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Status of the Public Company Accounting Oversight Board Under 18 U.S.C. § 207(c) A former senior employee of the Securities and Exchange Commission communicating with the Commission on behalf of the Public Company Accounting Oversight Board during the year after his service as a senior employee at the Commission ends would not be communicating on behalf of the United States and therefore 18 U.S.C. § 207(c) would apply to bar such a communication. March 30, 2007 MEMORANDUM OPINION FOR THE GENERAL COUNSEL SECURITIES AND EXCHANGE COMMISSION Under 18 U.S.C. § 207(c) (2000), a former senior official of the Executive Branch, in the year after his departure, may not communicate with, or appear before, his former agency “on behalf of any other person (except the United States),” in connection with a matter on which he seeks official action. You have asked whether a former senior official of the Securities and Exchange Commission (“Commission”) communicating with the Commission on behalf of the Public Company Accounting Oversight Board (“Board”) during the year after his service at the Commission ends would be acting “on behalf of . . . the United States.” 1 We believe that former senior official would not be communicating on behalf of the United States and that the statute therefore would apply to bar such a communication. I. The Sarbanes-Oxley Act, 15 U.S.C. § 7211 (Supp. IV 2004), created the Board “to oversee the audit of public companies that are subject to the securities laws, and related matters,” id. § 7211(a). To carry out that responsibility, the Board, among other things, is “to register public accounting firms that prepare audit reports for issuers” under the Act, id. § 7211(c)(1); “establish or adopt . . . auditing, quality control, ethics, independence, and other standards relating to the preparation of audit reports,” id. § 7211(c)(2); “conduct inspections of registered public accounting firms,” id. § 7211(c)(3); “conduct investigations and disciplinary proceedings concerning, and impose appropriate sanctions where justified upon, registered public accounting firms and associated persons of such firms,” id. § 7211(c)(4); “perform such other duties or functions as the Board (or the 1 Letter for Steven G. Bradbury, Acting Assistant Attorney General, Office of Legal Counsel, from Brian G. Cartwright, General Counsel, Securities and Exchange Commission (Apr. 14, 2006) (“Commission Letter”). In accordance with the practice of our Office, the Commission has agreed to be bound by our opinion in this matter. Id. at 1. We do not address the status of the Board for any other purpose, including under any provision of the United States Constitution. See generally Status of National Veterans Business Development Corporation, 28 Op. O.L.C. 70, 72 (2004). 47 Opinions of the Office of Legal Counsel in Volume 31 Commission, by rule or order) determines are necessary or appropriate to promote high professional standards among, and improve the quality of audit services offered by, registered public accounting firms and associated persons thereof, or otherwise to carry out [the] Act,” id. § 7211(c)(5); and “enforce compliance with [the] Act, the rules of the Board, professional standards, and the securities laws relating to the preparation and issuance of audit reports and the obligations and liabilities of accountants with respect thereto, by registered public accounting firms and associated persons thereof,” id. § 7211(c)(6). The Commission exercises substantial “oversight and enforcement authority” over the Board. Id. § 7217(a). For example, after consultation with the Chairman of the Board of Governors of the Federal Reserve System and the Secretary of the Treasury, the Commission appoints all five members of the Board. Id. § 7211(e)(4). The Commission has the power to approve the Board’s rules of operation and administration, id. § 7211(g), and must approve (or modify) the Board’s rules for public accounting firms before they can take effect, id. § 7217(b). The Commission also may “enhance, modify, cancel, reduce, or require the remission of a sanction imposed by the Board upon a registered public accounting firm or associated person thereof.” Id. § 7217(c)(3). The statute nonetheless declares that the Board shall not be an agency or establishment of the United States Government . . . . No Member or person employed by, or agent for, the Board shall be deemed to be an officer or employee of or agent for the Federal Government by reason of such service. Id. § 7211(b). The present question concerns the status of the Board for purposes of 18 U.S.C. § 207(c). Under that provision, a former senior employee of an agency is criminally liable if within 1 year after the termination of his or her service or employment . . . [he or she] knowingly makes, with the intent to influence, any communication to or appearance before any officer or employee of the department or agency in which such person served within 1 year before such termination, on behalf of any other person (except the United States), in connection with any matter on which such person seeks official action by any officer or employee of such department or agency. (Emphasis added). 2 Because “[t]he nature of the close working relationship between the Commission and the [Board] necessitates frequent contact between 2 Section 207(c) identifies covered senior officials by reference to salary level or to the authority under which they have been appointed. 18 U.S.C. § 207(c)(2). Although the Commission Letter does 48 Status of the Public Company Accounting Oversight Board Under 18 U.S.C. § 207(c) the Commission’s staff and [Board] members and staff,” Commission Letter at 4, if the Board is not considered “the United States” for purposes of section 207(c), a former senior Commission official “could not, as a practical matter, accept an appointment as a member of the [Board] or its senior staff,” id. II. Your question concerns former “Commissioners or staff members who leave the Commission to accept a position with the [Board]” and communicate with the Commission as part of their official functions. Commission Letter at 1, 3. We believe that such a former official would not communicate “on behalf of . . . the United States” under 18 U.S.C. § 207(c). A. We have previously concluded that communications “on behalf of” a person under section 207 “include only communications that are made by one who is acting as an agent or attorney, or in some other representational capacity for another.” Memorandum for Michael Boudin, Deputy Assistant Attorney General, Antitrust Division, from J. Michael Luttig, Assistant Attorney General, Office of Legal Counsel, Re: Application of 18 U.S.C. § 207(a) to Pardon Recommendation Made by Former Prosecutor at 6 (Oct. 17, 1990) (“Pardon Recommendation”).A former senior official who works at the Board and communicates in his official capacity to the Commission would do so as the Board’s agent: “‘Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and the consent of the other so to act.’” Id. (quoting Restatement of the Law (Second) of Agency § 1 (1958) (emphasis omitted)); accord Restatement of the Law (Third) of Agency § 1.01 (2006). The applicability of section 207(c) thus turns on whether, as an agent of the Board, a former employee of the Commission would act as an agent of “the United States.” The statute answers that question in the negative. The Sarbanes-Oxley Act provides that “[n]o member or person employed by, or agent for, the Board shall be deemed to be an officer or employee of or agent for the Federal Government by reason of such service.” 15 U.S.C. § 7211(b) (emphasis added). That provision, we believe, indicates that a person employed by or acting as agent for the Board is not acting “on behalf of . . . the United States” under section 207(c). Title 18 does not have a general definition of “the United States,” except “in a territorial sense,” 18 U.S.C. § 5 (2000), but section 207(c) itself suggests the meaning in the present context. Section 207(c) states that its not ask for us to address the lifetime ban under 18 U.S.C. § 207(a)(1) for specific-party matters in which a former officer or employee participated personally and substantially or the two-year ban for specific-party matters pending under the official responsibility of the former officer or employee, we note that both provisions also use the “on behalf of . . . the United States” language. 49 Opinions of the Office of Legal Counsel in Volume 31 restrictions apply to certain former “officer[s] or employee[s] of the executive branch of the United States.” The reference to the Executive Branch of “the United States” plainly is to the Executive Branch of the federal government. When the section later refers to a communication “on behalf of . . . the United States,” the “normal rule of statutory construction” would call for the conclusion that “identical words used in different parts of the same act are intended to have the same meaning,” Sorenson v. Sec’y of Treasury, 475 U.S. 851, 860 (1986), and this principle is especially compelling here because the identical words appear in the same sentence, see Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 448 (2006). 3 See also 18 U.S.C. § 207(b) (provision restricting a former employee’s activities with respect to trade or treaty negotiations applies to a former employee “who personally and substantially participated in any ongoing trade or treaty negotiation on behalf of the United States within the 1-year period preceding the date on which his or her service or employment with the United States terminated”). Because a communication “on behalf of the United States” would thus have to be on behalf of the federal government, the statement that the Board’s personnel are not “agent[s] for the Federal Government” negates precisely that they act “on behalf of . . . the United States” within the meaning of the statute. The interests of the Board may well coincide with those of the United States. The Board is a creation of the United States government and is subject to the control of the Commission in significant respects. Nevertheless, section 207 can apply even when a former official is advocating the same position that is taken by his former agency. “‘[A] former employee does not act on behalf of the United States . . . merely because the United States may share the same objective as the person whom the former employee is representing.’” 18 U.S.C. § 207 and the Government of Guam, 20 Op. O.L.C. 326, 329 (1996) (quoting Office of Government Ethics, Summary of Post-Employment Restrictions of 18 U.S.C. Section 207, at 4 (Nov. 4, 1992)). Here, although the Board, the Commission, and more generally the United States may have the same interests, Congress has declared that the Board’s personnel are not “agent[s] for the Federal Government,” and, given this declaration, it does not matter if the Board’s personnel advance interests that match those of other entities of the federal government. The statute, in other words, distinguishes between the Board and the United States and treats Board personnel as speaking on behalf of the Board. 3 The covered persons are former officers and employees “of the executive branch of the United States,” 18 U.S.C. § 207(c), but communications by a former officer or employee are allowed if they are “on behalf of . . . the United States,” not just the Executive Branch, Office of Government Ethics, Summary of Post-Employment Restrictions of 18 U.S.C. § 207, Informal Advisory Mem. 04x11a, at 5 (July 29, 2004) (attachment to Office of Government Ethics, Summary of 18 U.S.C. § 207, Informal Advisory Mem. 04x11 (July 29, 2004)) (available at http://www.oge.gov/OGE-Advisories/LegalAdvisories/Legal-Advisories/, last visited Aug. 12, 2014) (“2004 Summary”) (communications on behalf of Congress are permitted). This difference does not affect the meaning of “the United States,” which in both cases refers to the federal government. 50 Status of the Public Company Accounting Oversight Board Under 18 U.S.C. § 207(c) B. The conclusion that communications on behalf of the Board are not “on behalf of . . . the United States” is consistent with an earlier opinion of our Office, Applicability of 18 U.S.C. § 207(a) to the Union Station Development Corporation, 12 Op. O.L.C. 84 (1988) (“Union Station”). There, we stated that we have “looked to the definition of ‘agency of the United States’ in 18 U.S.C. § 6 to determine if an entity should be regarded as the United States for the purposes of the conflict of interest laws.” Id. at 84. We have some doubt that this characterization is entirely correct; the opinions cited in Union Station may be read to interpret the term “agency” or “agency of the United States,” not “United States” itself. Nevertheless, even if that line of opinions is applicable, it is consistent with the conclusion we reach here. Section 6 states that [t]he term ‘agency’ includes any department, independent establishment, commission, administration, authority, board or bureau of the United States or any corporation in which the United States has a proprietary interest, unless the context shows that such term was intended to be used in a more limited sense. 18 U.S.C. § 6. We have read section 6 as “establish[ing] a presumption that a governmental entity is an agency for purposes of a given offense, including the conflict of interest statutes.” Application of 18 U.S.C. § 205 to Union Organizing Activities of Department of Justice Employee, 5 Op. O.L.C. 194, 195 (1981) (“Organizing Activities”). Here, however, the statute conclusively rebuts that presumption. Section 7211 states explicitly that the Board “shall not be an agency or establishment of the United States Government.” 15 U.S.C. § 7211(b). In Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995), the Supreme Court concluded that a statute providing that Amtrak “‘will not be an agency or instrumentality of the United States Government,’” id. at 391 (quoting 84 Stat. 1330 (1970)), was “assuredly dispositive of Amtrak’s status as a Government entity for purposes of matters that are within Congress’s control.” Id. at 392. Similarly, Congress’s declaration that the Board is not “an agency or establishment of the United States Government” is dispositive of its status as an agency under the conflict of interest laws. When a statute has not expressly addressed whether an entity is an agency or establishment of the United States, we sometimes have examined such factors as the entity’s “functions, financing, control, and management.” Union Station, 12 Op. O.L.C. at 86. 4 But the use of a multi-factor test is not appropriate where, as 4 A 1948 letter of the Attorney General concluded that the Panama Railroad Company was an agency of the United States for purposes of the conflict of interest laws, Letter for the Secretary of the Army, from Tom C. Clark, Attorney General (Dec. 2, 1948), but the statute in that case provided that the company was “an agency or instrumentality of the United States,” Pub. L. No. 80-807, 62 Stat. 51 Opinions of the Office of Legal Counsel in Volume 31 here, Congress has explicitly determined that an entity is not an agency of the United States for purposes within Congress’s control. The conclusion that the Board is not “the United States,” we believe, squares with the Sarbanes-Oxley Act’s own post-employment provision. Under 15 U.S.C. § 7211(g)(3), the Board is to establish ethics rules and standards of conduct for Board members and staff, including a bar on practice before the Board (and the Commission, with respect to Board-related matters) of 1 year for former members of the Board, and appropriate periods (not to exceed 1 year) for former staff of the Board. This provision does put the Board into a position similar to that of an agency of the federal government, but this treatment is entirely consistent with the view that the Board is not a federal agency for purposes of the general conflict of interest laws, including 18 U.S.C. § 207(c), and thus requires its own conflict of interest provision. And although the provision, by limiting the practice before the Commission by former Board members and staff, might be read to suggest that, for conflict of interest purposes, the Board should be equated with the Commission, the bar on practice before the Commission also could reflect a concern that confidential information involving regulated entities might give former Board members and staff an unfair advantage. Cf. Bayless Manning, Federal Conflict of 1075, 1076 (1948). In 1963, we found that the Federal National Mortgage Association (“Fannie Mae”) was an agency of the United States under 18 U.S.C. § 431 (1958). See Memorandum for Joseph F. Dolan, Assistant Deputy Attorney General, from Norbert A. Schlei, Assistant Attorney General, Office of Legal Counsel (Dec. 18, 1963) (“Fannie Mae”). In that instance, the statute made Fannie Mae “a constituent agency of the Housing and Home Finance Agency,” 12 U.S.C. § 1717 (1958), and Fannie Mae’s obligations were not obligations of the United States or “of any agency or instrumentality thereof other than [Fannie Mae],” id. §§ 1719(b), 1721(b) (emphasis added); the “other than” language suggested that Fannie Mae itself was an agency or instrumentality of the government. Although we did not refer to these provisions, we noted that the Housing and Home Finance Administrator was the Chairman of Fannie Mae’s Board. Fannie Mae at 6, 8. In Organizing Activities, we determined that the Office of the Architect of the Capitol was an “agency.” Noting that the definition in 18 U.S.C. § 6 “in effect, establishes a presumption that a governmental entity is an agency for purposes of a given offense, including the conflict of interest statutes,” we did not then identify anything that might have rebutted that presumption. 5 Op. O.L.C. at 195. In Union Station, the corporation whose status was in question was “simply the vehicle created by that Department to accomplish [a] congressional mandate” imposed upon the Department of Transportation under 40 U.S.C. §§ 801–819 (1988), and the statute was silent on the status (indeed on the existence) of that corporation. 12 Op. O.L.C. at 86; see also Applicability of 18 U.S.C. § 207 to the General Accounting Office, 3 Op. O.L.C. 433 (1979) (concluding that section 207 applies to former employees of the General Accounting Office, which, under the then-applicable statute, was an “establishment of the Government”). Similarly, we concluded that the National Veterans Business Development Corporation was an “agency” under 31 U.S.C. § 9102. The statute creating that entity had “no . . . express disclaimer” of its status as an agency. National Veterans Business Development Corporation, 28 Op. O.L.C. at 72. 52 Status of the Public Company Accounting Oversight Board Under 18 U.S.C. § 207(c) Interest Law 179 (1964) (stating that concern about misuse of inside information is one reason for federal post-employment restrictions). 5 Concededly, as a matter of policy, it may make little sense to treat the Board as outside the government for purposes of the conflict of interest laws. As the Commission Letter points out, this understanding of section 207(c) has the effect of excluding from appointment to the Board a “uniquely qualified pool of candidates”—recently departed former high-level officials of the Commission. Commission Letter at 4. Given the “unique statutory relationship between the [Board] and the Commission,” there may be a strong policy argument that, for purposes of the conflict of interest laws, the Board should be treated as an agency of the government. On the other hand, the Board in several respects is similar to self-regulatory organizations like the National Association of Securities Dealers (“NASD”), “a private body empowered by the Commission to oversee the activities of broker-dealers.” United States v. Frith, 461 F.3d 914, 916 (7th Cir. 2006). Although the Commission’s authority to oversee the Board is even greater than its authority to oversee the NASD, the Sarbanes-Oxley Act declares that several provisions of the securities laws relating to the Commission’s oversight powers “shall apply to the Board as fully as if the Board were a ‘registered securities association.’” 15 U.S.C. § 7217(a), (b)(4), (b)(5), (c)(2). The statute, to this extent, treats the Board like the private NASD, which we understand is the only “registered securities association.” Congress may have wished to treat the Board as private for all statutory purposes, and section 7211(b) indicates that this is what Congress chose to do. The unequivocal declaration that “[n]o member or person employed by, or agent for, the Board shall be deemed to be an officer or employee of or agent for the Federal Government by reason of such service” and that the Board “shall not be an agency or establishment of the United States Government,” 15 U.S.C. § 7211(b), determines our answer. STEVEN G. BRADBURY Acting Assistant Attorney General Office of Legal Counsel 5 Moreover, if the Board were an agency of the United States, a highly paid official of the Board who left the government would be subject to the one-year cooling-off period under section 207(c), and practice before the Board by such a former official in the year after his or her departure would violate the criminal provision. The administrative rule, at least to this extent, would then seem superfluous. See 2004 Summary, supra note 3, at 8. 53

Write a legal research memo on the following topic.

Constitutionality of the Qui Tam Provisions of the False Claims Act Qui tam suits brought by private parties to enforce the claims of the United States violate the Appointments Clause of the Constitution because qui tam relators are “Officers of the United States” but are not appointed in accordance with the requirements of the Appointments Clause. Private qui tam actions violate the doctrine of Article III standing because the relator has suffered no personal “injury in fact.” The qui tam provisions of the False Claims Act violate the separation of powers doctrine because they impermissibly infringe on two aspects of the President’s authority to exe­ cute the laws: the discretion whether to prosecute a claim and the authority to control the conduct of litigation brought to enforce the Government’s interests. Given qui tam’s clear conflict with constitutional principles, any argument to sustain the qui tam provisions based upon historical practice must fail. July 18, 1989 M e m o r a n d u m O p in io n f o r t h e A t t o r n e y G e n e r a l * I. OVERVIEW AND SUMMARY A. The Issue The issue presented here is whether the so-called “qui tam” provisions o f the False Claims Act, 31 U.S.C. §§ 3729-3733 ( “Act”), are constitution­ al. This may well be the most important separation o f powers question you will have to address as Attorney General. In these qui tam provisions, Congress purports to authorize any person to prosecute — on behalf o f the United States and in the name o f the United States — a civil fraud for treble damages and penalties against any person who allegedly makes a false claim to the U.S. government. Unlike normal citizen suits, the qui tam plaintiff — or so-called “relator” — is ^ E d ito r’s N o te : This memorandum was not intended to present the official position o f the Department o f Justice at the time o f its writing, but rather was intended to contribute to a discussion within the Department over what position should be adopted The views on the Appointments Clause expressed in the memorandum have been superseded by a subsequent O ffice o f Legal Counsel memorandum. See Memorandum fo r the General Counsels o f the Federal Government from Walter Dellinger, Assistant Attorney General, Office o f Legal Counsel, Re. The Constitutional Separation o f Poivers between the President and Congress 20-21 n 53 (May 7, 1996) (to be published) 1 207 empowered to sue, on the government’s behalf, even if he has not sus­ tained any personal injury as a result o f the wrongdoer’s alleged miscon­ duct. As a bounty for prosecuting the fraud, the relator receives up to thirty percent o f any damages and penalties recovered, with the balance paid into the U.S. Treasury. The relator is empowered to prosecute the government’s claim even when the Attorney General has determined that there is no valid claim or that pursuing the suit is not in the interests o f the United States. Through qui tam, Congress has attempted to create universal standing to prosecute purely public offenses. These qui tam suits pose a devastat­ ing threat to the Executive’s constitutional authority and to the doctrine o f separation o f powers. If qui tam suits are upheld, it would mean Congress will have carte blanche to divest the executive branch o f its constitutional authority to enforce the laws and vest that authority in its own corps o f private bounty hunters. Simply by attaching a penalty to the violation o f any law and by offering a bounty to any person who sues, Congress effectively could “privatize” all civil law enforcement. Indeed, through this device, Congress has authorized each o f its own members (as any “person”) to enforce the laws directly. In several qui tam suits currently pending in federal district court, defendant contractors have moved to dismiss, contending that the qui tam mechanism is unconstitutional. Several courts have asked the Department o f Justice to express a position. The Office o f Legal Counsel, the Civil Division, and the former Office o f Legal Policy all agree that the qui tam provisions in the False Claims Act are unconstitutional. We believe they violate the Appointments Clause, infringe on the President’s core Article II authority to execute the law, and violate Article III stand­ ing doctrine. The Civil Division would like to enter an appropriate case and, either as amicus or by intervention, present the executive branch’s arguments against the constitutionality o f qui tam. The Solicitor General argues that we should intervene in district court to support the constitu­ tionality o f qui tam. B. Background The use o f qui tam suits arose in fourteenth century England as an aid to government’s primitive law enforcement capabilities. These statutes authorized private “informers” to bring criminal prosecutions for viola­ tion o f certain penal laws. Upon conviction of the wrongdoer, the private prosecutor was given a share o f the penalty as a reward. While some statutes permitted prosecution only by a person who had suffered injury, other statutes authorized “any person,” regardless o f ir\jury, to prosecute a wrongdoer in the name o f the sovereign for violation o f a penal law. Initially, these informer actions were brought by criminal indictment or information, but eventually informers could opt to bring their suits as 208 either a criminal or civil action. This experiment with private law enforcement had an unhappy history o f abuse. Qui tam suits fell into dis­ favor and, from the sixteenth century forward, their use was progres­ sively curtailed. In the United States, during the emergency o f the Civil War, Congress resorted to this archaic device in response to widespread contractor fraud. The False Claims Act o f 1863, 12 Stat. 696, authorized any person to prosecute, in the name o f the United States, a civil action against a con­ tractor for alleged fraud against the United States. As a reward, the rela­ tor received a share o f any recovery. After the Civil War, this qui tam statute fell into relative desuetude. By 1986, except for a flurry o f activi­ ty during World War II, it had become an anachronism. In 1986, Congress, dissatisfied with the way the executive branch was enforcing government procurement laws, sought to breathe new life into this dormant device. To stimulate private enforcement suits, Congress amended the False Claims Act to provide for treble damages and penal­ ties o f up to $10,000 for each false claim, and to provide for a bounty to the relator o f up to thirty percent o f any recovery (the “ 1986 Amend­ ments”). The congressional proponents o f these amendments made no pretense about the fact that they distrusted the executive’s willingness or ability to enforce the law properly, and they stated that their purpose was to “deputize” private citizens to ensure effective law enforcement. In the two years since enactment o f the 1986 Amendments, there has been a massive upsurge in qui tam actions — over 150 suits have been filed. These actions have disrupted the civil and criminal enforcement activities o f the Department. See Memorandum for the Solicitor General, from Stuart E. Schiffer, Acting Assistant Attorney General, Civil Division (June 15, 1989). They have also undermined the executive’s ability to administer complex procurement contracts and, in some cases, have caused serious national security concerns. The 1986 Amendments have also spawned the formation o f full-time “bounty hunting” groups — ersatz departments o f justice — that go about prosecuting civil fraud actions in the name o f the United States. C. Qui Tam’s Unconstitutionality The Office o f Legal Counsel believes that the qui tam provisions o f the False Claims Act are patently unconstitutional. In our view, this is not even a close question. Our conclusion rests on three grounds. First, we believe that private qui tam actions violate the Appointments Clause o f the Constitution. Art. II, § 2, cl. 2. The Supreme Court has repeatedly held that conducting litigation on behalf o f the United States to enforce the rights o f the United States must be carried out by an exec­ utive branch official or other properly appointed government officer. The Constitution thus does not permit Congress to vest governmental law 209 enforcement authority in self-selected private parties, who have not been it\jured and who act from mercenary motives, without commitment to the United States’ interests and without accountability. Second, we believe qui tam suits violate Article III standing doctrine. The Supreme Court has repeatedly held that under Article III, a plaintiff is ineligible to invoke federal judicial power unless he can demonstrate that he has suffered “ir\jury in fact” as a result o f the defendant’s alleged­ ly illegal conduct. Qui tam relators suffer no ii\jury in fact and thus fail to meet this bedrock constitutional requirement. Because Congress may not abrogate this requirement, the False Claims Act’s grant o f universal standing to any person violates Article III. Third, we believe that qui tam actions violate the doctrine o f separation o f powers. The Supreme Court has consistently ruled that the authority to enforce the laws is a core power vested in the Executive. The False Claims Act effectively strips this power away from the Executive and vests it in private individuals, depriving the Executive o f sufficient super­ vision and control over the exercise o f these sovereign powers. The Act thus impermissibly infringes on the President’s authority to ensure faith­ ful execution o f the laws. Until now, no federal court has ever considered or addressed the con­ stitutionality o f qui tam actions. Nor, to our knowledge, has any Attorney General ever conceded the constitutionality o f the device. Indeed, in 1943, Attorney General Biddle called for its repeal. He contended that it was the duty o f the Department o f Justice to enforce the laws and that qui tam suits interfered with that responsibility. During these debates in 1943, a leading Senate proponent o f qui tam complained: [T]he Congress enacted that statute in 1863. I ask any Senator to name one case, from 1863 until 1942, in which the Attorney General o f the United States tried to enforce the statute. From the day the statute went on the statute books to the present, the Attorneys General, whether Democrats or Republicans, fought it. 89 Cong. Rec. 10,697 (1943) (emphasis added). D. Reasons fo r Opposing Q u i Tam In my view, the Department o f Justice has an obligation to the President and to the Constitution to .resist this encroachment on executive power. Consequently, I recommend that the Civil Division be permitted to present the executive branch’s arguments against the constitutionality o f the qui tam device. I submit that three considerations dictate this course. First, qui tam poses a potentially devastating threat to the President’s constitutional authority. If qui tam is upheld, there would be nothing to 210 prevent Congress from using the device to eviscerate all o f the executive branch’s civil law enforcement authority. We can expect to see the inex­ orable extension o f qui tam into such areas as securities fraud, savings and loan fraud, and civil rights. Once the facial constitutionality o f the device is conceded, there is no principled basis for limiting its future use. As Justice Scalia noted with regard to the independent counsel statute: Frequently an issue o f this sort will come before the Court clad, so to speak, in sheep’s clothing: the potential o f the asserted principle to effect important change in the equilibrium o f power is not immediately evident, and must be discerned by a careful and perceptive analysis. But this wolf comes as a wolf. Morrison v. Olson, 487 U.S. 654, 699 (1988) (Scalia, J., dissenting). The rationale for the special prosecutor statute at least can be restricted to narrow circumstances. Qui tam is far more dangerous: there is simply no way to cage this beast. Not only would qui tam work a sea change in the balance o f power between the Congress and the Executive, but it would, in my view, under­ mine the liberties o f the American people — which is what the doctrine o f separation o f powers ultimately is designed to safeguard. One o f the central tenets o f the Framers was that the power to execute the law must be kept in hands that are both independent o f the legislature and politi­ cally accountable to the people. This enforcement structure was designed to protect the people from the improvident or tyrannical enforcement o f the laws. Qui tam allows Congress to circumvent the Executive’s check and to have its laws enforced directly by its own pri­ vate bounty hunters. This destroys the longstanding principle that all three branches must concur before the sovereign may exact public penal­ ties from an individual. The second consideration that dictates opposing the constitutionality o f qui tam is the very force o f the arguments against it. Taken together — or taken alone — the three constitutional objections against qui tam are formidable. Indeed, as a matter o f principle, they are irresistible. They are by no means extreme arguments. On the contrary, they are — as the Solicitor General would acknowledge — well within the mainstream and firmly rooted in the consistent rulings o f the Supreme Court. To date, the Supreme Court has been unyielding in its insistence both upon “injury in fact” as the essential requirement o f standing and upon strict compliance with the Appointments Clause whenever significant governmental authority is vested in an individual. But even if it were a close question — and I do not think that it is — it is not our job, when the President’s core constitutional powers are at stake, to “decide” these cases as if we were an Article III judge. We are 211 the Executive’s only advocates, and when the President’s core powers are at stake, the Executive’s case is so compelling, and the practical conse­ quences o f defeat so grave, w e have a duty to advance the President’s cause. Indeed, the Framers expected that a “great security” against the gradual erosion o f the separation o f powers was precisely the willingness and disposition o f each branch’s officers to resist the encroachments o f the others: “Ambition must be made to counteract ambition.” The Federalist No. 51, at 349 (James Madison) (Jacob E. Cooke ed. 1961). The third consideration that dictates opposing qui tam relates to the posture o f these cases. Because o f the unusual way these cases arise, we have nothing to lose by challenging the constitutionality o f qui tam. The Department o f Justice is not a formal party to these cases. Private defen­ dants, ably represented, have directly challenged the constitutionality o f the qui tam provisions. The U.S. Senate has filed amicus briefs in support o f qui tam. The fundamental powers o f the President are thus being decided in our absence. This is not a case in which we have the freedom to pick where or when to fight. This litigation will proceed with or with­ out us and will undoubtedly end up in the Supreme Court. As Madison noted, because o f the breadth o f the constitutional powers o f the legislative branch, that branch easily can “mask under complicat­ ed and indirect measures, the encroachments which it makes on the co­ ordinate departments.” The Federalist No. 48, at 334 (James Madison) (Jacob E. Cooke ed. 1961). Madison therefore found it often to be a “ques­ tion o f real-nicety” whether a particular measure would extend beyond the legislature’s sphere. Id. Despite the difficulties perceived by the Solicitor General, no such “question o f real-nicety” is involved here. If we fail to object to qui tam, it almost certainly will be upheld. If we enter the case and vigorously contest qui tarn’s constitutionality, we stand a good chance o f winning or, at least, obtaining a decision that restricts qui tam. Thus, this is a case in which w e will be in no worse position if we go in and lose than we are in right now. In short, there is no “downside” here, and this is precisely the kind o f case where we should be aggressively resisting encroachment. E. The Solicitor General’s Position The Solicitor General admits that qui tam poses “grave dangers” to the Presidency. See Memorandum for the Solicitor General, from Richard G. Taranto, Assistant to the Solicitor General at 3, 10-11 (June 26, 1989) ( “Taranto Memo”). He appears to perceive the issue o f qui tarn’s constitu­ tionality as a “close” one. See id. at 3. Nevertheless, he is recommending that the Department intervene in district court to support the facial con­ stitutionality o f the qui tam statute. The Solicitor General’s position would require the surrender at the outset o f the two strongest arguments against qui tam — the Appointments Clause and Article III standing arguments. 212 The Solicitor General assures us, however, that he will reserve the right to use a separation o f powers balancing test to defend against encroachment if qui tam is unconstitutionally applied in the future. Id. at 12-14. To uphold qui tam, the Solicitor General is prepared to disregard decades o f clear Supreme Court jurisprudence and the application o f wellsettled constitutional principles. His sole reason for embracing qui tam is its historical usage. Id. at 4-5. This argument — that past usage alone is enough to establish a practice’s constitutionality — is untenable both as a matter o f history and o f law. Moreover, the Solicitor General’s proposed strategy o f preemptive concession makes no sense as a litigation tactic. The Solicitor General vastly overstates the historical acceptance o f qui tam. Prior to passage o f the False Claims Act, the only significant use o f qui tam occurred in the Federalist period, during which time it appears that perhaps six statutes were enacted that may have authorized penalty actions by private persons. These statutes involved relatively arcane areas; one set fines for illegally trading with the Indians, another set fines for misconduct by census-takers. The record, however, is most unclear as to whether these statutes reflected any appreciable acceptance o f qui tam actions by persons who had sustained no injury. It appears from actu­ al practice that with very few exceptions, suits under these statutes were brought either by government officials (for whom the moiety was com­ pensation) or by persons who had suffered injury in fact. There is little evidence that the long-accepted historical practice on which the Solicitor General relies ever existed. It is easy to understand why qui tam has been so marginal a practice in the history o f federal law. Adopted when the Executive was embryonic, the early qui tam statutes were essentially stop-gap measures, confined to narrow circumstances in which the government lacked the institutions to enforce the law. The intent o f those statutes was to assist a fledgling executive, not supplant it. As the Executive’s law enforcement capabili­ ties gathered strength, qui tam rapidly fell into disuse. A fair reading o f the history o f qui tam in the United States reveals it as a transitory and aberrational device that never gained a secure foothold within our con­ stitutional structure because o f its fundamental incompatibility with that stmcture. Moreover, even strong historical support for qui tam could not cure the practice’s constitutional -infirmities. No Supreme Court case has ever given history the kind o f dispositive weight that the Solicitor General would here. On the contrary, the Supreme Court has repeatedly stated that history alone can never validate a practice that is contrary to consti­ tutional principle, even when the practice “covers our entire national existence and indeed predates it.” Walz v. Taac Commission, 397 U.S. 664, 678 (1970). Accord Marsh v. Chambers, 463 U.S. 783, 790 (1983). There are numerous examples o f statutes passed by the early congresses that have been held unconstitutional or clearly would be held unconstitution­ 213 al today. See infra p. 233. Thus, if a past practice cannot be reconciled with constitutional principle, an appeal to history alone cannot sustain it. In the case o f qui tam, absent the invocation o f history there is no ques­ tion about the practice’s unconstitutionality. Although history alone cannot validate a plainly unconstitutional prac­ tice, the Supreme Court has indicated that close cases will be resolved in favor o f the constitutionality o f certain strong historical traditions. The Court weighs several factors in determining the authority o f a tradition, including (1) whether there is evidence that the Framers actually consid­ ered the constitutional implications o f their actions; (2) whether the prac­ tice is so longstanding and pervasive that it has become “part o f the fab­ ric o f our society;” and (3) whether the practice can be accommodated within the constitutional framework in a way that does not undermine settled principles. See, e.g., Young v. United States ex rel. Vuitton et Fils, 487 U.S. 787 (1987); Marsh v. Chambers-, Walz v. Tax Commission. Qui tam would deserve no deference under these criteria. There is no evidence that the Framers considered the constitutional status o f qui tam. On the contrary, the early statutes are the kind to which the Court gives no weight — “action ... taken thoughtlessly, by force o f long tradi­ tion and without regard to the problems posed.” Marsh v. Chambers, 463 U.S. at 791. Nor can it seriously be maintained that qui tam is “part o f the fabric o f our society.” Never more than a marginal device, it is today an anachronism that easily can be excised without disruption. Qui tarn’s principle o f private law enforcement, however, is so fundamentally incompatible with established doctrines o f standing and separation of powers that, if accepted, it would substantially undermine these doc­ trines. Thus, qui tam is not merely an innocuous historical oddity that can be narrowly accommodated, but is, by nature, an exception that will con­ sume the rule. Further, the Solicitor General’s use o f history is internally inconsistent. None o f the old qui tam statutes upon which the Solicitor General relies allowed the Attorney General to intervene once the relator brought the case. However, the Solicitor General concludes that the current statute will be unconstitutional if it is applied to limit the Attorney General’s par­ ticipation in the suit. It is difficult to understand how the Solicitor General can give dispositive historical weight to statutes that would be unconstitutional under his theory for arguing qui tarn’s validity. Finally, as a tactical matter, the Solicitor General’s strategy of preemp­ tive concession is extremely unwise. It voluntarily surrenders at the out­ set the two strongest objective arguments against qui tam. Once those are abandoned, all that will remain to protect the President’s interests will be a subjective balancing approach and the argument that at some unde­ fined point the degree of encroachment will become unbearable. This approach leaves executive powers entirely vulnerable to an adverse judi­ cial decision. 214 II. THE STATUTE AND ITS IMPACT A. The Statute The False Claims Act provides that anyone who presents a false money claim to the Federal Government shall be liable for double or treble dam­ ages and civil penalties o f up to $10,000 per false claim. 31 U.S.C. § 3729. Under the qui tam provisions of the Act, any person may bring a civil action “for the person and for the United States Government” to recover damages and penalties. Id. § 3730(b)(1). The qui tam action, although ini­ tiated by a private person called a relator, is “brought in the name o f the Government.” Id. The details o f the qui tam mechanism demonstrate that the real party in interest is the United States, with the relator functioning as attorney for the United States. When a private person brings a qui tam action, he must serve on the Government the complaint and a written disclosure o f the information he possesses. Id. § 3730(b)(2). The Attorney General is then forced to decide, within 60 days, whether to “intervene and proceed with the action.” Id. By the end o f that period, the Attorney General must inform the court whether the government shall proceed; if not, “the per­ son bringing the action shall have the right to conduct the action.” Id. § 3730(b)(4)(B). Where the Attorney General decides not to proceed with the case, the relator alone represents the government. He has full control over the lit­ igation, including discovery, admissions, and presentation o f evidence, subject only to a few specific limitations.1If the relator prevails, most o f the recovery is paid into the Treasury, with the relator keeping between twenty-five and thrity percent as his reward. Id. § 3730(d)(2). The relator is also entitled to attorneys’ fees. Id. If the Attorney General initially declines to proceed with the case, he may intervene later only upon a showing of “good cause,” but such inter­ vention does not limit “the status and rights o f the person initiating the action.” Id. § 3730(c)(3). Thus, the relator retains primary control over the case despite the government’s intervention. Moreover, the legislative history to the 1986 Amendments expressly states that any judgment or settlement in a case conducted exclusively by the relator binds the Government under principles o f preclusion. S. Rep. No. 345, 99th Cong., 1 A qui tam action may be dismissed only if the court and the Attorney General give written consent. 31 U.S.C. § 3730(b)(1) If ihe Government shows that discovery by the relator would interfere with ongo­ ing civil or criminal investigations or prosecutions, the court may stay discovery for a penod not to exceed 60 days The court may impose further stays if the Attorney General shows “that the Government has pursued the cnminal or civil investigation or proceedings with reasonable diligence and any pro­ posed discovery in the Iqui tamj action will interfere with the ongoing cnminal or civil investigation or proceedings ” Id § 3730(c)(4). The relator is under no general constraint to pursue Department o f Justice litigation policies or procedures. 215 2d Sess. 27 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5292. This stands to reason: since the relator’s action is in the name of the United States, the relator seeks a share o f damages inflicted on the United States, and any recovery (minus the relator’s moiety) is paid into the Treasury. In cases in which the Attorney General does enter within the initial sixty-day period, the government has “primary responsibility for prose­ cuting the action.” 31 U.S.C. § 3730(c)(1). The relator nevertheless has “the right to continue as a party to the action.” Id. This participation right gives the relator a substantial role in the litigation. The relator has the right to a hearing if the Attorney General decides to dismiss the action. Id. § 3730(c)(2)(A). If the Attorney General proposes to settle the case but the relator objects, the settlement may go forward only if “the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances.” Id. § 3730(c)(2)(B). In addi­ tion, the relator participates fully at trial, calling witnesses, cross-examining witnesses, and testifying, except that on the government’s motion “the court may, in its discretion, impose limitations on the [relator’s] par­ ticipation.” Id. § 3730(c)(2)(C). In cases primarily conducted by the Attorney General, the relator receives between 15 and 25 percent o f the proceeds, plus reasonable expenses (including attorneys’ fees), as determined by the court. Id. § 3730(d)(1). Moreover, if the Government decides to pursue its claim in some forum other than a False Claims Act suit — such as an administra­ tive penalty action — the relator has the same rights in that proceeding that he would have in court. Id. § 3730(c)(5). In short, where the Government decides not to join, the relator con­ ducts the suit as if he were the Attorney General, except that unlike the Attorney General he takes no oath o f office, he bears no loyalty to the Government or continuing responsibility for implementing its policies, and he receives up to thirty percent o f the suit’s proceeds. If the Government enters the suit, the relator continues to represent the United States, subject to the court’s (not the Attorney General’s) control. This arrangement carries out the purpose that underlay the 1986 Amendments. Congress’s “overall intent in amending the qui tam section o f the False Claims Act is to encourage more private enforcement suits.” S. Rep. No. 345 at 23-24. In order to do that, Congress decided to “depu­ tize ready and able people ... to play an active and constructive role through their counsel to bring to justice those contractors who over­ charge the government.” 132 Cong. Rec. 29,322 (1986). B. The Statute’s Impact The heart o f the statute’s impact derives from the fact that the qui tam provisions interfere with the Attorney General’s discretion whether to ini­ tiate a suit under the False Claims Act. That interference adversely 216 affects both the Government’s law enforcement powers and its contract­ ing powers. 1. The Government’s Enforcement Role a. The decision to initiate litigation. First and most obviously, the qui tam mechanism removes from the Department’s hands the decision whether and when to commence an action. Once a relator files his com­ plaint, we have 60 days within which to decide whether to join. This is true even if we are pursuing an investigation that is far from ready for decision whether to prosecute.2 In several cases, district courts already have refused to grant us extensions in order to avoid interference with ongoing criminal investigations. See, e.g., United States ex rel. McCoy v. California Medical Review Inc., 723 F. Supp. 1363 (N.D. Cal. 1989).3 If a stay is unavailable, the civil case proceeds with or without us, sometimes alerting targets o f criminal investigations; sometimes resulting in disclo­ sure of key information in our possession, including our litigating posi­ tions; and sometimes complicating attempts to prepare a comprehensive plea arrangement and civil settlement. In addition, informal avenues o f redress and adjustment can be cut off. Instead, the Government may be forced to choose quickly between leaving the suit wholly to the relator or taking the very serious step o f charging fraud against a private person.4 Such a charge is a serious matter, whether brought by the Department or a relator. In many cases prosecutorial discre­ tion would counsel against our bringing a False Claims Act suit; for exam­ ple, we might find that although a contractor was technically liable, it has fired the employees responsible for the fraud. A relator, however, is inter­ ested only in money, not in the faithful execution o f the laws. He has taken no oath o f office, has no obligation of loyalty to the Government or its inter­ ests, and has no continuing responsibility for the governmental programs at issue. Rather, he holds a personal financial stake that in all other contexts would disqualify him from representing the Government’s interests. United States ex rel. Hyatt v. Northrop Corp., No. CV 87-6892 KN (Jrx), 1989 U.S. Dist. LEXIS 18940 (C.D. Cal. Dec. 27, 1989), provides an 2 Contrary to our experience, the Senate Committee believed that “with the vast majority o f cases, 60 days is an adequate amount o f time to allow Government coordination, review and decision" o f fraud actions running into millions or billions o f dollars. S Rep No. 345 at 24-25. 3 This accords with the legislative history, which states that “the Committee does not intend that crim­ inal investigations be considered an automatic bar to proceeding with a civil fraud suit." S. Rep N o 345 at 25. Instead, the Senate Committee stated that if the Government obtains an initial stay, “the court should carefully scrutinize any additional Government requests for extensions by evaluating the Government’s progress with its cnminal inquiry” Id 4 In some circumstances, w e may be considering enforcement action less draconian than a trebledamages-plus-penalties action under the False Claims Act. Once a relator has ensured that there will be a treble-damages action, however, we may be forced either to scrap a single-damage suit or attempt to handle it in coryunction with the other. 217 example o f a case in which the qui tam provisions have allowed a relator to force a suit that this Department would not have pursued. In that case, eight employees are suing Northrop for alleged fraud in the manufacture o f inertial measurement units ( “IMUs”) for the MX (Peacekeeper) Missile. They seek restitution o f $1 billion, $250 million in compensatory dam­ ages, and $5 million in punitive damages. Two o f the eight relators had filed an earlier qui tam action against Northrop that was dismissed because the information on which it was based was already in the Government’s possession. The pending suit makes numerous allegations o f fraud, including that Northrop knowingly delivered defective IMUs to the Air Force, that it failed to test or inspect all components properly, and that it misrepresented the performance o f operation audits and respon­ sive corrective action. In fact, the Civil Division’s memorandum review­ ing the relators’ suit notes that the complaint is so broad that it encom­ passes nearly every action undertaken by Northrop in the course o f the manufacture and delivery o f the IMUs.5 The Civil Division declined to enter the relators’ action because extensive investigations o f Northrop’s operations by the U.S. Attorney and the Air Force failed to produce evi­ dence o f fraud. See Civil Division Memo at 8-15. Moreover, the Air Force’s records show that the actual performance o f the allegedly defective IMUs has far exceeded expectations, thus rebutting the relators’ claims o f fraud. See id. at 12. Nevertheless, the relators are permitted by the qui tam provisions to continue to pursue their suit on behalf o f the Government to satisfy their personal purposes, whether for harassment or in hopes o f forcing Northrop to pay them a settlement award. b. The conduct of litigation. When we do enter a case, the relator retains his rights to participate, which often are exercised in ways adverse to the government’s interests. The Civil Division has already encountered claims by relators that they, as representatives o f the United States, are entitled access to our investigative files and personnel. Moreover, all disputes between us and the relator over the conduct of the case — from discovery to witness selection to cross-examination — are decided by the court. This leaves open the question whether the Act has transferred the executive power to the relator or the district judge, but it is clear that that power has been transferred away from the Attorney General.6 When we do not intervene, the Department nevertheless must spend resources monitoring cases that it had for good reason decided not to bring. Because it is never possible to tell what prejudice we might suffer 6 See Memorandum fo r John R. Bolton, Assistant Attorney General, Civil Division, from Michael F Hertz, Director, Com m ercial Litigation Branch, at 7 (the “Civil Division Mem o”), recommending that the Department decline to enter the relators’ suit. GThis arrangement, by which the relator looks over our shoulder at trial, is precisely what Congress intended. A t trial, the relator is to act as “a check that the Government does not neglect evidence, cause undue delay, o r drop the false claims case without legitimate reason " S Rep No 345 at 26 218 from a relator’s conduct, we must keep close track of these cases. Other difficulties will also arise; for example, the Civil Division has informed us that in one case a qui tam relator sought to depose a government investi­ gator who had worked on a grand jury probe o f a contractor other than the qui tam defendant. c. Judgment and settlement. Perhaps the most important interference comes if we seek to settle a case. If we negotiate a settlement but the rela­ tor objects, the court must determine whether the arrangement is “fair, adequate and just” under the circumstances — a judicial role that to our knowledge is unique.7 The perverse results this provision can have are reflected in the court’s action in Gravitt v. General Electric Co., 680 F. Supp. 1162 (S.D. Ohio), cert, denied, 488 U.S. 901 (1988). In that case, a relator claimed that General Electric had presented false statements to the Defense Department. Many o f General Electric’s records were indeed incorrect, but the inaccurate accounting system involved had resulted in net undercharges to the Government. We negotiated a settlement under which Genera] Electric would pay a substantial penalty and waive its counterclaims growing out o f the undercharges. The relator objected, and the district court refused to accept the settlement, lecturing us on the inadequacy o f our investigation into the matter, even though the Defense Department was already quite familiar with the situation.8 A few years later, we succeeded in settling for the original figure. Where we do not enter a qui tam action, the relator either litigates the case to judgment, which binds the United States, S. Rep. No. 345 at 27, or settles it, likewise binding the Government. This may be quite significant. For one thing, a qui tam relator, who has no enforcement interest, may allege far more corruption than he can prove. Even if that corruption were real, if the relator could not prove it, a judgment against him on those issues would bar us from acting later. In addition, relators such as discharged employees may bring a qui tam count in conjunction with pri­ vate causes o f action. To settle the private claims, the relator may have an incentive to trade the qui tam elements, since he receives only a frac­ 7 Even the Tunney Act, 15 U.S.C. § 16(e), which subjects antitrust consent decrees to judicial review as to the public interest, does not apply to settlements, which heretofore w ere entirely outside the court’s jurisdiction There are very senous doubts as to the constitutionality even o f the Tunney Act it intrudes into the executive power and requires the courts to decide upon the public interest — that is, to exercise a policy discretion normally reserved to the political branches Three Justices o f the Supreme Court questioned the constitutionality o f the TXmney A ct in M ainland o. United States, 460 U.S 1001 (1983) (Rehnquist, J , join ed by Burger, C.J., and White, J , dissenting). 8 In United States ex rel StillweU v Hughes Helicopters, In c , 714 F. Supp. 1084 (C D Cal 1989), the defendant argued that the qui tam mechanism was unconstitutional on its face and pointed to the distnct court’s conduct in Gravitt as an example o f an illicit transfer o f authority to the courts. The ju dge in StillweU, in upholding the qui tam provisions (which he presumed to be constitutional, since they had not been challenged by the executive branch), replied that the G ravitt court’s views o f our conduct w ere entirely reasonable Id. at 1092-93 n.8. This may indicate that in some qui tam cases the courts w ill not need to second-guess our decision to settle, because they will be able to dispose o f the issue by secondguessing our investigative zeal 219 tion o f any payment attributed to them. We must therefore carefully review every qui tam settlement and, if it is defective, try to persuade the judge to reject it. Moreover, the collateral effects may go beyond barring further False Claims Act litigation. In United States v. Halper, 490 U.S. 435 (1989), the Supreme Court held that civil penalties under the False Claims Act can represent punishment for purposes o f the Double Jeopardy Clause. The Court specifically left open the question whether a qui tam suit qualifies as a suit by the Government for these purposes. Id. at 451 n .ll. If it does, we may be foreclosed by the relator from bringing subsequent criminal prosecutions.9 2. The Government as Contractor Transfer o f control over the Government’s litigation to private persons affects not only our litigation function, but every aspect o f the Government’s work that can be implicated in a suit under the False Claims Act. Any Government contract can give rise to a False Claims Act action. For that reason, every routine decision that an agency makes as a contracting party is now subject to the relator’s influence. Any complex contract naturally will produce issues o f construction between the parties. In the case o f Government contracts, the agency concerned must decide whether contract deviations constitute a breach, and sometimes whether a breach amounts to fraud. In making these deci­ sions, it is frequently in the Government’s interest, as it would be in the interest o f any contracting party, to avoid excessive concern over minor failings that might threaten a useful course o f dealing with the other party. In the Government’s case, especially, the agency must carefully consider such matters where the contract involves important military or national security matters, particularly if there are a limited number o f qualified contractors, or the contractor’s performance otherwise has been adequate or even excellent. Under the 1986 Amendments, however, all such policy decisions poten­ tially are thrown into the public forum. Relators who have no interest in the smooth execution of the Government’s work have a strong dollar stake in alleging fraud whether or not it exists. The possibility o f a qui tam suit will therefore lead to a hardening o f positions by the Govern­ ment and the contractor: the contractor must be certain not to be too can­ did, while the Government must be scrupulous about even its least sig­ nificant rights, in order to avoid later second-guessing by a relator and a court. The ripple effects of qui tam in the Government’s contracting flex­ ibility thus could be enormous. 9 Th ere will also be the nice question o f when jeopardy attaches in a False Claims A ct suit 220 III. QUI TAM SUITS ARE UNCONSTITUTIONAL A. Appointments Clause Violation We believe that qui tam suits brought by private parties to enforce the claims o f the United States plainly violate the Appointments Clause o f the Constitution. Art. II, § 2, cl. 2. The Supreme Court has made clear that exercises o f significant governmental power must be carried out by “Officers o f the United States,” duly appointed under the Appointments Clause. E.g., Morrison v. Olson, 487 U.S. 654, 670-77 (1988); Buckley v. Valeo, 424 U.S. 1 (1976). It is well established that “conducting civil liti­ gation in the courts o f the United States for vindicating public rights” is at the core o f executive power and “may be discharged only by persons who are ‘Officers o f the United States.’” Id. at 140 (emphasis added). See also United States v. San Jacinto Tin Co., 125 U.S. 273, 279 (1888) (the Attorney General “is undoubtedly the officer who has charge o f the insti­ tution and conduct o f the pleas o f the United States, and o f the litigation which is necessary to establish the rights o f the government”); Confiscation Cases, 74 U.S. (7 Wall.) 454, 458-59 (1868) ( “ [S]o far as the interests o f the United States are concerned, [all suits] are subject to the direction, and within the control of, the Attorney-General.”). The Supreme Court has, to date, steadfastly adhered to the require­ ments of the Appointments Clause. See Public Citizen v. Department of Justice, 491 U.S. 440, 482-89 (1989) (Kennedy, J., concurring) (Appointments Clause must be strictly applied; no “balancing” where a power has been committed to a particular Branch o f the Government in the text o f the Constitution). Even in Morrison v. Olson, the Court insist­ ed on strict compliance with the Clause’s terms, upholding the use o f spe­ cial prosecutors only after concluding that (i) the prosecutors were “infe­ rior” officers, (ii) they were duly appointed by a “Court o f Law” in accordance with the Appointments Clause, and (iii) they remained subject to sufficient executive control in the initiation and prosecution o f cases. In Buckley, the Court held that Congress violated the Constitution when it attempted to vest civil litigation authority in a commission whose members had not been duly appointed under the Appointments Clause. The Court said that “ [a] lawsuit is the ultimate remedy for a breach o f the law, and it is to the President, and not to the Congress, that the Constitution entrusts the responsibility to ‘take Care that the Laws be faithfully executed.’” 424 U.S. at 138. The qui tam provisions in the False Claims Act are equally unconstitutional. Qui tam relators are not appoint­ ed in any o f the ways prescribed by the Appointments Clause and hold no commission under the United States. Yet these relators exercise signifi­ cant governmental authority by suing to enforce the rights o f the United States in the name o f the United States. Just as Congress cannot vest lit­ igation authority in commission members who have not been duly 221 appointed, it cannot vest such litigation authority in self- selected private bounty hunters who operate without accountability and without commit­ ment to the United States’ interests. There can be no doubt that qui tam relators are exercising significant governmental power. Private relators are empowered to level fraud charges against other private citizens and hail them into court to answer for these alleged public offenses, with the possibility o f collecting not only damages but substantial civil penalties. In so doing, the relators are empowered to overrule the judgment o f executive officials as to whether the contractor has, in fact, committed fraud and whether it is appropriate under the circumstances to prosecute the Government’s claim. Where the Attorney General determines not to proceed with a suit, the relator is empowered to prosecute the suit in the Government’s name, controlling all aspects o f the litigation and binding the United States by the judgment. I f the Attorney General later decides to intervene, the relator remains in control. Even if the Attorney General enters the suit at the outset, the relator remains a party and is empowered to challenge not only the liti­ gation judgments o f the Government but also any attempt to dismiss or settle the case. It is also beyond dispute that the claim the relator litigates is that o f the United States. Qui tam relators historically were understood to be suing in a representative capacity. They were viewed as standing in the shoes o f the Government and suing on behalf o f the Government to enforce the rights o f the Government. Note, The History and Development o f Qui Tam, 1972 Wash. U.L.Q. 81,83-84 ( “Washington University Note”). The qui tam provisions in the False Claims Act are based precisely on that premise. The Act provides that one who files a false claim “is liable to the United States Government for a civil penalty ..., plus 3 times the amount o f damages which the Government sustains.” 31 U.S.C. § 3729(a) (empha­ sis added). In authorizing qui tam suits, the Act provides that the suit shall be brought “fo r the United States Government" and “in the name of the Government." Id. § 3730(b)(1) (emphasis added). The history o f the False Claims Act demonstrates that the Act has always been understood to be what it seems to be: an authorization for private persons to bring suits on behalf o f the Government. Speaking in support o f the Act when it was adopted, Senator Howard explained that it was necessary to deal “speedy and exemplary justice” to “the knave and the rogue” who committed war fraud against “the Government, who is the real sufferer in all cases.” S. Rep. No. 291, 78th Cong., 1st Sess. (1943) (quoting 1863 debates). Similarly, the discussions in 1943, when Congress considered eliminating the qui tam action altogether, leave no doubt as to the nature o f a qui tam action. Speaking in defense o f the mechanism, Senator Murray, after com­ plaining about the Department o f Justice’s failure to prosecute antitrust cases, said that “if a fraud has been perpetrated ... and the Attorney 222 General is failing to take advantage o f [evidence of it], any private citizen in the United States should be entitled to bring up the case in court." 89 Cong. Rec. 7575 (1943) (emphasis added). In a like vein, Senator Revercomb asked, “[w]hat harm can be done by saying to the Department o f Justice, ‘If you do not perform your duty some citizen o f this country is going to rise and perform it for you?’ ” 89 Cong. Rec. 7598 (1943). The 1986 debates reflect the same understanding. Speaking in the House, Representative Brooks gave a straightforward explanation o f qui tam: “The False Claims Act contains provisions which allow citizens to bring suits for false claims on behalf o f the Government.” 132 Cong. Rec. 22,336 (1986). Representative Bedell described the statute as giving informers “standing to bring suit ... on behalf o f the Government.” 132 Cong. Rec. 22,340 (1986). Senator Grassley, the main force in the Senate behind the 1986 Amendments, explained that the “False Claims Act allows an individual knowing o f fraud[] ... to bring suit on behalf o f the government....” 131 Cong. Rec. 22,322 (1985). In perhaps the most telling description, Representative Berman, one o f the bill’s principal drafters, offered the following statement: “ [T]his is precisely what this law is intended to do: deputize ready and [willing] people ... to bring to justice those contractors who overcharge the government.” 132 Cong. Rec. 29,322 (1986). Indeed, the Solicitor General appears to concede that the qui tam device violates the Appointments Clause to the extent a qui tam relator is suing in a representative capacity. Taranto Memo at 8. To surmount this constitutional barrier, the Solicitor General argues that a qui tam action is not a suit based on the government’s claim but is really a private suit based on the relator’s private cause o f action for the contingent monetary award Congress offered for successfully litigating the suit. The Solicitor General thus would argue that, when the relator prosecutes a case, he is not exercising governmental authority, but merely litigating his own pri­ vate claim. The Solicitor General suggests an analogy to private antitrust actions or private title VII actions where both the private party and the government can bring substantially identical suits. Id. This argument is untenable because it flatly contradicts the history o f qui tam actions, the language and structure o f the False Claims Act, and the Act’s legislative history. All o f these sources make abundantly clear that the relator is suing in a representative capacity to enforce the claim o f the United States and that his statutory award is not relief for ir\jury suffered, but a reward for his services. See supra pp. 215, 222-23. In antitrust and title VII actions, the private plaintiff alleges that the defendant’s conduct has invaded his personal legal rights, causing him direct injury. The title VII plaintiff claims that he has been personally harmed by discriminatory practices. The antitrust plaintiff claims that he has been economically harmed by a price-fixer’s illegal conduct. Such pri­ vate plaintiffs have their own independent causes o f action to redress 223 these invasions o f their rights, which incidentally vindicate the public interest. Under the False Claims Act, however, the government is the only party who has suffered iryury as a result o f the contractor’s alleged fraud. Thus, the relator’s suit under the False Claims Act vindicates the ir\jury to the government and that iiyury alone. It is clear that the real party in interest represented by the relator is the government, because the relator’s suit binds the United States by res judi­ cata.10 Even when the Attorney General does not participate in the suit, any judgment or settlement obtained by the relator has preclusive effect on the United States. In this respect, qui tam actions differ fundamental­ ly from the private lawsuits cited by the Solicitor General, and indeed from all “private attorneys general” suits. These private actions do not bind the United States because the real plaintiff is the individual suing on his own independent claim. See, e.g., Sam Fox Publishing Co. v. United States, 366 U.S. 683, 690 (1961) ( “the Government is not bound by private antitrust litigation to which it is a stranger”). In a qui tam action, howev­ er, the relator is not really acting in a private capacity, but rather is stand­ ing in the government’s shoes and is prosecuting the United States’ claim. The Solicitor General’s argument that the relator is merely prosecuting his own private claim ultimately fails because it runs headlong into an Article III standing problem. As discussed below, the relator, especially when suing only in his personal capacity, has no “case or controversy” to present to the court because he can show no “iryury in fact” as a result of the contractor’s alleged fraud. B. Article I I I Standing Private qui tam actions violate the well-settled doctrine o f Article III standing. The keystone of this modem standing doctrine, which has been carefully refined by the Supreme Court over the past 20 years, is the con­ stitutional requirement of “iryury in fact.” The Supreme Court has repeat­ edly held that, at an “irreducible minimum,” Article III requires a plaintiff in federal court to demonstrate that: (1 ) (2) dant; (3) he personally has suffered some actual or threatened iryury; the iryury was caused by the putatively illegal conduct o f the defen­ and the relief sought likely w ill redress the iryury. E.g., Valley Forge Christian Colleqe v. Americans United fo r Separation o f Church & State, Inc., 454 U.S. 464, 482-83 (1982); Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99 (1979); Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 38, 41 (1976). 10 See su p ra p. 215-16. 224 A plaintiff cannot rely solely on abstract iryury or generalized griev­ ances shared by all citizens and taxpayers to establish standing. Allen v. Wright, 468 U.S. 737, 754 (1984); Valley Forge, 454 U.S. at 482-83. If the plaintiff himself has not suffered particularized harm that is “distinct and palpable,” Schlesinger v. Reservists Comm, to Stop the War, 418 U.S. 208, 221 (1974), there is no case or controversy under Article III. See, e.g., Worth v. Seldin, 422 U.S. 490 (1975); Sierra Club v. Morton, 405 U.S. 727 (1972). Under these well-established principles, qui tam suits are plainly unconstitutional to the extent they purport to be private actions because the relator has suffered no personal “injury in fact” as a result o f the con­ tractor’s alleged fraud. The Solicitor General argues that the relator’s prospect o f receiving a bounty is enough to satisfy Article III standing requirements. It is clear, however, that the mere expectation o f a reward cannot be characterized under established Supreme Court precedent as an “ir\jury” o f any kind.11 The only party who suffers iryury as a result o f the contractor’s false claims is the government. The relator simply seeks to stand in the gov­ ernment’s shoes to sue for an invasion o f the government’s rights. The monetary payment he seeks is not judicial relief to redress his iryury, but a reward for bringing the case. Mere financial incentive to bring the suit does not satisfy the constitutional standard. The Supreme Court has expressly rejected this argument in Diamond v. Charles, 476 U.S. 54 (1986). There, a physician argued that he had standing to continue defending an abortion statute because the trial court had already awarded attorneys’ fees against him. Only he was left to defend the statute, and only by vindicating the statute could he avoid pay­ ing the fees. Although the Court recognized that the physician had a financial stake in the outcome o f the litigation, it held that financial inter­ est alone is not sufficient to confer standing. Id. at 69-70. Citing Valley Forge to stress that the plaintiff’s iryury must be a “result o f the putatively illegal conduct,” the Court stated that “Art. Ill standing requires an iryury with a nexus to the substantive character” o f the underlying claim; an interest that is merely “a byproduct o f the suit” is not sufficient. Id. at 70-71. Just as an attorney with a contingency fee arrangement does not 11 This view is supported by tw o Supreme Court cases holding that an informer’s prospective interest in his reward does not give him a judicially cognizable interest sufficient to allow him to intervene m a case being prosecuted by the government In both cases, the statute at issue gave the informer a share o f the proceeds o f the governm ent’s recovery, but did not authorize direct suit by the informer In Un ited States v. M o m s , 23 U S (10 W h eat) 246 (1825), the Court ruled that customs officers who had a nght to a share o f forfeited property as a reward had no right to intervene in the forfeiture proceeding to prevent the United States from remitting the property to the ow ner The Court ruled that lt]he forfeiture is to the United States, and must be sued for in the name o f the United States. In all this, [the collector] acts as [an] agent o f the government, and subject to the authori­ ty o f the secretary o f the treasury, who may direct the prosecution to cease . [T]he nght [o f the customs officer] does not become fixed, until the receipt o f the money by the collector Id. at 290 Accord C onfiscation Cases, 74 U S. (7 Wall ) 454 (1868) (follow in g M o rris ). 225 have standing on his own to pursue his client’s claim, the relator does not have standing to pursue his claim for a share o f the False Claims Act dam­ ages. The monetary recovery must be directed at redressing an injury suf­ fered by the plaintiff as the result o f the invasion o f a substantive legal right. As the Assistant to the Solicitor General observes, Diamond v. Charles is consistent with: case or controversy law generally [which] requires that there be a legal dispute — and that the plaintiff have a claim o f legal right and the defendant an alleged legal duty to the plaintiff — that precedes and is independent o f the lawsuit itself. Taranto Memo at 4. Nor does the fact that Congress has specifically authorized uniryured persons to bring qui tam actions in any way cure the Article III deficien­ cy. Congress is bound by Article Ill’s “case or controversy” restriction on judicial power and cannot abolish the constitutional requirement o f “injury in fact.” Congress cannot confer standing on persons who fail to meet that test. Congress can, o f course, enact statutes creating new substantive legal rights, the invasion o f which can give rise to the kind o f particularized injury necessary to create standing. See Linda R.S. v. Richard D., 410 U.S. 614, 617 n.3 (1973). In no event, however, “may Congress abrogate the Art. Ill minima: plaintiff must always have suffered ‘a distinct and pal­ pable iryury to himself... that is likely to be redressed if the requested relief is granted.” Gladstone, Realtors v. Village o f Bellwood, 441 U.S. at 100. In enacting the qui tam provisions o f the False Claims Act, however, Congress has not created any substantive legal right for qui tam plaintiffs the invasion o f which creates Article III iryury. Those qui tam provisions simply permit the relator to sue on behalf o f the United States, whose substantive rights have been genuinely invaded. As the words o f the statute make clear, a qui tam suit is an action brought to recover “dam­ ages which the Government sustains because o f the [contractor’s fraud­ ulent] act.” 31 U.S.C. § 3729(a) (emphasis added). Qui tam suits thus differ fundamentally from “private attorneys gener­ al” suits or citizens’ suit provisions in other statutes. The Supreme Court has strictly adhered to the “injury in fact” requirement in interpreting those statutes, holding that only those who can demonstrate their own personal iryury from the claimed illegal conduct are allowed standing to sue to protect the public interest in coryunction with their own. See. e.g., Middlesex County Sewerage Auth. v. National Sea Clammers A ss’n, 453 U.S. 1, 16 (1981); Sierra Club v. Morton, 405 U.S. at 737 ( “ [I]r\jury is what gives a person standing to seek judicial review ..., but once review is properly invoked, that person may argue the public interest in support o f 226 his claim.... It is in [this] sense that we have used the phrase ‘private attorney general.’”). Qui tam suits also differ from those cases in which the Supreme Court has permitted litigants to raise the rights o f others under so-called jus tertii or “third party” standing. In those cases, the Court has strictly adhered to the “iryury in fact” requirement, allowing a plaintiff to assert the rights o f third parties only if the plaintiff showed that the challenged action also iryured him. See Craig v. Boren, 429 U.S. 190, 192-97 (1976); Charles A. Wright, TheLaiv of Federal Courts 72 (4th ed. 1983). Significantly, the Solicitor General’s own office cannot agree on whether the mere prospect o f a bounty is sufficient to create standing. The Deputy Solicitor “counsel [s] against” making such an argument because: (1) “it cannot be reconciled with recent Supreme Court deci­ sions”; (2) it cannot “account for the requirement o f redressability which the Court has stressed in recent decisions”; and (3) it “would be in some tension with our usual posture [in standing cases], which has generally been to insist on a formalistic, corrective-justice type model o f standing.” Memorandum for the Acting Solicitor General, from Thomas Merrill, Deputy Solicitor General at 3 (Apr. 5, 1989). The Assistant to the Solicitor General admits that the standing issue is “close” and “the hardest ques­ tion” and that the bounty theory “stands in uneasy relation to prevailing principles o f standing.” Taranto Memo at 3 n.l. To surmount qui tarn’s obvious conflict with established standing doc­ trine, the Solicitor General proposes to argue that qui tam actions must be recognized as “cases or controversies” within the meaning of Article III because they were known in England prior to the Revolution and seem to have been used to a limited degree in the early years o f the Republic. This historical argument is fundamentally flawed in several respects.12 First, the status o f historical qui tam actions as cases or controver­ sies is irrelevant to the validity o f the Solicitor General’s proposed reformulation o f qui tam as a truly private suit by the Telator. Qui tam as it existed at the time o f the framing involved actions in which the relator sued in a representative capacity to enforce a public penalty on behalf o f the government. See, e.g., Act o f Mar. 1, 1790, ch. 2, § 3, 1 Stat. at 102 (authorizing informers to collect penalties for official miscon­ duct under Census Act). Although it may have violated separation o f powers, such an action at least presented a case or controversy because the real party in interest — the government — had suffered an injury and thus had a cognizable claim. But it is mere sleight-of-hand to suggest that if qui tam in this sense was necessarily a case or contro­ versy, so is qui tam in the very different sense proposed by the Solicitor 12 This histoneal argument concerns the status o f qui tam actions as cases or controversies We discuss below, see infra, at pp. 232-38, the broader claim that history validates qui tam whether or not it can be accommodated to any particular constitutional principle, such as the requirements o f Article III 227 General, in which a relator w ho has not been injured sues for himself, not the government. Next, it is far from clear that the Framers, had they examined the mat­ ter, would have concluded that qui tam as they knew it satisfied the case or controversy requirement. There is certainly no direct evidence that they thought so. Indeed, qui tam statutes that permitted an uninjured informer to sue, and actions brought by such informers, apparently were both fairly rare. Many statutes seem to have contemplated — and almost all suits actually brought seem to have been — actions either by public officials or injured parties.13 Qui tam actions brought by pure informers thus probably would not have seemed a commonplace thing for the Framers, and we cannot assume that they would have thought that Article III had to bend to such actions. Finally, the argument that anything that could go into court in 1787 must be a case or controversy has unacceptable consequences. At com­ mon law, the writs o f prohibition, certiorari, quo warranto, and man­ damus all were available to “strangers” who had no personal interest or iryury in fact. See, e.g., Raoul Berger, Standing to Sue in Public Actions: Is it a Constitutional Requirement? 78 Yale L.J. 816, 819-25 (1969); Louis L. Jaffe, Standing to Secure Judicial Review: Public Actions, 74 Harv. L. Rev. 1265, 1269-71 (1961). But both mandamus and quo warranto are actions brought to challenge the conduct o f government officials. Under the Solicitor General’s regime, any person could use these writs to chal­ lenge or compel government action wholly unrelated to the person using the writ. The implications o f this position are staggering. In any event, the Solicitor General’s historical argument proves too much. If this view were accepted, it would mean that Congress could cre­ ate universal standing simply by attaching a penalty to the violation o f any law and offering any person who sues a right to share in the pro­ ceeds. This would privatize the Executive power, allowing any private person to enforce the law against any other, while opening up the deci­ sions by the Executive to unprecedented interference. For example, Congress could enforce its restrictions on the President’s conduct o f for­ eign policy (such as the Boland Amendment) through qui tam actions. All executive actions would be subject to judicial review at the instance o f any intermeddler, and the limits on the federal judicial power would be set by Congress, not the Constitution. C. Encroachment on Executive Powers The President’s power to execute the laws includes two aspects o f 13 We are aware o f only one statistical survey o f qui tam actions in America. That survey reflects that on the eve o f the Revolution, o f 70 inform er suits brought under the navigation laws, 67 w ere brought by governm ent officials, and only 1 was brought by an informer who appeared to have no u\jury o f his own to redress. Lawrence A. Harper, The E n g lish N a vig a tio n L a w s 170 (1939). 228 authority that are important here: the discretion to decide whether to prosecute a claim, and the control o f litigation brought to enforce the government’s interests. The qui tam provisions infringe on both. First, the provisions permit a private citizen to sue on behalf o f the government, even though the Attorney General may have decided for legitimate rea­ sons not to prosecute the claim. This power removes from the executive branch the prosecutorial discretion that is at the heart o f the President’s power to execute the laws. Second, the qui tam provisions vest in the relator a voice in crucial litigation decisions, even if the Attorney General decides to enter the suit. The Attorney General may not move to dismiss the suit, settle the action, or restrict the relator’s participation except by permission o f the court. See 31 U.S.C. § 3730(c). The court also decides whether discovery may be stayed to prevent interference with ongoing civil or criminal investigations. Id. These provisions vest core executive power in the judicial branch. Moreover, in suits in which the Attorney General declines to participate, the relator exercises full sway over the course of the government’s litigation interests. The Attorney General can neither remove the relator from his “office” nor instruct him how to rep­ resent the government’s interests. This transfer by Congress o f executive power away from the President to the relator and the court is impermissible even under the Supreme Court’s most lenient standard forjudging threats to separation o f powers. In Morrison v. Olson, the Court held that restrictions on the Executive’s power to supervise and remove an independent counsel did not violate separation o f powers principles, but only because the Attorney General retained “sufficient control over the independent counsel to ensure that the President is able to perform his constitutionally assigned duties.” 487 U.S. at 696. In upholding the independent counsel statute, the Court stressed four aspects o f executive control. First, the Attorney General has control over initiation o f prosecutions because he retains the “unreviewable discretion” to decline to request the appointment o f an inde­ pendent counsel. See id. at 695-96. Second, the Attorney General controls the breadth o f the independent counsel’s investigation because it is he who provides the statement o f facts upon which the special court sets the counsel’s jurisdiction. Third, the Attorney General retains the power to remove the independent counsel for “good cause” and thus has “ample authority” to ensure that the counsel is properly fulfilling his duties. Id. at 696. Fourth, the Act expressly requires that, once appointed, the inde­ pendent counsel must comply with Justice Department policy unless it would be impossible to do so. See id. The Court’s analysis in Morrison highlights the unconstitutionality o f the qui tam provisions. In contrast to the independent counsel statute, under the qui tam provisions the Attorney General loses all control over the decision whether to initiate a suit. Even where the Attorney General determines that initiating a suit is not warranted, the qui tam relator is 229 empowered to override his judgment and initiate the fraud action. When the Attorney General concludes that proceeding with a suit is not merited or otherwise not in the United States’ interests, the fraud action neverthe­ less goes forward in the government’s name, under the complete control o f the self-interested relator. The Attorney General has no control over the breadth o f the suit. He has no pow er to remove the relator no matter how irresponsible his suit becomes. He has no power to require the relator to adhere to the rules and policies o f the Department o f Justice, despite the fact that the relator is suing in the name o f the United States.14 Further, if the Attorney General does not enter the suit within the first sixty days, his ability later to assert the interests o f the United States are sharply curtailed. He cannot intervene unless he persuades the court that “good cause” exists. Even then, the private relator still has “the right to conduct the action,” and the court may not “limit[] [his] status and rights.” 31 U.S.C. § 3730(c)(3). Moreover, even where the Attorney General does enter the case during the first sixty days, he does not have the right to take over the litigation. The relator remains a full party enti­ tled to participate in the case. Through his own conduct o f the case, the relator effectively can overrule litigation decisions made by the Attorney General, and he is specifically empowered to challenge any effort by the government to settle or dismiss the suit. When a dispute arises between the Attorney General and the relator, the ultimate decision is left to the discretion o f the court. There is another fundamental difference between the qui tam provisions and the independent counsel statute. The independent counsel device was intended to address a narrow“structural problem — the perceived conflict o f interest when the Attorney General is called upon to investigate crimi­ nal wrongdoing by his close colleagues within the executive branch. The Court accepted the independent counsel device as an appropriate means o f dealing with this intrabranch conflict. The device arguably does not undu­ ly encroach on executive power because its very purpose is to investigate impermissible executive activity. Moreover, the device is narrowly tailored to achieve its purpose; it encroaches on the Executive only to the limited extent necessary to protect against a conflict o f interest, while retaining executive control consistent with that objective. Both the premise o f the qui tam provisions and the means Congress has used to advance its goals are far more threatening to the executive branch. The legislative history o f the 1986 Amendments shows that Congress was acting out o f generalized distrust of, and dissatisfaction with, the way the executive branch was carrying out its law enforcement responsibilities. Senator Grassley felt that “the Government bureaucracy [was] ... unwilling to guard against or aggressively punish fraud.” 131 Cong. Rec. 22,322 (1985). Representative Berman was equally candid: 14 See the general discussion o f the statute’s provisions, supra pp. 215-17. 230 he supported qui tam because he thought that “the Department o f Justice has not done an acceptable job o f prosecuting defense contractor fraud.” 132 Cong. Rec. 22,339 (1986). Later in the debate, he explained that the relator was being given full party status at trial “to keep pressure on the Government to pursue the case in a diligent fashion.” 132 Cong. Rec. 29,322 (1986).15 The history o f qui tam thus confirms that it is not a narrowly focused measure designed to cure a structural defect within the executive branch. Rather, Congress is simply attempting to substitute its judgment on how to execute the laws for that o f the President. More narrowly tailored means are available to fulfill the legitimate purpose o f enhancing enforce­ ment o f procurement fraud cases. Congress could provide greater resources and, to the extent it wanted to encourage informers, could pro­ vide for simple bounties for their information without giving them the authority to conduct the litigation. In contrast, permitting Congress to choose its own private law enforcers violates separation o f powers and establishes a basis for gov­ ernance by tyranny. As Madison recognized, the legislative branch is the most powerful, and hence, potentially the most dangerous to the separa­ tion o f powers, because it can with the greater facility, mask under complicated and indirect measures, the encroachments which it makes on the co-ordinate departments. It is not unfrequently a ques­ tion o f real-nicety in legislative bodies, whether the opera­ tion o f a particular measure, will, or will not extend beyond the legislative sphere. The Federalist No. 48, at 334 (James Madison) (Jacob E. Cooke ed. 1961). No question o f “real-nicety” is involved here — in the qui tam provisions, Congress has extended its power far beyond the legislative sphere. Where, as here, Congress has provided for its law to be enforced by its own deputies, the essence o f separation o f powers has been violated, for “‘[w]hen the legislative and executive powers are united in the same per­ son or body,’ ... ‘there can be no liberty, because apprehensions may arise lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner.’” The Federalist No. 47, at 326 (James Madison) (Jacob E. Cooke ed. 1961) (quoting Montesquieu). Contrary to the Solicitor General’s view, the Attorney General’s right to 15 The legislators who supported the 1986 Amendments w ere echoing those who, in 1943, defeated repeal o f the False Claims Act's qui tam provisions An opponent o f qui tam, Senator Van Nuys, asked one o f its friends, Senator Murray, whether he had “sufficient confidence in the man who is a member o f the President’s Cabinet, the Attorney General, to believe that he w ill conserve the best interests o f the pub­ lic9” Senator Murray replied that “ [w ]e have found that that cannot always be relied upon.” 89 Cong. Rec 7575 (1943) 231 intervene and take over the case does not save the statute from violating separation o f powers principles. The statute enables a private party with only a mercenary interest in a case to force a suit to be brought, even though the Attorney General already may have decided for legitimate pol­ icy reasons not to prosecute. The Supreme Court has recognized that the Executive has the exclusive authority to decide whether to prosecute a case, United States v. Nixon, 418 U.S. 683, 693 (1974), because only a uni­ tary executive properly can balance the competing interests at stake, including law enforcement, foreign affairs, national security, and the overriding interest in just administration o f the laws. IV. HISTORY DOES NOT VALIDATE QUI TAM In the face o f qui tarn’s admittedly “grave dangers” to the President, the Solicitor General is prepared to disregard settled constitutional doctrine and decades o f clear Supreme Court decisions in order to uphold the facial valid­ ity o f qui tam. He claims this fateful step is compelled by qui tarn’s historical usage.16In fact, the historical argument is subject to decisive objections. To begin with, the entire historical inquiry is essentially pointless, since the version o f qui tam that the Solicitor General proposes to defend dif­ fers essentially from qui tam as it existed in history. Whatever else may have been true o f it, historical qui tam was a proceeding in which the rela­ tor sued on behalf o f the government, and once the suit was brought, there was no provision for government intervention. The Solicitor General recognizes that this violates the Appointments Clause and would substitute for it a new regime under which the relator sues on his own behalf and the government is entitled to enter the case. History does not contain that regime, and therefore cannot be invoked to support it. Moreover, the historical argument fails on its own terms. We agree with the Solicitor General that certain kinds o f constitutional questions will be influenced by certain kinds o f historical practices. But an examination o f the Supreme Court’s use of history demonstrates, not that history invari­ ably prevails, but that close questions where the application o f principle is unclear can be resolved by thoroughly considered, lonq-standing his­ torical practices that can be reconciled with doctrine. The constitution­ ality o f qui tam, however, is not a close question, and the use o f qui tam, far from being ingrained in our legal institutions, has been marginal at most. History cannot save qui tam. First, usage alone — regardless how longstanding and venerable — cannot validate a practice that clearly violates constitutional principles.17 IG That usage, which w e discuss more fu lly below, consists o f the existence o f qui tam in England and the enactm ent by early Congresses o f a fe w qui tam provisions 17 See, e.g., Walz v Tax C o m m ’n , 397 U.S. 664,678 (1970) ( “It is obviously correct that no one acquires a vested o r protected right in violation o f the Constitution by long use, even when that span o f time cov­ ers our entire national existence and indeed predates it."). 232 The Constitution, not history, is the supreme law. The Court repeatedly has stated that “ [standing alone, historical [practice] cannot justify con­ temporary [constitutional] violations,” Marsh v. Chambers, 463 U.S. at 790, even when the practice “covers our entire national existence and indeed predates it.” Walz v. Tax Com m ’n, 397 U.S. at 678. Qui tam is fundamentally irreconcilable with the doctrine o f standing under Article III and the President’s appointment powers and law enforcement functions under Article II. This is a case where, absent the invocation o f history, there would be no question about the practice’s unconstitutionality. The mere fact that the earliest congresses adopted a practice has never been enough to establish conclusively the practice’s constitutionality. Indeed, Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), struck down part o f the Judiciary Act o f 1789, a statute adopted by the First Congress. There are other examples o f actions taken by the First Congress that later became viewed as unconstitutional. See, e.g., Wallace v. Jaffree, 472 U.S. 38, 100 (1985) (Rehnquist, J., dissenting) (fed­ eral aid to sectarian schools viewed as unconstitutional despite grants o f such aid by First Congress); IN S v. Chadha, 462 U.S. 919, 982-84 n.18 (1983) White, J., dissenting) (use by First Congress o f precursors to leg­ islative veto held unconstitutional); H a ybu m ’s Case, 2 U.S. (2 Dali.) 409 (1792) (declining to enforce First Congress statute giving courts non-judi­ cial duties). Cf. New York Times Co. v. Sullivan, 376 U.S. 254, 276 (1964) ( “broad consensus” that Sedition Act o f 1798 was unconstitutional); Paul M. Bator, et. al., Hart & Wechsler’s The Federal Courts and the Federal System 65-67 (3d ed. 1988) (describing request by Thomas Jefferson for Supreme Court advisory opinions that was .rejected as unconstitutional). Likewise, the same Congress that proposed the Fourteenth Amendment adopted a statute one week later reaffirming racial segregation o f public schools in Washington, D.C. See Marsh v. Chambers, 463 U.S. at 814 n.30 (Brennan, J., dissenting). Given qui tarn’s basic conflict with the Constitution, we believe any argument to sustain qui tam based solely on prior practice must fail. We are unaware o f a single Supreme Court case that has upheld a past prac­ tice that could not be reconciled with principle. On the contrary, the Supreme Court has recognized that long-standing practice does not insu­ late even its own errors from correction.18 Historical practice can influence close cases where the implications of principle are not clear. In such close cases, the authority o f a practice depends mainly on three factors: (1) whether there is evidence the Framers actually considered the constitutional implications o f their 18 See, eg ., Shaffer v. H eitn er, 433 U.S. 186 (1977) (overruling Pen n o y er v. N e ff 95 U.S 714 (1878)); Brow n v Board o f Ed u c , 347 U.S. 483 (1954) (overruling Plessy v. Ferguson, 163 U.S. 537 (1896)); Graves v. N ew York ex r e f O'Keefe, 306 U.S 466 (1939) (overruling D obbin s v E rie C ounty, 41 U.S. (16 P e t ) 435 (1842)), E rie R R v Tompkins, 304 U S 64 (1938) (overruling Sivift v . Tyson, 41 U S (16 Pet.) 1 (1842)). 233 actions; (2) whether the practice is so longstanding and pervasive that it has become “part o f the fabric o f society;” and (3) whether the practice can be reconciled with constitutional principles in a way that does not undermine settled doctrine. See, e.g., Young v. United States ex ref. Vuitton et Fils S.A.; Marsh v. Chambers; Walz v. Tax Com m ’n. Even if the constitutionality o f qui tam were a close question, however, the statute could not satisfy these three factors. As to the first factor, the Court noted in Marsh v. Chambers that the weight to be accorded the actions o f the First Congress depends on the extent to which the members actually reflected upon how the provisions o f the new Constitution applied to the actions they were taking. “[E]vidence o f opposition to a measure ... infuses [the historical argu­ ment] with power by demonstrating that the subject was considered care­ fully and the action not taken thoughtlessly, by force o f long tradition and without regard to the problems posed” by principles embodied in the new Constitution. 463 U.S. at 791. Early qui tam statutes have all the hallmarks o f action “thoughtlessly” taken. As far as we are aware, the historical record shows no evidence that qui tarn’s constitutional implications were discussed or considered. On the contrary, because o f the unique historical contexts in which qui tam statutes were adopted, the device’s incompatibility with executive law enforcement functions would not have been immediately apparent. Qui tam simply did not bite hard enough for the Executive to recognize or resist it as a usurpation o f its authority. Moreover, we know that mem­ bers o f the First Congress held erroneous assumptions about the extent to which, under the Constitution, English common law and its institu­ tions had been carried over to the federal level of the United States.19The First Congress’s early use o f qui tam appears to have been nothing more than a manifestation of this initial confusion. As to the second factor, the Court has relied on history to resolve bor­ derline cases when the practice has been so pervasive as to become “part o f the fabric o f our society.” Id. at 792. A brief survey o f the history o f qui tam demonstrates that it is a marginal practice that could be eliminated without leaving a trace. 19 For the first six years after the Constitution was adopted, virtually all persons who considered the issue believed that the Constitution permitted a federal comm on law o f crimes. See Stewart Jay, O i'igin s o f Federal C o m m o n L a w P a ri One , 133 U Pa L Rev 1003 (1985). The Framers presumably believed this because it was a practice with which they w ere familiar at common law in Britain and in the states. Th e federal com m on law o f cnmes w as challenged only after a political dispute arose between the Federalist and Republican parties, which led the Republicans to begin to appreciate that the federal com ­ mon law o f crimes was inconsistent w ith the new Constitution’s vesting o f the legislative power solely in Congress Thom as Jefferson, who had approved a comm on law prosecution, became a vigorous advo­ cate o f the view that such prosecutions w ere unconstitutional Today, this is the conventional view o f the matter. Indeed, it is worth noting that com m on law cnm es and qui tam involve complementary errors: cnm inal comm on law is inconsistent w ith Congress’s legislative power, while qui tam is inconsistent with the President’s executive power. Both o f those exclusive vestings o f pow er w ere innovations introduced by the Constitution, the full implications o f which were only slowly perceived 234 In name, qui tam originated at common law, but common law qui tam — which disappeared as early as the 14th century — required injury in fact. See Washington University Note, at 83-86. An aggrieved party sought to gain access to royal courts by arguing that the private ii\jury he had sustained also was an affront to the king. By the end o f the 14th century, the royal courts were hearing suits without the fiction of qui tam, and the device faded. See id. at 85. Common law qui tam thus supports the Solicitor General’s position only if turned on its head: at common law, the actual iryury was to the plaintiff, and it was a legal fiction that iryury was also done the king; under the False Claims Act, the real iryury is to the government, and the Solicitor General urges upon us the fiction that it is the private plaintiff who has a viable cause o f action. After the 14th century, qui tam became a creature o f statute, under which injury in fact was often required. See Washington University Note, at 86. Some statutes, however, permitted private informers, regardless o f iryury, to prosecute a wrongdoer for violation o f a penal law. Although the statutes o f Parliament have only tangential bearing on the validity o f a practice under our new Constitution, it nevertheless is noteworthy that even in England, qui tam proved a vexatious device that ultimately could not be reconciled with the institutions o f free and responsible government. As in the early days o f our Republic, statutory qui tam served a necessary expedient for a medieval English Gov­ ernment that did not yet have the machinery for effective local law enforcement. Part o f the decline o f qui tam may be attributed to its history o f abuse. One commentator noted that the device was used “as means to gratify ill will. Litigation was stirred up simply in order that the informer might compound for a sum o f money. Threats to sue were an easy means o f levying blackmail.” 4 Holdsworth, A History of English Law 356 (1924). Lord Coke classed informers as “viperous vermin.” He contended that “the king cannot commit the sword o f his justice or the oil o f his mercy concerning any penal statute to any subject.” See Gerald Hurst, “ Common Informers ,” 147 Contemp. Rev. 189-90 (1935). From the 16th century for­ ward, the history o f qui tam is one o f retreat, as Parliament progressive­ ly restricted and curtailed its use. It ultimately was abolished there in 1951. See Washington University Note, at 83-88. On this side o f the Atlantic, qui tam never really gained a secure foothold, particularly at the federal level. It appears that six qui tam statutes, restricted to narrow enforcement areas, were enacted during the first four congresses. Adopted when the Executive was embryonic, these statutes were essentially stop-gap measures, confined to narrow circumstances where the Executive lacked the resources to enforce the law. Their intent was to assist a fledgling Executive, not supplant it. As the Executive’s law enforcement capabilities gathered strength, qui tam rapidly fell into disfavor. Within a decade, “the tide had ... tum[ed] 235 against” qui tam, and Congress started curtailing its use. Leonard D. White, The Federalists 417 (1956). The only other appreciable use o f qui tam came during the Nation’s greatest emergency, the Civil War. The unprecedented explosion in fed­ eral procurement, coupled with the extreme demands o f war, prompted enactment o f the False Claims Act. Following the war, qui tam again became dormant. By 1986, except for a flurry o f activity during World War II, qui tam had become an anachronism.20 We think a fair survey o f the history o f qui tam in the United States reveals it as, at best, a mar­ ginal and transitory device that never achieved prominence within our constitutional system because it was so fundamentally incompatible with that system. Nor does the practice of qui tam meet the third criterion, under which the Court may uphold a practice that can be accommodated as a narrow and self-contained exception that does not threaten to undermine impor­ tant constitutional principles. See e.g., Young v. ref. Vuitton et Fils S. A.. But qui tam is not capable o f being contained as a narrow exception, restricted in a principled manner to its limited historic scope.21 Qui tarn’s principle o f private law enforcement is so fundamentally incompatible with the established doctrines o f standing and separation o f powers that if qui tam were accepted, these doctrines would be drained o f any mean­ ing. Qui tam is, by its nature, an exception that will consume the rule. Qui tam thus does not have any o f the characteristics that have led the Supreme Court to give an historical practice the benefit o f the doubt in a close case. Moreover, there are two considerations specific to qui tam that reduce the authority of its historical pedigree. First, where separation of powers issues are at stake, w e do not think it is appropriate to give prior congressional action dispositive weight in determining the constitutional­ 20 For example, w e are aware o f only on e case in this century under the qui tam provisions that apply to the Indian trade, and that was brought by a relator who had been personally injured. See U nited States e x ref. Chase v. Wald, 557 F2d 157 (8th Cir.), cert denied, 434 U.S. 1002 (1977). Similarly, w e are aware o f only one 20th century action brought under the qui tam provision o f the postal laws, which nominal­ ly remained in fo rce until the creation o f the Postal Service in 1970. In that case, the Eighth Circuit held that the statute did not provide a private right o f action fo r the informer. Williams v. WeUs Fargo & Co Express, 177 F 352 (8th Cir. 1910). However, passage o f the 1986 Amendments significantly increased awards and subsequently has resulted in a substantial increase in the number o f qui tam suits. 21 I f w e find that the historical practice o f qui tam is per se constitutional because o f its pedigree, then w e must accept the entire practice as it actually existed, not merely those aspects o f it that seem least objectionable to m odem sensibilities. Th is would raise the possibility o f cnminal prosecutions by private persons, especially given that in England cnminal qui tam was w ell known. See Washington University N ote, at 87-89 In the United States, the penalty provision o f the first Census Act, which authorized qui tam enforcem ent, allowed the penalty to b e collected through an action in debt or by indictment or infor­ mation — the latter tw o implying a cnminal proceeding. A ct o f Mar. 1, 1790, ch. 2, § 3, 1 Stat. 101, 102. Moreover, some o f the early qui tam statutes, including the first Census Act, authonzed private persons w h o had not been ii\jured to sue public officials in qui tam to collect penalties for the officials’ failure to perform their duty. Id We could tolerate neither pnvate criminal prosecution nor the general pnvatization o f execu tive branch employee discipline. But if w e conclude that w e cannot accept some part o f the histoncal practice, there is no reason to defend the remainder under the theory that history is necessar­ ily correct 236 ity o f a later statute. Congress’s aggrandizing enactments should not serve as conclusive precedent on the scope o f Congress’s own authority. The Framers recognized that, in a mixed government, it is the legislative body — the “impetuous vortex” — that is the branch most disposed to usurp the powers o f the others. They also warned that “ [the legislative department] can with the greater facility, mask under complicated and indirect mea­ sures, the encroachments which it makes on the coordinate departments.” The Federalist No. 48, at 334 (James Madison) (Jacob E. Cooke ed. 1961). It is true that many o f the members o f the early congresses had been involved in framing the Constitution. We cannot assume for that reason, however, that as congressmen they were above attempted encroachments on the other branches. Their actions are not sacrosanct and should be sub­ ject to careful examination for “masked” encroachments on co-ordinate branches. Our obligation to the Constitution requires that we adhere to the principles the Framers wrote into that document, not to the Framers’ misapplications o f those principles.22 Longstanding congressional practice gains somewhat more preceden­ tial value where accompanied by equally longstanding ratification by one or both o f the other branches. But ratification requires more than unthinking acquiescence — it requires an informed and deliberate judg­ ment that a particular practice is constitutional. Early Executive acquies­ cence to qui tam is easily explained. As suggested above, because o f the unique historical context in which qui tam was adopted, its incompatibil­ ity with our constitutional framework was not immediately evident. An expedient measure — even one undergirded by a noxious principle — may, in a particular historical setting, appear benign and at first be w el­ comed without question because of its apparent functionality. It is only through experience, as the measure is applied through a range o f cir­ cumstances, that the pernicious principle reveals itself and becomes fully understood. There is no doubt that the First Congress resorted, sparing­ ly, to the expedient measure o f qui tam. But we doubt the Framers or the First President would have embraced the underlying principle had they considered and fully understood its implications. 22 Genuine separation o f powers, with three truly distinct and independent branches o f government under a written constitution, was very new in 1789. It is therefore not surprising that early congresses enacted a number o f measures that would today stnke us as plainly unconstitutional. For example, the courts w ere given a number o f non-judicial powers and duties, including the removaJ o f U.S Marshals, who then as now w ere appointed by the President. A ct o f Sept. 24, 1789, ch 20, § 27, 1 Stat 72, 87 The First Congress also directed federal judges to substitute fo r French consuls in investigating shipwrecks o f French vessels, A ct o f A pr 14,1792, ch. 24, § 1,1 Stat. 254, and to make reports to the Secretary o f the Treasury on customs forfeitures, Act o f May 26, 1790, ch 12, 1 Stat. at 122-23. See generally Russell Wheeler, E x tm ju d ic ia l A ctivities o f the Early Suprem e Court, 1973 Sup. Ct. Rev 123. Moreover, early congresses follow ed the colonial practice o f treating the Secretary o f the Treasury as if he w ere as much their officer as the President’s, requiring that he prepare reports at the request o f either House. A c t o f Sept 2, 1789, ch. 12, § 2, 1 Stat 65-66. This provision survives as 31 U S.C. § 331(d), which appears to be a clear violation o f IN S v. Chadha, 462 U.S. 919 (1983) 237 Second, we think a strong case can be made that Morrison v. Olson sharply undercuts any historical argument for qui tam. Morrison judges a practice’s constitutionality by the degree to which the practice actually interferes with the Executive’s functions. See 487 U.S. at 685-97. Under this balancing test, the early qui tam statutes arguably may have passed constitutional muster, while Congress’s 1986 use o f qui tam clearly does not. Early qui tam statutes involved little or no actual interference with the Executive. For practical purposes, they were confined to circum­ stances where the Executive’s capacity to enforce the law was virtually non-existent — either because, as in the case o f the 18th century statutes, the Executive was embryonic, or, as in the case o f the Civil War statute, the Executive was overwhelmed and otherwise occupied. Those statutes were designed to aid, not supplant, the Executive. They reflect no ambi­ tion to control or override the Executive’s official law enforcement activ­ ities. Prompted by necessity, they fell into disuse once necessity abated. In contrast, the 1986 Amendments substantially interfere with the Executive’s functions. The executive branch today is fully capable o f policing claims against the government.23 Indeed, procurement is now one o f the most heavily regulated and policed sectors o f public activity. In resuscitating the dormant qui tam device, Congress’s express purpose was to interfere with the Executive’s law enforcement activities, to displace official prosecutorial discretion with the mercenary motives o f private bounty hunters. The narrow use o f qui tam in the 18th century cannot validate the kind of encroachment qui tam causes today. V. THE SOLICITOR GENERAL’S UNWISE STRATEGY The Solicitor General's approach declines to face squarely the consti­ tutional questions raised by the qui tam statute. Rather, it adopts the tac­ tic o f arguing that the statute is facially constitutional and constitutional as it has been applied so far, but reserving the right to argue a violation o f separation o f powers based on a balancing o f interests if additional encroachment on the Executive’s powers subsequently occurs. This approach employs both bad tactics and bad law. First, the approach is tactically unwise because it forces us to forfeit the strongest objective arguments in favor o f protecting executive branch interests. The Solicitor General advocates total relinquishment o f the standing and Appointments Clause arguments; yet, as discussed above, under existing case law these arguments point clearly toward a conclu­ sion that the statute is unconstitutional. Once those are abandoned, all that will remain to protect the President’s interests will be the argument 23 Even assuming the Executive lacks sufficient resources to investigate and prosecute such claims, there are other ways Congress can address the problem that would be constitutional, such as funding more Department o f Justice resources targeted at those claims. 238 that at some undefined point, the subjective degree o f encroachment on executive powers will have become unbearable. That sort o f unprincipled balancing approach leaves the Executive entirely vulnerable to an adverse judicial decision. Moreover, conceding standing itself weakens the separation of powers argument. To satisfy the standing requirements, we must accept the fic­ tion that the relator and the Executive are coplaintiffs pursuing two sep­ arate claims. With that fiction in place, the encroachment on executive powers is difficult to resist, since the issue becomes framed in terms of the competing interests o f two litigants rather than an infringement on separation o f powers. Second, the approach represents a completely disingenuous way of determining a statute’s constitutionality. Although it is generally true that a statute should be construed when possible to avoid constitutional prob­ lems, portions o f the statute cannot be twisted or ignored to reach that result. The Court recently reaffirmed the longstanding principle that in assessing the facial validity o f a statute, it will not ‘“press statutory con­ struction “to the point o f disingenuous evasion” even to avoid a constitu­ tional question.’” Public Citizen v. United States Department of Justice, 491 U.S. at 467 (quoting United States v. Locke, 471 U.S. 84, 96 (1985) (quoting Moore Ice Cream Co. v. Rose, 289 U.S. 373, 379 (1933))). Accord Webster v. Reproductive Health Servs., 492 U.S. 490 (1989) (reprimand­ ing the plurality for “distorting the statute” to avoid invalidating it) (Blackmun, J., dissenting). Even the Solicitor General concedes that some provisions of the qui tam statute are facially unconstitutional, such as the grant to the court o f the ultimate power to decide whether the gov­ ernment may settle or dismiss a qui tam suit when the relator objects. See Taranto Memo at 12. To argue, then, that these provisions must be ignored for now and later applied other than as written to avoid an asapplied challenge engages in the very sort o f “disingenuous evasion” against which the Court has cautioned. Moreover, by conceding that the statute is constitutional as applied to date, the Solicitor General concedes the legality o f the prime example o f encroachment on executive powers — the Executive’s ability to initiate suit and the discretion to decide which cases not to pursue. Third, the Solicitor General’s proposed balancing approach does not properly apply Morrison v. Olson. The Solicitor General advocates exam­ ining each case brought under the qui tam statute to ascertain the degree of that case’s encroachment on executive powers. This method o f analy­ sis is completely inconsistent with the balancing approach used in Morrison, which looked instead at the potential impact o f applying the statute according to its terms. The Solicitor General also advocates a more global approach to ana­ lyzing the potential encroachment on executive powers. Under this approach, the Solicitor General recommends waiting to see if Congress 239 employs the qui tam method o f enforcement in other statutory contexts. If so, the Solicitor General postulates that the cumulative burden on executive powers might be so great that the amendments to the False Claims Act then would be unconstitutional. This method o f analysis has no basis in law. The Court has never determined the constitutionality o f a statute based on the effect o f other statutes. Moreover, there is no prin­ cipled way to determine how many such statutes must be enacted before the encroachment achieves constitutional proportions. Finally, the Solicitor General’s piecemeal approach fundamentally con­ flicts with his historical argument. The Solicitor General contends in part that qui tam must be upheld because its historical acceptance by courts and Congress since this country’s inception has been “ancient, regular, and unbroken.” Taranto Memo at 4. In particular, the Solicitor General has pointed to the favorable treatment given an earlier version o f the False Claims Act qui tam provisions in United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943). That version o f the Act, however, did not con­ tain the provisions introduced by the 1986 Amendments granting the court the ultimate authority to dismiss or settle a qui tam action in which the government has intervened. The Solicitor General acknowledges that his view o f the statute’s constitutionality ultimately depends upon a prop­ er application o f those provisions. See Taranto Memo at 12. The Solicitor General cannot consistently claim both that qui tam has historical con­ stitutionality and that the current statute’s validity rests on the proper application o f provisions introduced in 1986. The two arguments cannot and do not coexist. VI. CONCLUSION For these reasons we recommend that you authorize the Civil Division to enter an appropriate case and present the executive branch’s argu­ ments against the constitutionality o f qui tam. WILLIAM P. BARR Assistant Attorney General Office o f Legal Counsel 240

Write a legal research memo on the following topic.

April 27, 1977 78-78 MEMORANDUM OPINION FOR THE COUNSEL TO THE PRESIDENT The White House—The Vice President— Gifts (3 U.S.C. §§ 110, 111; 16 U.S.C. § 6a) You have asked for our views regarding the acceptance of gifts to be used in the White House, the official residence of the Vice President, or the offices of the President and Vice President. We separately answer the questions raised by the proposed gifts. I. Gifts of Art and Furnishings for the White House, the Vice President’s Residence or the Offices of the President and Vice President There is- express statutory authorization for the acceptance of such gifts. Section 6 of Pub. L. No. 93-346, 88 Stat. 340 (1974), as amended, 3 U.S.C. § 111 note (1976), authorizes the acceptance of donations of art and furnishings for the official residence of the Vice President: The Secretary of the Navy is authorized and directed, with the approval of the Vice President, to accept donations of money or property for the furnishing of or making improvements in or about the temporary official residence of the Vice President, all such donations to become the property of the United States and to be accounted for as such. Gifts for use in the White House are authorized by 3 U.S.C. § 110 (1976), which provides in pertinent part: With a view to conserving in the White House the best specimens of the early American furniture and furnishings, and for the purpose of maintaining the interior of the White House in keeping with its original design, the Director of the National Park Service is author­ ized and directed, with the approval of the President, to accept donations of furniture and furnishings for use in the White House, all such articles thus donated to become the property of the United States and to be accounted for as such. 349 This statute authorizes gifts of “ furniture and furnishings” for the official residence and the offices of the President and Vice President and other offices that are located in the East or West Wing of the White House.1 We construe the term “ furnishings” to include gifts of art and other decorations that cannot be readily characterized as “ furniture.” It should be noted, however, that the statute appears to contemplate the acceptance of early American items, and only where this would be consistent with maintaining the interior of the White House in keeping with its original design. Aside from this specific provision applicable to the White House, the Secretary of the Interior is authorized to accept, in the name of the United States, “ gifts or bequests of money for immediate disbursement or other property in the interest of the National Park Service, its activities, or its service, as heretofore authorized by law.” 16 U.S.C. § 6a (1976). In our view, this statute constitutes authority for the acceptance of gifts in connection with the Department of the Interior’s general statutory responsibility under Pub. L. No. 87-286 for maintenance of the White House and its grounds.2 This Office advised the White House in 1974 that 16 U.S.C. § 6a authorized the Secretary of the Interior to accept the donation of a swimming pool at the White House for the President’s use. The mentioned statutes are silent on the question of the acceptance of conditional gifts. As a general rule, such gifts may not be accepted by the Government without the express approval of Congress. Story v. Snyder, 184 F. (2d) 454, 456 (D.C. Cir. 1950). The policy of the Curator of the White House has been to refuse gifts offered on the condition that they be displayed in a certain manner or location in the White House, on the ground that this would interfere with the continuing responsibility of the Committee for the Preserva­ tion of the White House to maintain the interior of the White House in the manner deemed suitable at a particular time. Executive Order No. 11145, 3 CFR 184 (1964-1965 compilation), reprinted in 3 U.S.C. § 110 note (1976). The type of condition that would be acceptable to the Curator would be, for example, attaching a small plaque to the gift to identify the donor. The current White House policy appears to be consistent with the general rule on conditional gifts outlined above. We recommend that a similar policy on acceptance of conditional gifts be adopted for the Vice President’s residence. It is our understanding that, by arrangement with the National Park Service, maintenance and furnishing of the East and West Wings of the White House are the responsibility of the General Services Administration (GSA). According to 'Section 1 of Pub. L. No. 87-286, 75 Stat. 586 (1961), describes the “ While H ouse" as “ all of that portion of reservation numbered 1 in the city of W ashington, District of Columbia, which is within the President’s park enclosure, comprising eighteen and seven one-hundredths acres . . . ” 2The Department of the Interior’s responsibility derives from the language in § I o f Pub. L. No. 87-286 that the White House and its grounds “ shall be administered pursuant to the Act of August 25, 1916, 39 Stat. 535; 16 U.S.C. 1-3, and Acts supplementary thereto and amendatory thereof.” The Act of August 25, 1916, established the National Park Service in the Department of the Interior. 350 the Curator’s Office, few of the furnishings donated to the White House are used in the East and West Wings; when they are, the items are apparently regarded as being on loan from the.collection intended for the residence. We see no reason why gifts donated to the White House, especially those of an historical nature, cannot be used in the East and West Wings in this fashion. The General Services Administration has jurisdiction over the Old Executive Office Building and would therefore be the proper recipient of any gifts for use in that building. The Administrator of GSA is authorized to accept on behalf of the United States “ unconditional gifts of real, personal, or other property in aid of any project or function” within his jurisdiction. 40 U.S.C. § 298a (1976). Because GSA has assumed responsibility for maintenance and furnishing of the East and West Wings, we believe it may accept gifts for use there as well. It should be noted, however, that 40 U.S.C. § 298a (1976) refers only to unconditional gifts.3 II. Gifts of Services Attendant to the Loan of Art dr Furnish­ ings to the Residences or Offices, such as Collection, Crating, Transportation, and Insurance While there is no express statutory authority for the White House or the official residence of the Vice President to receive works of art or other objects on loan, we see no reason to object to this practice.4 Nor do we see any basis for objecting to the acceptance of services related to the loan, such as collection, crating, transportation, and insurance. In 1974 this Office advised the White House that a painting that had been given to the White House on the condition that it be exhibited to the public could be viewed as a loan and be returned to the donor if it was no longer to be displayed. That earlier advice necessarily proceeded on the assumption that such a loan could be accepted. Moreover, the Comptroller General has ruled that agencies may accept a loan of equipment to be used in performing an agency function, although he noted that this practice should not be encouraged because of the possibility of claims against the Government or the appearance of favoritism in later agency dealings with the lender. 22 Comp. Gen. 153 (1942). In most cases there is little likelihood of an appearance of favoritism toward one who lends items to the White House or the Vice President’s residence. With respect to the possibility of claims against the Government, the Committee for the Preservation of the 3This Office advised the White House in 1964 that 40 U.S.C. § 298a (1976) permitted GSA to accept a donation of television lights to be installed in one of the Wings by several networks. It was emphasized that the fixtures, once installed, were to be regarded as property of the United States for all purposes. 4See Secretary of the Navy Instruction 4001.2E (Oct. 18, 1978) governing acceptance of gifts for the Vice President's residence under Pub. L. No. 93-346, supra. Paragraph 3.e. defines the term "gift” to include loans, except loans of money. See H 4.b. Arguably. 3 U.S.C. § 110 (1976) and 16 U.S.C. § 6a (1976) could also be construed to permit acceptance of loans, which are in a sense only temporary gifts. 351 White House has in the past purchased an insurance policy covering all items on loan to the White House. If, as it appears, loans of furnishings may be accepted for use in the White House or Vice President’s residence, we see no reason why the lender may not pay the costs incident to the loan. We do not mean to suggest, however, that funds appropriated for the Executive Residence or the Official Residence of the Vice President under the Executive Office Appropriations Act of 1977, Pub. L. No. 94-363, 90 Stat. 966 (1976), may not be used to pay these costs. The appropriations are available for the “ refurnishing” and “ furnishing” of the two residences, respectively. Presumably they may be spent for the outright acquisition of suitable art and furnishings. Obtaining such items on loan is merely another form of acquisition, albeit of a temporary nature, and we see no reason why appropriated funds cannot be expended to meet the costs of their use by the Government. Cf. 22 Comp. Gen. 153, 154 (1942). In this connection, the Curator’s Office informed us that it has in the past spent appropriated funds to pay the costs incidental to loans of art and furnishings to the White House. One final point with respect to loans may be of interest. The Committee for the Preservation of the White House has apparently required lenders of property to state in writing that they will not sell the property in question for a certain period of time after it has been returned by the White House and to promise that the fact that the property was once displayed in the White House will not be mentioned in advertising in connection with its later sale. This obviously is intended to prevent trading on the White House name. It may be appropriate to adopt a similar policy for the Vice President’s residence. III. Gifts for the Purpose of Acquiring Art, Furnishings, or Attendant Services The special statute authorizing the acceptance of furniture and furnishings for the White House does not appear to permit acceptance of cash donations. 3 U.S.C. § 110 (1976). However, the general statutory authority of the Secretary of the Interior to accept gifts in connection with National Park Service activities specifically mentions money, 16 U.S.C. § 6a (1976), as does the special statute applicable to the Vice President’s residence, Pub. L. No. 93-346, supra. The statute applicable to GSA does not expressly mention gifts of money, but such gifts would appear to be.included in the general phrase in 40 U.S.C. § 298a (1976), “ gifts of real, personal, or other property.” IV. The Proper Recipient of Gifts Under paragraph 12 of Secretary of the Navy Instruction (SECNAV) 4001,2E, the Chief of Naval Operations is designated as the “ cognizant official” responsible for processing gifts to the Vice President’s residence; but it is the Secretary of the Navy who ultimately accepts such gifts.5 5If any questions arise regarding the acceptance of gifts for the Vice President’s residence, the Administrative Law Section of the Navy’s Office of the Judge Advocate General is familiar with (Continued) By tradition, the Committee for the Preservation of the White House, established by Executive Order No. 11145, has been designated as the recipient of gifts made to the White House, although it, of course, accepts such gifts on behalf of the United States. As we understand it, donations of funds to be used for furnishing the White House are accepted by the Committee and deposited in a special account maintained by the National Park Service for use by the Committee. All gifts are acknowledged by a certificate issued by the Commit­ tee.6 The Curator’s Office assists the Committee in these matters. Finally, the regional office of the General Services Administration should be consulted regarding donations of art or furnishings to be used in the Old Executive Office Building or gifts of furniture of no particular historical significance to be used in the East or West Wings of the White House. V. Solicitation of Gifts We are not aware of any statute that either authorizes or prohibits members of the President’s or Vice President’s staff from soliciting gifts of art, furnishings, and attendant services.7 To the degree that the President and Vice President become involved in the gift process, we see no reason why their staffs may not assist them. However, the applicable statutes appear to assign primary responsibility for the White House and Vice President’s residence to other entities, subject to the general supervision of the President and Vice President. As mentioned above, the Committee for the Preservation of the White House has traditionally assumed responsibility for acceptance of gifts to the White House. In addition, the restrictions contained in Executive Order No. 11222, 3 CFR 306 (1964-1965 compilation), reprinted in 18 U.S.C. § 201, note (1976), and the implementing regulations for the Executive Office of the President should be considered.8 Section 201(a) of the Executive order prohibits any employee covered by the order from soliciting any gift, loan, or other thing of monetary value from any person, organization, or group that: (1) has, or is seeking to obtain, contractual or other business or financial relationships with his agency; (Continued) internal procedures for gifts to the Navy in general, including those to the Vice President’s residence. 6We are not aware that a comparable committee has been established for the Vice President’s residence, but one could presumably be created by the Secretary of the Navy, with the Vice President’s approval. Such a committee could relieve the Vice President’s staff and family of any administrative burden in accepting gifts and dispel any potential awkwardness in having them directly involved in the process. 740 U.S.C. § 193p. (1976) makes it unlawful for "anyone other than an authorized employee or concessionaire . . . to solicit alms, subscriptions, or contributions” (emphasis added) within the buildings or grounds of the Institution. Although this statute is obviously inapplicable to the present situation, it is the only statute pertaining to solicitation of gifts by Federal employees. “The Office of the Vice President is not included among the agencies to which the Executive Office’s Standards of Conduct apply. See 3 CFR IOO,735-2(a) (1977). However, we understand that Vice President Rockefeller issued Standards of Conduct regulations for the Vice President’s staff which are still in effect and are sim ilar‘in most respects to those of the Executive Office. 353 (2) conducts operations or activities which are regulated by his agency; or (3) has interests which may be substantially affected by the performance or nonperformance of his official duty. See also 3 CFR 100.735-14(a) (1977). This section was directed primarily at the solicitation of gifts for the employee’s personal benefits. Nevertheless, as a matter of policy, solicitations should be avoided where the persons or organizations involved have a significant interest in matters that are likely to be reviewed in the White House or the Vice President’s Office. See also Executive Order No. 11222, §§ 201(c)(2), (4), and (6); 3 CFR 100.735-4(c)(2), (4) and (6) (1977). Even where the potential donor has no particular interest in matters pending before the President or Vice President, we believe it would be advisable for members of the President’s and Vice President’s regular staffs to avoid extensive involvement in the solicitation of gifts or loans. Time spent by these individuals on solicitation of gifts would of necessity be diverted from their ordinary governmental duties, thereby, perhaps, giving the appearance of “ [i]mpeding Government efficiency and economy.” Executive Order No. 11222, § 201(c)(3); 3 CFR 100.735-4(c)(3) (1977). Finally, although loans of art and furnishings to the White House and the Vice President’s residence are official in nature, they result in at least some personal benefit in terms of use and enjoyment by the President and Vice President, their families, and staff members. To this extent, excessive involvement of staff members in solicitation might create an appearance of ” [u]sing public office for private gain,” which is prohibited by section 201(c)(1) of Executive Order No. 11222 and 3 CFR 100.735-4(c)(l) (1977). VI. Forms of Agreement The Office of the Curator has stated that most donors do not use any particular form or deed for gifts to the White House. The usual procedure is for the donor to address a letter to the Committee for the Preservation of the White House stating that an unconditional gift is being made to the Committee on behalf of the United States.9 The Curator’s Office also informed us that this arrangement has proved to be satisfactory in the past and that no problems have arisen. We see no reason why the same procedure cannot be used for gifts to the Vice President’s residence, especially if a policy is adopted of not accepting conditional gifts. Vice President Rockefeller executed a deed of gift for certain property he donated to the Vice President’s residence, but a copy of this deed was not ’The Curator’s Office also stated that it makes clear that it is the donor’s responsibility to have the properly assessed for tax purposes. 354 retained in the files o f the Office of the N avy’s Judge Advocate General because it was an unrestricted gift. Generally, deeds should be filed with the Secretary of the Navy through the Chief of Naval Operations, the cognizant official for gifts to the Vice President’s residence, as a permanent record of the gift. A letter o f acknowledgement from the Secretary of the Navy to the donor would be adequate evidence o f acceptance. Jo h n M . H armon A cting A ssistant A ttorney G eneral Office o f L egal Counsel 355

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Recess Appointments During an Intrasession Recess T he President may make interim recess appointments during an intrasession recess o f eighteen days. January 14, 1992 M e m o r a n d u m O p i n io n f o r t h e D e p u t y C o u n s e l t o t h e P r e s id e n t This memorandum responds to your request that this Office determine whether the President may make appointments under the Recess Appoint­ ments Clause to the Federal Housing Finance Board (“FHFB”), the Legal Services Corporation (“LSC”), and the office of the Chief Executive Officer o f the Resolution Trust Corporation (“RTC”) during the current recess of the Senate, which began on January 3, 1992 and will end on January 21, 1992. We conclude that he may. Common to all of these appointments is the issue whether the President may make recess appointments during an intrasession recess of eighteen days.1 Article II, Section 2, Clause 3 of the Constitution provides: “The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End o f their next Session.” The longstanding view of the Attorneys General has been that the term “recess” includes intrasession recesses if they are of substantial length. Attorney General Daugherty held in 1921 that the Presi­ dent had the power to make a recess appointment during a twenty-eight day intrasession recess. He explained that recess appointments could be made during any recess of such duration that the Senate could “not receive com ­ munications from the President or participate as a body in making appointments.” 33 Op. Att’y Gen. 20, 24 (1921) (quoting S. Rep. No. 4389, 58th Cong., 3d Sess. 1905; 39 Cong. Rec. 3823). According to Attorney General Daugherty, while “the line of demarcation cannot be accurately drawn,” id. at 25, ' For practical purposes with respect to nominations, this recess closely resembles one of substantially greater length. House Concurrent Resolution 260, enacted on November 27, 1991, provides that the first session of the 102nd Congress stood adjourned until 11:55 a.m. on January 3, 1992, or until M em ­ bers were otherwise notified to reassemble. H. Con. Res. 260, I02d Cong., 1st Sess. (1991). It also provides that "when the Congress convenes on January 3, 1992 . . . , the Senate shall not conduct any organizational or legislative business and when it recesses or adjourns on that day, it stand in recess or adjournm ent until 11:30 a.m. on Tuesday, January 21,1992 [or until otherwise notified to reassem ble].” Id. Except for its brief formal session on January 3, then, the Senate will have been absent from N ovem ber 27, 1991 until January 21, 1992, a period of fifty-four days. 15 the President is necessarily vested with a large, although not unlimited, discretion to determine when there is a real and genuine recess making it impossible for him to receive the advice and consent of the Senate. Every presumption is to be indulged in favor of the validity of whatever action he may take. Attorney General Daugherty’s opinion has been cited with approval in subsequent opinions of the Attorneys General, and has been relied on by the Com ptroller General as well. See e.g., 41 Op. Att’y Gen. 463, 468 (1960); 28 Comp. Gen. 30, 34-36 (1948). Past practice is consistent with exercise o f the recess appointment power during an intrasession recess of eighteen days. President Coolidge made a recess appointment during a fifteen day recess. Memorandum for the Coun­ sel to the President, from Leon Ulman, Deputy Assistant Attorney General, Office of Legal Counsel at 3 (Dec. 3, 1971). In 1985 President Reagan made recess appointments during an eighteen day intrasession recess. Memo­ randum to Files, from Herman Marcuse, Office of Legal Counsel (Jan. 28, 1985). Accordingly, we believe that the President may constitutionally make recess appointments during the current intrasession recess.2 We next address the specific offices you have identified. All of the mem­ bers o f the Boards of Directors of the LSC and the FHFB had been serving pursuant to recess appointments that expired when the First Session of the 102nd Congress ended on January 3, 1992. Those offices are thus now vacant and the President may make recess appointments to them during the current recess. See Permissibility o f Recess Appointments o f Directors o f the Federal Housing Finance Board, 15 Op. O.L.C. 91 (1991); Memorandum for John P. Schmitz, Deputy Counsel to the President, from Timothy E. Flanigan, Special Assistant, Office of Legal Counsel (Oct. 17, 1990). Finally, we believe that the President may recess appoint the Chief Ex­ ecutive Officer of the RTC. That office was created by section 201 of the Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991, Pub. L. No. 102-233, 105 Stat. 1761 (“Act”), which the Presi­ dent signed on December 12, 1991. Although certain of the substantive provisions of the Act do not take effect until February 1, 1992, see title III of the Act, the provision creating the position of Chief Executive Officer is not subject to any special effective date provision, and hence went into effect upon enactment. The Attorneys General have long believed that the President has the power to make an original recess appointment to a newly created position. See 12 Op. A tt’y Gen. 455 (1868); 14 Op. Att’y Gen. 562 (1875); 18 Op. A tt’y Gen. 28 (1880), a position upheld in United States v. A llocco, 305 F.2d 704, 713-14 (2d Cir. 1962), cert, denied, 371 U.S. 964 Id. 2 Attorney General Daugherty, however, suggested in 1921 that “an adjournment for 5 or even 10 days” would not be sufficient “to constitute the recess intended by the Constitution.” 33 Op. Att’y Gen. at 25. 16 (1963). The Office therefore now exists and is vacant for purposes o f the Recess Appointments Clause. In conclusion, we believe that the current recess constitutes a sufficient period for the President to make the aforementioned recess appointments as a matter of law. As a matter of policy, we suggest that the President make the appointments as soon in the recess as possible. TIMOTHY E. FLANIGAN Acting Assistant Attorney General Office o f Legal Counsel 17

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Proposed Legislation to Restrict the Sales of Alcoholic Beverages in Interstate Commerce Proposed legislation to prohibit the sale in interstate commerce of alcohol to persons under the age o f 21 is a valid exercise o f Congress’ power under the Commerce Clause and consistent with the Twenty-First Amendment. The Twenty-First Amendment permits states to enact legislation more restrictive than would otherw ise be permissible under the Com merce Clause; however, it does not deprive the federal government o f any authority over alcohol under the Commerce Clause. The proposed legislation would not be “in violation” of more permissive state law s. Even if it were read to be “in violation” o f such law s, a court would likely find that the federal interest in preventing damage to national commerce outweighed any particular state’s interest in permitting access to liquor for persons under age 21. April 16, 1984 M em orandum O p in io n O f f ic e for th e of A s s is t a n t A t t o r n e y G e n e r a l , L e g is l a t iv e A f f a ir s This responds to your request of January 20, 1984 for our views on H.R. 3870, a bill to restrict the sales of alcoholic beverages in interstate commerce. Although Congress has not yet asked for the Department’s views on this bill, you have requested our opinion in view of the questions raised by opponents of the bill and the public debate over it.1We have reviewed H.R. 3870 and believe that it is constitutional. Section 1 of the bill contains congressional findings on the economic dam­ age done by drunk drivers, the disproportionate number of accidents caused by drunk drivers who are under the age of 21, and the benefits to the public welfare that will result from restricting sales of alcohol to those over 21. Section 2 prohibits the sale in interstate commerce of alcohol to those under 21: No person may sell or offer to sell any alcoholic beverage to any individual who is under the age of twenty-one if the beverage is or has traveled in interstate commerce or if the sale or offer to sell is made in an establishment which is in or affects interstate commerce. 1 See W ash. Post, Feb. 9, 1984, at A 12, col. 6; 70 A.B.A. J.18 (Apr. 1984). The O ffice of M anagem ent and Budget has recently asked for our view s on this bill. 53 Section 3 provides definitions; § 4, penalties; and § 5 authorizes civil actions by citizens against those who violate § 2 ? Section 6 permits the Secretary of Commerce to waive the application of § 2 in any state that has a law “effective in prohibiting the sale of liquor” to those under 21, and to cancel the waiver if the law is ineffective. Section 7 makes § 2 effective two years after passage of H .R .3870. The constitutional question raised by H.R. 3870 is whether § 2 of the Twenty-First Amendment to the Constitution prohibits the federal government from exercising authority under the Commerce Clause, U.S. Const, art. I, § 8, cl. 3, that would otherwise clearly furnish a constitutional basis for enacting this legislation.3 Although the issue is not, because of its novelty, entirely free from doubt, we believe that the proposed legislation is constitutionally permissible. The Twenty-First Amendment to the Constitution repealed the Eighteenth Amendment and the imposition of nationwide prohibition. U.S. Const, amend. XXI. Section 2 of the Amendment provides: “The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.” The effect of § 2 is to permit states to enact legislation more restrictive than would otherwise be permissible under the Commerce Clause. See U nited States v. Frankfort D istilleries, Inc., 324 U.S. 293, 300 (1945) (Frankfurter, J., concurring); 76 Cong. Rec. 4141, 4143 (1933) (statement of Sen. Blaine). That is to say, the Twenty-First Amendment permits states to go beyond non-discriminatory regulation based on their police powers4 and enact discriminatory regulation.5 However, early arguments that § 2 entirely de­ 2 A s reported o u t by the Committee on Energy and C om m erce o f the H ouse o f R epresentatives, § 5 o f H.R. 3870 w ould perm it any one to file civil su its to enjoin violations of § 2. The suits could be brought only in state court. 3 G iven the phraseology o f § 2 of H.R. 3870, w e have analyzed this b ill under the Com m erce Clause. We do not ad d ress th e federal governm ent’s p o w e r over alcohol arising under other portions of the C onstitution, such as the Export-Im port Clause, see Department o f Revenue v. James Beam Corp., 377 U.S. 341 (1964), or the Fourteenth A m en d m en t's requirem ent o f equal protection, see Craig v. Boren, 429 U S. 190 (1976). 4 F o r exam ple, p rio r to passage o f th e Eighteenth A m endm ent, the Suprem e C ourt rebuffed Commerce C lause challenges to several state statutes prohibiting en tirely the sale o r manufacture o f alcohol. The Court held th at the law s w ere valid exercises o f the states’ p olice power o v e r local com m erce even though their effects “may reach beyond the State b y lessening the am ount of intoxicating liquors exported." Kidd v. Pearson, 128 U .S. 1, 22 (1888). Seealso F oster v. Kansas, 112 U.S. 201, 206 (1884); Bartemeyer v. Iowa, 85 U .S. 129, 133 (1873); The License Cases, 4 6 U.S. (5 H ow .) 504, 57 6 -7 7 (1847) (Taney, C.J.). 5 T hus, state statutes th at regulate the entry o f alcohol in order to p rotect a state liquor monopoly. State Board v. Young's Market Co., 299 U.S. 59 (1936), o r to retaliate against other states’ discrim inatory laws, Indianapolis Brewing Co. v. Liquor Control Comm’n, 305 U.S. 391 (1939), have been upheld even though such legislation “w ould obviously have b e en unconstitutional” in the absence of the Tw enty-First A mend­ m ent. State Board v. Young’s Market Co., 299 U.S. at 62. Prior to passage o f the Eighteenth A mendment, sim ilar discrim inatory statu tes barring th e entry o f alcohol into a state except under the auspices o f the state liqu o r m onopoly w ere struck down as an im perm issible burden on interstate com m erce. See, e.g., Vance v. W.A. Vandercook Co. (N o. 1), 170 U .S. 438 (1898); Scott v. Donald. 165 U.S. 58 (1897). The legislative histo ry o f § 2 indicates that it was passed, at least in part, to assure the “ dry” states that they would be able to defend th em selves against shipments o f alcohol into their states. 76 C ong. Rec. 4141 (1933). 54 prived the federal government of any authority under the Commerce Clause over alcohol were quickly rejected. United States v. Frankfort Distilleries, Inc., 324 U.S. 293,299 (1945); Jameson & Co. v. Morgenthau, 307 U.S. 171, 172-73 (1939).6 We believe that H.R. 3870 is constitutional for three reasons. First, we do not believe that H.R. 3870 violates the literal language of § 2 of the Twenty-First Amendment. Forbidding the sale of alcohol to those under 21 in a state that permits sales to those over, for example, the age of 18 is not “in violation of the laws” of the state. Id. It may replace a permissive state policy with a more restrictive federal statute, but it does so without literally violating a state statute.7 Thus, the ban on sale of alcohol to those under 21 raises questions under the Twenty-First Amendment only because some have assumed that broad federal deference to state action in this area is a matter of constitutional law rather than policy. Second, even assuming that H.R. 3870 were read to be “in violation” of a more permissive state law because the bill conflicts with the policy expressed by the state law, we believe that it would, under the balancing test articulated in the Supreme Court’s most recently decided case in this area, California Retail Liquor Dealers Ass 'n v. M idcal Aluminum, Inc., 445 U.S. 97, 108 (1980) (M idcal), pass constitutional muster because the federal interests would outweigh any particular state’s interest. M idcal involved a Sherman Act challenge to a California law governing wine pricing. In resolving whether the Sherman Act applied, the Supreme Court addressed the issue whether § 2 of the Twenty-First Amendment permit­ ted California to countermand the congressional policy in favor of competition. The Court emphasized that § 2 and the Commerce Clause must be viewed as part of a whole. ‘“ Like other provisions of the Constitution, each must be considered in light of the other, and in the context of the issues and interests at stake in any concrete case.’” Id. at 109 (quoting H ostetter v. Idlewild Liquor Corp., 377 U.S. 324, 331-32 (1964)). The focus of the analysis should be a “pragmatic effort to harmonize state and federal powers” that gives proper respect to both Clauses: 6 Id Jameson & Co. v. Morgenthau, the C ourt said: [T]he Federal Alcohol A dm inistration Act was attacked upon the ground that the Tw enty-First ■ Amendm ent to the Federal C onstitution gives to the States com plete and exclusive control over commerce in intoxicating liquors, unlim ited by the commerce clause, and hence that Congress has no longer authority to control the im portation o f these com m odities into the United States. W e see no substance in this contention. 307 U.S. at 172-73; see also H anfv. United States. 235 F.2d 710 (8th Cir.), cert . denied, 352 U.S. 880 (1956); Old Monastery Co. v. United States, 147 F 2 d 905 (4th C ir.), cert, denied, 326 U.S. 734 (1945); Jatros v. Bowles. 143 F.2d 453 (6th Cir. 1944); Arrow Distilleries, Inc. v. Alexander, 109 F.2d 397 (7th Cir), cert, denied, 310 U .S. 646 (1940) 7 T herefore, in states that do not forbid drinking under the age o f 18, H R. 3870’s passage w ill not oust a more perm issive state statute. The Fifth Circuit has read the T w enty-First Amendment as providing authority for perm issive state alcohol laws to override more restrictive federal regulations, notw ithstanding the Suprem acy C lause. Cf. Castlewood Int'l Corp. v. Simon, 596 F.2d 638 (5th Cir. 1979), vacated, 446 U.S. 949 (1980), opinion reinstated on remand, 626 F.2d 1200 (5th Cir. 1980) (Florida law perm itting sales at unlim ited discount to retailers prevailed over D epartm ent o f the Treasury regulation forbidding same; F lorida's interest in regulating intrastate retailers greater than federal interest in uniform national regula­ tions). See also Wine Indus, v. Miller. 609 F.2d 1167 (5th Cir. 1980); Washington Brewers Inst. v. United States. 137 F.2d 964 (9th Cir.), cert, denied, 320 U.S. 776 (1943). 55 [T]here is no bright line between federal and state powers over liquor. The Twenty-First Amendment grants the States virtually complete control over whether to permit importation or sale of liquor and how to structure the liquor distribution system. Al­ though States retain substantial discretion to establish other liquor regulations, those controls may be subject to the federal commerce power in appropriate situations. The competing state and federal interests can be reconciled only after careful scru­ tiny of those concerns in a “concrete case.” M idcal, 445 U.S. at 110.8 The analysis of H.R. 3870 must begin, therefore, with an identification of the state and federal interests involved. States that already prohibit drinking by those under 21 have interests that coincide, at least presently, with the federal interests detailed in § 1 of H.R. 3870. The practical effect of the proposed bill would be to assist those states in enforcing their own laws by reducing the availability of alcohol in neighboring states that have more permissive laws. On the other hand, states that have drinking ages lower than 21 have presumably made a legislative determination that drinking by those over, for example, the age of 18 is permissible. The interests of these states may be described as protecting their separate decisions to permit access to liquor to those over 18.9 The federal government’s interest is, we assume, the economic injuries and resultant allocation of resources flowing in interstate commerce caused by 8 In Midcal, the C ourt identified the federal interest as the “fam iliar and substantial” one o f a national policy favoring com petition. 445 U.S. at 110. The state's interest in the resale price m aintenance statute had been identified by the C alifo rn ia Supreme C ourt as tw ofold: prom otion o f tem perance and orderly market conditions. Id. at 112. T hat same c o u rt had then found, how ever, that there was in fact little correlation betw een the statute and eith er tem perance or orderly m arket conditions. The U nited States Suprem e Court stated, in co n clu d in g that the federal in terests outw eighed state concerns. “ [w]e have no basis fo r disagreeing w ith the view o f the C alifornia courts th at the asserted state interests are less substantial than the national policy in fav o r o f com petition.” Id. at 113. 9 T here may also be states, particularly those w ith a m onopoly on liquor sales, that have an econom ic interest in prom oting sales to those o v er 18. T o the extent that states advance an econom ic interest, however, it seem s reasonable to assum e that the federal governm ent can dem onstrate that its econom ic interest in property and people probably outweighs w hatever the particular sta te 's individual interest is in revenue from potential sales. W e do not believe that th e exercise o f C ongress’ authority in this fashion under the Commerce C lause w ould be h eld to violate any state interest protected by the Tenth A mendment. The sale o f alcohol by a state m onopoly is not one o f the “integral governm ent functions,” National League o f Cities v. (Jsery, 426 U.S. 833, 855 (1976), protected by that Amendm ent from federal interference. See Ohio v. Helvering, 292 U.S. 360, 3 6 8 -6 9 (1934); South Carolina v. United States, 199 U.S. 437, 463 (1905). Both Ohio and South Carolina involved state challenges to federal taxes on the state liquor monopoly. The South Carolina Court held th at the sale o f liquor by a state m onopoly “ is o f a private nature” and not a governm ental function w hose taxation w ould “ im pede o r embarrass a State in the discharge o f its functions.” 199 U.S. at 463. This ruling was reaffirm ed in the Ohio case notw ithstanding passage o f the Tw enty-First Amendment: A d istinction is sought in the fact th a t after that case was decided the Eighteenth A mendment was passed, and thereby, it is contended, the traffic in intoxicating liquors ceased to be pnvate business, and then w ith the repeal o f the am endm ent assum ed a status which enables a state to carry it on under the police pow er. The point seem s to us altogether fanciful. The Eighteenth A m endm ent outlaw ed the traffic; but, certainly, it did not have the effect o f converting w hat had alw ays been a private activity in to a governm ental function. Ohio v. Helvering, 292 U .S. at 369. 56 drunk drivers under the age of 21. H.R. 3870, § 1. The loss of life, the crippling of individuals, the loss to production because of time lost from work, and the property damage caused by accidents involving such drunk drivers will, we assume, be detailed in H.R. 3870’s legislative history.10 Using M idcal 's bal­ ancing test, we believe that a court could find, assuming a sufficient legislative history, that the federal government’s interest in preventing damage to national commerce outweighed any particular state’s interest in permitting access to liquor for those under 21. Finally and, we believe, importantly, given that § 2 of the Twenty-First Amendment was intended to assure that states would be able to enact restrictive legislation retaining prohibition on a local level, 76 Cong. Rec. 4140-41 (1933), it would be anomalous if states could use § 2 to insist on permissive state laws that could frustrate federal efforts directed towards a limited form of temperance. Conclusion H.R. 3870 will not mandate importation of alcohol into any state in violation of its laws. Under the M idcal test, Congress could, we believe, articulate a federal interest that would outweigh a state’s interest in providing its citizens under the age of 21 access to alcohol. We therefore believe that H.R. 3870 will survive constitutional attack. L a r r y L . S im m s Deputy Assistant Attorney General Office o f Legal Counsel 10 W e assum e that the statistical evidence will be more persuasive than that presented to the Suprem e C ourt in Craig v. Boren, 429 U .S. 190 (1976), and rejected there as too tenuous. See id. at 200-04 (striking dow n state ban on sale o f 3.2 percent beer to males between the ages o f 18 and 21).

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"(Slip Opinion)\n\nLicensing Marijuana Cultivation in Compliance\nwith the Single Convention on Narc(...TRUNCATED)

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"Exclusion of Medicine and Medical Supplies From Controls\nUnder the Export Administration Act of 19(...TRUNCATED)

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"Whether the Federal Trade Commission Has Authority\nto Prosecute Actions for Criminal Contempt\nThe(...TRUNCATED)

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"Enforcement of INA Employer Sanctions Provisions Against\nFederal Government Entities\nSection 274A(...TRUNCATED)

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"Enforcement of INA Employer Sanctions Provisions Against\nFederal Government Entities\nSection 274A(...TRUNCATED)