Opinion ID: 6984428
Heading Depth: 2
Heading Rank: 2

Heading: Assignment Theory

Text: Riley contends that she also has standing as an “assignee” of the government’s fraud claim. Indeed, some courts have approved of relator standing on the theory that the qui tam relator is an assignee of the government’s own fraud action. See, e.g., United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 748 (9th Cir.1993) (“the FCA effectively assigns the government’s claims to qui tam plaintiffs ... who then may sue based upon an injury to the federal treasury”). Under the assignment theory, the FCA qui tam provisions operate as an enforceable unilateral contract, the terms of which are accepted by the relator upon the filing of suit. See id. at 748. There are several difficulties with the assignment theory. First of all, the FCA’s language contains no mention of an assignment. Courts may not simply re-write statutes in order to make them constitutional. Moreover, the assignment theory is really just a variation of the statutory permission theory, and the same criticism applies: Congress cannot circumvent the standing requirement by conferring standing, even if it does so using the assignment mechanism. Riley asserts that it is not important to inquire whether an actual assignment has occurred; the fact that courts permit assignment indicates that a personalized injury is not an absolute pre-requisite to Article III standing. This premise conflicts with express language in Lujan, which states that “the injury must affect the plaintiff in a personal and individual way.” Lujan, 112 S.Ct. at 2136 n. 1. Absent a valid assignment, there is absolutely no justification for excusing the requirement that the plaintiff allege a particularized and personal injury. The “assignment” in the FCA does not comport with basic principles of contract law and thus cannot be a valid assignment. First of all, an assignor must give up his interest in that which has been assigned. See Restatement (Second) of Contracts § 317(1) (1980). But the FCA provisions permit the government to retain, not only an interest in the lawsuit, but control over certain aspects of the lawsuit. For example, the government can settle the case over the relator’s objections. See 31 U.S.C. § 3730(c)(2)(B). The government can dismiss the case over the relator’s objections. Id. at § 3730(c)(2)(A). The “assignment” purportedly made in the FCA must also fail because Article II § 3 vests the right to prosecute with the Executive branch, while the assignment of that right to a private citizen is being made in the FCA by the Legislative branch. Congress cannot assign something it does not “own.” Finally, no legal right to prosecute a fraud claim existed at the time the supposed “offer” of assignment is claimed to have been made (i.e., at the enactment of the FCA). Thus, the FCA qui tam provisions should be viewed, at the most, as a promise to make an assignment in the future, rather than an actual assignment. The assignment exception to the personalized injury requirement should be narrowly confined to those cases in which the assignee really “steps into the shoes” of the assignor. There are simply too many differences between a valid assignment and the FCA’s qui tam provisions to conclude that the FCA’s qui tam provisions set out a valid Congressional assignment of the Executive right to prosecute a case for injury to the government. Hence, the assignment theory must also fail in this case.