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Enron Mail |
This action by the U.S. Supreme Court may be very good news for the Grynberg
case. ---------------------- Forwarded by Richard B Sanders/HOU/ECT on 11/22/99 06:31 AM --------------------------- Dawne Davis <DDAVIS@HOLLANDHART.COM< on 11/20/99 04:05:29 PM To: cc: Richard B Sanders/HOU/ECT@ECT Subject: News Flash! Supreme Court to review qui tam standing this term We received this news flash courtesy of John Boese. CIVIL FALSE CLAIMS ACT: SUPREME COURT ORDERS BRIEFING ON CONSTITUTIONALITY OF QUI TAM ENFORCEMENT In a surprise announcement, the Supreme Court yesterday indicated that it will determine this term whether a private individual (known as a"relator") who files a qui tam False Claims Act cases has standing to bring such a case. In an FCA case already fully briefed and ready for argument on November 29, Vermont Agency of Natural Resources v. United States ex rel Stevens, No. 98-1828, the court had granted certiorari to determine two issues: (1) whether states have immunity under the Eleventh Amendment from FCA suits brought by qui tam relators, and (2) whether states are "persons" subject to FCA liability. Yesterday, the Supreme Court issued an order instructing the parties to file, by November 30, additional briefs on the qui tam relator's standing to bring an FCA suit. A panel of the Fifth Circuit Court of Appeals recently issued an opinion declaring qui tam enforcement unconstitutional, a ruling that would have created a conflict among the circuits. See, United States ex rel. Riley v. St. Luke's Episcopal Hospital, No. 97-20948, 1999 WL 1034216 (5th Cir. Nov 15, 1999), discussed in FraudMail Alertc 11-15-99 and FraudMail Alert No. 99-11-18. In a split decision, the Fifth Circuit panel ruled that when the government declines intervention, qui tam enforcement of the FCA violates the Take Care Clause of the Constitution and the separation of powers doctrine. However, that ruling was vacated and the Riley case is now before the full Fifth Circuit for en banc review. The constitutionality of qui tam enforcement has been hotly debated since the watershed amendments to the False Claims Act in 1986 significantly expanded the rights and powers of qui tam relators. Every district court to consider the issue, and five (5) courts of appeals, had concluded that qui tam enforcement is constitutional, albeit on conflicting (and sometimes inexplicable) grounds. Judge Hoyt's ruling in Riley was the first district court opinion holding that qui tam enforcement is unconstitutional. The District Court in Riley concluded that the qui tam relator lacked standing to sue under the FCA because he had suffered no injury in fact. See Riley v. St. Luke's Episcopal Hospital, 982 F. Supp. 1261 (S.D. Tex 1997). The Fifth Circuit panel affirmed this ruling, but on different constitutional grounds. It was hoped that on rehearing en banc the Fifth Circuit would also find the qui tam provisions unconstitutional, and would create a conflict in the circuits to require Supreme Court review of this constitutional issue. The Supreme Court's order yesterday in the Stevens case indicates that the Court intends to expedite that consideration and resolve at least the standing issue this term. One final note: while it is surprising that the constitutional issue would be raised by the Court at such a late date, the issue is not new to the Stevens case. In the Second Circuit Court of Appeals decision in Stevens, 162 F.3d 195 (2d Cir. 1999), Judge Jack B. Weinstein, sitting by designation, issued a lengthy dissent from the panel decision both on the issue of Eleventh Amendment immunity and on the separation of powers and standing issues even though the Second Circuit had ruled in 1993 that qui tam enforcement was constitutional. See, U.S. ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F. 2d 1148 (2d Cir.), cert denied, 113 S. Ct. 2962 (1993). And, of course, it is not unusual for the court to question standing at any time. FraudMail Alertc No. 11-20-99
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