Carol Rae Cooper Foulds v. Texas Tech UniversityCarol Rae Cooper Foulds v. Texas Tech University
This appeal speaks of a qui tam action brought by Carol Rae Cooper Foulds, on behalf of the United States, against Texas Tech University and Texas Tech University Health Sciences Center for violations of the False Claims Act,
I
A
Foulds possesses information that she believes will bring to light a massive number of fraudulent claims submitted to the
This alleged falsification of documents forms the basis for Foulds’s action under the False Claims Act (“FCA” or “Act”). That Act creates civil liability for,
inter alia,
“[a]ny
person
who knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false claim for payment or approval.”
Aside from the question of whether the Act’s language subjects states to potential liability, Foulds has other hurdles to clear. An uninterested third party ordinarily cannot seek relief for the United States’ injuries suffered at the hands of another.
See, e.g., Valley Forge Christian College v. Americans United for Separation of Church and State, Inc.,
For hundreds of years, these proceedings have been labeled “qui tam” actions.
3
A qui tam plaintiff under the FCA must file her complaint under seal and deliver copies of the complaint to the United States.
B
This appeal presents an additional claim. According to Foulds, her decision to blow the whistle on the allegedly fraudulent activities led to retaliatory conduct by the chairman of the dermatology department.
4
Foulds contends that she first notified Texas Tech University’s general counsel of the false claims in the fall of 1993. She alleges that soon thereafter she received derogatory memoranda from the chairman of the dermatology department and was subsequently placed on probation. Section 3730(h) of the FCA provides remedies for those employees harassed by their employers because of lawful acts performed in furtherance of qui tam actions under the Act. The “employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection.”
II
Foulds filed her complaint with the district court in August of 1995. This complaint remained under seal until the district court issued an order in September of 1996, denying the United States’ request for an extension of time during which it could determine whether to intervene.
5
According to assertions made by the United States at oral argument, the federal government simply did not have the time necessary to determine whether this case warranted its intervention. Shortly after the district court issued the order denying the government’s request for an extension, two of the defendants, Texas Tech University and Texas Tech Health Sciences Center (“Texas defendants”),
6
filed a motion to dismiss the qui tam action pursuant to Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure. The Texas defendants based their motion to dismiss on four arguments: (1) the Eleventh Amendment precludes a private citizen from bringing a qui tam suit against the sovereign states for alleged violations of the FCA; (2) the Eleventh Amendment bars private citizens from naming states as defendants to a claim seeking a retaliation remedy under
The district court denied the Texas defendants’ motion to dismiss. Noting that a ruling on a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction must precede any decisions on other Rule 12 motions, the court first addressed the defendants’ Eleventh Amendment arguments.
The Texas defendants argued that the principles recognized in
Seminole Tribe of Florida v. Florida,
The district court quickly brushed aside the applicability of
Seminole Tribe.
The court decided that it need not address
Seminole
Tribe’s holding because the defense of sovereign immunity from suit under the Eleventh Amendment was not presented here inasmuch as the Eleventh Amendment did not apply to suits by the United States against a state, which, it held, a qui tam action is in fact.
United States ex rel. Foulds v. Texas Tech Univ.,
The district court then decided that rejection of the Eleventh Amendment challenge to Foulds’s
[i]fsection 3730(h) is eviscerated, then the Government is truly the one that will suffer the greatest harm. This is because a “whistleblower” will not be encouraged to come forward with information for fear of being retaliated against.
Id.
at 871. Thus, the district court reasoned that sovereign immunity should not prevent the
Having disposed of the Eleventh Amendment issues, the district court proceeded to address the remaining question: Does the term “person,” under the FCA, encompass states? Although it recognized that courts ordinarily do not understand the term “person” to include the sovereign states, the court rejected this general rule because
this would be an illogical step to make in light of [the district] court’s finding that the Eleventh Anendment does not bar Foulds’s suit against [the Texas defendants].
Id. at 871. This somewhat questionable reasoning 8 led the district court to dismiss the Texas defendants’ 12(b)(6) motion.
Ill
A
We begin and end with the jurisdictional question presented by the Eleventh Amendment. Generally, our court would first interpret the ambiguous statute before deciding any constitutional issues. Indeed, courts’ interpretive results are often influenced by their desire to avoid potential constitutional problems.
See, e.g., Ashwander v. Tennessee Valley Authority,
The Eleventh Amendment’s admonition is jurisdictional in nature:
The 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.
Although parties may (and do in this case) present their arguments in the alternative, we cannot hand down a decision in this fashion. To rule on a merits question before, or in addition to, answering the omnipresent jurisdictional question would contravene the well-established principle that the federal courts may not issue advisory opinions.
See Marathon Oil Co. v. A.G. Ruhrgas,
Nor can we assume jurisdiction to decide that the statute creates no cause of action and then brush away the jurisdictional question as unnecessary to address for the reason that, in either event, the sum of the relief granted equals zero. The Supreme Court has recently, and flatly, rejected any “doctrine of hypothetical jurisdiction”
10
required for such a holding.
Steel Co.,
[wjithout jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.
Accordingly, if the Eleventh Amendment removes our jurisdictional authority to hear Foulds's case, we have no power to determine whether the False Claims Act creates a cause of action against states-i.e., whether states are "person[s]" under the Act. See Blatchford v. Native Village of Noatak,
B
1
We now attend to the threshold jurisdictional issue: whether a private citizen may institute a suit-on behalf of the United States-against a state in federal court. The facts of this case necessarily limit our inquiry to the situation in which a private citizen brings the qui tam action and the United States government has not intervened.
13
We review Eleventh Amendment immunity determinations, like other questions of subject matter jurisdiction, de novo as a question of law. Ussery v. Louisiana,
As a matter of helpful repetition, we again set out the text of the Eleventh Amendment:
The 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.
By first asking who has commenced or prosecuted the suit against Texas, our starting point differs from that of the four other circuit courts that have addressed this issue. Those courts began their anal-yses by first determining that the United States is the “real party in interest” in qui tam actions. Then, they conclude that because the states enjoy no sovereign immunity from the United States,
15
the Eleventh Amendment does not apply.
United States ex rel. Rodgers v. Arkansas,
The question allows no easy answer. One reason for the perplexity is that Congress has not, in this respect, specified the contours of the relationship between the qui tam plaintiff and the United States.
Contrary to language in the cases just cited, neither of those two concepts-— at the respective ends of our spectrum— accurately describes the relationship:
17
The government retains some control over the qui tam suit commenced by the plaintiff,
see, e.g.,
2
Preliminarily, we note that even though the United States may be a relevant “party” in this suit for some purposes of the litigation, the Federal Government certainly is not the acting party-of-record in this suit. Our court’s precedent commands this view. In
Searcy v. Philips Electronics North America Corp.,
structure distinguishes between eases in which the United States is an active participant and cases in which the United States is a passive beneficiary of the relator’s efforts. [Thus,] when the government chooses to remain passive, as it [had in Searcy ], we [saw] no reason to treat it as a party with standing to chal-
lenge the district court’s action as of right.
Id.
at 156 (emphasis added);
see also Avco Corp. v. United States Dept. of Justice,
3
The only argument raised to challenge the facial assumption that Foulds actually “commenced and prosecuted” this action as a private citizen is that the FCA establishes Foulds as the deputy of the United States.
21
The Supreme Court has made
In
Blatchford,
the Court held that the Eleventh Amendment bars federal court suits by Indian tribes against a state.
Blatchford,
We doubt ... that the sovereign exemption can be delegated ... The consent “inherent in the convention,” to suit by the United States — at the instance and under the control of responsible federal officers — is not consent to suit by anyone whom the United States might select ...
Id.
at 785,
As the Supreme Court has suggested in
Blatchford,
the principle of federalism embodied in both the Constitution and the Eleventh Amendment reflects an understanding between two sovereign authorities — the Federal Government and the respective states — that state sovereignty is surrendered only to another sovereign, the United States, which, of course, acts through “responsible federal officers.” Qui tam plaintiffs cannot qualify as surrogates of “responsible federal officers” who have the right to represent the sovereign to sue the respective states.- Indeed, the Supreme Court has recognized this fact. In a recent case, it stated that “[a]s a class of plaintiffs, qui tam relators are different
in kind
than the Government. They are motivated primarily by prospects of monetary reward rather than the public good.”
Hughes Aircraft Co. v. United States ex rel. Schumer,
I have based the enforcement provisions upon the old-fashioned idea of holding out a temptation, and “setting a rogue to catch a rogue,” which is the safest and most expeditious way I have ever discovered of bringing rogues to justice.
Cong. Globe, 37th Cong., 3d Sess. 955-56 (1863). Furthermore, Sir Edward Coke’s class description of qui tam plaintiffs hardly suggests a historical understanding of relators as responsible representatives of the sovereign. He described the common informers who institute penal actions for the government as “viperous vermin” that prevent “[t]he King [from] committing] the sword of his justice or the oil of his mercy.” Gerald Hurst, The Common Informer, 147 Contemp. Rev. 189-90 (1935). In short, these descriptions of the historical qui tam plaintiff undermine the concept that she is deputized to stand in for the “responsible federal officers” to whom the states have surrendered their sovereign rights.
Furthermore, rogue or not, the qui tam plaintiff is surely no mere opportunistic bystander in the litigation, irrespective of whose name the litigation may bear. With the merely chimerical presence of the United States in this case, -the relator’s significant control over the litigation process plainly impinges on state sovereignty. It is Foulds — not the United States as sovereign — who controls all strategic litigation decisions in the ease such as how, when and in what manner to make demands on a state, whether to sue a state, how far to push the state toward a jury trial in extended litigation, whether to settle with a state and on what terms, etc.; and it is Foulds who maintains
sole
responsibility for financing the litigation and for its costs.
See
4
In sum, we hold that when the United States has not actively intervened in the action, the Eleventh Amendment bars qui tam plaintiffs from instituting suits against the sovereign states in federal court. The United States’ decision to maintain a passive role compels us to conclude that the private citizen, not the United States, has “commenced or prosecuted” the suit. Furthermore, the United States cannot delegate to non-designated, private individuals its sovereign ability to evade the prohibitions of the Eleventh Amendment. Only “responsible federal officers,” or those who act at their instance and under their control, may exercise the authority of the United States as sovereign. Foulds does not qualify.
C
Having decided that a private citizen has commenced and prosecuted this action against a sovereign state within the meaning of the Eleventh Amendment’s proscription, our remaining task is to apply the dictates of Seminole Tribe:
In order to determine whether Congress has abrogated the States’ sovereign immunity, we ask two questions: first, whether Congress has “unequivocally expresse[d] its intent to abrogate the immunity,” and second, whether Congress has acted “pursuant to a valid exercise of power.”
Seminole Tribe,
In
Scott v. University of Mississippi
Congress’s intent to abrogate state sovereign immunity “must be obvious from ‘a clear legislative statement.’ ” Congress may abrogate state sovereign immunity “only by making its intention unmistakably clear in the language of the statute.” “A general authorization for suit in federal court is not the kind of unequivocal statutory language sufficient to abrogate the Eleventh Amendment.” Instead, both the text and structure of the statute must “make[ ] it clear that the State is the [intended] defendant in the suit.” Congress is not required, however, to “explicitly reference to state sovereign immunity or the Eleventh Amendment.”
Id.,
Foulds has not argued that the FCA “unequivocally expressed]” a congressional intent to abrogate the states’ sovereign immunity. Neither have we found any such clear intent, as no relevant provision of the Act explicitly mentions states as defendants.
Cf. Seminole Tribe,
D
We must next consider the Eleventh Amendment implications for Foulds’s
Foulds’s argument that the United States is also a real party in interest in a
IV
For all of the foregoing reasons, we REVERSE the district court’s order denying the Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction over the suit, and we REMAND for an entry of a judgment dismissing the complaint as to Texas Tech University and Texas Tech University Health Sciences Center.
REVERSED and REMANDED for Entry of Judgment Dismissing Appellants.
Notes
. The Act sets the penalty for violating this provision between $5,000 and $10,000, plus three times the amount of damages that the United States sustains.
. The private party’s reward for prosecuting the case depends, in part, upon whether the government decides to intervene. If the government chooses to intervene, the relator "shall receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim.”
.This abbreviated Latin phrase is shorthand for "he who as much for the king as for himself.” See generally Note, The History and Development of Qui Tam, 1972 Wash. U. L.Q. 81, 83.
. Foulds has not named this, or any, individual as a defendant in this suit.
. To date, the United States has intervened solely for purposes of appeal. It would still be possible, however, for the United States to intervene at the district court level if proceedings were to continue.
. In the original complaint, Foulds named five defendants: Lubbock County, Lubbock County Hospital District, University Medical Center, Texas Tech University, and Texas Tech Health Sciences Center. Only the latter two defendants are before us on this appeal.
. In its order responding to the motion to dismiss, the district court did not comment on the fourth argument. We express no opinion as to it.
. The reasoning is questionable because the district court could have decided that private citizens can use the qui tam device to bring states to court, while yet denying those citizens relief because the particular statute at issue (the FCA) did not subject states to liability. The statutory interpretation issue need not be determined by resolution of the Eleventh Amendment issue.
. In a recent case, the Supreme Court decided an Article III question before reaching an Eleventh Amendment issue and stated in a footnote that “[w]hile the Eleventh Amendment is jurisdictional in the sense that it is a limitation on the federal court's judicial power, and therefore can be raised at any stage of the proceedings, we have recognized that it is not co-extensive with the limitations on judicial power in Article III."
Calderon v. Ashmus,
The Supreme Court (in an opinion issued after Calderon) has explicitly recognized that
. The “doctrine of hypothetical jurisdiction” is a phrase coined by the Ninth Circuit.
United States v. Troescher,
. In
Ruhrgas,
the en banc opinion quotes the relevant language in
Steel Co.
rejecting the doctrine of hypothetical jurisdiction. Appended to this quotation is the parenthetical "(majority opinion).”
Ruhrgas,
I ... agree with the Court's statement that federal courts should be certain of their jurisdiction before reaching the merits of a case.... I write separately to note that, in my view, the Court’s opinion should not be read as cataloging an exhaustive list of circumstances under which federal courts may exercise judgment in ”reserv[ing] difficult questions of ... jurisdiction when the case alternatively could be resolved on the merits in favor of the same party.”
Steel Co.,
. No one has challenged Foulds's standing in this case. We must, however, consider possible objections to standing sua sponte. Lang v. French,
. Although we express no opinion as to whether the government's presence as inter-venor would change the Eleventh Amendment analysis, we do note that at least one Supreme Court case may be relevant to that question. In an original action before the Supreme Court involving a dispute between two states over water rights of the Colorado River, the Court allowed Indian Tribes to intervene after the United States had actively intervened in the case. Arizona v. California,
The Tribes do not seek to bring new claims or issues against the states, but only ask leave to participate in an adjudication of their vital water rights that was commenced by the United States. Therefore, our judicial power over the controversy is not enlarged by granting leave to intervene, and the States' sovereign immunity protected by the Eleventh Amendment is not compromised.
Id. (emphasis added).
. The Eleventh Amendment cloaks Texas Tech University and Texas Tech University Health Sciences Center with sovereign immunity as state institutions.
See Wallace v. Texas Tech Univ.,
.
United States v. Texas,
.Our own circuit's precedent describes the United States as “a” real party in interest rather than ''the” real party in interest.
Searcy v. Philips Electronics North America Corp.,
. See generally Valerie R. Park, Note, The False Claims Act, Qui Tam Relators, and the Government: Which is the Real Party to the Action?, 43 Stan. L.Rev. 1061 (1991).
. The Second Circuit has indicated that the interests of a qui tam plaintiff are akin to the interests of an attorney working for a contingent fee.
Stevens,
. We went on to conclude, however, that the United States could appeal the district court’s order as a proper non-party appellant.
Searcy,
. Our early legislators adopted the qui tam concept from the English system. See Note, The History and Development of Qui Tam, 1972 Wash. U. L.Q. 81. Thus, it is significant that in his description of qui tam actions, William Blackstone indicated that either the king or the relator could “commence” a quit tam action:
Sometimes one part [of the proceeds from suit] is given to the king, to the poor, or to some public use, and the other part to the informer or prosecutor; and then the suit is called a qui tam action, because it is brought by a person “qui tam pro domino rege quam pro se imposo sequitur." If the king therefore himself commences this suit, he shall have the whole forfeiture.
3 William Blackstone, Commentaries *160. Blackstone penned this passage less than thirty years before ratification of the Eleventh Amendment.
.A critical issue related to this "deputization” argument, however, is whether the United States Congress can assign the power of the United States as a sovereign to sue anoth
. Section 1362 states:
The district courts shall have original jurisdiction of all civil actions, brought by any Indian tribe or band with a governing body duly recognized by the Secretary of the Interior, wherein the matter in controversy arises under the Constitution, laws, or treaties of the United States.
. The argument did not assert that Congress abrogated the states’ sovereign immunity in
. Of course, citizens may, generally, pursue prospective injunctive relief against state officials.
See Edelman v. Jordan,
. Section 3730(h) states:
Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An employee may bring an action in the appropriate district courL of the United States for the relief provided in this subsection.
. With respect to