Opinion ID: 6984428
Heading Depth: 1
Heading Rank: 4

Heading: riley’s alternative theories

Text: Riley first argues that relators meet standing requirements because Congress has said that they do. In other words, Riley claims that the FCA is a statutory grant of standing to qui tam relators. A few decisions, including this Court’s decision in Weinberger, have taken this “statutory permission” approach. See, e.g., United States ex rel. Woodard v. Country View Care Ctr., Inc., 797 F.2d 888, 893 (10th Cir.1986) (“The statute of course eliminated any standing problem”); Weinberger, 557 F.2d at 460 (reasoning that “the statute clearly accords [the relator] standing to bring the action”). But the statutory permission approach fails because Congress is itself constrained by the Constitution. The Constitution requires a personalized injury, and Congress cannot, by legislation, waive that requirement. See Raines v. Byrd, 521 U.S. 811, 117 S.Ct. 2312, 2318 n. 3, 138 L.Ed.2d 849 (1997) (“It is settled that Congress cannot erase Article Ill’s standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing.”). Those courts that have adopted the statutory permission approach likely viewed the injury element as a prudential standing requirement that Congress could waive. Indeed, earlier Supreme Court opinions referred to waiveable prudential standing requirements. See, e.g., Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 2206 & n. 12, 45 L.Ed.2d 343 (1975). But the Court has now stated, without equivocation, that a particularized and personal injury is a constitutional— not a prudential — standing requirement, which cannot be waived by legislation. See Lujan, 112 S.Ct. at 2136. The courts that have adopted the statutory permission approach may also have confused Congress’s power to create rights with the power to create standing. Congress can, of course, enact statutes creating new substantive legal rights, the invasion of which can give rise to the kind of particularized injury necessary to create standing. See Linda R.S. v. Richard D., 410 U.S. 614, 93 S.Ct. 1146, 1148 n. 3, 35 L.Ed.2d 536 (1973). In no event, however, “may Congress abrogate the article III minima: A plaintiff must always have suffered ‘a distinct and palpable injury to himself ... that is likely to be redressed if the requested relief is granted.” Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979). In light of more recent Supreme Court authority, such as Steel Co. and Lujan, those cases relying upon a statutory permission theory and the statutory permission theory itself, must fail.
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.
Riley argues that she was injured, and thus has standing, because her employer retaliated against her for filing her qui tam action. Her reasoning echoes that of a few courts that have found that qui tam relators meet the injury requirement because they are likely to face retaliation for initiating a qui tam suit. See, e.g., United States ex rel. Dunleavy v. County of Delaware, 123 F.3d 734, 739 (3d Cir.1997); United States ex rel. Neher v. NEC Corp., 11 F.3d 136, 138 (11th Cir.1993). Those courts assert that the possibility of the extreme emotional strain resulting from exposure to the fraudulent scheme, or the time and expense required to bring suit, or the possibility of retaliation for filing the suit, may serve as the injury in fact that confers standing. The defendants correctly note that this argument proves too much. If the emotional, financial, or retaliatory costs of filing a lawsuit constitute an injury upon which standing may rest, then every plaintiff will be blessed with standing. The defendant, after all, could always retaliate. The Supreme Court recently eliminated any doubt as to the validity of the retaliation theory, stating: Obviously, ... a plaintiff cannot achieve standing to litigate a substantive issue by bringing suit for the cost of bringing suit. The litigation must give the plaintiff some other benefit besides reimbursement of costs that are a by product of the litigation itself. Steel Co., 118 S.Ct. at 1019. The possibility of retaliation — like emotional and litigation-based transaction costs — are “by produces] of the litigation itself’ and thus cannot be grounds for standing to litigate. Furthermore, the “retaliation” claim is expressly dealt with in subsection (h) of § 3730. That subsection gives an “employee” who is “discriminated against in the terms and conditions of employment by his or her employer” an entitlement to “all relief necessary to make the employee whole.” 31 U.S.C. § 3730(h). This subsection further gives the employee the right to “reinstatement,” two times back pay, interest on back pay, and compensation for any special damages sustained as a result of the discrimination, all of which are relief applicable only against the employer. Id. Finally, this subsection gives federal district courts jurisdiction to provide this relief. Id. In the present case, subsection (h) may give Riley her own claim (as distinct from the government’s claim) against her employer, St. Luke’s Hospital, but it could not possibly give Riley any claim against the other defendants named herein. For all of these reasons, Riley’s retaliation claim does not support any judgment finding that she has standing to prosecute claims for injury to the government under the FCA’s qui tarn provisions. The retaliation theory must fail.
Riley also argues that she has standing to pursue her FCA action because she has a concrete interest in the outcome of her lawsuit. She argues that the FCA provides a bounty for successful relators, see 31 U.S.C. § 3730(d), and relators thus have a concrete interest in succeeding in their fraud actions. Several courts have found standing on the basis of the relator having an interest in the outcome of the litigation. See, e.g., United States ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148, 1154 (2d Cir.1993). The Supreme Court, however, has required an injury — not merely an incentive or interest. Defendants contend that an incentive or interest is not an injury and will not satisfy Article Ill’s injury requirement. See Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 1368, 31 L.Ed.2d 636 (1972) (existence of ideological interest to litigate vigorously is not sufficient basis for finding injury in fact); Valley Forge, 102 S.Ct. at 766 (“[s]tanding is not measured by the intensity of the litigant’s interest or the fervor of his advocacy.”). The presence of a statutory bounty for successful qui tam plaintiffs does not satisfy the injury requirement because the injury requirement does more than merely ensure that parties have an incentive to prosecute a claim vigorously. The requirement of a particularized and personal injury also ensures that the judiciary stays in its assigned role as arbiter of disputes and does not wander into the arena of policy making (the Legislature’s role) or ensuring the execution of laws (the Executive’s role). As the Lujan Court explained: If the concrete injury requirement has the separation-of-powers significance we have always said, the answer must be obvious: To permit Congress to convert the undifferentiated public interest in executive officers’ compliance with the law into an “individual right” vindicable in the courts is to permit Congress to transfer from the President to the courts the Chief Executive’s most important constitutional duty, to “take Care that the Laws be faithfully executed.” It would enable the courts, with the permission of Congress, “to assume a position of authority over the governmental acts of another and co-equal department,” and to become “ ‘virtually continuing monitors of the wisdom and soundness of Executive action.’ ” We have always rejected that vision of our role. 112 S.Ct. at 2145 (citations omitted); see also Antonin Scalia, The Doctrine of Standing As An Essential Element Of The Separation Of Powers, 17 Suffolk U.L.Rev. 881 (1983). Requiring merely an incentive, rather than an injury personal to the party in interest, would not adequately circumscribe the judiciary. Permitting a statutory bounty, standing alone, to vest a plaintiff with sufficient interest to bring suit inherently involves an impermissible encroachment upon the separation-of-powers principles that lie at the heart of the Constitution. I therefore conclude that the bounty theory must likewise fail.