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