United States ex rel. Eisenstein v. City of New York
Encyclopedia
United States ex rel. Eisenstein v. City of New York, No. 08-660, 556 U.S. ___ (2009), was a recent case in which the Supreme Court of the United States
held that where the Government has not intervened or actively participated, private plaintiffs under the False Claims Act
must filed an appeal within 30 days of the judgment or order being appealed, according to the Federal Rules of Appellate Procedure
.
" (as the one allegedly being defrauded), the statute allows a private plaintiff (known as a "relator
" under the FCA) to sue qui tam
(on the government’s behalf) since the relator is "partially assigned" part of the government's legal injury.
The False Claims Act provides:
Despite this provision, the United States does not need to participate in False Claims Act litigation. After conducting an investigation, the government may choose to intervene and take over the litigation. However, even if it decides not to do so, the FCA statute provides the government a right to be involved in the action and to receive a majority share of any monetary recovery. The government also has a right to intervene later, if it can show good cause for doing this. Where the government does not intervene, the False Claims Act provides the government a right to receive copies of the parties' pleadings and deposition transcripts (rights usually reserved for parties to a suit).
The district court dismissed Eisenstein’s claim for failure to state a claim and entered final judgment in favor of the City of New York. Eisenstein filed notice of appeal from that judgment 54 days later. Six months after Eisenstein filed his notice of appeal, the Second Circuit ordered the parties to brief the issue of what time limit for filing the notice of appeal applied in this case, where the action was conducted in the name of the United States but the government had declined to intervene. Rule 4(a)(1)(A) of the Federal Rules of Appellate Procedure (FRAP) gives a party 30 days to appeal in a civil case, but the rule gives “any party” 60 days to appeal when the United States is a party to the action. The City of New York later filed a motion to dismiss the appeal as untimely.
The Second Circuit concluded that because the United States was not a “party” to the action, the special FRAP 60-day time limit did not apply. Therefore, it dismissed the appeal as untimely.
The petitioner (Eisenstein & co.) argued that the government was considered both a "party in interest" and a "party" under the FCA statute. As a result, the Federal Rules of Appellate Procedure would have allowed petitioners 60 days to file their appeal, and the Second Circuit would likely have been found to have had jurisdiction to hear their appeal.
The respondent (the City of New York) argued that only individuals or entities that actually participate in and control the qui tam litigation can qualify as “parties” to an action. Because the Government neither intervened nor participated in the qui tam action, and it could not have appealed the decision without first seeking leave to do so, the respondents argued that the 30 day time limit set out in the Federal Rules of Appellate Procedure should apply.
Three amicus briefs were filed in the case as well.
Oral arguments indicated that Congress provided no express answer within the False Claims Act text or legislative history regarding whether the United States should be considered a "party" to a qui tam action when it declines to intervene. As both parties pointed out, a qui tam action is unique and the government has unique rights, even when it declines to intervene; it is not a stranger to the litigation. By the terms of the statute, the government is the "real party in interest" in an FCA suit. The United States is also named in the caption of the case, and it receives the bulk of any monetary recovery. In sum, the United States bears some of the characteristics of a party and some characteristics of a non-party.
Associate Justice Clarence Thomas
wrote for a unanimous Court, holding that the FRAP 30-day time limit applies to a private relator's claim under the False Claims Act
where the government has not intervened. Thus, the Court affirmed the Second Circuit's finding that it lacked jurisdiction to hear an appeal of the dismissal of the private parties' suit against New York since the appeal had been filed in an untimely manner.
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
held that where the Government has not intervened or actively participated, private plaintiffs under the False Claims Act
False Claims Act
The False Claims Act is an American federal law that imposes liability on persons and companies who defraud governmental programs. The law includes a "qui tam" provision that allows people who are not affiliated with the government to file actions on behalf of the government...
must filed an appeal within 30 days of the judgment or order being appealed, according to the Federal Rules of Appellate Procedure
Federal Rules of Appellate Procedure
The Federal Rules of Appellate Procedure are a set of rules, promulgated by the Supreme Court of the United States on recommendation of an advisory committee, to govern procedures in cases in the United States Courts of Appeals....
.
Prior history
The Eisenstein case arose out of New York City’s decision to require government employees who do not live in the City to pay a fee equivalent to the municipal income taxes paid by employees who do live there. Irwin Eisenstein and four other city employees who do not live in New York sued the city, pro se (i.e., representing themselves without being represented by attorneys), alleging that the policy violated – among other things – the federal False Claims Act, which imposes civil liability on any person who “knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval.” The False Claims Act is unique because, while the federal government is always the "real party in interestReal party in interest
In law, the real party in interest is the one who actually possesses the substantive right being asserted and has a legal right to enforce the claim . Additionally, the "real party in interest" must sue in his own name...
" (as the one allegedly being defrauded), the statute allows a private plaintiff (known as a "relator
Relator (law)
-Qui Tam action:A Qui Tam Action may be brought by any party against an entity that is fraudulently collecting money from the United States government by filing false claims. The party bringing the suit -- the relator -- must have possession of information substantiating the claim of fraud against...
" under the FCA) to sue qui tam
Qui tam
In common law, a writ of qui tam is a writ whereby a private individual who assists a prosecution can receive all or part of any penalty imposed...
(on the government’s behalf) since the relator is "partially assigned" part of the government's legal injury.
The False Claims Act provides:
Despite this provision, the United States does not need to participate in False Claims Act litigation. After conducting an investigation, the government may choose to intervene and take over the litigation. However, even if it decides not to do so, the FCA statute provides the government a right to be involved in the action and to receive a majority share of any monetary recovery. The government also has a right to intervene later, if it can show good cause for doing this. Where the government does not intervene, the False Claims Act provides the government a right to receive copies of the parties' pleadings and deposition transcripts (rights usually reserved for parties to a suit).
The district court dismissed Eisenstein’s claim for failure to state a claim and entered final judgment in favor of the City of New York. Eisenstein filed notice of appeal from that judgment 54 days later. Six months after Eisenstein filed his notice of appeal, the Second Circuit ordered the parties to brief the issue of what time limit for filing the notice of appeal applied in this case, where the action was conducted in the name of the United States but the government had declined to intervene. Rule 4(a)(1)(A) of the Federal Rules of Appellate Procedure (FRAP) gives a party 30 days to appeal in a civil case, but the rule gives “any party” 60 days to appeal when the United States is a party to the action. The City of New York later filed a motion to dismiss the appeal as untimely.
The Second Circuit concluded that because the United States was not a “party” to the action, the special FRAP 60-day time limit did not apply. Therefore, it dismissed the appeal as untimely.
Case
The Supreme Court of the United States granted the petition for certiorari, allowing it to review the case, in January 2009.The petitioner (Eisenstein & co.) argued that the government was considered both a "party in interest" and a "party" under the FCA statute. As a result, the Federal Rules of Appellate Procedure would have allowed petitioners 60 days to file their appeal, and the Second Circuit would likely have been found to have had jurisdiction to hear their appeal.
The respondent (the City of New York) argued that only individuals or entities that actually participate in and control the qui tam litigation can qualify as “parties” to an action. Because the Government neither intervened nor participated in the qui tam action, and it could not have appealed the decision without first seeking leave to do so, the respondents argued that the 30 day time limit set out in the Federal Rules of Appellate Procedure should apply.
Three amicus briefs were filed in the case as well.
Oral arguments indicated that Congress provided no express answer within the False Claims Act text or legislative history regarding whether the United States should be considered a "party" to a qui tam action when it declines to intervene. As both parties pointed out, a qui tam action is unique and the government has unique rights, even when it declines to intervene; it is not a stranger to the litigation. By the terms of the statute, the government is the "real party in interest" in an FCA suit. The United States is also named in the caption of the case, and it receives the bulk of any monetary recovery. In sum, the United States bears some of the characteristics of a party and some characteristics of a non-party.
Associate Justice Clarence Thomas
Clarence Thomas
Clarence Thomas is an Associate Justice of the Supreme Court of the United States. Succeeding Thurgood Marshall, Thomas is the second African American to serve on the Court....
wrote for a unanimous Court, holding that the FRAP 30-day time limit applies to a private relator's claim under the False Claims Act
False Claims Act
The False Claims Act is an American federal law that imposes liability on persons and companies who defraud governmental programs. The law includes a "qui tam" provision that allows people who are not affiliated with the government to file actions on behalf of the government...
where the government has not intervened. Thus, the Court affirmed the Second Circuit's finding that it lacked jurisdiction to hear an appeal of the dismissal of the private parties' suit against New York since the appeal had been filed in an untimely manner.