Opinion ID: 174432
Heading Depth: 2
Heading Rank: 1

Heading: Stauffer's Standing

Text: The government argues that the district court erred in dismissing Stauffer's suit for lack of standing based on a lack of injury in fact. [2] The government asserts that Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000), controls the outcome in this case, and that decision held that a qui tam relator has standing without an injury to the relator himself, a proposition that, according to the government, the court stated but did not follow. Furthermore, the government argues that the United States' interest in seeing its laws enforced itself leads to an injury in fact when those laws are not obeyed. In other words, according to the government, in enacting the false marking statute, Congress determined that such conduct is harmful and should be prohibited, which is a sufficient injury in fact to confer standing on the government and therefore on Stauffer as the government's implicit assignee of the action to recover for injury. Finally, the government asserts that even if a proprietary injury involving the federal treasury's being directly diminished were required under Vermont Agency, as opposed to solely a sovereign injury based on the United States' interest in seeing its laws enforced, the United States has a proprietary interest in receiving half of the recovery in a suit under section 292. Stauffer separately argues that, according to this court's decision in Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347 (Fed.Cir.2005), the public is injured by false marking, which misleads and wrongly imposes the costs of evaluating patents on the public. Thus, he argues, the public has suffered an injury in fact sufficient to confer standing. Stauffer adds that his complaint alleged that Brooks Brothers had wrongfully quelled competition with respect to . . . bow tie products thereby causing harm to the economy of the United States. J.A. 66, para. 129. That, he argues, further demonstrates an injury to the public. Stauffer also asserts that he has individually been injured as a member of the public, thereby demonstrating another injury to the public. Brooks Brothers responds that standing is not automatically conferred on qui tam relators, but that they must demonstrate standing. Brooks Brothers adds that Stauffer has not met the other factors required for standing; the marking is not fairly traceable to Brooks Brothers but to J.M.C. Bow, and any injury to the United States is unlikely to be redressed by a favorable decision. We agree with the government and Stauffer that Stauffer had standing to sue Brooks Brothers. The question of standing to sue is a jurisdictional one, which we review de novo.  Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1551 (Fed.Cir.1995) ( en banc ) (citation omitted). Every plaintiff must demonstrate standing, a jurisdictional prerequisite under Article III's case-or-controversy requirement. Vermont Agency, 529 U.S. at 771, 120 S.Ct. 1858. Thus, a plaintiff must show (1) that he has suffered an injury in fact, an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical, (2) that there is a causal connection between the injury and the conduct complained of, and (3) that the injury is likely to be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (citations and quotations marks omitted); see Vermont Agency, 529 U.S. at 771, 120 S.Ct. 1858. We conclude that Stauffer has met that test and hence has standing in this case. As the district court noted, section 292(b) is a qui tam provision,  i.e., a statute that authorizes someone to pursue an action on behalf of the government as well as himself. Standing Op., 615 F.Supp.2d at 253. The Supreme Court, this court, and the Second Circuit have repeatedly treated it as such. See Vermont Agency, 529 U.S. at 768 n. 1, 120 S.Ct. 1858 (listing section 292(b) as one of four qui tam statutes currently in force); Pequignot v. Solo Cup Co., 608 F.3d 1356 (Fed.Cir.2010) (referring to section 292 as a qui tam provision); Boyd v. Schildkraut Giftware Corp., 936 F.2d 76, 79 (2d Cir.1991) (Section 292 is enforceable by a qui tam remedy, enabling any person to sue for the statutory penalty and retain one-half of the recovery.). Under Vermont Agency, a qui tam plaintiff, or relator, can establish standing based on the United States' implicit partial assignment of its damages claim, 529 U.S. at 773, 120 S.Ct. 1858, to any person, see 35 U.S.C. § 292(b). In other words, even though a relator may suffer no injury himself, a qui tam provision operates as a statutory assignment of the United States' rights, and the assignee of a claim has standing to assert the injury in fact suffered by the assignor. Vermont Agency, 529 U.S. at 773, 120 S.Ct. 1858. Thus, in order to have standing, Stauffer must allege that the United States has suffered an injury in fact causally connected to Brooks Brothers' conduct that is likely to be redressed by the court. As the government points out, Congress has, by enacting section 292, defined an injury in fact to the United States. In other words, a violation of that statute inherently constitutes an injury to the United States. In passing the statute prohibiting deceptive patent mismarking, Congress determined that such conduct is harmful and should be prohibited. The parties have not cited any case in which the government has been denied standing to enforce its own law. Because the government would have standing to enforce its own law, Stauffer, as the government's assignee, also has standing to enforce section 292. Brooks Brothers relies heavily on Lujan, which denied plaintiffs standing under a citizen-suit provision. 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351. However, in that case, the citizen-suit provision allowed private individuals to sue the government. Thus, the Supreme Court reasoned that such a law would enable courts to become virtually continuing monitors of the wisdom and soundness of Executive action. Id. at 577, 112, S.Ct. 2130. Hence, it was clear that in suits against the Government, at least, the concrete injury [to the plaintiff] requirement must remain. Id. at 578, 112 S.Ct. 2130. Here, in contrast, the qui tam provision operates not to allow individuals to sue the government, but to allow individuals to stand in the government's stead, as assignees of the government's own claims. See id. at 572-73, 112 S.Ct. 2130 (emphasizing that Lujan's was not the unusual case in which 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). Thus, Lujan does not preclude Congress from assigning the government's claims to any person, even if that person has no concrete injury himself. Contrary to the district court's decision and Brooks Brothers' argument, Stauffer's standing as the United States' assignee does not depend upon the alleged injury to the United States being proprietary, as opposed to sovereign. We therefore express no view as to whether section 292 addresses a proprietary or a sovereign injury of the United States, or both (as does the False Claims Act, 31 U.S.C. §§ 3729-3733, according to Vermont Agency, 529 U.S. at 771, 120 S.Ct. 1858). The court incorrectly read Vermont Agency as applying only to the United States' proprietary injury. In fact, the Supreme Court stated, It is beyond doubt that the complainant asserts an injury to the United States both the injury to its sovereignty arising from violation of its laws (which suffices to support a criminal lawsuit by the Government) and the proprietary injury resulting from the alleged fraud. Vermont Agency, 529 U.S. at 771, 120 S.Ct. 1858. The Supreme Court considered both types of injuries and found them collectively to be sufficient to confer standing on the government and therefore on the relator. See id. at 774, 120 S.Ct. 1858 (concluding, without stating which specific injury, that the United States' injury in fact suffices to confer standing on respondent Stevens). The Court made no distinction between the two, and we similarly do not do so here. To support the contrary proposition that sovereign injury is not assignable, the district court cited Fed. Election Comm. v. Akins, 524 U.S. 11, 24, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998), which stated that an abstract harm, for example, injury to the interest in seeing that the law is obeyeddeprives the case of the concrete specificity necessary for standing. However, that statement referred to a private individual's abstract interest in seeing that the law is obeyed, not the government's interest in seeing that its own law is obeyed. From the government's perspective, a harm arises from an injury to its sovereignty arising from violation of its laws. Vermont Agency, 529 U.S. at 771, 120 S.Ct. 1858. Indeed, the Court in Vermont Agency recognized and found conclusive the historical precedent of informer statutes enacted by the First Congress, which assigned certain sovereign interests of the United States to private parties. Id. at 776-77, 120 S.Ct. 1858. For example, the Court relied upon statutes allowing an informer to sue for, and receive half the fine for, failure to file a census return, carriage of seamen without contract or illegal harboring of runaway seamen, and unlicensed trading with Indian tribes. Id. at 777 n. 6, 120 S.Ct. 1858. Those fines were not based on harms to the United States' proprietary interest, as the federal treasury was not directly diminished because of the violations. The fines were instead based only on harms to the sovereign interest of the United States, viz., the interest in seeing the harms, as defined in the statutes, redressed. One statute noted by the Court even allowed informers to conduct a criminal prosecution and receive half the fine, id., which would redress an injury that the Court explicitly found to be sovereign, id. at 771, 120 S.Ct. 1858 (stating that a sovereign, as opposed to proprietary, injury suffices to support a criminal lawsuit). Thus, under Vermont Agency, the United States' sovereign injury is sufficient to confer standing upon it and therefore upon Stauffer, its implicit partial assignee. [3] We therefore take no view as to whether section 292 addresses a proprietary or a sovereign injury of the United States, or both, as either one would confer standing on the government, and therefore Stauffer. Amicus Ciba asserts that the government cannot constitutionally assign any claim without retaining control over the relator's actions, arguing that such assignment violates the take Care clause of Article II, § 3 of the Constitution. According to Ciba, in enacting section 292(b), Congress has stripped the executive branch of its duty to take Care that the Laws be faithfully executed by giving such power to the public. In support of that position, Ciba contrasts section 292 with the False Claims Act, which provides the government with, inter alia, the right to be notified of a case before the defendant is served, the right to intervene, and the right to seek dismissal or settlement over the objection of the relator or to prevent dismissal of the action by the relator. While Ciba raises relevant points, the district court did not decide, and the parties did not appeal, the constitutionality of section 292. Thus, we will not decide its constitutionality without the issue having been raised or argued by the parties. See Vermont Agency, 529 U.S. at 778 n. 8, 120 S.Ct. 1858 (expressing no view on whether qui tam suits violate the take Care clause of Article II, as the parties did not raise it, nor is the validity of qui tam suits . . . a jurisdictional issue that we must resolve here). We also need not address whether Stauffer's alleged injuries to himself or his asserted injuries to competition give him standing, either individually or as a member of the public. Stauffer's standing arises from his status as any person, and he need not allege more for jurisdictional purposes. The district court conflated its jurisdiction with the merits of the case when it stated that Stauffer had failed to sufficiently allege a purpose of deceiving the public. Standing Op., 615 F.Supp.2d at 254 n. 5. Brooks Brothers similarly conflates jurisdiction and merits in asserting that Stauffer must show that the marking is fairly traceable to Brooks Brothers, rather than to J.M.C. Bow, the third party Adjustolox manufacturer. Neither of those points is jurisdictional in nature, nor do they fall under the standing inquiry. The standing doctrine is intended to require that the plaintiff is a proper person to bring the suit; it does not require that the plaintiff properly allege all of the elements of his claim. Thus, standing does not depend on the merits of the plaintiff's contention that particular conduct is illegal; it instead requires a claim to an injury of a legally cognizable right. 15 James Wm. Moore et al., Moore's Federal PracticeCivil ¶ 101.40[5][a]. By allowing any person to sue, Congress granted individuals a legally cognizable right to half of the penalty defined in section 292(a). Thus, Stauffer has sufficiently alleged (1) an injury in fact to the United States that (2) is caused by Brooks Brothers' alleged conduct, attaching the markings to its bow ties, and (3) is likely to be redressed, with a statutory fine, by a favorable decision. See Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130. We therefore reverse the district court's decision concluding that Stauffer did not have standing. We remand for the court to address the merits of the case, including Brooks Brothers' motion to dismiss pursuant to Rule 12(b)(6) on the grounds that the complaint fails to state a plausible claim to relief because it fails to allege an `intent to deceive' the publica critical element of a section 292 claimwith sufficient specificity to meet the heightened pleading requirements for claims of fraud imposed by Rule 9(b). Standing Op., 615 F.Supp.2d at 251 n. 1.