Opinion ID: 6984428
Heading Depth: 1
Heading Rank: 3

Heading: the precedent argument

Text: Riley contends that the Supreme Court either implicitly or explicitly approved of qui tam relator standing under the FCA in four cases. In three of those cases, Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997); United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443 (1943); and Marvin v. Trout, 199 U.S. 212, 26 S.Ct. 31, 50 L.Ed. 157 (1905), the Supreme Court decided qui tam cases brought under the FCA (Hughes and Hess) or some other statute {Marvin) without questioning its Article III ability to do so. Thus, Riley reads the Supreme Court’s failure to address standing sua sponte as an implicit assertion that standing existed in each case. This reasoning is inherently suspect. See Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 336 n. 2 (5th Cir.1999) (“Even though subject matter jurisdiction can be raised sua sponte, we take nothing away from our failure to do so in these cases.”). But there are even better reasons for rejecting the “implicit” holdings suggested by Riley. The first case, Marvin v. Trout, 199 U.S. 212, 26 S.Ct. 31, 50 L.Ed. 157 (1905), did not present any question related to the qui tam provisions of the False Claims Act, the statute at issue here. To the contrary, Marvin involved only the constitutional validity of an Ohio state statute that was applied in that case to permit a spouse to recover gambling losses from, inter alia, the owner of the gambling establishment where the losses were incurred. The Supreme Court noted that no well-defined constitutional issues had been presented to the lower courts or to the Supreme Court. Id. at 33-34. Indeed, the Supreme Court noted that the federal issues involved were so poorly defined that similar petitions had been held to raise no federal issue at all. Id. at 34-35. Nonetheless, in a subsequent discussion assuming that there was a due process violation at issue, the Supreme Court first raised and then rejected the argument that every action brought by an informer to recover a penalty or forfeiture granted by statute would be per se unconstitutional. Id. Given the limitations on both the issues presented and the holding in Marvin, that case cannot be cited with any credibility as a considered holding on the issue of standing under the FCA. Only two of Riley’s four Supreme Court cases, Hughes and Hess, involved the qui tam provisions set out in the FCA, the statute at issue in this case. It is abundantly clear from the text of Hughes itself that the Supreme Court did not intend any “implicit” holding on the issue of Article III standing. Indeed, the writ of certiora-ri in Hughes was expressly limited to “the nonconstitutional questions presented by the petition” for writ of certiorari. Hughes, 117 S.Ct. at 1875 n. 3. The “constitutional challenges to the qui tam provisions” of the FCA, which were presented to and decided by the courts below, and which included the argument that qui tam relators lack standing, see United States ex rel. Schumer v. Hughes Aircraft Co., 63 F.3d 1512, 1520-21 (9th Cir.1995), vacated, 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997), were simply not before the Supreme Court for decision. Hughes, 117 S.Ct. at 1875 n. 3. Instead, the Hughes court decided the case on a merit-based issue of statutory construction. See id. at 1878. Hess may skate a little closer to some of the constitutional concerns raised by the FCA’s qui tam provisions, but the case is likewise silent on the issue of the Article III requirement for an injury in fact, or any of the other fundamental elements of Article III standing. To the contrary, the disposition in Hess, like the disposition in Hughes, is based upon an issue of merit-based statutory construction. See Hess, 63 S.Ct. at 383-84. The timing and context of Hess, and the plain language used in Hughes, compels the conclusion that the Supreme Court did not intend to reach any issue relating to Article III standing in those cases. See Ara Lovitt, Note, Fight for Your Right to Litigate: Qui Tam, Article II, and the President, 49 Stan. L.Rev. 853, 855 n. 12 (1997) (suggesting, in 1997, that the Supreme Court may be waiting upon a circuit split to directly address the standing of qui tam relators); see also Edward A. Hartnett, The Standing of the United States: How Criminal Prosecutions Show that Standing Doctrine is Looking for Answers in all the Wrong Places, 97 Mich. L.Rev. 2239, 2243-45 (1999) (explaining how courts have avoided reconciling the injury in fact standing requirement with ancient qui tam practice). Significantly, all four of the Supreme Court cases Riley relies upon, including Hughes and Hess, were decided before Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Steel Co. considered and rejected the argument that the Court can assume hypothetical jurisdiction to reach the merits in a case without regard to whether the parties have raised a disputed question relating to Article III jurisdiction. See id. at 1012-15 & n. 3 (noting the absence of any Supreme Court cases addressing the merits before first answering any “disputed question of Article III jurisdiction”). For these reasons, the Court should reject Riley’s invitation to draw any meaningful inference from the Court’s silence in Marvin, Hess, and Hughes on the important issue of Article III standing. The fourth Supreme Court case, which Riley reads more broadly as explicitly holding that a qui tam relator has Article III standing is Lujan v. Defenders of Wildlife, 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) — the very case the district court cited for the proposition that qui tam relators who lack a personalized injury also lack Article III standing to sue. Lujan involved a challenge to a rule promulgated by the Secretary of the Interior interpreting certain provisions of the Endangered Species Act. See id. at 2135. The Supreme Court stated that the rule at issue could not vest private citizens with standing to sue on the theory that the statutory provisions involved created “an abstract, self-contained, noninstrumental ‘right’ to have the Executive observe the procedures required by law.” Id. at 2143. In reaching that conclusion, the Court distinguished the issue presented from 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.” Id. at 573, 112 S.Ct. 2130. To the extent this is relevant at all in this FCA suit, it is plainly dictum used to define the scope of the Lujan decision, rather than any explicit approval of qui tam actions under the FCA or, for that matter, qui tam actions in general. As in Hughes, Hess, and Trout, the standing of qui tam relators under the FCA was simply not before the Lujan Court. To sum up, Riley has not offered any binding or persuasive authority that the Supreme Court has either implicitly or explicitly closed the door on arguments that qui tam relators under the FCA lack standing.
The majority somewhat reluctantly concludes that Fifth Circuit precedent precludes a holding that Riley lacked Article III standing in this case. The majority opinion’s analysis on this important issue in our Circuit is based upon the purported binding effect of a passing footnote reference in United States ex rel. Foulds v. Texas Tech University, 171 F.3d 279, 288 n. 12 (5th Cir.1999), petition for cert. filed, 68 U.S.L.W. 3138 (Aug. 23, 1999) (No. 99-32). While I agree, and even applaud the majority opinion’s reasoning with respect to the remaining constitutional issues, I am not persuaded that Foulds or any other Fifth Circuit case constitutes binding precedent competent to waive the Article III requirement of a particularized and personal injury in qui tam suits. Moreover, and without regard to the binding effect of the brief sub-textual reference to standing in Foulds, it seems very likely that this case will invite en banc scrutiny, and I therefore think it appropriate that a more comprehensive analysis of the Foulds opinion, and the majority’s treatment of that opinion, be available to the en banc court. Foulds includes the following language in footnote 12: No one has challenged [relator] Fould’s standing in this case. We must, however, consider possible objections to standing sua sponte. Lang v. French, 154 F.3d 217, 222 (5th Cir.1998). Our court has explicitly found that qui tam plaintiffs have standing. United States ex rel. Weinberger v. Equifax, Inc., 557 F.2d 456, 460 (5th Cir.1977). As noted in a district court opinion concluding that relators lack standing, since our opinion in Equifax, the Supreme Court has refined its standing jurisprudence. United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 982 F.Supp. 1261 (S.D.Tex.1997). Yet, with regard to this issue, we consider persuasive a recent Supreme Court decision dealing with a qui tam issue under the False Claims Act. See Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997) (holding that portions of the 1986 amendments to the Act do not apply retroactively). The Hughes Aircraft Court did not raise any standing objections. Foulds, 171 F.3d at 288 n. 12. I do not believe that this brief footnote reference constitutes a considered and binding holding on the issue of the Article III standing of qui tam relators. First of all, the Foulds panel did not need to reach the issue of the relator’s standing in order to resolve the dispositive question in that case, i.e., whether the Eleventh Amendment barred the relator’s claims against state entities. As the panel correctly noted, the Eleventh Amendment issue was itself jurisdictional, and sufficient to dispose of the case. See Foulds, 171 F.3d at 285-88. The majority disagrees. Curiously, the majority first characterizes the purportedly controlling language in Foulds as “no more than a passing reference,” but then concludes that that passing reference is nonetheless binding on novel issues that were never briefed or otherwise placed in dispute in Foulds. This remarkable conclusion was drawn from Calderon v. Ashmus, 523 U.S. 740, 118 S.Ct. 1694, 140 L.Ed.2d 970 (1998), which held that the particular action for declaratory judgment and injunctive relief at issue in that case did not present a justiciable controversy within the meaning of Article III. Calderon was not a standing case, and did not set forth any new jurisdictional or jurisprudential rule that standing must in all cases be addressed sua sponte by a federal court prior to consideration of any other jurisdictional limitations. Rather, Calderon merely noted that Eleventh Amendment limitations are not co-extensive with those basic limitations upon the federal judicial power specified in Article III of the Constitution, and then observed that reviewing the case for compliance with Article Ill’s case or controversy requirement prior to addressing the Eleventh Amendment issue was more “in keeping with” the Supreme Court’s “precedents.” Id. at 1697 & n. 2. The majority reads Calderon’s observation that the Eleventh Amendment is not co-extensive with Article III as a holding that Article III is in some undefined way “a more ‘basic’ jurisdictional requirement.” The majority reads Calderon’s statement that resolving the Article III issue in that case before reaching the Eleventh Amendment issue in that case was more “in keeping with” the Supreme Court’s existing precedent as a holding that Article III questions must always in every case be addressed before Eleventh Amendment questions. The majority concludes that the Foulds panel’s discussion of standing was therefore, under Calderon, a necessary and essential part of the holding in Foulds. There are several problems with 'this analysis. First, I believe that what a particular decision “held” must be judged, not by external authority that could hypothetically have directed the result, but by what the particular panel of the Court wrote down on the pages comprising the decision. Thus, I reject the notion that our judgment about what constitutes the holding in Foulds, and what mere dicta, must necessarily be informed by resort to the external legal authority in Calderon. Second, the majority’s conclusion that Article III limitations are more “basic” than Eleventh Amendment is presumably based upon the fact that Eleventh Amendment objections to the court’s jurisdiction can be waived, while Article III requirements go directly to the power of the court and may not. Foulds examined this difference for the purpose of characterizing the Eleventh Amendment issue presented as jurisdictional. The Court stated that the significance of the Eleventh Amendment “lies in its affirmation that the fundamental principle of sovereign immunity limits the grant of judicial authority in Article] III of the Constitution.” Foulds, 171 F.3d at 285. Foulds then quoted from the Calderon language relied upon by the majority in this case. Foulds acknowledged Calderon ’s statement that the Eleventh Amendment and Article III are not coextensive, but reiterated this Court’s view, as established by numerous cases, that the Eleventh Amendment, while “not part and parcel of the Article III restrictions,” nonetheless partakes of subject matter jurisdiction. See id. at 285-86 & n. 9. Thus, Foulds itself seems to belie the majority’s conclusion that Calderon mandates a world in which Article III questions take primary place over Eleventh Amendment questions in all circumstances. Further, to the extent that Calderon could be read to so hold, that premise is completely negated by the Supreme Court’s disposition of the appeal from our en banc decision in Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir.1998) (en banc). See Ruhrgas v. Marathon Oil Co., 526 U.S. 574, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). In Marathon Oil, a majority of this en banc court held that in removed cases, the district courts must first decide non-waiveable issues of subject matter jurisdiction before reaching any waiveable issues of personal jurisdiction. See Marathon Oil, 119 S.Ct. at 1569. The Supreme Court reversed, holding that while a determination on the issue of subject matter jurisdiction must necessarily precede any determination on the merits, “the same principle does not dictate a sequencing of jurisdictional issues.” Id. at 1570. Rather, the decision to reach subject matter jurisdiction before other jurisdictional issues is one for the Court’s discretion. See id. at 1572. The Court recognized that in “most instances” a determination of the Court’s subject matter jurisdiction would not involve any arduous inquiry. See id. When, however, a relatively straightforward jurisdictional basis for disposing of the case is available, the Court does not abuse its discretion by seizing upon that course rather than reaching a difficult and novel question that would be required to determine the Court’s subject matter jurisdiction. Id. Stated simply, Marathon abolishes any inference from Calderon, that the Foulds panel must have necessarily decided the Article III issue to reach its determination that the Eleventh Amendment posed jurisdictional barriers. To the contrary, the novelty of the standing issue in light of recent Supreme Court precedent and the difficulty of reaching an informed decision in the absence of any briefing or adversarial argument, explains why the Foulds panel restricted the standing issue to footnote dicta and decided the case instead on the Eleventh Amendment grounds. As further support for this conclusion, I would note that our Court has twice, since the purported “holding” in Foulds, declined to engage the more difficult standing issue, deciding the cases on the basis of more accessible jurisdictional arguments instead. If Foulds were as clear as the majority suggests, there would be no reason to expressly avoid stating that uninjured qui tam relators have standing to sue under the FCA. See United States ex rel. Russell v. Epic Healthcare Management Group, 193 F.3d 304, 307 (5th Cir.1999) (involving qui tam provisions of the FCA, and stating “[w]e need not here join the debate over a relator’s standing under Article III”); see also TTEA v. Ysleta Del Sur Pueblo, 181 F.3d 676, 683 n. 1 (1999) (involving qui tam provision relating to the rights of an Indian tribe, and stating that standing was not directly relevant because a holding that the qui tam relator lacked standing would only solidify the Court’s conclusion that there was no jurisdiction to grant declaratory relief). For the foregoing reasons, I conclude that an Article III decision was not essential to,the Court’s Eleventh Amendment disposition in Foulds. The language in footnote 12 of Foulds is therefore simply dicta, which is not binding upon this panel. In addition to the reasons given above, I note that the purported “holding” in Foulds is not supported by any reasoned analysis of the issue in the text of that opinion. Moreover, and as will shortly be clear, the purported “holding” is not supported by any citations that plainly require the conclusion that uninjured qui tam rela-tors have standing under the FCA even when the government does not choose to intervene. Foulds cites two primary authorities: this Court’s opinion in United States ex rel. Weinberger v. Equifax, 557 F.2d 456, 460 (5th Cir.1977), and the Supreme Court’s opinion in United States ex rel. Schumer v. Hughes Aircraft Co., 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). As discussed above, Hughes simply did not decide any constitutional issues at all. To the contrary, the Hughes Court expressly avoided reaching any decision concerning the Article III standing of qui tam relators, notwithstanding the fact that the, issue was presented and decided below. See Hughes, 117 S.Ct. at 1875 n. 3. Hughes, therefore, is no authority at all with respect to Article III standing. Foulds also cited this Court’s decision in Weinberger. Although Weinberger held, in 1977, that uninjured qui tam relators have standing, even the Foulds panel recognized that the force of that case has been substantially undermined by refinements in the Supreme Court’s treatment of Article III standing. See Foulds, 171 F.3d at 288 n. 12. Weinberger was decided long before the Supreme Court clarified the constitutional scope of Article III standing in cases such as Steel Co. and Lujan. Aside from Foulds, the Court has only cited the Weinberger decision one time for the proposition that qui tam rela-tors enjoy Article III standing, see United States ex rel. Weinberger v. State of Florida, 615 F.2d 1370, 1370 (5th Cir.1980), and even then, the reference was only in passing and was not material to the disposition of the case. So much for the proposition that Weinberger amounts to seminal Fifth Circuit precedent. Moreover, the reasoning supporting the relevant holding in Weinberger is brief, and merely states that Congress granted standing by passing the statute, without examining whether Congress has any authority to do so. Wein- berger, 557 F.2d at 460. The statutory permission theory of qui tam relator standing poses significant constitutional questions, some of which are addressed in the majority’s analysis and some of which are addressed in the following section. Having negated the premise that binding precedent places Riley squarely in the shoes of the government, I will now examine whether any of Riley’s more abstract constitutional theories are competent to place her there.