entered in a qui tam action may have preclusive effect in a subsequent suit brought by the United States, the relator’s legal and factual representations (for example, in pleadings and at oral argument) are not
those of the United States, may be contradicted by representations made by attorneys for the United States, and are not binding on the United States. In sum, a private plaintiff in a qui tam case is not a government official and does not represent the United States. See Riley, 252 F.3d at 755. Only the Executive, and not the relator, has the power to decide whether the United States will bring suit.
Hence, a qui tam relator is not interfering with the President’s constitutionally assigned functions because the relator is not suing as the United States. And, although his successful suit benefits himself as well as the United States Treasury, in that sense (and in other relevant respects) a relator is no different from other private plaintiffs who sue under federal statutes on their own behalf, but simultaneously vindicate public purposes.
The fact that under other statutes – although not Section 292(b)– a relator files a qui tam action “in the name of the Government” (31 U.S.C. § 3730(b)(1)), is a procedural practice that in no way alters this analysis. The use of the term “ex rel.” in itself distinguishes qui tam suits from actions that are truly brought by the United States Government. That caption alerts all concerned to the fact that the suit is actually being carried on by a party other than the Government itself. Habeas corpus actions brought by state prisoners in federal court, for instance, have often been styled “United States ex rel. [State Prisoner] v. [State Warden].” See, e.g., United States ex rel. Jennings v. Ragen, 358 U.S. 276 (1959); and cases cited in Townsend v. Sain, 372 U.S. 293, 310 and nn. 7 & 8 (1963).
3. Wham-O appears to assume that the distinction between private qui tam plaintiffs and the Government are irrelevant. Rather, in Wham-O’s view, when public interests are at stake, the Executive Branch must retain discretion over case-by-case decisions about whether and how to proceed. That assumption is mistaken. While Congress cannot itself “execute” the laws it has enacted, it may structure enforcement of statutes. Case-by-case enforcement decisions are “generally committed” to the Executive Branch (Heckler v. Chaney, 470 U.S. 821, 831 (1985)), and only the Executive may exercise that discretion when Congress gives it.
But Congress may
limit and define the Executive’s “exercise of enforcement power if it wishes, either by setting substantive priorities, or by otherwise circumscribing an agency’s power to discriminate among issues or cases it will pursue,” id., at 833; see also Dunlop v. Bachowski, 421 U.S. 560 (1975) (upholding provision that required the Secretary of Labor to bring an enforcement action); Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524, 613 (1838) (“To contend that the obligation imposed on the President to see
See United States v. Cox, 342 F.2d 167, 171 (5th Cir. 1965) (en banc) (“[i]t follows, as an incident of the constitutional separation of powers, that the courts are not to interfere with the free exercise of the discretionary powers of the attorneys of the United States in their control over criminal prosecutions”); In re International Business Machines Corp., 687 F.2d 591, 602 (2d Cir. 1982) (“[t]he district court’s involvement in the executive branch’s decision to abandon litigation might impinge upon the doctrine of separation of powers”).
the laws faithfully executed, implies a power to forbid their execution, is a novel construction of the constitution, and entirely inadmissible.”); cf. Davis, 442 U.S., at 241 (“Statutory rights and obligations are established by Congress, and it is entirely appropriate for Congress, in creating these rights and obligations, to determine in addition, who may enforce them and in what manner.”).
By creating a qui tam action in Section 292(b), Congress determined not only that patent mismarking is difficult to deter without the assistance or private parties, but also that it would set in motion an enforcement machinery designed to encourage legal action to enforce the statute. See Forest Group, 590 F.3d, at 1303 (“Congress’ interest in preventing false marking was so great that it enacted a statute which sought to encourage third parties to bring qui tam suits to enforce the statute.”); id., at 1303-04 (interpreting Section 292 in light of Congress’ policy of encouraging substantial private litigation). This is within Congress’ power.
Indeed, even in Morrison, where the Independent Counsel was an arm of the Government acting at odds with members of the Executive Branch, the Court analyzed the removal provision to assure itself that “the Executive, through the Attorney General,” could “assure that the counsel is competently performing his or her statutory responsibilities in a manner that comports with the provisions of the Act” (487 U.S., at 692 (emphasis added)), not that the counsel was abiding by the President’s discretionary preferences.
One can argue whether this is a wise policy, but concerns about there being too much litigation over patent mismarking are here “directed to the wrong forum”; that is a decision for Congress to make. See United States ex rel. Marcus, 317 U.S., at 547; see also Forest Group, 590 F.3d, at 1303 (responding to concerns about “‘a new cottage industry’ of false marking litigation” by noting that this “is what the clear language of the statute allows”). For these reasons, qui tam provisions do not infringe the Executive Branch’s constitutionally assigned functions. And there is nothing in the Constitution that categorically forbids the use of the qui tam mechanism or requires affirmative authorization from the Executive Branch before the suit can go forward. 4. The analysis is no different by virtue of Wham-O’s (and its amici’s) occasional suggestion that a qui tam suit under Section 292(b) really is a criminal prosecution. Wham-O appears to concede that there is no “criminal/civil distinction in the President’s Take Care Clause duties.” Def. Br. 48-49. Here, though, this Court’s precedent firmly establishes that the qui tam suit brought under Section 292(b) is a civil action. As this Court has explained, Section 292(b) “provides a civil penalty.” Forest Group, Inc., 590 F.3d, at 1301 (emphasis added); accord Pequignot v. Solo Cup Co., 608
F.3d 1356, 1363 (Fed. Cir. 2010); Clontech Labs., 406 F.3d, at 1352. And a qui tam action seeking that civil penalty is a civil action. See Pequignot, 608 F.3d, at 1363. Thus, this Court applies the general statute of limitations for civil fines. Arcadia Mach. & Tool, Inc. v. Sturm, Ruger & Co., 786 F.2d 1124, 1125 (Fed. Cir. 1986). This Court applies the civil rules of procedure. See In re BP Lubricants USA Inc. --- F.3d ----, 2011 WL 873147 (Fed. Cir. 2011); see also, e.g., G. LeBlanc Corp. v. H. & A. Selmer, Inc., 310 F.2d 449 (7th Cir. 1962).
And judgment in favor of a defendant may be appealed
without violating the Double Jeopardy Clause. Filmon Process Corp. v. Spell-Right Corp., 404 F.2d 1351, 1355 (D.C. Cir. 1968). This Court has held that the substantive prohibition against false marking is a criminal one. Pequignot, 608 F.3d, at 1363; see also Boyd v. Schildkraut Giftware Corp., 936 F.2d 76, 79 (2d Cir. 1991). That conclusion, however, does not alter the fact that a qui tam action under Section 292(b) is a civil action to recover a civil fine. See See Fish v. Manning, 31 F. 340, 340 (S.D.N.Y. 1887) (“The sufficiency of the complaint is to be determined according to the rules applicable to civil actions, and according to the state practice in similar or analogous actions at common law, and not according to the analogies of criminal procedure.”); see also, e.g., Channel Master Corp. v. JFD Electronics Corp., 260 F. Supp. 568 (E.D.N.Y. 1966) (Section 292(b) claim may be joined with other civil claims); Trabon Engineering Corp. v. Eaton Mfg. Co., 37 F.R.D. 51 (N.D. Ohio 1964) (civil discovery rules apply); Sippit Cups, Inc. v. Michael's Creations, Inc., 180 F. Supp. 58 (E.D.N.Y. 1960) (defendant must submit to discovery through deposition); Hawloetz v. Kass, 25 F 765 (CCD NY 1885) (civil burden of proof and rules of evidence apply).
Pequignot, 608 F.3d, at 1361-63. Thus, when the patent laws were recodified in 1952, the Committee report described the changes to the false marking prohibition and distinguished between the “criminal action” and the “[t]he informer action” (a synonym for qui tam suit). S. Rep. 82-1979, at 31; cf. Kingsley Books, Inc., 354 U.S., at 441 (listing separately “a criminal prosecution” and a “qui tam action”). This two-pronged approach is consistent with the historic practice of “Congress provid[ing] what we would now consider to be both civil and criminal penalties for the same conduct, and authoriz[ing] private citizens to bring defendants to justice by ‘action of debt’ [a civil action].”
Krent, supra, at 297. It is also consistent with the statute’s
text which permits a qui tam plaintiff to “sue,” (§ 292(b)) – a term generally reserved for civil actions. Accordingly, if a person or company engages in false marking, the United States may prosecute the criminal infraction and, if there is a conviction, ask a Court to impose criminal penalties. Section 292(a) imposes a fine of not more than $500 per
An “action of debt” was a historic form of civil action used to collect sums of money. See A Dictionary of American & English Law with Definitions of the Technical Terms of the Canon and Civil Laws 353 (1888) (S. Rapalje & R. Lawrence eds.); H. Black, Dictionary of Law Containing Definitions of the Terms and Phrases of American and English Jurisprudence, Ancient and Modern 234 (1891) (giving as an example of a “civil action,” an “action of debt”).
occurrence. 35 U.S.C. § 292(a). In the context of a criminal prosecution, because it is a criminal fine for an infraction, that fine is increased by 18 U.S.C. § 3571 to a maximum of $5,000 for individuals ($10,000 for corporations) per occurrence, or twice the monetary gain or loss, whichever is greatest. See 18 U.S.C. § 3571(b)(2), (b)(7), (c)(2), (c)(7), (d). And as Congress decided, a qui tam plaintiff may bring a civil action to collect a civil penalty of up to $500 per occurrence. See § 292(b). To be sure, some courts have described the civil penalty for false marking as “penal” and sometimes relied on that label to interpret the substantive prohibition narrowly. See, e.g., Mayview Corp. v. Rodstein, 620 F.2d 1347, 1359 (9th Cir. 1980); Filmon Process Corp., 404 F.2d, at 1355, Brose, 455 F.2d, at 765; G. LeBlanc Corp., 310 F.2d, at 459. But that may reflect only an analysis of the substantive prohibition. See United States ex rel. Marcus, 317 U.S., at 542. Or, it may reflect that the term“penal” describes statutes that impose penalties, including civil penalties. See, e.g., Filmon Process Corp., 404 F.2d, at 1355 (“35 U.S.C. § 292(b), while penal, is not a criminal statute.”); Black’s Law Dictionary (9th ed. 2009) (defining “penal” as “Of, relating to, or being a penalty or punishment”; Black’s Law Dictionary (9th ed. 2009) (defining a “penal action” as including “[a] civil proceeding in which either the state or a common informer sues to recover a penalty from a defendant who has violated a statute”); see also John Salmond, Jurisprudence 107
(Glanville L. Williams ed., 10th ed. 1947) (describing the historic practice of deterring harmful conduct with “civil rather than of the criminal law” through “a penal action, as being brought for the recovery of a penalty” that “might be brought, according to the wording of the particular statute creating the penal action, either by the Attorney–General on behalf of the state, or by a common informer on his own account.”). Moreover, the narrow construction may reflect only a traditional rule of interpretation that addressed “not only such statutes as in terms impose a fine, or corporal punishment, or forfeiture as a consequence of violating laws, but also all acts which impose * * * damages beyond compensation.” William M. Lile et al., Brief Making and the Use of Law Books 344 (3d ed. 1914). In any event, even if qui tam actions are not easily classified as “civil” or “criminal,” they do not fall into any potential core executive power over criminal prosecutions. It may not always be easy to classify a particular action as being civil or criminal. See, e.g., Myers v. United States, 264 U.S. 95, 103 (1924) (describing contempt as “sui generis”). But the fact that a qui tam action for false marking is not easily classified as a criminal prosecution demonstrates that no special separation of powers concerns attach. Cf. United States v. Halper, 490 U.S. 435, 451, n.11 (1989), overruled by Hudson v. United States, 522 U.S. 93 (1997) (holding open whether a penalty in a False Claims Act qui tam suit triggers double jeopardy concerns). This is especially so
given the history of qui tam actions. Cf. Young, 481 U.S. at 799-800 (contempt need not “be considered an execution of the criminal law in which only the Executive Branch may engage”). This conclusion also follows from the practical reality that a qui tam suit is in so many ways distinct from any ordinary criminal prosecution. A plaintiff has a private interest in the case. He is not engaging in law enforcement for its own sake. And he does not “have available [the] terrible array of coercive methods” that are available in criminal prosecutions, “such as ‘police investigation and interrogation, warrants, informers and agents whose activities are immunized, authorized wiretapping, civil investigatory demands, [and] enhanced subpoena power.’” Young, 481 U.S., at 811. At bottom, civil qui tam actions pose no greater risk of oppressive law enforcement than do the vast array of privately prosecuted civil enforcement actions routinely initiated by self-interested plaintiffs to vindicate their own rights. Cf. Newman-Green Inc. v. Alfonzo-Larrain, 490 U.S. 826, 837 (1989) (“because law is an instrument of governance rather than a hymn to intellectual beauty, some consideration must be given to practicalities”) (internal quotation marks omitted). C. Mo rriso n is Readily Distinguishable
Wham-O’s attack on Section 292(b) proceeds from the premise that the Supreme Court’s analysis in Morrison of Presidential control over the Independent Counsel must
apply also to qui tam actions. That is incorrect. Morrison is readily distinguishable. First, unlike a qui tam plaintiff, the Independent Counsel at issue in Morrison was not merely conducting litigation for government purposes; she was doing so as the Government and, indeed, as a Government prosecutor. The act at issue in Morrison granted the prosecutor “full power * * * to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice.” 487 U.S., at 662 (quoting 28 U.S.C. § 594(a)). Thus, the Independent Counsel could “appoint employees,” “counduc[t] grand jury proceedings,” “fram[e] and sig[n] indictments,” and do so with Justice Department resources. Id., at 662 & n. 7. In contrast, as already discussed, a qui tam plaintiff is not an agent of the Government, has no Government powers, does not represent the Government, and cannot be understood to represent the Government. And unlike the Independent Counsel in Morrison, a qui tam plaintiff under Section 292(b) is not initiating a criminal prosecution. He is merely seeking a civil penalty in a civil action. Second, unlike a qui tam plaintiff, the Independent Counsel in Morrison could interfere directly in Executive Branch affairs. For one thing, the Independent Counsel was tasked with prosecuting federal officials. Indeed, the party who challenged the
statute in Morrison had been an Assistant Attorney General and was under investigation by the Independent Counsel. Moreover, the Independent Counsel could prevent the Executive Branch from investigating criminal matters: The statute required that once a matter was referred to the Independent Counsel, “the Justice Department [was] required to suspend all investigations and proceedings regarding the matter” and the Counsel could herself choose to the dismiss the matter. Morrison, 487 U.S., at 662-63. This direct interference with executive functions poses a far greater threat to Executive power. Cf. Lujan, 504 U.S., at 577 (noting in dicta that if Congress creates a civil action to compel executive officers, it might interfere with the President’s “duty, to ‘take Care that the Laws be faithfully executed,’ Art. II, § 3”). Section 292(b) poses no such concern. It was neither adopted with the intention nor does it serve the function of challenging Executive Branch decisionmaking. It creates virtually no potential for vexatious litigation against the Executive Branch. Nor does it enable even private parties to question, challenge, investigate, or otherwise obfuscate Executive conduct. Cf. Nixon v. Fitzgerald, 457 U.S. 731, 749-754 (1982) (describing the traditional view that a sitting President could not be subject to suit for official acts, lest it infringe his ability to carry out his duties as the Executive).
The Facial Constitutionality of Section 292(b) is Not Squarely Presented
Based on Wham-O’s core assumption that the false marking qui tam provision must be analyzed in the same way as the Supreme Court analyzed the Independent Counsel provision in Morrison, Wham-O here has hypothesized that the qui tam provisions of Section 292(b) might impermissibly intrude on the Executive’s core constitutional functions in a case — unlike this one — in which the Executive wishes to intervene and take the litigation in a different direction than the plaintiff. As noted at the outset of this brief, that concern could raise constitutional issues. That is a question, however, that this Court should not address, because this is not a case in which the Government has attempted to participate on behalf of the United States in any way other than to defend the constitutionality of Section 292. Wham-O and its amici correctly note that in Morrison, the Supreme Court looked at a statutory control mechanism, even though the Executive Branch had not yet tried to exercise it: removing the Independent Counsel. See, e.g., Def. Br. 12. But in Morrison, the mechanism that the Attorney General could exercise in the future had a present effect on the Independent Counsel. The threat of being fired – and thus losing her office and job – loomed like the Sword of Damocles, as an ever-present reason not to stray too far from the President’s wishes. Cf. Bowsher, 478 U.S., at 727, n.5 (“the effect of a removal provision” that has not been used is “ripe” for review because the
“desire to avoid removal * * * creates [a] here-and-now subservience”); Humphrey's Executor v. United States, 295 U.S. 602, 629 (1935) (reasoning that “one who holds his office only during the pleasure of another cannot be depended upon to maintain an attitude of independence against the latter’s will”). But here, there is no office and no long term interest. The possibility of future control over a case could have little present effect on a qui tam plaintiff under Section 292(b). Thus, the question that Wham-O wishes this Court to address is not whether the threat of Government control tethers a qui tam plaintiff to the Executive Branch, as it did in Morrison. Rather, Wham-O wants this Court to decide whether – in a hypothetical case in the future – there could be a situation where Government interests diverge from a plaintiff’s and the Government cannot assert its interests, and if so, whether that divergence poses a constitutional problem. Because the Government has not attempted to take over this litigation, or otherwise prevent FLMC from pursuing it, this Court should not address whether in such an event a qui tam action under Section 292(b) would be unconstitutional. Nor should this Court rule on the facial constitutionality of Section 292(b) when that question is not squarely presented. In any event, although the United States has not attempted to participate in this civil action other than to defend the constitutionality of Section 292(b), the
Government has various tools to participate if it wishes by virtue of other applicable statutes and rules, which include: (1) the right to be notified of the filing of the qui tam complaint (35 U.S.C. § 290); (2) the right to appear in the qui tam litigation (28 U.S.C. §§ 517 and 518), and to intervene if the relator cannot adequately represent the interests of the United States (Fed. R. Civ. P. 24(a)(2), see Stauffer, 619 F.3d, at 1328); and (3) the right to veto a settlement by the qui tam plaintiff in cases in which the United States has intervened as a party by withholding its consent to a voluntary dismissal (Fed. R. Civ. P. 41(a)(1)(A)(ii)). The Government also possesses additional rights that may be employed with court approval: (1) the right to intervene upon a showing that the Government’s claim “shares with the main action a common question of law or fact” (id. 24(b)); and (2) the right to a protective order staying the relator’s discovery upon a showing that it would interfere with the Government’s investigation or prosecution arising out of the same facts (id. 26(c)). Moreover, although no court has been forced to address the issue, Section 292(b) itself may best be interpreted against the historical background of the King’s control over qui tam actions and, if Wham-O’s arguments have merit, to avoid any constitutional infirmities (see Hooper v. California, 155 U.S. 648, 657 (1895) (“every
reasonable construction must be resorted to in order to save a statute from unconstitutionality”); accord Skilling v. United States, 130 S.Ct. 2896, 2928 (2009)). See, e.g., United States ex rel. Ridenour, 397 F.3d, at 934-35 (interpreting the False Claims Act to give the Government powers to intervene so as to avoid “constitutionally unsteady ground”). Finally, if Section 292(a) does define a criminal offense, the President may retain the power to pardon any penalty stemming from that offense. Cf. Osborn v. United States, 91 U.S. 474, 478 (1875). The applicability of those provisions to a qui tam action under Section 292(b) are not at issue in this case, however. Here, the only question presented is whether, consistent with the requirements of Article II, a private party may initiate a qui tam action without Executive Branch authorization or involvement. Because nothing in Article II forecloses such a result, Section 292(b) is not unconstitutional on its face, nor is there any basis to conclude that it is unconstitutional as applied to the facts of this case. Accordingly, Wham-O’s constitutional challenge under Article II should be rejected. III. THE QUI TAM MECHANISM IN SECTION 292(b) DOES NOT VIOLATE THE APPOINTMENTS CLAUSE In two paragraphs of its brief, Wham-O asserts that the false marking qui tam
provision also violates the Appointments Clause found in Article II. Def. Br. 58-59. This argument is plainly wrong. The Constitution provides that only the President may appoint superior “Officers on the United States” – such as ambassadors – and that Congress may “vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” U.S. Const. Art. II, § 2, cl. 2. A plaintiff in a qui tam action, however, has not been “appoint[ed]” at all and is not an “Officer.” As an initial matter, for Congress to have violated the Appointment’s Clause, it must have appointed or “vest[ed] the Appointment” of a qui tam plaintiff. U.S. Const. Art. II, §2, cl. 2. See Buckley v. Valeo, 424 U.S. 1, 125-26 (1976) (per curiam) (the clause applies to “any appointee exercising significant authority pursuant to the laws of the United States”) (emphasis added); id., at 131 (“Officers” are “all appointed officials exercising responsibility under the public laws”) (emphasis added). But a plaintiff in a qui tam action is not appointed in any sense of the word. It would strain the English language to suggest that by passing Section 292(b), Congress“appointed” every future plaintiff who brings suit, or “vest[ed]” in every potential plaintiff the power to “appoint” themselves.
Moreover, the Appointments Clause is inapplicable because plaintiffs in qui tam actions are not “Officers.” As the Supreme Court has long explained, the requirements of the Appointments Clause apply only to “persons who can be said to hold an office under the government.” United States v. Germaine, 99 U.S. (9 Otto) 508, 510 (1879); accord Buckley, 424 U.S., at 126. Thus, the term “Officer” in Article II “embraces the ideas of tenure, duration, emolument, and duties [that are] * * * continuing and permanent, not occasional or temporary.” United States v. Germaine, 99 U.S. 508, 511-12 (1878); see United States v. Hartwell, 73 U.S. 385, 393 (1867) (“An office is a public station, or employment, conferred by the appointment of government.”); Riley, 252 F.3d, at 757 (“Supreme Court precedent has established that the constitutional definition of an ‘officer’ encompasses, at a minimum, a continuing and formalized relationship of employment with the United States Government.”). Qui tam plaintiffs fit none of these characteristics. They hold no established position, serve for no particular period, receive no federal salary or other emoluments, and have no formal duties. Moreover, they litigate with their own resources and enjoy only the powers given to any private plaintiff in a federal court. Accordingly, they are
Although some qui tam plaintiffs are repeat litigants (see Def. Br. 58-59), that fact does not transform those particular plaintiffs – or qui tam plaintiffs generally – into “Officers” subject to appointment only by the President, Courts, or Heads of Departments.
not “Officers” subject to the Appointments Clause. See Auffmordt v. Hedden, 137 U.S. 310, 326-27 (1890) (holding that a person who performs public duties for a “particular case” but “has no general functions, nor any employment which has any duration as to time” is not an Officer because his “position is without tenure, duration, continuing emolument, or continuous duties, and he acts only occasionally and temporarily”). It is for these reasons that in the context of qui tam actions brought under the False Claims Act, every court of appeals that has addressed the issue has rejected Appointments Clause challenges. See, e.g., United States ex rel. Stone, 282 F.3d, at 805; Riley, 252 F.3d, at 757-58; United States ex rel. Taxpayers Against Fraud, 41 F.3d, at 1041; United States ex rel. Kelly, 9 F.3d, at 757-59. Buckley v. Valeo, 424 U.S. 1, is not to the contrary. Wham-O focuses on two phrases from the Buckley opinion to suggest that any individual qui tam plaintiff – or the body of qui tam plaintiffs generally – is an “Officer” because a qui tam plaintiff exercises “significant authority” (id., at 126), and has the “primary responsibility” for litigation under the false marking provision (id., at 140). See Def. Br. 58. (Defendant’s amicus makes the even bolder claim that under Buckley, anyone “prosecuting civil litigation to vindicate public rights” is an Officer. Brief for Chamber of Commerce as Amicus Curiae 20.)
In Buckley, however, the Court was clear that it was merely applying the definition of an officer drawn from Germaine and Auffmordt to officials of the Federal Election Commission. 424 U.S. at 124-26 & n.162. There is no suggestion that the Court overruled those cases sub silentio. Indeed, in several of its statements of the definition of “officers,” the Court appeared to recognize that people might exercise significant authority but not be covered by the Appointments Clause because they were not appointed to an office. See, e.g., id., at 126 (“any appointee exercising significant authority pursuant to the laws of the United States” is an “Officer”) (emphasis added); id., at 131 (“Officers” are “all appointed officials exercising responsibility under the public laws”) (emphasis added). In any event, even Wham-O’s reading of Buckley would not make the Appointments Clause applicable. No individual qui tam plaintiff is vested with the “primary responsibility” (424 U.S., at 140) of enforcing the patent mismarking statute. Rather,“any person” with knowledge of false marking is free to bring a civil action under Section 292(b), and no person is “responsibl[e]” (424 U.S., at 140) for doing so. And assuming that Section 292(a) is a criminal provision (see Pequignot, 608 F.3d, at 1363), the United States may criminally prosecute false marking and seek to impose substantial fines.
Accordingly, the Appointments Clause is inapplicable.
CONCLUSION For the foregoing reasons, Wham-O’s constitutional claims should be rejected, the judgment of dismissal by the district court in the underlying case should be reversed, and this suit should be reinstated. Respectfully submitted, TONY WEST Assistant Attorney General MICHAEL F. HERTZ Deputy Assistant Attorney General
DOUGLAS N. LETTER (202) 514-3602 Appellate Litigation Counsel Civil Division, Room 7513 Department of Justice 950 Pennsylvania Ave., N.W. Washington, D.C. 20530
CERTIFICATE OF SERVICE I hereby certify that on March 30, 2011, I filed and served the foregoing Brief for the Intervenor United States by causing an original and twelve copies to be mailed to the Clerk of the Court by first class mail, and by causing two copies to be mailed by overnight Federal Express to the following: Andrew J. Dhuey, Esq. 456 Boynton Ave. Berkeley, CA 94707 David G. Overdick, Esq. Meyer, Unkovic & Scott LLP 535 Smithfield St. Suite 1300 Pittsburgh, PA 15222
CERTIFICATE OF COMPLIANCE WITH RULE 32(a) OF THE FEDERAL RULES OF APPELLATE PROCEDURE 1. Pursuant to Fed. R. App. P. 32(a)(7), I certify that the attached Brief for the Movants-Cross Appellants complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B). The brief contains 13,656 words, as counted by Word Perfect X4, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii) and Federal Circuit Rule 32(b). 2. I also certify that this brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6). The brief has been prepared in a proportionally-spaced typeface using Word Perfect X4 in 14-point Goudy Old Style.
Douglas Letter Counsel for Intervenor United States
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