Respondents Brief — Vermont Agency of Natural Resources v. United States Ex Rel. Stevens

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No. 98-1828 Ney

IN THE

Supreme Court of the United States

STATE OF VERMONT

AGENCY OF NATURAL RESOURCES,

Petitioner,

Vv.

UNITED STATES OF AMERICA EX REL.

JONATHAN STEVENS,

Respondent.

On Writ Of Certiorari

To The United States Court Of Appeals

For The Second Circuit

BRIEF FOR RESPONDENT

Of Counsel: THEODORE B. OLSON

STEPHEN J. SOULE Counsel of Record

MATTHEW E.C. PIFER THOMAS G. HUNGAR

MARK G. HALL MIGUEL A. ESTRADA

PAUL, FRANK & COLLINS, INC GIBSON, DUNN & CRUTCHER LLP

P.O. Box 1307 1050 Connecticut Avenue, N.W.

Burlington, Vermont 05402 Washington, D.C. 20036

(802) 658-2311 (202) 955-8500

Counsel for Respondent

)

QUESTIONS PRESENTED

1. Whether a gui fam suit against a State under the False

Claims Act is barred by the Eleventh Amendment.

2. Whether a State is a “person” subject to suit under the

False Claims Act, 31 U.S.C. § 3729 et seq.

PARTIES TO THE PROCEEDING

All parties to the proceedings below appear in the

caption.

TABLE OF CONTENTS

Page

i ccaptenoneosesen i

PARTIES TO THE PROCEEDING. .............ccccccssssccssceseseeseees ii

CONSTITUTIONAL AND STATUTORY

I II ED occ nccedcctsteccsicctooceesossssecssescseceses l

ss csestnnomaonnnennes l

SUMMARY OF ARGUMENT............:.:ccccccsscssscessseresseeesneeees 9

ECS SSE cee 11

I. THE UNITED STATES MAY USE THE

“QUI TAM” VEHICLE TO SUE A STATE

OF THE UNION FOR FRAUDULENTLY

OBTAINING FEDERAL PROPERTY .................... 11

A. States Of The Union Have No Eleventh

Amendment Immunity Against The

ST 14

B. This Court Has Applied A Real-Party-In-

Interest Test To Determine Whether The

United States Is A Party to Litigation ............... 15

C. The United States Is The Real Party In

Interest In Qui Tam Suits Under The Act........... 24

D. The False Claims Act Satisfies Any

Requirement For Executive Branch

Control That This Court Reasonably

END aI a 33

Il. STATES OF THE UNION ARE “PERSONS”

THAT MAY SUE AND BE SUED UNDER

ESSERE EIA OD 37

TABLE OF CONTENTS—Continued

Page

A. Because The Court Of Appeals Lacked

Jurisdiction Over Vermont's Statutory

Arguments, This Court May Not Consider

B. No Canon of Construction Requires This

Court To Presume That States Are Not

tg FS ee 40

C. The Act Unambiguously Applies To

RN Se Fate Sie ieitenssvccihttidinnaanincichaslinstaians 44

CT AIS ccocrsnsecsiitutipssigiesstbinetiascideespanaiiianiabaaaliienites 49

ee >

—_ -

TABLE OF AUTHORITIES

CASES Pages(s)

Alden v. Maine, 119 S. Ct. 2240 (1999) oo... .ccccccccecceees passim

Alfred L. Snapp & Son, Inc. v. Puerto Rico,

ER ESS ECS I Oe a Oe 23

Arizona v. California, 460 U.S. 605 (1983) ......cccccceeeeens 33

Arkansas v. Farm Credit Servs.,

RE EE 43

Ashwander v. Tennessee Valley Auth.,

(REN EIST AE a 26

Bell v. United States, 462 U.S. 356 (1983) ........cccccceeeeeeeeeees 32

Blanchard v. Bergeron, 489 U.S. 87 (1989) ......ccceceseeeenes 48

Blatchford v. Native Village of Noatak,

Ay 7 RRR EE ee er passim

Block v. North Dakota, 461 U.S. 273 (1983) ..........000+ 43, 49

Bowsher v. Synar, 478 U.S. 714 (1986) ......ccccccccssceeseseeeees 30

Brogan v. United States, 118 S. Ct. 805 (1998) ............0000 45

Brown v. Gardner, 513 U.S. 115 (1994) .....ccccccccccseeseeeeenees 47

California v. Deep Sea Research, Inc.,

I alias coc cednemepcnamiinessociansins 16

Citizens Bank v. Strumpf, 516 U.S. 16 (1995) «0.0.00: 46

City of Mesquite v. Aladdin's Castle, Inc.,

RS SP fii cai casi ieneninntiaicsbtnipnbbicsesisecounes 39

City of Newport v. Fact Concerts, Inc., 453 U.S.

ST Tinh ciaticdedintnicsbnstpeasliajbeaundartendiemoramarnnnens 49

Cohen v. Beneficial Indus. Loan Corp., 337 U.S.

EELS RI! SE EN 38

Confiscation Cases, 74 U.S. (7 Wall.) 454

I a al arian cnc ated abliencetinatansenceorepeenenenetons 35

Davis v. Gray, 83 U.S. (16 Wall.) 203 (1872) ........cccc-ceeseees 16

Dugan v. Rank, 372 U.S. 609 (1963) ........ccccecereeseereneeesenees 15

Edelman v. Jordan, 415 U.S. 651 (1974) ....cccccccccceseeeeeeeennes 39

Ex parte New York, No. 1, 256 U.S. 490 (1921) ........... 11,17

TABLE OF AUTHORITIES—Continued

Page(s)

Ex parte Young, 256 U.S. 123 (1908) ........ccccccceseeeeeeeeneenees 17

Ford Motor Co. v. Department of the Treasury,

ik Ry Sree ee eee 17

Georgia v. Evans, 316 U.S. 159 (1942) .....cccccecceeereereeenenees 45

Gibson v. Chouteau, 80 U.S. (13 Wall.) 92

CORTE) sccrceciessscncsncacinctininsiindiliiiaialaiieesarestcctstmiscntitigsn 25, 26

Hans v. Louisiana, 134 U.S. 1 (1890) ........ccccccceeesersereeeeeneee 11

Helvering v. Stockholms Enskilda Bank, 293

CRS, BS CI acrasdasintectnecinrertiblicingitaranenencmsstnvagnatnnen, 41

Hilton v. South Carolina Public Rys. Comm'n,

SOD TE, BF Ce ciciepictneteciinrttcninntenrsinnictnenss 40, 41

Ickes v. Fox, FOO U.S. 82 (1937) .....0.ccccercssecssecsessosssecseresees 3

Idaho v. Couer d'Alene Tribe, 521 U.S. 261

CRIT sccicduisentincstnguibivatininiiiaiiiatgiiabebmmbeimmaniepnaninont 17

In re Ayers, 123 U.S. 443 (1887) ........:ccesccsceeserneereeessenenes 16

In re Schimmels, 127 F.3d 875 (9th Cir. 1997) ........cccc00000+ 25

International Union of Operating Engineers v.

Flair Builders, Inc., 406 U.S. 487 (1972) ....c0.-ccceeeeeeees 45

Jefferson County Pharm. Ass'n v. Abbott Labs.,

Pg eee 41

Kansas v. United States, 204 U.S. 331 (1907) ........ 13, 15, 16

Knowlton v. Moore, 178 U.S. 41 (1900) .......cccccccceeerereeeeees 30

Kokkonen v. Guardian Life Ins. Co., 511 U.S.

DID CIB sccittietnssttninsisciiitatiitnasitninitiinisineseninennntinins 20

L ‘Invincible, 14 U.S. (1 Wheat.) 238 (1816) .........ccccceeeeeeees 31

Light v. United States, 220 U.S. 523 (1911) ........cccceee seenees 26

Louisiana v. Texas, 176 U.S. 1 (1900) ......cccccccecceeseeeeeenenenes 17

Marvin v. Trout, 199 U.S. 212 (1905) ......ccccccserereeereneeenennes 27

McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316

CRB IDD cetrrenescoretniciliscrenttnnguptninatneimputinniatemnntes 29, 32

Mine Safety Appliances Co. v. Forrestal, 326

CE, BIE CIE ckesnceticetecienesntinsittinitabiintiinentinnncccsgian 3, 20

Minnesota v. Hitchcock, 185 U.S. 373 (1902) .........1c0eeeeees 16

Vii

TABLE OF AUTHORITIES—Continued

Page(s)

Missouri, Kansas & Texas Ry. Co. v. Missouri

R.R. & Warehouse Comm 'nrs,

ERS IEE RES + 0 ee 17,19

Missouri v. Illinois & Sanitary Dist. of Chicago,

a AMEDD dilbeniisiatidindelinicidennhttiestthcnisegustecontatiines 18

Morissette v. United States,

a RENEE hd ar A | Snel ee Oe 32

Myers v. United States, 272 U.S. 52 (1926) ........ccccccccesseees 30

Naganab v. Hitchcock, 202 U.S. 473 (1906) ..........ccccccee0000 16

New Hampshire v. Louisiana, 108 U.S. 76

SE Gelenpihiiaasendiliiaiemttediatiidi pti dcnsccstenpsinelies 18

North Dakota v. Minnesota, 263 U.S. 365

ARES Ero FREI AES SEAR re eno 23

Ohio v. Helvering, 292 U.S. 360 (1934) o...ccccccccccccceeeseeeeeees 41

Oklahoma ex rel. Johnson v. Cook, 304 U.S. 387

SIT sessaidihivigiicittllicarmdiniitehgelaiidthahsiintarinichtntpininahitinecaenis 18, 19

Oregon v. Hitchcock, 202 U.S. 60 (1906) .........ccccccccccceeeeees 15

Osborn v. Bank of the United States,

22 U.S. (9 Wheat.) 738 (1824) .........cc.ccsccseresssscssessseosees 16

Pennhurst State Sch. & Hosp. v. Halderman,

SP SII ‘dcithndicahiniiadsenasaieipupenntctinnninanonitianes 17, 33

Pennsylvania v. New Jersey,

Ee NR, PE I Cs aN aa 23

Pennsylvania v. Union Gas Co.,

REE RI er ee 42, 43

Primate Protection League v. Administrators of

Tulane Educational Fund,

A RE RSS? Cn Ca 40, 44

Principality of Monaco v. Mississippi,

FEI EL A 11,15

Printz v. United States, 521 U.S. 898 (1997) ..........cccccccceees 30

Puerto Rico Aqueduct & Sewer Authority v.

Metcalf & Eddy, Inc., 506 U.S. 139 (1993) ........... 6, 7, 38

Vili

TABLE OF AUTHORITIES—Continued

Page(s)

Rainwater v. United States,

SOG ULE, FED wcenswvitiestreneatinviniesinemnavenin 1, 25

Ruddy v. Rossi, 248 U.S. 104 (1918) .........cccccccssseeeereeeennees 25

Salinas v. United States, 522 U.S. 52 (1997) .......ccccccceerseees 4)

Seminole Tribe of Florida v. Florida,

SET TBR GORD tielilcteceninidibinsastetiebenesinnsimnviitia 11, 42

Shea v. Vialpando, 416 U.S. 251 (1974) ...ccccccccecseseeeeneenenes 45

Sims v. United States, 359 U.S. 108 (1959) ..........ccecceeeeeeees 45

South Carolina v. Baker, 485 U.S. 505 (1988) .........:ccceeee: 37

South Dakota v. North Carolina,

RSE CEE, SD necectnecesonstshvnicniinctinnnendsceccnntenatianeiie 19

Stuart v. Laird, 5 U.S. (1 Cranch) 299 (1803) ...........ccccceee 30

Swint v. Chambers County Comm'n,

ee | a ree 9, 37, 38

The Gray Jacket, 72 U.S. (5 Wall.) 370 (1866) ...........000+6 35

Thornburg v. Gingles, 478 U.S. 30 (1986) ......:cccceeeeeeeeneees 48

United States ex rel. Fine v. Chevron, U.S.A.,

Inc., 39 F.3d 957 (9th Cir. 1994), vacated on

other grounds, 72 F.3d 740 (9th Cir. 1995) .......c0000200 12

United States ex rel. Foulds v. Texas Tech

University, 171 F.3d 279, petition for cert.

filed, 68 U.S.L.W. 3138 (Aug. 23, 1999) ......cccccccceeeeeees 12

United States ex rel. Marcus v. Hess, 317 U.S.

SOF CRDGDD evinierssvsincatinnsuininmnintiitelentinaianipinensmmats passim

United States ex rel. Milam v. University of

Texas, 961 F.2d 46 (4th Cir. 1992) ......ccccccrsceseseeeeeeernenes 12

United States ex rel. Rodgers v. Arkansas, 154

F.3d 865 (8th Cir. 1998), cert. dismissed,

BOS Be. CR BOR CRD cetrcctscescncsensnsinviannenbeanseretnicoeencosin 12

United States ex rel. Stevens v. State of Vermont

Agency of Natural Resources, 162 F.3d 195

(38 Cae BODE. ccsstnivcocntithisscerdccsshanicensbecniinnennitiionnniaitin 12

United States v. Bornstein, 423 U.S. 303 (1976) ........00++ 1,48

TABLE OF AUTHORITIES—Continued

Page(s)

United States v. California, 332 U.S. 19 (1947) .....ccccecce 43

United States v. Chemical Found., Inc.,

a C iiacieidicidtn Lasiticnpsintbbesshniiaadabventencesunaoves 36

United States v. Cooper Corp., 312 U.S. 600

SRIDED Wintatindiiichecacertnibindsacdincetabinbitiahineiaatvesapbebebth 40, 41, 44

United States v. Curtiss-Wright Export Corp.,

a: A OEE Unlchamadetbesttiincddapsaicnniesibeaisapeaneuiatate 30

United States v. Gonzales, 520 U.S. 1 (1997) .....cccccccceeceeees 45

United States v. Gratiot, 39 U.S. (14 Pet.) 526

SENET vevietidchasenelwilidhida hiceimsbinsciosthduidhiiadibadiiembsheidghneceesotoves 26

United States v. Halper, 490 U.S. 435 (1989) ........cccccccceeee 48

United States v. McNinch, 356 U.S. 595 (1958) .......ccccccccees l

United States v. Mezzanatto,

DEE TO fi dl taicicsnisncegsninthcoemioniuatsidbineeseniaonied 36

United States v. Michigan, 190 U.S. 379 (1903) ..........0006 15

United States v. Minnesota,

I i si ese eee 22

United States v. Mississippi,

REE SEIT ERE ee Oe ON EIT 15

United States v. National Treasury Emp. Union,

I i ns 39

United States v. Neifert-White Co., 390 U.S. 228

III ihc sccaisdibsinsenlblalaitacihaaieidiagihaniabatntistisan tes ddiabapetianys 21, 47

United States v. Peters, 3 U.S. (3 Dallas) 121

SETI cshcicceensediituetthditeesinepsnanndtphatablasheadinidibanpiedanaaiiniens 30, 31

United States v. Rosenwasser, 323 U.S. 360

iL seestonionss 45

United States v. San Jacinto Tin Co., 125 U.S.

RRS RSC RIE EN RRR SS Se OO 35

United States v. Texas, 143 U.S. 621 (1892) «0.0.0... 10, 14

United States v. Turkette, 452 U.S. 576 (1981) .....ccccccccceees 45

United States v. X-Citement Video, Inc., 513

TINTED sscnciuith cciitstien cdienhaciahinbbatebbcttatliginescetianareeys 41

TABLE OF AUTHORITIES—Continued

Page(s)

Utah Div. of State Lands v. United States, 482

UB. 190 CISC) .ccccccecccecciovsneconinsssesonssevonenpsinicagsceccsntsnece 25

Van Brocklin v. Tennessee, 117 U.S. 151 (1886) ..............: 26

Welch v. Texas Dep't of Highways & Pub.

Transp., 483 U.S. 468 (1987) .....ccccccsseesereerneerensnensensenees 11

West Virginia v. United States, 479 U.S. 305

C1 DBT). siecensrercnccvesceadssiitinnssenessonbisbinesnssnebstectnescaeenees 15, 43

Will v. Michigan Dep't of State Police, 491 U.S.

SB CRDEID ov cncrccsercctosersecosecenitensnesmnmnevespeeqocesonsocesonoeseteodie 39

Worcester v. Georgia, 31 U.S. (6 Pet.) 515

C1 BSA) cececccdncossarendsvciecesoveranecotnosbanisagnsscanvensentsaesetetetenss 30

CONSTITUTION

U.S. Comat. ant. TV, G3, GB. 2 ....ccccccccessnssesscossecsecses 1, 10, 13, 25

U.S. Comet, Genet. FEE ..ccrvevsccesccssossiscscesnacvetoveseoscnetensespecseees 11

STATUTES AND LEGISLATIVE MATERIALS

2B U.S.C. 8 LDDE ..cercercorererscserersscscosnsscosenseossessesseovenessessonees 38

28 U.S.C. §§ 1292(a)-(B) ..........ccccecscrsssecercrseersecssnsensessnssnsess 38

2B U.S.C. § BOTS cxrcerererverecceseseccessonsveononesciveccsserensessenecseeoanes 38

31 U.S.C. § 3729 68 0g. .......ccssecrccescrscccororersrcesercsonesess 1,2, 44

31 U.S.C.6 STILE) ...0cccccceossscersesescrarscosenosensssssscosenssnsenees 2, 34

32 UG.C. G STROUD) neencensccceorerceccsscesccccorccccensnnsssscsessesosoces 2, 31

31 USC. § STSCI A) «.0.-coreserreccnvescrsvecccccscosscerseveeneess 2, 3, 34

31 U.S.C. § STSOCMA) «...0:00rcreoserscrcossersssccercseversnssesenesnrssrsoees 2

31 UGC. GSTIOEIG) .ncceceseccccscssnerccesnncorecsssecscesorisnnssneessorene 3

31 U.S.C. § STIOLE NA) ..000.0.cccrccscsssccccsccscosenesconseverevssestecnscses 3

31 U.S.C. § ST3EOLD) .......eccnrccccscrscsccseccecrerconcsseseereesenoesensenseness 3

31 U.S.C. § ST3OU) ...0-.c.ccerecressesrcrerceresorenssncsessesosncecssorsoneess 32

31 U.S.C. § ST32D) n.scsecco.cccrccnceccserserosossossserssncensconecessssseoss 47

31 U.S.C. § ST3BB(S) ....0.000.00erccerecrscscerceesssoncsescesnoesasencesss 45, 46

TABLE OF AUTHORITIES—Continued

Page(s)

Fe Re IID ‘stil cichussascnsescctneisieceisd dcbidmmbbidssleaceudss 46

Rg OAR FREE eae ae Sie a 46

Pe ici ies cicicd sineans eden sitinaheeasebos 46

OF Sie te EE iiidinns Ssceicsdecciaitakcennitcnieccccsscnssabbakiondactnsasen 39

Act of July 31, 1789, ch. 5, § 8, 1 Stat. 29 oe 28

Act of Sept. 1, 1789, ch. 11, § 21, 1 Stat. 55.0.0... 28

Act of March 1, 1790, ch. 2, § 3, 1 Stat. 101 ooo. 28

Act of May 31, 1790, ch. 15, § 2, 1 Stat. 124.0000... 28

Act of July 5, 1790, ch. 25, § 1, 1 Stat. 129 oc 29

Act of July 20, 1790, ch. 29, §§ 1, 4, 1 Stat. 131 00... 28

Act of July 22, 1790, ch. 33, § 3, 1 Stat. 137 occu. 28

Act of Aug. 4, 1790, ch. 35, §§ 55, 69, 1 Stat. 145.0000... 28

Act of Feb. 25, 1791, ch. 10, §§ 8, 9, 1 Stat. 191.00. 28

Act of March 3, 1791, ch. 15, § 44, 1 Stat. 199 oo. 28

Act of March 3, 1791, ch. 8, § 1, 1 Stat. 215 oo... 28

Act of Feb. 20, 1792, ch. 7, § 25, 1 Stat. 232.0000... 29

Act of March 1, 1793, ch. 19, § 12, 1 Stat. 329 oo... 29

Act of June 5, 1794, ch. 45, § 10, 1 Stat. 373.000... 29

Act of June 5, 1794, ch. 48, § 5, 1 Stat. 376.......cccccceceees 29

Act of June 5, 1794, ch. 50, § 3, 1 Stat. 381.00... eee 29

Act of June 5, 1794, ch. 51, § 21, 1 Stat. 384 oo. 29

Act of June 9, 1794, ch. 65, § 12, 1 Stat. 397.000... 29

Fa Se BO, Bt Bi icttbcnsnasicrnctcninesssncsaveaiverevie 29

Act of March 3, 1797, ch. 13, § 3, 1 Stat. 506.00... 29

Act of March 2, 1863, ch. 67, § 1, 12 Stat. 696 ..........ccc 2

Clean Water Act, 33 U.S.C. § 1251 ef Seq. .......cccccccceeseeeseeees 3

Comprehensive Environmental Kesponse,

Compensation and Liability Act of 1980, 42

II i 42

Fair Labor Standards Act of 1938, 52 Stat. 1060,

codified as amended at 29 U.S.C. § 201 er

RS pscaietetntsdensestehndebstnncnbindninibeah eenecinnstinnensancetnbsovevvortnenees 21

False Claims Act, 31 U.S.C. § 3729 ef seg. ..........000000: 1,2,44

xil

TABLE OF AUTHORITIES—Continued

Page(s)

False Claims Amendments Act of 1986, Pub. L.

GD-~ GET; BOD Dia, SAG ncceccissncecqecsciscceinintnbsnsiensccesecsoree 44

S. REP. No. 345, 99th Cong., 2d Sess. (1986) .............. passim

Safe Drinking Water Act,

42 U.S.C. § BOOT G6 BOG. 101000.ccseccersncsrccesesescosvsnsscseneeseces 3,6

OTHER AUTHORITIES

2 WILLIAM HAWKINS, A TREATISE OF THE PLEAS

OF THE CROWN (1972 €01.) .......ccsssersrecscecscssosseserenrenseeeees 27

3 WILLIAM BLACKSTONE, COMMENTARIES ON

THE LAWS OF ENGLAND (1768).............0:csseceeeeessseeeseerenes 27

JOHN T. BoESE, CIVIL FALSE CLAIMS AND QUI

TAR ACTION 3-8 CISIPP wecrcceccotccscreccrcceccvoseccvessesevcssveces 28

Dan D. Pitzer, Comment, Qui Tam: A

Comparative Analysis of Its Application in

the United States and the British

Commonwealth, 7 TEX. INTL L. J. 415

(1972). <.ceccscsasssenseresshitenesuansnsnoqnenaccontansenersteneqscesienesenseoses 28

Cass R. Sunstein, What's Standing After Lujan?

Of Citizen Suits, “Injuries,” and Article III,

91 MICH. L. REV. 163 (1992) ........ssscssecerrereeereerseeneees 28

Note, The History and Development of Qui Tam,

ROTB Werle. UU. Li GY. cciescescsseseiccsccvinnvnsscrsininctovecicts 27-28

BRIEF FOR RESPONDENT

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The Eleventh Amendment to the United States

Constitution and the relevant provisions of the False Claims

Act, 31 U.S.C. § 3729 et seq., are set forth at Pet. App. 91-

125. The Property Clause of the United States Constitution,

U.S. Const. art. IV, § 3, cl. 2, provides:

The Congress shall have Power to dispose of and

make all needful Rules and Regulations respecting the

Territory or other Property belonging to the United

States; and nothing in this Constitution shall be so

construed as to Prejudice any Claims of the United

States, or of any particular State.

STATEMENT

1. The False Claims Act “was originally passed in 1863

after disclosure of widespread fraud against the Government

during the War Between: the States.” Rainwater v. United

States, 356 U.S. 590, 592 (1958); see United States v.

Bornstein, 423 U.S. 303, 309 (1976). “Testimony before the

Congress painted a sordid picture of how the United States

had been billed for nonexistent or worthless goods, charged

exorbitant prices for goods delivered, and generally robbed in

purchasing the necessities of war.” United States vy.

MeNinch, 356 U.S. 595, 599 (1958). In order “to provide

protection against those who would ‘cheat the United

States,’” United States ex rel. Marcus v. Hess, 317 U.S. 537,

544 (1943) (citation omitted), and “broadly to protect the

funds and property of the Government,” Rainwater, 356 U.S.

at 592, Congress made it illegal “to present or cause to be

pre: ented for payment or approval * * * any claim upon the

Government of the United States * * * knowing such claim

to be false, fictitious, or fraudulent.” Act of March 2, 1863,

ch. 67, § 1, 12 Stat. 696.

The Act, which was substantially rewritten, expanded,

and enacted afresh in 1986, now makes “any person” who

knowingly presents a false or fraudulent claim to the United

States “liable to the United States Government for a civil

penalty” not exceeding $10,000 “plus 3 times the amount of

damages which the Government sustains.” 31 U.S.C. § 3729.

As it has in substance since 1863, the Act directs federal

prosecutors to “diligently investigate” violations of the Act,

and it authorizes them to “bring a civil action * * * against

the person” that submitted the false claim. 31 U.S.C.

§ 3730(a). The Act also provides, as did the original statute,

an additional enforcement mechanism in the form of a “qui

tam” suit: it authorizes “[a] person [to] bring a civil action

for a violation of section 3729 for the person and for the

United States Government. The action shall be brought in

the name of the Government.” 31 U.S.C. § 3730(b).

A person who brings a qui tam action (called a “relator”)

must file his complaint in camera and under seal. The com-

plaint and a “written disclos:>” of the facts on which the

relator bases his complaint must be served on the Attorney

General and on the local United States Attorney. 31 U.S.C.

§ 3730(b)(2). The complaint, however, may “not be served

on the defendant until the court so orders,” usually after it is

unsealed. The complaint must remain under seal for at least

60 days—a period that may be extended by leave of the

court—while government attorneys investigate the com-

plaint’s allegations. By the end of that 60-day period (and

any extensions) the Attorney General must inform the district

court whether government attorneys will take over the action.

Ibid.

If government attorneys do take over the case, they “have

the primary responsibility for prosecuting the action,” and

they may, subject to court approval, dismiss it altogether

“notwithstanding the objections of the [relator],” compromise

it, Or prosecute it to judgment. Jd. at § 3730(c)(2). If the

Attorney General elects not to take over the case, on the other

hand, the relator may prosecute the action in the name of the

United States—but he must do so at his own expense and

may become liable for the defendant’s attorneys fees and

expenses if the suit later is found by the court to be frivolous

or vexatious. Jd. at §§ 3730(c)(3), 3730(d)(4), 3730(f).

Moreover, the Attorney General still retains the right to

intervene and litigate the action upon “a showing of good

cause.” Jd. at § 3730(c)(3). A portion of any recovery by the

United States—whether or not the Attorney General elected

to take over the litigation—must be shared with the relator.

2. Respondent Jonathan Stevens commenced this gui

tam action against the State of Vermont Agency of Natural

Resources (“VANR”) in May 1995. The allegations of the

complaint, which “must” be presumed to be true “for the

purpose of disposing of the jurisdictional issue[s]” raised by

this case, Mine Safety Appliances Co. v. Forrestal, 326 U.S.

371, 374 (1945); see Ickes v. Fox, 300 U.S. 82, 96 (1937),

disclosed that VANR systematically defrauded the United

States Government by instructing its employees to prepare

documents that falsely certified that those employees had

worked on matters funded by certain federal grants

administered by the United States Environmental Protection

Agency (“EPA”). Pet. App. 6-7.

The EPA administers a number of federal grants under

the Clean Water Act, 33 U.S.C. § 1251 et seq., and the Safe

Drinking Water Act, 42 U.S.C. § 300f et seg. As a recipient

of federal funds under those grants, VANR must meet certain

reporting requirements, including the submission of time-

and-attendance records that reflect the amount of time spent

by VANR employees on activities that qualify for federal

grant money. Pet. App. 6. Mr. Stevens was employed as an

attorney by the Water Supply Division of the Department of

Environmental Conservation, an arm of VANR. While Mr.

Stevens was employed by VANR, he and his fellow

employees were instructed by their superiors to complete

time-and-attendance records that falsely reflected that their

time was being spent on grant-eligible tasks. Jd. at 6-7.

Indeed, employees were told to fill out time-sheets in

advance, and to allocate specific proportions of their reported

time to particular federal grant codes that were dictated by

agency supervisors. Those allocations bore no relation to the

tasks actually performed by VANR employees. /d. at 6; see

also Relator’s Wnitten Disclosure of Material Evidence and

Information at 4 (“Written Disclosure”).

The Written Disclosure that Mr. Stevens submitted to the

Attorney General in accordance with the Act documented

those allegations in detail, including contemporaneous

VANR memoranda allocating employee hours to federal

grants in advance of any work being performed? The

Written Disclosure showed that Mr. Stevens repeatedly had

questioned his supervisors’ orders, pointing out that the time

' Because the False Claims Act requires that the Written

Disclosure be served on the Attorney General, and because that

disclosure forms the basis for her investigation and ultimate

decision concerning intervention, Mr. Stevens has lodged copies of

the Written Disclosure with the Clerk.

2 In one e-mail exchange, a VANR supervisor instructed an

employee to continue using the codes prescribed for federal

funding even though, three months into the fiscal year, she no

longer had federal responsibilities; the State later reported that

95% of her time during that year had been devoted to those

responsibilities. Written Disclosure at Tabs G, H, I.

forms he was required to complete required him personally to

certify falsely “under the pains and penalties of perjury * * *

that the for[e]going report does accurately reflect the time

worked * * *.” See Written Disclosure, at Tab L. Mr.

Stevens also alerted his supervisors to the criminal penalties

prescribed by state law for making false statements to

governmental bodies, and reminded his supervisors that, as

an attorney, he was required by the Code of Professional

Responsibility to take a “proactive role” in urging a client to

rectify an ongoing fraud and, if necessary, to reveal the fraud

to the affected person or tribunal. /d. at Tab O. Mr. Stevens

additionally sought a meeting, and did meet, with the

Secretary of VANR in order to apprise him of the agency’s

improper conduct. /d. at 5.

Mr. Stevens’ efforts proved wholly unavailing. The

General Counsel of VANR warned Mr. Stevens that he

“should choose [his] battles more carefully.” Written

Disclosure at 6. Other employees who questioned VANR’s

practices “were told that if they wanted to keep their jobs

they should not raise this issue.” /d. at 4. In the end, VANR

simply “failed to change its practices or make any effort to

account for the discrepancies.” Jd. at 7. In fact, VANR

“never has maintained any accounting procedure to verify

that pre-allocated employee hours assigned to federal grant

funding sourcing codes were actually worked,” and no ad-

justments have ever been made “to account for, or even

identify, discrepancies” between hours worked and the

arbitrary pre-allocated figures. JA 38 (9 33-34).

3. The Attorney General investigated the allegations of

the complaint and its supporting materials from May 1995

until June 1996. Pet. App. 7. The Attorney General then

informed the court that federal prosecutors would not take

over the action, but she did not intervene, as was her statutory

right, to terminate the suit. Instead, she expressly reserved

her statutory right to intervene against the State at a later time

as the case proceeded. /d. She also requested to be served

with copies of all pleadings filed in the case. /d.

After the complaint was unsealed and served upon

Vermont, the State moved to dismiss it. JA 7. Vermont con-

tended that States and their instrumentalities are not persons

under the Act and that, in any event, this suit is barred by the

Eleventh Amendment. Pet. App. 8. The United States, ap-

pearing as amicus curiae, opposed the State’s motion, noting

that despite the Attorney General’s election not to take over

the litigation, “the United States remains the real party in

interest in this * * * gui tam action * * *.” U.S. Memo-

randum In Opposition to Defendant’s Motion To Dismiss at

1; see also id. at 7 (“the United States remains the real party

in interest and, ultimately, the primary beneficiary should the

relator’s efforts prove successful.”

The district court denied Vermont’s motion to dismiss.

Pet. App. 86-87. The court first rejected Vermont’s Eleventh

Amendment claim, agreeing with the Attorney General’s

position that “the Eleventh Amendment does not bar suits

such as the instant one because the United States, which has

the ability to sue a state, is the real party in interest and

ultimately the primary beneficiary of a successful gui tam

action.” Jd. at 86. The court also rejected Vermont’s claims

that States are not “persons” under the Act, noting that States

can be “persons” when they appear as plaintiffs under the Act

and “identical words used in different parts of the same act

should be afforded the same meaning.” /d. at 87 (citing

Commissioner v. Lundy, 516 U.S. 235, 250 (1996)).

4. Vermont took an interlocutory appeal from the district

court’s Eleventh Amendment ruling, as permitted by Puerto

Rico Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc.,

506 U.S. 139, 147 (1993). The United States intervened to

defend the district court’s decision. Pet. App. 9. The court

of appeals affirmed. Pet. App. 1-30.

In rejecting Vermont’s claim of Eleventh Amendment

immunity, the court of appeals found dispositive the nature of

“[t]he interests to be vindicated, in combination with the

government’s ability to control the conduct and duration of

the gui tam suit.” Pet. App. 16. In particular, the court

agreed with the district court’s conclusion that “[t]he real

party in interest in a gui tam suit is the United States.” The

court reasoned:

All of the acts that make a person liable under

§ 3729(a) focus on the use of fraud to secure payment

from the government. It is the government that has

been injured by the presentation of such claims; it is

in the government’s name that the action must be

brought; it is the government’s injury that provides

the measure for the damages that are to be trebled;

and it is the government that must receive the lion’s

share * * * of any recovery.

Id. The court also emphasized that “the government has the

right to control the action” by intervening, has “the right to

be kept abreast of discovery” even if it does not intervene,

and “has both the right to prevent a dismissal sought by the

qui tam plaintiff and the right to cause the action to be dis-

the qui tam plaintiff s desire that it continue.” Jd. at 17.

Those factors established, the court found, that a qui tam

suit “is in essence a suit by the United States and hence is not

barred by the Eleventh Amendment” (Pet. App. 18), because

“{ajs against the United States * * * the States have no

sovereign immunity.” Jd. at 15. The court rejected the con-

tention that a contrary conclusion was required by Blatchford

v. Native Village of Noatak, 501 U.S. 775 (1991), which held

that the Eleventh Amendment bars Indian tribes from directly

suing States on claims that the United States might have

brought against those States on the tribes’ behalf. The court

found it “plain{]” that “in those circumstances * * * the

injury to be remedied was one to the tribes, not to the federal

government, and the cause of action did not belong to the

government.” Pet. App. 18.

Vermont also sought interlocutory review of the district

court’s conclusion that States are “persons” under the Act.

The court of appeals purported to exercise “pendent appellate

jurisdiction” over that statutory question and affirmed. Pet.

App. 19. The court first rejected Vermont’s contention that a

“plain statement” of Congress’ intent to render States liable is

required here, explaining that “(t]he Act does not intrude into

any area of traditional state power” since the “[t]he goal of

the statute is simply to remedy and deter procurement of fed-

eral funds by means of fraud.” /d. at 20-21.

The court then concluded that “[ujnder the usual

standards” of construction, Congress plainly intended for the

Act to authorize suits against States. Jd. at 21. The court of

appeals found significant the fact that the term “person” is

“used to categorize both those who may sue and those who

may be sued, whether by the government itself or by a qui

tam plaintiff.” Pet. App. 21. The court noted that States

have brought suit under the Act as qui tam plaintiffs, and that

the 1986 legislation reinforced a State’s ability to do so by

permitting joinder, in an action under the Act, of related

state-law claims seeking money for the benefit of a State. Jd.

at 22-23. The court concluded that States are plainly

“persons” under the Act, because courts “normally infer that

in using the same word in more than one section of a

statute—or indeed twice within the same section, as in sub-

sections (a) and (b) of § 3730—Congress meant the word to

have the same meaning.” Jd. at 23-24.

The court of appeals also noted that its interpretation of

the term “person” is supported by the Senate Report that

accompanied the 1986 law. Pet. App. 25-27. That report

expressly stated that the term “‘person’ is used in its broad

sense to include * * * States and political subdivisions

thereof.” Jd. at 27-28 (quoting S. REP. No. 345, 99th Cong.,

2d Sess. 8 (1986)).

District Judge Weinstein, sitting by designation,

dissented. Pet. App. 31-85.

SUMMARY OF ARGUMENT

Vermont presents two questions for review: whether

States are “persons” under the Act and whether the States’

sovereign immunity precludes gui tam suits against States.

Although the court of appeals addressed both issues, its

jurisdiction in this interlocutory case was limited to the

question of immunity. The court of appeals’ assertion of

“pendent appellate jurisdiction” over Vermont’s statutory

claim cannot be squared with Swint v. Chambers County

Comm'n, 514 U.S. 35 (1995), which precludes appellate

consideration of issues not independently appealable or

certified as such by the district court. Because only the

Eleventh Amendment ruling was properly the subject of

interlocutory review, Mr. Stevens will address that claim

before addressing the State’s statutory defense.

I. This Court has consistently held that questions of

sovereign immunity must be resolved by evaluating whether

a State or the United States is the real party in interest.

Because suits under the False Claims Act vindicate the

sovereign proprietary interests of the United States, the

United States is indisputably the real party in interest in such

suits. Few principles are better established in the field of

sovereign immunity than that States have no Eleventh

Amendment immunity as against the United States. See

United States v. Texas, 143 U.S. 621 (1892). Vermont’s

sovereign immunity defense, therefore, must fail.

Blatchford v. Native Village of Noatak, 501 U.S. 775

(1991), and Alden v. Maine, 119 S. Ct. 2240 (1999), do not

establish, as Vermont contends, that the United States can be

a party to litigation only_when Executive Branch officials

personally conduct the litigation. Those cases instead ad-

dress an issue different from that presented here, because

they involved suits by private individuals seeking to enforce

their own personal federal rights. What is at issue in this

case, by contrast, is whether Congress may authorize gui tam

litigation against States when the United States’ own

property rights are at issue. Neither Blatchford nor Alden

speaks to that question.

While Executive Branch participation may be necessary

to demonstrate the sovereign’s interest in suits that appear to

redress purely private grievances, it is not necessary in suits

under the Act. Every suit under the False Claims Act—be it

initiated by the Attorney General or by a gui tam relator—

vindicates the proprietary interest of the United States.

Because Congress has exceptionally broad authority in re-

spect of those interests (see U.S. Const. art. IV, §3, cl. 2), it

was assuredly within its constitutional authority to vindicate

those interests through the gui tam mechanism, a form of

action that was well known to the Framers. And in any

event, even if Blatchford and Alden could plausibly be read

to require some level of control by Executive Branch

officials, gui tam litigation under the Act would meet any test

that this Court might reasonably fashion in that regard.

Il. Were the Court to reach Vermont’s statutory

argument, it would have to reject Vermont’s interpretation of

the Act. The words “any person” in the Act plainly encom-

pass States of the Union, a conclusion buttressed by the civil

investigative demand provisions of the Act, which unam-

biguously define States as “persons,” and by the undisputed

proposition that States are “persons” that can initiate gui tam

proceedings under the Act as relators. Vermont errs in

contending that Congress need have made a “plain state-

ment” of its intent to subject States to suit, because the Act is

not ambiguous. Accordingly, should the Court reach

Vermont’s statutory claim, it must affirm the judgment of the

court of appeals on this ground as well.

ARGUMENT

I. THE UNITED STATES MAY USE THE “QUI

TAM” VEHICLE TO SUE A STATE OF THE

UNION FOR FRAUDULENTLY OBTAINING

FEDERAL PROPERTY

The Eleventh Amendment provides that “[t]he judicial

power of the United States shall not be construed to extend to

any suit in law or equity, commenced or prosecuted against

one of the United States by Citizens of another State, or by

Citizens or Subjects of any Foreign State.” U.S. Const.

amend. XI. Although by its literal terms the amendment

“would appear to restrict only the Article III diversity

jurisdiction of the federal courts,” Seminole Tribe of Florida

v. Florida, 517 U.S. 44, 54 (1996), this Court has concluded

that the text of the amendment is not controlling. Thus, the

Court has held that the amendment shields States from suits

by their own citizens, Hans v. Louisiana, 134 U.S. 1 (1890),

by foreign countries, Principality of Monaco v. Mississippi,

292 U.S. 313 (1934), and by Indian tribes, Blatchford v.

Native Village of Noatak, 501 U.S. 775 (1991). Similarly,

the Court has ruled that the amendment applies in federal

question cases, see Hans, supra, and—notwithstanding the

textual limitation to “suits in law or equity”—to certain suits

in admiralty as well. See Welch v. Texas Dep't of Highways

& Pub. Transp., 483 U.S. 468 (1987); Ex parte New York,

No. 1,256 U.S. 490 (1921).

Because it is now settled that the Eleventh Amendment

embodies general principles of sovereign immunity that ante-

date the Constitution, rather than any particular rule dis-

cernable from its text (Alden v. Maine, 119 S. Ct. 2240,

2250-53 (1999)), it is surprising that so much of Vermont’s

argument is predicated on the purely text-based argument

that gui tam suits are “commenced” or “prosecuted” “by”

private individuals. E.g., Vt. Br. 29, 30, 43, 45; see also

Bnef of the National Governors’ Association ef al. as Amici

Curiae 27. In fact, Vermont’s entire argument proceeds as

though the Second Circuit—whose conclusion is in accord

with the views of all but one court of appeals to consider the

constitutional question presented here—had invented the

real-party-in-interest inquiry out of whole cloth.* According

to Vermont, the Second Circuit’s analysis “is flatly incon-

sistent with the larger body of this Court’s sovereign immu-

nity decisions” (Vt. Br. 47), because under an inflexible

“rule” (id. at 34) purportedly adopted by this Court in Blatch-

> Of the five courts of appeals that have ruled on the question,

only the Fifth Circuit has held that the Eleventh Amendment pre-

cludes gui tam suits brought against States under the False Claims

Act. See United States ex rel. Foulds v. Texas Tech University,

171 F.3d 279, petition for cert. filed, 68 U.S.L.W. 3138 (Aug. 23,

1999). The majority view is that the Eleventh Amendment has no

bearing on such suits because the United States is the real party in

interest. See United States ex rel. Rodgers v. Arkansas, 154 F.3d

865 (8th Cir. 1998), cert. dismissed, 119 S. Ct. 2387 (1999);

United Staies ex rel. Stevens v. State of Vermont Agency of Natural

Resources, 162 F.3d 195 (2d Cir. 1998) (decision below); United

States ex rel. Fine v. Chevron, U.S.A., Inc., 39 F.3d 957 (9th Cir.

1994), vacated on other grounds, 72 F.3d 740 (9th Cir. 1995);

United States ex rel. Milam v. University of Texas, 961 F.2d 46

(4th Cir. 1992).

ford and reaffirmed in Alden, the question of sovereign im-

munity turns on “who is responsible for and in control of the

suit—not [on] who benefits from the suit.” Jd. at 47, 31-32.

It is Vermont’s position, however, that cannot be

reconciled with this Court’s sovereign immunity cases. In a

long line of authority—which Vermont does not even cite,

much less attempt to distinguish—this Court has consistently

held that questions of immunity must be resolved by

inquiring whether a State or the United States “is the real

party in interest.” E£.g., Kansas v. United States, 204 U.S.

331, 341 (1907). Far from stating a “rule” to the contrary,

Blatchford is one of several cases in which this Court has

enforced the real-party-in-interest inquiry by requiring proof

that some sovereign or quasi-sovereign interest is actually at

stake when a suit appears solely to benefit private persons.

That concern has no relevance here, because suits under the

False Claims Act plainly vindicate the sovereign proprietary

interests of the United States—interests over which Congress

has plenary authority and which no State is empowered to

hinder. See U.S. Const. art. IV, §3, cl. 2. Nothing in the

Eleventh Amendment prevents Congress from vindicating

those sovereign interests against a State through a qui tam

suit, a form of action that was well known to the Framers of

the Constitution, especially in light of the numerous

provisions of the Act that ensure that modern qui tam

litigation is subject to Executive Branch control. Indeed,

even if Vermont were correct that “control” rather than real-

party status determines the sovereign immunity issue, the

Attorney General’s nght to control litigation under the Act

would more than suffice to meet any such requirement.

A. States Of The Union Have No Eleventh

Amendment Immunity Against The United

States

1. This Court first explicitly addressed whether the

United States may sue a State in United States v. Texas, 143

U.S. 621 (1892), a dispute over the ownership of property—a

tract of land—claimed by both sovereigns. Congress, by stat-

ute, had directed the Attorney General to commence suit on

behalf of the United States “in order that the rightful title to

said land may be finally determined.” Jd. at 622 (Statement

of the Case, quoting Act of May 2, 1890, ch. 182, § 25, 26

Stat. 81, 92). Texas demurred, asserting that the United

States did not have the constitutional authority to bring suit

against a State in federal court. Indeed, in an argument that

recalls the “cooperative federalism” contentions advanced by

Vermont here (e.g., Vt. Br. 34-35), “Texas insist[ed] that no

such jurisdiction has been conferred [by the Constitution],

and that the only mode in which the * * * dispute [could] be

peaceably setiled [was] by agreement, in some form, between

the United States and that State.” 143 U.S. at 641.

This Court decisively rejected Texas’ claim. The Court

was unwilling to presume that the Framers “overlooked the

possibility that controversies, capable of judicial solution,

might arise between the United States and some of the

States,” especially since the Constitution expressly makes

other inter-sovereign controversies cognizable in federal

court. Texas, 143 U.S. at 644-45. As the Court put it, “the

framers of the Constitution, while extending the judicial

power of the United States to controversies between two or

more States of the Union,” could not have “intended to

exempt a State altogether from suit by the General Govern-

ment.” Jbid. While acknowledging the limitations placed by

the Eleventh Amendment on the jurisdiction of the federal

courts (id. at 645-46), the Court emphasized that the Consti-

tution necessarily makes States amenable to “the suit of the

government established for the common and equal benefit of

the people of all the States.” Jd. at 646.

2. As this Court has observed, Texas established that the

United States may sue a State of the Union “without the con-

sent of the latter. While that jurisdiction is not conferred by

the Constitution in express words, it is inherent in the consti-

tutional plan.” Principality of Monaco vy. Mississippi, 292

U.S. 313, 329 (1934); see also United States v. Michigan,

190 U.S. 379, 396 (1903). And since Texas, this Court has

repeatedly reaffirmed that “nothing” in the Eleventh Amend-

ment “or any other provision of the Constitution prevents or

has ever been seriously supposed to prevent a State’s being

sued by the United States.” United States v. Mississippi, 380

U.S. 128, 140 (1965). To the contrary, “[t]he United States

in the past has in many cases been allowed to file suits in this

and other courts against States * * * with or without specific

authorization from Congress.” Jbid. Accordingly, it is now

established, and it cannot reasonably be disputed by Vermont

here, that “States have no sovereign immunity as against the

Federal Government.” West Virginia v. United States, 479

U.S. 305, 311 (1987).

B. This Court Has Applied A Real-Party-In-

Interest Test To Determine Whether The

United States Is A Party to Litigation

Although one would not know it from Vermont’s brief,

this Court has long held that “(t]he question whether the

United States is a party to a controversy is not determined by

the merely nominal party on the record but by the question of

the effect of the judgment or decree that can be entered.”

Kansas, 204 U.S. at 341 (emphasis added); accord Dugan v.

Rank, 372 U.S. 609, 620-21 (1963); Oregon v. Hitchcock,

202 U.S. 60, 69-70 (1906). The question is determined, in

other words, not by the executive-officer “rule” advocated by

Vermont, but by asking whether “the United States [is] the

real party in interest.” Naganab v. Hitchcock, 202 U.S. 473,

476 (1906).

The real-party-in-interest doctrine was originally

developed by this Court in a series of Eleventh Amendment

cases involving suits against individuals who claimed sover-

eign immunity on the basis of their official duties on behalf

of a State, and soon was extended to suits by one State

against a sister State—in which the Court dismissed suits

brought on behalf of States by their respective attorneys gen-

eral after concluding that the putative plaintiffs were not the

real parties in interest. In light of the “correlation between

sovereign immunity principles applicable to States and the

Federal Government,” California v. Deep Sea Research, Inc.,

523 U.S. 491, 506-07 (1998), this Court long ago held that

the same real-party-in-interest principles “must apply to the

United States.” Kansas, 204 U.S. at 341; Minnesota v.

Hitchcock, 185 U.S. 373, 387 (1902). Those Eleventh

Amendment cases, therefore, control the inquiry here.

1. The real-party-in-interest rule was not always the

touchstone for this Court’s sovereign immunity juris-

prudence. In Osborn v. Bank of the United States, 22 U.S. (9

Wheat.) 738 (1824), for example, this Court rejected an

Eleventh Amendment defense to a suit against State officials,

announcing “as a rule, which admits of no exception, that in

all cases where jurisdiction depends on a party, it is the party

named in the record.” Jd. at 857-58. The Court generally

followed Osborn’s party-of-record rule well into the 19th

century, repeatedly rejecting the Eleventh Amendment pleas

of state officers who had been sued in their official

capacities. See, e.g., Davis v. Gray, 83 U.S. (16 Wall.) 203,

220 (1872). In Jn re Ayers, 123 U.S. 443, 487-508 (1887),

however, the Court discarded Osborn altogether and held that

a suit against state officers is a suit against the State for pur-

poses of the Eleventh Amendment when the relief prayed for

would constitute performance of one of the State’s obliga-

tions. See Ex parte Young, 209 U.S. 123, 150-51 (1908).

And “that construction of the Amendment has since been

followed.” Missouri, Kansas & Texas Ry. Co. v. Missouri

R.R. & Warehouse Comm'ars, 183 U.S. 53, 59 (1901).

The modern rule is that “what is to be deemed a suit

against a State * * * is to be determined not by the mere

names of the titular parties but by the essential nature and

effect of the proceeding, as it appears from the entire record.”

Ex parte New York, No. 1, 256 U.S. at 500 (emphasis

supplied). Thus, “when the action is in essence one for the

recovery of money from the state, the state is the real, sub-

stantial party in interest and is entitled to invoke its sovereign

immunity” even if private parties, who obviously are not

themselves the State, are the named defendants. Ford Motor

Co. v. Department of the Treasury, 323 U.S. 459, 464 (1945).

In other words, “the general criterion for determining when a

suit is in fact against the sovereign is the effect of the relief

sought.” Pennhurst State Sch. & Hosp. v. Halderman, 465

U.S. 89, 107 (1984) (emphasis in original); accord Idaho v.

Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 269-70 (1997).

2. This Court’s cases make clear that the same real-

party-in-interest inquiry is also required when a State seeks to

proceed as a plaintiff in a suit against a sister State—the

situation most analogous to suits, such as this one, in which

the United States seeks redress of its claims against one of

the States. Federal courts may exercise jurisdiction in such

State-against-State cases only if the suit is brought to further

the plaintiff State’s own substantial interests, and is not

merely “a controversy in the vindication of grievances of

particular individuals.” Louisiana v. Texas, 176 U.S. 1, 16

(1900).

That rule is exemplified by the leading case of New

Hampshire v. Louisiana, 108 U.S. 76 (1883). The States of

New Hampshire and New York had enacted statutes

permitting their citizens to assign to their respective States

any past due bonds issued by another State, and to deliver

such bonds, together with the costs of suit, to the States’

attorneys general for collection. /d. at 76-79. In reliance on

their respective State statutes, the attorneys general of New

Hampshire and New York brought original actions in this

Court seeking to collect on past-due bonds issued by the

State of Louisiana.

Although each cause was ostensibly commenced and

prosecuted in the name of a State by its attorney general (108

U.S. at 78, 81)}—and thus undoubtedly met the executive-

officer “rule” that Vermont urges in this case as the true test

for sovereign immunity questions—this Court dismissed both

suits. The Court was satisfied that the suits “were in legal

effect commenced, and [were being] prosecuted, solely by the

owners of the bonds and coupons.” Jd. at 89 (emphasis

added). The Court emphasized that the bond owners paid the

expenses of the suit, had the authority to compromise it, “and

if any money is ever collected, it must be paid to [them].”

Ibid. Because it was plain from those facts “that both the

State and the attorney-general are only nominal actors in the

proceeding,” ibid., the suit was barred by the Eleventh

Amendment. See Missouri v. Illinois & Sanitary Dist. of

Chicago, 180 U.S. 208, 231 (1901) (reaffirming reasoning of

New Hampshire). As the Court later noted, “the effort * * *

to use the name of the complainant States in order to evade

the application of the Eleventh Amendment” failed because

“the State was not seeking a recovery in its own interest, as

distinguished from the rights and interests of the individuals

who were the real beneficiaries.” Oklahoma ex rel. Johnson

v. Cook, 304 U.S. 387, 392-93 (1938).

In South Dakota v. North Carolina, 192 U.S. 286 (1904),

by contrast, private holders of certain North Carolina

bonds—who concededly were barred by the Eleventh

Amendment from suing to collect the debt—donated a

number of the bonds to South Dakota, which then brought an

original action to recover on them. /d. at 310. This Court

rejected North Carolina’s Eleventh Amendment defense,

explaining that the bonds were “not held by the State as

representative of individual owners, as in [Nev Hampshire},

for they were given outright and absolutely to the State.”

South Dakota, 192 U.S. at 310. Unlike the cases framed by

New Hampshire and New York, “[tJhe title of South Dakota

[was] as perfect as though it had received the[] bonds directly

from North Carolina.” Jd. at 312. Because “the clear import

of the decisions of this court * * * [was] in favor of its juris-

diction over an action brought by one State against another to

enforce a property right,” id. at 318, the Court concluded that

South Dakota was the real party in interest. The Court over-

ruled North Carolina’s Eleventh Amendment defense, in

other words, because “[t]he case was * * * one ‘directly af-

fecting the property rights and interests of a State.”

Oklahoma ex rel. Johnson, 304 U.S. at 393 (quoting South

Dakota, 192 U.S. at 314, 318).

* In Missouri, Kansas & Texas Railway Co. v. Missouri

Railroad and Warehouse Commn'rs, supra, the Court examined

whether a suit brought by individuals—certain railroad commis-

sioners—should be characterized, for purposes of removal juris-

diction, as a suit by the State of Missouri. The Court decided that

issue by relying on its Eleventh Amendment real-party precedents,

explaining that “it may be fairly held that the State is such a real

party” when the relief would inure to the State’s benefit “and * * *

the judgment or decree, if for the plaintiff, will effectively operate”

3. Vermont does not address this Court’s cases estab-

lishing that questions of sovereign immunity—whether the

party defendant is entitled to immunity or whether the party

plaintiff is a sovereign who may sue despite that immunity—

turn on real-party-in-interest status, and must therefore be

decided on the basis of “the essential nature and effect of the

proceeding.” Mine Safety Appliances Co. v. Forrestal, 326

U.S. 371, 374 (1945). Vermont contends instead that Blatch-

ford and Alden adopted a “rule” that the United States is a

party only when a case is actively prosecuted by Executive

Branch officials. E.g., Vt. Br. 32, 34. Leaving aside the fact

that the language on which Vermont relies was unnecessary

to the judgment in each of those cases, and thus scarcely

could be taken to promulgate a “rule” of any sort, see, e.g.,

Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 379

(1994), both Blatchford and Alden in fact reflect the tradi-

tional understanding that sovereign immunity questions turn

on real, rather than nominal, parties. Thus, neither case sup-

ports Vermont’s position here.

In both Blatchford and Alden individuals attempted to sue

a State in order to assert their own rights, rather than any

rights of the United States as a sovereign. In Blatchford,

Indian tribes sued State officials to recover money that the

tribes allegedly were owed under a state revenue-sharing stat-

ute. Alden was a suit against the State by a group of the

State’s employees, who sought compensatory and liquidated

[Footnote continued from previous page]

in the State’s favor. 183 U.S. at 59. Under that test, the Court

concluded, the suit was not one by the State of Missouri, because it

was “not an action to recover any money for the State” and “[i]ts

results [would] not enure to the benefit of the State as a State in

any degree.” Ibid.

damages for the State’s alleged violation of their rights under

the overtime provisions of the Fair Labor Standards Act of

1938, 52 Stat. 1060, codified as amended at 29 U.S.C. § 201

et seq. Not surprisingly, the Court’s rejection of each of

those suits emphasized the fundamental character of the case

as involving the vindication of purely private grievances.

Thus, Blatchford pointed out that even if the plan of the

convention contemplated that the United States would have

the power to sue States “for the benefit of private parties,” it

would not follow that those parties could sue a State them-

selves. Blatchford, 501 U.S. at 785 (“even consent to suit by

the United States for a particular person’s benefit is not con-

sent to suit by that person himself”). Similarly, in Alden, the

Court noted that, unlike suits brought by the employees

themselves pursuant to a “broad delegation” by Congress of

authority to sue nonconsenting States, “[s]uits brought by the

United States itself require the exercise of political responsib-

ility for each suit prosecuted against a State.” 119 S. Ct. at

2267. In other words, “(t]he difference between a suit by the

United States on behalf of the employees and a suit by the

employees implicates a rule that the National Government

must itself deem the case of sufficient importance to take

action against the State.” /d. at 2269 (emphasis added).

Because both Slatchford and Alden addressed only the

United States’ authority to vindicate the interests of private

parties through litigation against States, “(t]he language in

[those] opinion{s] upon which [Vermont] relies cannot be

taken as a decision upon a point which the facts of th[ose]

case[s] did not present” (United States v. Neifert-White Co.,

390 U.S. 228, 231 (1968))}—i.e., whether the United States

may recover damages from States that fraudulently obtain

federal property only if the government's claim is personally

and actively prosecuted by Executive Branch officials. In

fact, the real-party-in-interest authorities that Vermont omits

from its brief fully explain the Court’s imsistence on

Executive Branch involvement when litigation is brought by

the United States for the apparent benefit of private parties.

That involvement, in furtherance of legislatively declared

federal policies, provides a necessary assurance that the

interests of the United States are actually at stake in litigation

that otherwise would be suspect as purely private under New

Hampshire.

> The Court resolved a variant of that issue in United States v.

Minnesota, 270 U.S. 181 (1926), a case that Blatchford distin-

guished. See 501 U.S. at 783. In Minnesota, federal officials

brought suit against Minnesota, in the name of the United States,

to enforce the rights of Indian tribes to certain land. It was alleged

that federal land officers had issued land patents to the State un-

lawfully, in disregard of the applicable statute and of tribal treaty

rights. Minnesota, 270 U.S. at 192-93. The State defended on the

ground that a suit by individual Indians would violate the Eleventh

Amendment (id. at 194-95), and “that the United States [was] only

a nominal party—a mere conduit through which the Indians are

asserting their private rights.” Jd. at 193. Although this Court

readily “conceded” that it could not entertain the suit “if the

Indians [were] the real parties in interest and the United States

only a nominal party,” ibid. (citing, inter alia, New Hampshire and

Hans), it nonetheless concluded that the United States “ha[d] a real

and direct interest” in the controversy because it had a “sovereign”

interest in fulfilling its treaty and other obligations. Jd. at 194. As

the Court noted, it is a “duty” of government to fulfill “an obliga-

tion incurred by it * * * which personal litigation could not

remedy.” Jd. at 195. In other words, the suit’s obvious benefit to

private parties notwithstanding, the suit was not barred by New

Hampshire because the circumstances indicated that the govern-

ment was in fact pursuing its own, sovereign policy objectives.

Alden and Blatchford belong to the class of cases in

which this Court has recognized that the United States (and

the States) may properly engage in litigation that appears to

benefit identifiable private parties when such litigation serves

larger governmental goals. See North Dakota v. Minnesota,

263 U.S. 365, 375-76 (1923) (notwithstanding New

Hampshire, one State can sue another “to protect the general

comfort, health or property nights of its inhabitants”). Such

suits—some of which this Court has analyzed under the

rubric of “parens patriae”—are permissible when the gov-

ernment “is not merely litigating as a volunteer the personal

claims of its citizens” but instead establishes that “sovereign

Or quasi-sovereign interests are implicated.” Pennsylvania v.

New Jersey, 426 U.S. 660, 665 (1976) (per curiam); see also

Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592,

600-01 (1982). Although “neither an exhaustive formal

definition nor a definitive list of qualifying interests can be

presented in the abstract,” Alfred L. Snapp & Son, 458 U.S. at

607, the Court over time has emphasized such considerations

as the subject matter of the suit (e.g., general health and well-

being of the citizenry) and the government’s ability “to

address [the asserted injury] through its [own] sovereign law-

making powers.” Jd. at607. —

Examining whether Executive Branch officials take

affirmative steps to prosecute a suit that primarily appears to

benefit private parties, as was suggested in Blatchford and

Alden, is best understood as a way of assuring that the United

States is a real party in interest in such cases, and of fore-

closing suits that merely “redress private grievances.”

Pennsylvania, 426 U.S. at 665. Indeed, that is the clear im-

plication of Alden, which expressly stressed the need to be

sure that the interests of the Nation are truly implicated when

a suit benefits particular employees. Alden, 119 S. Ct. at

2269. When the only apparent injury was suffered by a

private party, and the recovery will inure solely to him,

ST See

Executive Branch participation provides a basis for con-

cluding that federal interests—such as generalized deterrence

or securing favorable interpretations of federal statutes for

programmatic reasons—are actually at stake in the litigation.

That need to make sure that the interests to be vindicated

in the suit are indeed sovereign or quasi-sovereign has little

bearing in cases like this one, which involves a cause of

action that manifestly belongs to the United States. Because

this case, unlike A/den and Blatchford, inherently implicates

the United States’ property interests, Vermont’s nearly com-

plete reliance on those cases is entirely misplaced.

C. The United States Is The Real Party In

Interest In Qui Tam Suits Under The Act

The court of appeals correctly determined that the United

States is the real party in interest in gui tam suits brought

under the Act, because such suits plainly redress injuries to

the property rights of the United States. It is particularly

appropriate to conclude that Congress may vindicate those

interests through gui tam suits, because similar informer

statutes were frequently enacted by the early congresses.

1. While contesting (albeit erroneously) the relevance of

the inquiry, Vermont scarcely disputes that the United States

is the real party in interest in litigation brought under the Act,

nor could it. Under the plain terms of the Act, suit must be

brought in the name of the government, and the essence of

the case is the defendant’s fraudulent procurement of govern-

ment property—an injury to the United States Treasury that

the government undoubtedly is entitled to remedy by legal

action. That injury to the fisc provides the measure for any

damages that may be assessed, and, when recovered, the bulk

of those damages must be paid over to the federal treasury.

Indeed, as the court of appeals observed, “if there has been

no injury to the United States, the gui tam plaintiff cannot

recover.” Pet. App. 17. And, of course, the United States

may not seek a “dual recovery on the same claim or

claims”—because the United States is the real party in

interest, “if the Government declines to intervene in a gui tam

action, it is estopped from pursuing the same action

administratively or in a separate judicial action.” S. REp.

345, at 27; see In re Schimmels, 127 F.3d 875, 881-84 (9th

Cir. 1997) (government is bound by prior adjudication

against relator).

Vermont darkly suggests that Congress might use gui tam

remedies broadly to circumvent recent rulings by this Court

that deny Congress the power to abrogate a State’s immunity

under Article I of the Constitution. Vt. Br. 32-33. But that

alarmist rhetoric is unjustifiable and misleading: what is at

issue here is whether Congress may authorize gui tam litiga-

tion against States when the United States is the real party in

interest, not whether Congress may invoke the gui tam vehi-

cle to permit the vindication of purely private grievances that

it might make actionable under Article I. Indeed, Vermont’s

arguments overlook the fact that the False Claims Act was

enacted “broadly to protect the funds and property of the

Government” (Rainwater, 356 U.S. at 592), and thus is based

on the Property Clause of Article IV of the Constitution, U.S.

Const. art. IV, § 3, cl. 2, rather than solely on Article I.

The Property Clause gives Congress the “power to dis-

pose of and make all needful Rules and Regulations re-

specting * * * Property belonging to the United States.” It

goes on expressly to provide that “nothing” in the original

Constitution “shall be so construed as to Prejudice any

Claims of the United States * * *.” U.S. Const. art. IV, § 3,

cl. 2. This Court repeatedly has held that Congress’ power to

protect the property of the United States is “plenary,” Utah

Div. of State Lands v. United States, 482 U.S. 193, 201

(1987); Ruddy v. Rossi, 248 U.S. 104, 106 (1918), and “sub-

ject to no limitations.” Gibson v. Chouteau, 80 U.S. (13

Wall.) 92, 99 (1871). Moreover, because “Congress has the

absolute right to prescribe the times, the conditions and the

mode of transferring” federal property (id.), it “can prohibit

absolutely or fix the terns on which its property may be

used.” Light v. United States, 220 U.S. 523, 536 (1911).

Neither Vermont nor any other State “can interfere with this

right or embarrass its exercise.” Gibson, 80 U.S. (13 Wall.)

at 99; Van Brocklin v. Tennessee, 117 U.S. 151, 168 (1886).

Thus, the exercise of congressional authority under the

Property Clause inherently disallows “apprehension of any

encroachments upon state rights.” United States v. Gratiot,

39 U.S. (14 Pet.) 526, 537 (1840).°

The breadth of Congress’ authority to provide for the pro-

tection of federal property, and to vindicate the claims of the

United States against those who convert such property or ob-

tain it fraudulently, cannot be doubted. Indeed, because the

Property Clause expressly forecloses any interpretation of the

original Constitution that might prejudice the United States’

. Although the bulk of this Court’s cases concerning the Pro-

perty Clause address congressional power over public lands, the

Clause by its terms applies to any “other Property belonging to the

United States.” As the Court noted in Ashwander v. Tennessee

Valley Authority, 297 U.S. 288 (1936), “[t]he grant was made in

broad terms, and the power of regulation and disposition was not

confined to territory * * * so that the power may be applied, as

[Justice] Story says, ‘to the due regulation of all other personal and

real property rightfully belonging to the United States.’ And so, he

adds, ‘it has been constantly understood and acted upon.’” /d. at

331 (quoting STORY ON THE CONSTITUTION §§ 1325, 1326); see

also Gratiot, 39 U.S. (14 Pet.) at 536-37 (Congress’ power over

property is “the same” as over lands); Van Brocklin, 117 U.S. at

168 (same).

ability to vindicate its “Claims,” it is difficult to see how the

Eleventh Amendment can stand as an obstacle to the

accomplishment of the means chosen by Congress in the

False Claims Act to secure that end. After all, it is now

settled that the Eleventh Amendment did not “change” the

constitutional plan devised by the Framers, but merely

“restore[d] the original constitutional design.” Alden, 119 S.

Ct. at 2251. By the express terms of the Constitution, the

authority of Congress under Article IV to prescribe the con-

ditions under which federal property is available to States—

and the terms under which federal “Claims” against States for

the misuse of such property will be prosecuted in federal

court—are not powers cabined by the text of the Constitution

itself, much less by an immunity for States that is implicit in

the original constitutional plan.

2. The fact that Congress chose to protect federal pro-

perty rights through qui tam litigation supports the appro-

priateness of Congress’ exercise of its Article IV power here,

because qui tam suits have a long-standing pedigree.

“Statutes providing for actions by a common informer, who

himself has no interest in the controversy other than that

given by statute, have been in existence for hundreds of years

in England, and in this country ever since the foundation of

our Government.” Marvin v. Trout, 199 U.S. 212, 225

(1905); see also United States ex rel. Marcus, 317 U.S. at

541, n.4 (same). Indeed, such qui tam actions are among the

oldest forms of action known to the common law. See, e.g., 3

WILLIAM BLACKSTONE, COMMENTARIES ON THE LAWS OF

ENGLAND 160 (1768); 2 WILLIAM HAWKINS, A TREATISE OF

THE PLEAS OF THE CROWN 265 (1972 ed.).

American colonial legislatures not only adopted English

qui tam statutes but also drafted new laws containing qui tam

provisions based on the English model, creating a system in

early America that was “virtually identical” to the English

system. See Note, The History and Development of Qui Tam,

1972 WASH. U.L.Q. 81, 97. Thus, gui tam actions had

“entered American law through the general introduction of

British statutory law at the time independence was declared.”

JOHN T. BOESE, CIVIL FALSE CLAIMS AND QUI TAM ACTIONS

1-8 (1999). Those early American statutes adhered to Black-

stone’s formulation, generally giving half of the recovery to

the informer and half to the government. See Dan D. Pitzer,

Comment, Qui Tam: A Comparative Analysis of Its Applica-

tion in the United States and the British Commonwealth, 7

Tex. INT’L L. J. 415, 417 (1972).

In addition to gui tam statutes enacted by state legis-

latures, the federal government engaged in the “widespread

early congressional creation of the gui tam action.” Cass R.

Sunstein, What's Standing After Lujan? Of Citizen Suits,

“Injuries,” and Article III, 91 MicH. L. REV. 163, 175

(1992). The First Congress alone enacted at least a dozen

statutes that expressly authorized an informer to share in a

portion of the authorized recovery.’ Similar provisions were

7 See Act of July 31, 1789, ch. 5, § 8, 1 Stat. 29, 38, 44-45, 48

(import duties); Act of Sept. 1, 1789, ch. 11, § 21, 1 Stat. 55, 60

(vessel registration); Act of March 1, 1790, ch. 2, § 3, 6, 1 Stat.

101, 102-03 (census); Act of May 31, 1790, ch. 15, § 2, 1 Stat.

124, 124-25 (copyright infringement; recovery of the moeity by

the injured author); Act of July 20, 1790, ch. 29, §§ 1, 4, 1 Stat.

131, 133 (sea regulations); Act of July 22, 1790, ch. 33, § 3, 1 Stat.

137, 137-38 (regulation of trade with Indian tribes); Act of Aug. 4,

1790, ch. 35, §§ 55, 69, 1 Stat. 145, 173, 177 (import duties); Act

of Feb. 25, 1791, ch. 10, §§ 8, 9, 1 Stat. 191, 195-96 (Bank of the

United States); Act of March 3, 1791, ch. 15, § 44, 1 Stat. 199, 209

(duties on liquor); see also Act of Sept. 2, 1789, ch. 12, § 8, 1 Stat.

65, 67 (regulation of Treasury officers); Act of March 3, 1791, ch.

8, § 1, 1 Stat. 215 (extension of same); Act of July 5, 1790, ch. 25,

contained in acts passed by the Second, Third, and Fourth

Congresses.* Like the actions of the early congresses, the

decisions of this Court during the infancy of our Constitution

demonstrate that qui tam actions were viewed as a lawful and

proper means of advancing sovereign interests. Soon after

the Constitution was adopted, for example, the Court held

that statutes that provide a reward to an informer will be

construed to authorize a qui tam suit by him even if that

cause of action does not expressly appear in the statute.

United States ex rel. Marcus, 317 U.S. at 537 n.4 (citing

Adams v. Woods, 6 U.S. (2 Cranch) 336 (1805)). And one of

the earliest and most celebrated landmarks in this Court’s

jurisprudence of federal-state relations—McCulloch v.

Maryland, 17 U.S. (4 Wheat.) 316 (1819)}—"was a qui tam

[Foomote continued from previous page]

§ 1, 1 Stat. 129 (extending provisions of the census Act of March

1, 1790, supra, to Rhode Island).

® The Second Congress, for example, enacted informer pro-

visions in statutes governing the postal service, while extending

qui tam enforcement of laws regulating trade with Indian tribes.

See Act of Feb. 20, 1792, ch. 7, § 25, 1 Stat. 232, 239 (postal

service); Act of March 1, 1793, ch. 19, § 12, 1 Stat. 329, 331

(regulation of trade with Indian tribes). Among statutes enacted by

the Third Congress, similar provisions appeared in the Neutrality

Act, see Act of June 5, 1794, ch. 50, § 3, 1 Stat. 381, 383, and in

many provisions dealing with the collection of duties. See, e.g.,

Act of June 5, 1794, ch. 48, § 5, 1 Stat. 376, 378; see also Act of

June 9, 1794, ch. 65, § 12, 1 Stat. 397, 400; Act of June 5, 1794,

ch. 45, § 10, 1 Stat. 373, 375; Act of June 5, 1794, ch. 51, § 21, 1

Stat. 384, 389. The Fourth Congress extended earlier statutes

regulating trade with Indian tribes, see Act of May 19, 1796, ch.

30, § 18, and provided that the government's decision to mitigate a

fine or forfeiture would not affect an informer’s interest in his

moiety. Act of March 3, 1797, ch. 13, §3, 1 Stat. 506, 506-07.

action, brought to recover a penalty.” Worcester v. Georgia,

31 U.S. (6 Pet.) 515, 537 (1832).

Because “early congressional enactments provide con-

temporaneous and weighty evidence of the Constitution’s

meaning” (Printz v. United States, 521 U.S. 898, 905 (1997)

(internal quotations and brackets omitted)), the fact that Con-

gress so extensively relied on informer statutes to protect the

federal fisc and further federal regulatory policies “when the

founders of our government and framers of our Constitution

were actively participating in public affairs” (Knowlton v.

Moore, 178 U.S. 41, 56 (1900)) “goes a long way in the dir-

ection of proving the presence of unassailable ground for the

constitutionality of the practice.” United States v. Curtiss-

Wright Export Corp., 299 U.S. 304, 327-28 (1936); see also

Bowsher v. Synar, 478 U.S. 714, 723-24 (1986); Myers v.

United States, 272 U.S. 52, 175 (1926); Stuart v. Laird, 5

U.S. (1 Cranch) 299, 309 (1803) (“[iJt is a contemporary

interpretation of the most forcible nature”). Of particular rele-

vance here, the prevalence of informer statutes at the

founding provides powerful evidence that the Framers well

understood that the United States might rely on qui tam

actions to vindicate its rights. Because the “plan of the Con-

vention” necessarily subjects States to suit by the United

States (Alden, 119 S. Ct. at 2267), compelling proof would be

needed to show that the Framers somehvuw intended to pre-

clude the United States from relying on that traditional form

of action in protecting its rights against state interference—

especially where, as here, Congress does so to protect federal

property from fraud. Vermont provides no such evidence. 4

> Amici Regents of the University of Minnesota ef al. contend

that this Court’s decision in United States v. Peters, 3 U.S. (3

Dallas) 121 (1795), somehow establishes that qui tam suits may

3. Finally, Vermont suggests that even if the United

States is a real party in interest, and therefore properly

viewed as the plaintiff in this action, Mr. Stevens is an

additional party whose participation in the suit is barred by

Vermont’s sovereign immunity. According to Vermont, that

conclusion follows from the fact that a gui tam plaintiff under

the Act brings suit “for [himself] and for the United States

Government,” 31 U.S.C. § 3730(b), and from this Court’s

purported holding in Pennhurst IJ that the United States’

presence as a plaintiff never eliminates a State’s immunity

with respect to a “co-plaintiff.” Vt. Br. 40-41, 46-47.

Neither objection is sound.

[Footmote continued from previous page]

not be maintained against States. No State was even remotely a

party to the case, however, and amici concede that Peters was not

a qui tam action—it was a libel filed for various alleged torts com-

mitted on the high seas by a ship owned by the Republic of France.

In fact, even on their own terms, amici’s claims are strained to the

point of absurdity: the contention is that counsel for the French

ship’s captain mentioned the then-proposed Eleventh Amendment

by way of analogy during his argument, and that the facts of the

case might support a qui tam action, which had indeed separately

been filed. This Court did not “broadly accept[{]” all of counsel’s

arguments, as alleged by amici (Minn. Br. 8-9); it issued a three-

line opinion stating that Members of the Court held differing views

on the issues, but that a majority was of the view that a writ of pro-

hibition should issue. 3 U.S. (3 Dallas) at 129. The recitals to that

writ cited, as support for the prohibition, the law of nations and our

treaties with the French. /d. at 129-30. L'Invincible, 14 U.S. (1

Wheat.) 238, 259-60 (1816), also relied on by amici as reaffirming

the supposed holding of Peters, stated only that the recitals to the

writ issued in Peters correctly stated the law applicable to alleged

war prizes.

Vermont’s reliance on the Act’s description of a qui tam

suit as an action brought by a person both for himself and for

the government advances the analysis very little. The statu-

tory language merely mirrors the phraseology used at com-

mon law to denote that an action is brought by the plaintiff as

a qui tam relator. Compare McCulloch v. Maryland, 17 U.S.

(4 Wheat.) at 317 (“John James, who sued as well for himself

as for the state of Maryland”). Like other terms of art used

by Congress, the phrase bears only the meaning given it by

the accumulated tradition that it invokes. Morissette vy.

United States, 342 U.S. 246, 263 (1952); Bell v. United

States, 462 U.S. 356, 360 (1983). Nothing in the common

law tradition suggests that a relator’s suit redresses any injury

other than that suffered by the sovereign as a result of the

defendant’s violation of the pertinent statutory norms.'°

Indeed, the relator sues “for himself” only in the sense that he

may receive, as a reward, part of the sovereign’s recovery.

Because the relator does not have a personal cause of action

against a gui tam defendant, it is error to view him as a “co-

plaintiff” in the sense suggested by Vermont.

In any event, Vermont’s reading of Pennhurst J] is itself

erroneous, and thus Vermont’s claim must fail even if a qui

tam relator properly is characterized as a “co-plaintiff.” The

question this Court considered in Pennhurst I] was whether

the Eleventh Amendment barred monetary suits against a

State for violations of state law. One of the arguments ad-

vanced by the plaintiffs was that the United States was

'° Because Mr. Stevens has not sued the State on the basis of the

adverse employment action taken against him by his employer, the

Court need not consider in this case whether a different analysis

would apply to a claim brought under the Act’s anti-retaliation

provision, 31 U.S.C. § 3730(h).

already a plaintiff in the case, having sued the State for viola-

tions of federal law. This Court ruled that the United States’

participation did not authorize the private parties to assert

their own additional claims under state law. “(T]he United

States does not have standing to assert the state-law claims of

third parties,” the Court observed, and therefore “the ap-

plicability of the Eleventh Amendment to respondents’ state-

law claim is unaffected by the United States’ participation in

the case.” Pennhurst IJ, 465 U.S. at 103 n.12.

Pennhurst II did not address the situation that, on

Vermont’s view of the statute, is presented here: a case in

which the United States and a private party are “co-plaintiffs”

on the same federal-law claim. In fuct, Arizona v. California,

460 U.S. 605 (1983), a case raising those facts but not cited

by Vermont, rejects Vermont’s argument. In that case, the

United States brought water claims against several States on

behalf of certain Indian tribes. The tribes sought to inter-

vene, but the defendant States objected to the tribes’ inter-

vention on the basis of the Eleventh Amendment. This Court

squarely rejected the States’ Eleventh Amendment claim,

explaining that “the tribes do not seek to bring new claims or

issues against the States” and “[t]herefore our judicial power

over the controversy is not enlarged by granting leave to

intervene.” Jd. at 614. Thus, even on Vermont’s view that

Mr. Stevens should be considered a “co-plaintiff’ of the

United States in this case, his presence in that purported role

does not expand the claims before the Court and, therefore,

“the State{‘s] sovereign immunity protected by the Eleventh

Amendment is not compromised.” Jbid.

D. The False Claims Act Satisfies Any Require-

ment For Executive Branch Control That This

Court Reasonably Might Impose

Even if the Eleventh Amendment in fact invariab ly

ired Ex ine ; ticipation in government suits

against States, as alleged by Vermont, the Attorney General’s

power under the Act to control qui tam litigation surely

would meet any standard for such participation that this

Court reasonably might impose.

1. The Act expressly requires a relator to provide the

Attorney General, when the complaint is filed, with a

“written disclosure of substantially all material evidence and

information the [relator] possesses * * *.” 31 U.S.C.

§ 3730(b)(2). On the basis of that information and of her

own “diligent[{]” investigation of the allegations supporting

the complaint (id. §§ 3730(a), 3730(b)(2)), the Attorney Gen-

eral must make an affirmative decision whether to take over

the prosecution of the case. That means, as the court of ap-

peals noted, that she is authorized to intervene at the outset,

take control of the case, and compromise it or end it for any

legitimate governmental purpose “notwithstanding the qui

tam plaintiff's desire that it continue.” Pet. App. 17. In ef-

fect, the statute allows the Attorney General to leverage her

resources by permitting the continuation of fraud cases that

she might not otherwise have the ability to prosecute, despite

their potential for redressing an injury to the public fisc.

The Act also provides the Attorney General the means for

keeping abreast of later developments in the litigation, such

as evidence that might “escalate the magnitude or complexity

of the fraud * * * or [that otherwise] make[] it difficult for

the gui tam relator to litigate alone,” so that she may elect to

intervene at a later time. S. REP. 345, at 26-27. Although

Vermont stresses that such later intervention by the Attorney

General does not “‘limit[] the status and rights’” of the

relator under the Act (Vt. Br. 43, quoting 31 U.S.C.

§ 3730(c)(3)), the State is wrong to contend that that provi-

sion denies the Attorney General “authoritative control over

the litigation.” Jbid. Congress contemplated that even inter-

vention at a later stage of the case would still “allow the Gov-

ernment to take over the suit.” S. REP. 345, at 27. Indeed, if

there were any doubt on that score it would be rather odd to

construe the statutory language, as Vermont urges, more

broadly than its text fairly requires solely to bolster

Vermont's challenge to the Act’s constitutionality.'!

2. Vermont contends, however, that States somehow

will lose a fundamental safeguard of federalism unless this

Court requires Executive Branch officials to conduct person-

ally all litigation by the United States against a State of the

Union. According to Vermont, gui tam suits under the Act

“deprive[] Vermont of the affirmative discretion exercised by

federal officers in their enforcement of federal laws,” prevent

States from seeking the intercession of their congressional

delegation in persuading Executive Branch officials not to

prosecute, and generally “allow[] the United States to remove

itself from political accountability.” Vt. Br. 37-38. Those

claims are meritless.

a The language on which Vermont relies is most naturally read

as making clear that later intervention does not divest the relator of

his share of any eventual recovery or of the limited right to

participate in the action that he would have enjoyed had the

Attorney General intervened at the outset. Indeed, because the

Attorney General ordinarily is presumed to have the right to

control all litigation in which the United States is a party, to the

exclusion even of counsel for other government departments, see

United States v. San Jacinto Tin Co., 125 U.S. 273, 278-82 (1888);

Confiscation Cases, 74 U.S. (7 Wall.) 454, 458 (1868); The Gray

Jacket, 72 U.S. (5 Wall.) 370, 371 (1866), stronger language than

that relied on by Vermont would be necessary to conclude that the

Attorney General does not have the ultimate authority to speak for

the United States in litigation conducted under a statute that

specifically gives her the night to interv~ne.

Vermont cites no authority, apart from its indefensibly

broad reading of Blatchford and Alden, for the proposition

that States invariably are entitled to an exercise of “discre-

tion” by Executive Branch officials as a condition to suit.

Moreover, Vermont is simply wrong in asserting that the

False Claims Act forecloses that “discretion,” relieves the

Attorney General from accountability, or somehow disables a

State’s congressional delegation from interceding with the

Executive Branch.

Because the Attorney General has the statutory nght to

intervene and terminate a gui tam suit, she remains account-

able for the litigation. The paradoxical premise of Vermont’s

argument is that, while Executive Branch officials alone are

empowered by our Constitution to make the sensitive litiga-

tion judgments that might be required by federal-state

conflicts, the Attorney General will cravenly rely on the fact

that a suit was filed by a relator (rather than a federal

prosecutor) to look the other way, shirk her duties, and

escape political accountability. E.g., Vt. Br. 38. Although

Vermont’s own acts (as detailed in the Complaint and

Written Disclosure) persuasively demonstrate that public

officers on occasion engage in reprehensible conduct, it

hardly needs saying that this Court, in framing rules of law,

ordinarily proceeds on the opposite assumption—i.e., that

public officers will “properly discharge{] their official

duties.” United States v. Chemical Found., Inc., 272 U.S. 1,

14-15 (1926); see also United States v. Mezzanatto, 513 U.S.

196, 210 (1995). Indeed, Vermont’s argument rings parti-

cularly hollow in this case, where the Attorney General has

affirmatively opposed Vermont’s arguments in every court to

which Vermont has presented them.

Moreover, invoking the gui tam provisions of the Act in

suits against States scarcely diminishes the value of States’

congressional representation. A State’s congressional dele-

gation can make as effective an argument for dismissal in this

context as it can in any run-of-the-mine case in which a fed-

eral prosecutor has brought suit, in the name of the United

States, against a State of the Union. Moreover, Vermont

retains the key procedural safeguard that congressional

representation affords States in the federal system: Vermont

can seek the enactment of federal /egis/ation that fully im-

plements Vermont’s jaundiced view of qui tam litigation.

South Carolina v. Baker, 485 U.S. 505, 512-13 (1988). That

safeguard is more than sufficient to protect the general

federalism concerns asserted by Vermont here, at least absent

some “extraordinary defect[] in the nationai political process”

that somehow has deprived Vermont “of its right to partici-

pate” in the process of framing federal legislation. Baker,

485 U.S. at 512. Im fact, if this Court were to credit

Vermont’s and its amici’s assertions about the patent un-

wisdom of subjecting States to gui tam liability, it would also

have to conclude that Vermont and her sister States will en-

counter little difficulty in enlisting their respective con-

gressional delegations to dispense with such liability entirely.

Il. STATES OF THE UNION ARE “PERSONS”

THAT MAY SUE AND BE SUED UNDER THE

ACT

A. Because The Court Of Appeals Lacked Juris-

diction Over Vermont’s Statutory Arguments,

This Court May Not Consider Them

While the court of appeals correctly reviewed Vermont’s

Eleventh Amendment claim, that court’s assertion of “pen-

dent appellate jurisdiction” over the statutory issue cannot be

reconciled with Swint v. Chambers County Comm'n, 514

U.S. 35, 49-50 (1995).'* Swint held that courts of appeals

lack discretion “to append to an * * * appeal from a collateral

order further rulings of a kind neither independently appeal-

able nor certified by the district court.” 514 U.S. at 47.'°

Although the Solicitor General correctly noted at the

certiorari stage that Swinz left open the possibility that courts

of appeals may have jurisdiction to review an otherwise non-

appealable ruling that is “inextricably intertwined” with a

properly appealable interlocutory order, or that must be

decided to ensure “meaningful review” of the issue properly

before the court (U.S. Pet. Br. at 10 n.5 (May 26, 1999)),

12 Vermont's interlocutory appeal of the denial of its motion to

dismiss on Eleventh Amendment grounds falls within the narrow

class of exceptions to the final judgment rule recognized in Cohen

v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). See

Metcalf & Eddy, Inc., 506 U.S. at 147. States may appeal such

orders immediately because the immunity from suit conferred by

the Eleventh Amendment “is effectively lost if a case is errone-

ously permitted to go to trial.” Jd. at 144. The State’s statutory

claim, however, is a defense to liability, not an immunity from

suit, and it may be asserted by the State on appeal from a final

judgment.

'3 The Court reasoned that the statutory scheme of 28 U.S.C.

§§ 1292(a)-(b) contemplates that district courts have “first line

discretion” (514 U.S. at 47), to determine which orders not enu-

merated in 28 U.S.C. § 1291 or otherwise appealable under Cohen,

supra, are appropriate for interlocutory review; that the Rules

Enabling Act empowers the Court to expand the list of orders

appealable on an interlocutory basis only through the rulemaking

process of 28 U.S.C. § 2072 and not through judicial decision;

and that “loosely allowing pendent appellate jurisdiction would

encourage parties to parlay Cohen-type collateral orders into

multi-issue interlocutory appeal tickets.” 514 U.S. at 49-50.

_—

those circumstances do not justify review of the statutory

issue pressed by Vermont here.

The Eleventh Amendment issue is not “inextricably inter-

twined” with the statutory question decided by the court of

tutional issue on the assumption that States are “persons”

under the False Claims Act. Indeed, this Court has followed

precisely that course in the past. In Edelman v. Jordan, 415

U.S. 651 (1974), for example, the Court adjudicated the

scope of a State’s Eleventh Amendment immunity without

addressing whether States are “persons” under 42 U.S.C.

§ 1983, an issue that the Court only decided fifteen years

later. See Will v. Michigan Dep't of State Police, 491 U.S.

58, 63 n4 (1989). Moreover, the Eleventh Amendment

question is not coterminous with the statutory question, ner

does it subsume it. To the contrary, the statutory question is

far broader: the State's arguments on that question, if

accepted, would preclude even suits brought by the Attorney

General, who concededly is not bound by the constitutional

immunity that justified Vermont’s interlocutory appeal in the

first place.

The Solicitor General has suggested that the court of

appeals may have properly reviewed the statutory question

because “accepted principles of constitutional adjudication”

require this Court to decide the “logically antecedent”

statutory issue before the constitutional one. U.S. Pet. Br. at

10 n.5. That approach, however, begs the question of juris-

diction. While this Court has long adhered to a “policy of

avoiding the unnecessary adjudication of federal constitu-

tional questions,” City of Mesquite v. Aladdin's Castle, Inc.,

455 U.S. 283, 294 (1981) (emphasis added); see also United

States v. National Treasury Emp. Union, 513 U.S. 454, 477

(1995), that prudential doctrine presupposes that the Court

has jurisdiction to review both the constitutional and non-

constitutional grounds of decision. The doctrine does not it-

self confer jurisdiction on an appellate court to decide an

issue not otherwise before it. Indeed, it is, to say the least,

anomalous to assert “pendent” jurisdiction over a question,

not otherwise before the Court, for the sole purpose of

avoiding, if possible, decision of the only issue subject to

interlocutory review. In sum, there is no substantial basis on

which to conclude that Vermont’s statutory challenge was

properly before the court of appeals or can be addressed by

this Court.

B. No Canon of Construction Requires This

Court To Presume That States Are Not

Persons Under The Act

Were this Court to reach the statutory question presented

by Vermont, it would have to reject Vermont’s interpretation

of the Act. Vermont's position flows almost entirely from its

contention that Will establishes that “the plain meaning” of

the word person “excludes” States unless Congress uses a

“plain statement” to refer to them by name. Vt. Br. 11-12,

18. Vermont is wrong both in its reading of Will and in

supposing that any “plain statement” canon applies here.

1. Will did not “adopt a per se rule prohibiting the

interpretation of general liability language to include the

States, absent a clear statement by Congress to the effect that

Congress intends to subject the States to the cause of action.”

Hilton v. South Carolina Public Rys. Comm'n, 502 U.S. 197,

205 (1991). As this Court repeatedly has ruled—both before

and after its decision in Wil/—’there is no hard and fast rule

of exclusion’ of the sovereign.” Primate Protection League

v. Administrators of Tulane Educational Fund, 500 U.S. 72,

83 (1991) (quoting United States v. Cooper Corp., 312 U.S.

600, 604-05 (1941)). Not surprisingly, this Court “many

times has * * * held that the United States or a state is a

‘person’ within the meaning of statutory provisions applying

only to persons.” Helvering v. Stockholms Enskilda Bank,

293 U.S. 84, 91-92 (1934); see also Jefferson County Pharm.

Ass'n v. Abbott Labs., 460 U.S. 150, 154-55 (1983); Ohio ¥.

Helvering, 292 U.S. 360, 371 (1934).

Instead, Will simply “appl[ied] an ‘ordinary rule of statu-

tory construction,” Hilton, 502 U.S. at 205 (quoting Will,

491 U.S. at 65), that operates “‘where statutory intent is am-

biguous.’” Jd. at 206 (quoting Gregory v. Ashcroft, 501 U.S.

452, 470 (1991)). In those circumstances, “[s]ince, in com-

mon usage, the term ‘person’ does not include the sovereign,

statutes employing the phrase are ordinarily construed to

exclude it.” United States v. Cooper Corp., 312 U.S. at 604.

The principle on which Vermont relies, in other words, is a

tie-breaker that comes into operation at the end of the process

of construction, not, as Vermont would have it, a rule of law

that States are not “persons” unless Congress invokes explicit

language of inclusion. See Salinas v. United States, 522 U.S.

52, 60 (1997) (“the rules of statutory construction we have

followed to give proper respect to the federal-state balance *

* * d/o] not apply when a statute [is] unambiguous. A statute

can be unambiguous without addressing every interpretive

theory offered by a party” (internal citations omitted)).'*

|4 Vermont's invocation of the doctrine of constitutional “doubt”

(Vt. Br. 16-17) fails for much the same reason. That canon may

be applied only to embrace a statutory reading “not plainly con-

trary to the intent of Congress,” United States v. X-Citement Video,

Inc., 513 U.S. 64, 78 (1994), and thus can have no operation

where, as here, the statute unambiguously reaches the challenged

conduct. In any event, even if there were some doubt about the

constitutionality of a particular application of the Act (i.e., suits by

qui tam relators), that doubt would scarcely justify the statutory

construction urged by Vermont, which would have the primary

2. In any event, that tie-breaking canon would have no

bearing in this case even if Vermont could establish that the

Act is ambiguous, because the Act makes “person{s]” liable

to the United States for fraud against the federal government.

Under Vermont’s statutory theory, the Attorney General

herself could not have brought suit against Vermont. Neither

Vermont nor its amici, however, have cited a single case

from this Court that applies Wil/’s rule of statutory construc-

tion where, as here, a federal statute grants a right of action to

the United States. In fact, Pennsylvania v. Union Gas Co.,

491 U.S. 1 (1989), concluded that States were “persons”

suable under the Comprehensive Environmental Response,

Compensation and Liability Act of 1980, 42 U.S.C. § 9601 er

seq., based in part on the Court’s express rejection of such a

proposition. As the Court noted, “the Constitution presents

no barrier to lawsuits brought by the United States against a

State” and “(flor purposes of such lawsuits, States are

naturally just like ‘any nongovernmental entity.”” Jd. at 11.

Accordingly, “there are no special rules dictating when they

may be sued by the Federal Government, nor is there a

stringent interpretive principle guiding construction of

statutes that appear to authorize such suits.” Jbid.'>

[Footnote continued from previous page]

effect of foreclosing suits brought by the Attorney General on

behalf of the United States that are not open to any conceivable

constitutional objection.

'S Although the Court subsequently repudiated the constitutional

holding of Union Gas in Seminole Tribe v. Florida, 517 U.S. 44

(1996), the Court never has wavered from the statutory analysis

that commanded a majority of the Court in Union Gas. As the

Court noted in Union Gas, a rule exempting States from suits by

the United States, save where Congress expressly names States as

The Court’s refusal to apply any “stringent interpretive

principle” (Union Gas, 491 U.S. at 11) to federal statutes that

authorize suits by the United States in no way denigrates “the

systemic importance of the federal balance.” Arkansas v.

Farm Credit Servs., 520 U.S. 821, 827 (1997). It simply

recognizes that in cases in which the United States is a

plaintiff “the other side of the federal balance must be con-

sidered,” because “[i}]n our constitutional system the National

Government has sovereign interests of its own.” /d. As this

Court explained in Block v. North Dakota, 461 U.S. 273

(1983), “[t}he judicially created rule that a sovereign is

normally exempt from the operation of a generally worded

statute * * * serves the public policy of preserving the public

rights, revenues and property from injury and loss, by the

negligence of public officers.” Jd. at 290. Because that

“judge-created rule [is] designed to protect the interests of the

citizens of one particular State,” it “must yield in the face of

* * * evidence that Congress has determined that the national

interest requires a contrary rule.” Jbid.

[Footnote continued from previous page]

parties defendant, would effectively repudiate the traditional rule

“that no explicit statutory authorization is necessary before the

Federal Government may sue a State.” Union Gas, 491 U.S. at 11

(citing United States v. California, 332 U.S. 19, 26-28 (1947)); see

also West Virginia, 479 U.S. at 311-12. Indeed, Justice Scalia

fully joined the part of the Court’s opinion in Union Gas that

embraced that statutory analysis—and which rejected the

interpretive methodology urged by Vermont here—while

dissenting from the Court’s Eleventh Amendment holding and

later joining the Seminole Tribe majority in overruling that

holding.

C. The Act Unambiguously Applies To States Of

The Union

To the extent Vermont and its amici even attempt to

address whether Congress intended to make States suable

under the Act by using traditional “aids to construction,”

Cooper Corp., 312 U.S. at 604-05; Primate Protection

League, 500 U.S. at 83, their arguments are almost entirely

misdirected. According to Vermont and its amici, the con-

trolling question is whether Congress intended to subject

States to suit in 1863. In 1986, however, Congress repealed

the entire paragraph that formerly defined the scope of the

Act and enacted, in its place, language that applies the Act’s

proscriptions to “[aJny person.” See False Claims Amend-

ments Act of 1986, Pub. L. 99-562, 100 Stat. 3153, 3153.'°

3729 read:

A person not a member of an armed force of the United

States is liable to the United States Government for a civil

penalty of $2,000, an amount equal to 2 times the amount

of damages the Government sustains because of the act of

that person, and costs of the civil action, if the person—

31 U.S.C. § 3729 (1982). The Act then went on to enumerate the

prohibited conduct in paragraphs (1) through (6). In 1986

Congress entirely deleted that introductory paragraph and enacted

new charging language:

Section 3729 of Title 31, United States Code, is

amended— (1) by striking the matter precediny paragraph

(1) and inserting the following: “(a) LIABILITY FOR

CERTAIN ACTS. —Any person who—”

False Claims Amendments Act of 1986, Pub. L. No. 99-562, 100

Stat. 3153, 3153 (emphasis added).

ee ge

Moreover, Congress made other changes to the text of the

Act that unambiguously establish its intent to subject the

States to suit. And Congress also expressly stated that

intent in the relevant Committee Report. Vermont’s statu-

tory argument to the contrary is simply untenable.

1. Three distinct aspects of the statutory text squarely

demonstrate that Congress clearly intended that the Act apply

to the States. First, the Act reaches “/a]/ny person” without

qualification. “Read naturally, the word ‘any’ has an expan-

sive meaning, that is, ‘one or some indiscriminately of what-

ever kind.’” United States v. Gonzales, 520 U.S. 1, 5 (1997)

(quoting WEBSTER’S THIRD NEW INTERNATIONAL

DICTIONARY 97 (1976)); see also Brogan v. United States,

118 S. Ct. 805, 808 (1998) (statute that criminalizes “any”

false statement reaches “a false statement ‘of whatever

kind’”). Because the term “any” imports “no restriction”

(United States v. Turkette, 452 U.S. 576, 580 (1981)) or

“limit[ation]” (Jnternational Union of Operating Engineers v.

Flair Builders, Inc., 406 U.S. 487, 491 (1972); Shea v.

Vialpando, 416 U.S. 251, 260 (1974)), it “leaves no doubt as

to the Congressional intention to include all” members of the

category identified by the enactment. United States vy.

Rosenwasser, 323 U.S. 360, 363 (1945). And since States

can be “persons” suable under federal statutes, see, e.g., Sims

v. United States, 359 U.S. 108, 112-13 (1959); Georgia y.

Evans, 316 U.S. 159, 161 (1942), Congress’ use of the

expansive term “any” necessarily manifested its intent to

reach States among the “person[s]” that might be subjected to

suit.

Second, the 1986 enactment included a provision author-

izing the Attorney General to issue “civil investigative

demands” (CIDs) when she conducts “false claim law in-

vestigations.” 31 U.S.C. §3733(a). The CID provisions

define a “false claims law investigation” as an inquiry con-

ducted “for the purpose of ascertaining whether any person is

or has been engaged in any violation of a false claims law,”

id. § 3733(/(2), and expressly include the provisions of the

Act that are at issue here (“sections 3729 through 3732”) as

“false claims laws” subject to such investigation. Jd.

§ 3733()(1)(A). Because the CID provisions also expressly

define “person” to include “any State or political subdivision

of a State” (id. § 3733(/)(4)), the conclusion is inescapable

that States are “persons” under Section 3729—else there

would be little point in authorizing the Attorney General to

investigate whether a State “is or has been engaged in any

violation” of that section.

Vermont objects, however, that the definitions in Section

3733(/) apply only “for purposes of” the CID provisions. It

contends that those definitions therefore bespeak an intent to

exclude States from other parts of the Act, since “[i]f the term

‘person’ as used in the FCA already included the States, this

added definition would have been unnecessary.” Vt. Br. 20-

21. That argument overlooks the fact that the CID provisions

do not merely define “person” to include States, but also

expressly refer to Section 3729 as one of the laws that such

“person{[s]” may “violat[e].” Moreover, the definition of

“person” in the CID provisions includes not only States, but

also “any natural person, partnership, corporation, associa-

tion, or other legal entity.” 31 U.S.C. § 3733(/(4). Under

Vermont’s interpretive theory, therefore, Section 3729 would

apply to no one. There is no reason for this Court to accept

such an absurd interpretation of the Act. See, e.g., Citizens

Bank v. Strumpf, 516 U.S. 16, 20 (1995) (“fiJt is an

elementary rule of construction that the act cannot be held to

destroy itself’) (internal quotation marks and citation

omitted).

Third, Vermont does not seriously dispute that States are

“persons” that can initiate gui tam proceedings as plaintiffs

under the Act, nor could it. Before the 1986 enactment, the

National Association of Attorneys General “strongly

urge[d]” Congress to remove impediments that had been

fashioned by lower courts to such suits (S. REP. 345, at 13),

and Congress responded by, inter alia, amending the Act to

permit “State and local governments to join State law actions

with False Claims Act actions brought in Federal district

court * * *.” Jd. at 16; see 31 U.S.C. § 3732(b). “Since there

is a presumption that a given term is used to mean the same

thing throughout a statute,” Brown v. Gardner, 513 U.S. 115,

118 (1994), and Section 3730 uses the term “person” to refer

both to gui tam relators and to potential defendants, “it is

virtually impossible” (ibid.) to read the Act to say that States

are persons in the former sense but not in the latter. While

Vermont stresses that this canon of interpretation is “not

rigid” (Vt. Br. 24), the State offers nothing to counteract the

force of that canon here.

2. The plain-language interpretation of the Act is fully

consistent with the Act’s broad remedial purposes. This

Court has long recognized that the Act “was intended to

reach all types of fraud, without qualification, that might

result in financial loss to the Government.” Niefert-White,

390 U.S. at 232. Indeed, more than 50 years ago, this Court

held that the Act covers contractors who defraud State

agencies out of federal grant monies, since “Government

money is as truly expended whether by checks drawn directly

against the Treasury to the ultimate recipient or by grants in

aid to the states.” United States ex rel. Marcus, 317 U.S. at

544. As the Court noted, grants in aid to the States “are as

much in need of protection from fraudulent claims as any

other federal money.” /bid.

Whatever ambiguity may have existed before 1986

concerning whether the Act fully addressed that “need” in

cases in which a State itself attempted to cheat the Union, the

1986 amendments unambiguously removed any doubt on the

question. Indeed, as the court of appeals noted, the Senate

Report that accompanied the legislation expressly noted that

the Act “reaches all parties” who might defraud the govern-

ment, including “States and political subdivisions thereof.”

S. REP. 345, at 8-9. While Vermont attempts to denigrate

that statement as nothing more than the uninformed views of

a later Congress on the meaning of language enacted more

than a century earlier (Vt. Br. 26-27), its argument com-

pletely overlooks the fact that the controlling language (“any

person”) was enacted for the first time by the 1986 Congress.

Thus, even if Vermont were correct in asserting that the 1986

Congress misconceived the original Act’s scope, and that

consequently it erred in its belief that the 1986 Act did not

change the statute’s breadth, the Court would still have to

treat the Senate Report as “the authoritative source for

legislative intent” with respect to the language at issue here,

which was clearly enacted by the 1986 Congress. See

Thornburg v. Gingles, 478 U.S. 30, 44 n.7 (1986); see also

Blanchard v. Bergeron, 489 U.S. 87, 91 (1989).

3. Finally, there is no force to Vermont’s contention that

Congress could not have intended that States be “persons”

under the Act, because public entities are not ordinarily

exposed to the “punitive” liability for treble damages or civil

fines. Vt. Br. 20-21. This Court has repeatedly held that the

double damages and fines provided for in the original Act

were intended to serve remedial rather than punitive

purposes, and afforded the government no more than “com-

plete indemnity for the injuries done it,” including “not mere-

ly the amount of the fraud itself, but also ancillary costs, such

as the costs of detection and investigation, that routinely

attend the Government's efforts to root out deceptive prac-

tices directed at the public purse.” United States v. Halper,

490 U.S. 435, 444-45 (1989); see also United States y.

Bornstein, 423 U.S. at 314-15 & n.11; United States ex rel.

Marcus, 317 U.S. at 549, 551-52.

That remedial rationale for the Act’s damages and civil

fines does not disappear, as Vermont contends, merely be-

cause Congress determined in 1986 that presumptively larger

liquidated damages are now neces ry to make the govern-

ment whole. Indeed, even if Vermont were correct that the

Act incorporates some punitive elements, that would not

establish any incongruity in subjecting States to its pro-

visions. Public entities ordinarily are exempt from such

liability in order to spare innocent taxpayers from the burden

of paying for the misdeeds of public officials. See City of

Newport v. Fact Concerts, Inc., 453 U.S. 247, 267-69 (1981).

That rationale carries little force where, as here, the issue 1s

which set of taxpayers—state or federal—will be left to pay

for the State’s fraud. It is hardly incongruous to ascribe to

Congress the intent to ensure that that burden will not be

placed on the taxpayers of this Nation who have no direct

ability to control the State’s conduct. Compare Block, 461

U.S. at 290.

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted.

Counsel: THEODORE B. OLSON

Semamees SOULE Counsel of Record

MATTHEW E.C. PIFER THOMAS G. HUNGAR

MARK G. HALL MIGUEL A. ESTRADA

FRANK & COLLINS, INC. GIBSON, DUNN & CRUTCHER LLP

PO] Box 1307 1050 Connecticut Avenue, N.W.

a Vermont 05402 Washington, D.C. 20036

(802) 658-2311 (202) 955-8500

Counsel for Respondent

October 22, 1999

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.