United States ex rel. Eisenstein v. City of New York ( 2009 )

(Slip Opinion) OCTOBER TERM, 2008 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
UNITED STATES EX REL. EISENSTEIN v. CITY OF
NEW YORK, NEW YORK, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SECOND CIRCUIT
No. 08–660. Argued April 21, 2009—Decided June 8, 2009
Petitioner filed this qui tam action in the name of the United States
against respondent city and several of its officials under the False
Claims Act (FCA), 31 U.S. C. §3729. The Government declined to
exercise its statutory right to intervene, the District Court dismissed
the complaint and entered judgment for respondents, and petitioner
filed a notice of appeal 54 days later. Federal Rule of Appellate Pro
cedure 4(a)(1)(A) and 28 U.S. C. §2107(a) require, generally, that
such a notice be filed within 30 days of the entry of judgment, but
Rule 4(a)(1)(B) and §2107(b) extend the period to 60 days when the
United States is a “party.” The Second Circuit held that the 30-day
limit applied and dismissed petitioner’s appeal as untimely.
Held: When the United States has declined to intervene in a privately
initiated FCA action, it is not a “party” to the litigation for purposes
of either §2107 or Rule 4. Because petitioner’s time for filing a notice
of appeal in this case was therefore 30 days, his appeal was untimely.
Pp. 3–9.
(a) Although the United States is aware of and minimally involved
in every FCA action, it is not a “party” thereto unless it has brought
the action or exercised its statutory right to intervene in the case.
Indeed, intervention is the requisite method for a nonparty to become
a party. See Marino v. Ortiz, 484 U.S. 301, 304. To hold otherwise
would render the FCA’s intervention provisions superfluous, contra
dicting the requirement that statutes be construed in a manner that
gives effect to all their provisions, see, e.g., Cooper Industries, Inc. v.
Aviall Services, Inc., 543 U.S. 157, 166. The FCA expressly gave the
United States discretion to intervene in FCA actions, and the Court
cannot disregard that congressional assignment of discretion by des
2 UNITED STATES EX REL. EISENSTEIN v. CITY OF
NEW YORK
Syllabus
ignating the United States a “party” even after it has declined to as
sume the rights and burdens attendant to full party status. Pp. 3–6.
(b) Petitioner’s arguments for designating the United States a
party in all FCA actions are unconvincing. First, neither the United
States’ “real party in interest” status, see Fed. Rule Civ. Proc. 17(a),
nor the requirement that an FCA action be “brought in the name of
the Government,” 31 U.S. C. §3730(b)(1), converts the United States
into a “party” where, as here, it has declined to bring the action or in
tervene. Second, the Government’s right to receive pleadings and
deposition transcripts when it declines to intervene, see §3730(c)(3),
does not support, but weighs against, petitioner’s argument: If the
United States were a party to every FCA suit, it would already be en
titled to such materials under Federal Rule of Civil Procedure 5.
Third, the fact that the United States is bound by the judgment in all
FCA actions regardless of its participation in the case is not a legiti
mate basis for disregarding the statute’s intervention scheme. Fi
nally, given that Rule 4(a)(1)(B) hinges its 60-day time limit on the
United States’ “party” status, petitioner’s contention that the limit’s
underlying purpose would be best served by applying it in every FCA
case is unavailing. Pp. 6–9.
540 F.3d 94, affirmed.
THOMAS, J., delivered the opinion for a unanimous Court.
Cite as: 556 U. S. ____ (2009) 1
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
_________________
No. 08–660
_________________
UNITED STATES, EX REL. IRWIN EISENSTEIN,
PETITIONER v. CITY OF NEW YORK,
NEW YORK, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SECOND CIRCUIT
[June 8, 2009]
JUSTICE THOMAS delivered the opinion of the Court.
The question presented is whether the 30-day time limit
to file a notice of appeal in Federal Rule of Appellate
Procedure 4(a)(1)(A) or the 60-day time limit in Rule
4(a)(1)(B) applies when the United States declines to
formally intervene in a qui tam action brought under the
False Claims Act (FCA), 31 U.S. C. §3729. The United
States Court of Appeals for the Second Circuit held that
the 30-day limit applies. We affirm.
I
Petitioner Irwin Eisenstein and four New York City
(City) employees filed this lawsuit against the City to
challenge a fee charged by the City to nonresident work
ers. They contended, inter alia, that the City deprived the
United States of tax revenue that it otherwise would have
received if the fee had not been deducted as an expense
from the workers’ taxable income. In their view, this
violated the FCA, which creates civil liability for “[a]ny
person who knowingly presents, or causes to be presented,
to an officer or employee of the United States Government
2 UNITED STATES EX REL. EISENSTEIN v. CITY OF
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Opinion of the Court
. . . a false or fraudulent claim for payment or approval.”
§3729(a)(1). Although the United States is a “real party in
interest” in a case brought under the FCA, Fed. Rule Civ.
Proc. 17(a), an FCA action does not need to be brought by
the United States. The FCA also allows “[a] person [to]
bring a civil action for a violation of section 3729 for the
person and for the United States Government,”
§3730(b)(1). In a case brought by a person rather than the
United States, the FCA grants the United States 60 days
to review the claim and decide whether it will “elect to
intervene and proceed with the action.” §3730(b)(2). After
reviewing the complaint in this case, the United States
declined to intervene but requested continued service of
the pleadings. The United States took no other action
with respect to the litigation. The District Court subse
quently granted respondents’ motion to dismiss the com
plaint and entered final judgment in their favor.
Petitioner filed a notice of appeal 54 days later. While
the appeal was pending, the Court of Appeals sua sponte
ordered the parties to brief the issue whether the notice of
appeal had been timely filed. Federal Rule of Appellate
Procedure 4(a)(1)(A)–(B) and 28 U.S. C. §§2107(a)–(b)
generally require that a notice of appeal be filed within 30
days of the entry of judgment but extend the period to 60
days when “the United States or an officer or agency
thereof is a party,” §2107(b). Petitioner argued that his
appeal was timely filed under the 60-day limit because the
United States is a “party” to every FCA suit. Respondents
countered that the appeal was untimely under the 30-day
limit because the United States is not a party to an FCA
action absent formal intervention or other meaningful
participation.
The Court of Appeals agreed with respondents that the
30-day limit applied and dismissed the appeal as un
timely. See 540 F.3d 94 (CA2 2008). We granted certio
rari, 555 U. S. ___ (2009), to resolve division in the courts
Cite as: 556 U. S. ____ (2009) 3
Opinion of the Court
of appeals on the question,1 and now affirm.
II
A party has 60 days to file a notice of appeal if “the
United States or an officer or agency thereof is a party” to
the action. See §2107(b) (“In any such [civil] action, suit or
proceeding in which the United States or an officer or
agency thereof is a party, the time as to all parties shall be
sixty days from such entry [of judgment]”); Fed. Rule App.
Proc. 4(a)(1)(B) (“When the United States or its officer or
agency is a party, the notice of appeal may be filed by any
party within 60 days after the judgment or order appealed
from is entered”). Although the United States is aware of
and minimally involved in every FCA action, we hold that
it is not a “party” to an FCA action for purposes of the
appellate filing deadline unless it has exercised its right to
intervene in the case.2
A
The FCA establishes a scheme that permits either the
Attorney General, §3730(a), or a private party, §3730(b),
——————
1 Compare Rodriguez v. Our Lady of Lourdes Medical Center, 552
F.3d 297, 302 (CA3 2008); United States ex rel. Lu v. Ou, 368 F.3d 773,
775 (CA7 2004); United States ex rel. Russell v. Epic Healthcare Mgmt.
Group, 193 F.3d 304, 308 (CA5 1999); United States ex rel. Haycock v.
Hughes Aircraft Co., 98 F.3d 1100, 1102 (CA9 1996), with United
States ex rel. Petrofsky v. Van Cott, Bagley, Cornwall, McCarthy, 588 F.
2d 1327, 1329 (CA10 1978) (per curiam).
2 This does not mean that the United States must intervene before it
can appeal any order of the court in an FCA action. Under the collat
eral-order doctrine recognized by this Court in Cohen v. Beneficial
Industrial Loan Corp., 337 U.S. 541, 546–547 (1949), the United States
may appeal, for example, the dismissal of an FCA action over its
objection. See 31 U.S. C. §3730(b)(1); see also §3730(c)(3); Marino v.
Ortiz, 484 U.S. 301, 304 (1988) (per curiam) (noting that “denials of
[motions to intervene] are, of course, appealable”). In such a case, the
Government is a party for purposes of appealing the specific order at
issue even though it is not a party for purposes of the final judgment
and Federal Rule of Appellate Procedure 4(a)(1)(B).
4 UNITED STATES EX REL. EISENSTEIN v. CITY OF
NEW YORK
Opinion of the Court
to initiate a civil action alleging fraud on the Government.
A private enforcement action under the FCA is called a
qui tam action, with the private party referred to as the
“relator.” Vermont Agency of Natural Resources v. United
States ex rel. Stevens, 529 U.S. 765, 769 (2000). When a
relator initiates such an action, the United States is given
60 days to review the claim and decide whether it will
“elect to intervene and proceed with the action,”
§§3730(b)(2), 3730(b)(4); see also §3730(c)(3) (permitting
the United States to intervene even after the expiration of
the 60-day period “upon a showing of good cause”).
If the United States intervenes, the relator has “the
right to continue as a party to the action,” but the United
States acquires the “primary responsibility for prosecuting
the action.” §3730(c)(1). If the United States declines to
intervene, the relator retains “the right to conduct the
action.” §3730(c)(3). The United States is thereafter
limited to exercising only specific rights during the pro
ceeding. These rights include requesting service of plead
ings and deposition transcripts, §3730(c)(3), seeking to
stay discovery that “would interfere with the Govern
ment’s investigation or prosecution of a criminal or civil
matter arising out of the same facts,” §3730(c)(4), and
vetoing a relator’s decision to voluntarily dismiss the
action, §3730(b)(1).
Petitioner nonetheless asserts that the Government is a
“party” to the action even when it has not exercised its
right to intervene. We disagree. A “party” to litigation is
“[o]ne by or against whom a lawsuit is brought.” Black’s
Law Dictionary 1154 (8th ed. 2004). An individual may
also become a “party” to a lawsuit by intervening in the
action. See id., at 840 (defining “intervention” as “[t]he
legal procedure by which . . . a third party is allowed to
become a party to the litigation”). As the Court long ago
explained, “ [w]hen the term [to intervene] is used in refer
ence to legal proceedings, it covers the right of one to
Cite as: 556 U. S. ____ (2009) 5
Opinion of the Court
interpose in, or become a party to, a proceeding already
instituted. ” Rocca v. Thompson, 223 U.S. 317, 330 (1912)
(emphasis added). The Court has further indicated that
intervention is the requisite method for a nonparty to
become a party to a lawsuit. See Marino v. Ortiz, 484
U.S. 301, 304 (1988) (per curiam) (holding that “when [a]
nonparty has an interest that is affected by the trial
court’s judgment . . . the better practice is for such a non
party to seek intervention for purposes of appeal” because
“only parties to a lawsuit, or those that properly become
parties, may appeal an adverse judgment” (internal quota
tion marks omitted; emphasis added)). The United States,
therefore, is a “party” to a privately filed FCA action only
if it intervenes in accordance with the procedures estab
lished by federal law.
To hold otherwise would render the intervention provi
sions of the FCA superfluous, as there would be no reason
for the United States to intervene in an action in which it
is already a party. Such a holding would contradict well
established principles of statutory interpretation that
require statutes to be construed in a manner that gives
effect to all of their provisions. See, e.g., Cooper Indus
tries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 166 (2004);
Dole Food Co. v. Patrickson, 538 U.S. 468, 476–477
(2003). Congress expressly gave the United States discre
tion to intervene in FCA actions—a decision that requires
consideration of the costs and benefits of party status.
See, e.g., Fed. Rule Civ. Proc. 26(a) (requiring a party to
disclose certain information without awaiting any discov
ery request); Rule 34 (imposing obligations on parties
served with requests for production of information); Rule
37 (providing for sanctions for noncompliance with certain
party obligations). The Court cannot disregard that con
gressional assignment of discretion by designating the
United States a “party” even after it has declined to as
sume the rights and burdens attendant to full party
6 UNITED STATES EX REL. EISENSTEIN v. CITY OF
NEW YORK
Opinion of the Court
status.3
B
Petitioner’s arguments that the United States should be
designated a party in all FCA actions irrespective of its
decision to intervene are unconvincing. First, petitioner
points to the United States’ status as a “real party in
interest” in an FCA action and its right to a share of any
resulting damages. See Fed. Rule Civ. Proc. 17(a); Ver
mont Agency of Natural Resources, supra, at 772; see also
6A C. Wright, A. Miller, & M. Kane, Federal Practice and
Procedure §1545, pp. 351–353 (2d ed. 1990) (“[W]hen there
has been . . . a partial assignment the assignor and the
assignee each retain an interest in the claim and are both
real parties in interest”). But the United States’ status as
a “real party in interest” in a qui tam action does not
automatically convert it into a “party.”
The phrase, “real party in interest,” is a term of art
utilized in federal law to refer to an actor with a substan
tive right whose interests may be represented in litigation
by another. See, e.g., Fed. Rule Civ. Proc. 17(a); see also
Cts. Crim. App. Rule Prac. & Proc. 20(b), 44 M.J. LXXII(1996) (“When an accused has not been named as a party,
the accused . . . shall be designated as the real party in
interest”); Black’s Law Dictionary, supra, at 1154 (defin
ing a “real party in interest” as “[a] person entitled under
——————
3 This
Court’s decision in Devlin v. Scardelletti, 536 U.S. 1 (2002), is
not to the contrary. There, the Court held that in a class-action suit, a
class member who was not a named party in the litigation could appeal
the approval of a settlement without formally intervening. See id., at
6–14. But the Court’s ruling was premised on the class-action nature of
the suit, see id., at 10–11, and specifically noted that party status
depends on “the applicability of various procedural rules that may
differ based on context,” id., at 10. For the reasons explained above, we
conclude that in the specific context of the FCA, intervention is neces
sary for the United States to obtain status as a “party” for purposes of
Rule 4(a)(1)(B).
Cite as: 556 U. S. ____ (2009) 7
Opinion of the Court
the substantive law to enforce the right sued upon and
who generally . . . benefits from the action’s final out
come”). Congress’ choice of the term “party” in Rule
4(a)(1)(B) and §2107(b), and not the distinctive phrase,
“real party in interest,” indicates that the 60-day time
limit applies only when the United States is an actual
“party” in qui tam actions—and not when the United
States holds the status of “real party in interest.” Cf.
Barnhart v. Sigmon Coal Co., 534 U.S. 438, 452 (2002)
(“[W]hen Congress includes particular language in one
section of a statute but omits it in another section of the
same Act, it is generally presumed that Congress acts
intentionally and purposely in the disparate inclusion or
exclusion” (internal quotation marks omitted)). Conse
quently, when, as here, a real party in interest has de
clined to bring the action or intervene, there is no basis for
deeming it a “party” for purposes of Rule 4(a)(1)(B).
We likewise reject petitioner’s related claim that the
United States’ party status for purposes of Rule 4(a)(1)(B)
is controlled by the statutory requirement that an FCA
action be “brought in the name of the Government.” 31
U.S. C. §3730(b)(1). A person or entity can be named in
the caption of a complaint without necessarily becoming a
party to the action. See 5A C. Wright & A. Miller, Federal
Practice and Procedure §1321, p. 388 (3d ed. 2004) (“[T]he
caption is not determinative as to the identity of the par
ties to the action”). And here, it would make little sense to
interpret the naming requirement of §3730(b)(1) to dis
pense with the specific procedures for intervention pro
vided elsewhere in the statute.
Second, petitioner relies on the Government’s right to
receive pleadings and deposition transcripts in cases
where it declines to intervene, see §3730(c)(3). But the
existence of this right, if anything, weighs against peti
tioner’s argument. If the United States were a party to
every FCA suit, it would already be entitled to such mate
8 UNITED STATES EX REL. EISENSTEIN v. CITY OF
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Opinion of the Court
rials under Federal Rule of Civil Procedure 5, thus leaving
no need for a separate provision preserving this basic right
of litigation for the Government.
Third, petitioner relies on the fact that the United
States is bound by the judgment in all FCA actions regard
less of its participation in the case. But this fact is not
determinative; nonparties may be bound by a judgment for
a host of different reasons. See Taylor v. Sturgell, 553
U.S. ___, ___ (2008) (slip op., at 9–14) (describing “six
established categories” in which a nonparty may be bound
by a judgment); see also Restatement (Second) of Judg
ments §41(1)(d), p. 393 (1980) (noting that a nonparty may
be bound by a judgment obtained by a party who, inter
alia, is “an official or agency invested by law with author
ity to represent the person’s interests”). If the United
States believes that its rights are jeopardized by an ongo
ing qui tam action, the FCA provides for intervention—
including “for good cause shown” after the expiration of
the 60-day review period. The fact that the Government is
bound by the judgment is not a legitimate basis for disre
garding this statutory scheme.
Finally, petitioner contends that the underlying purpose
of the 60-day time limit would be best served by applying
Rule 4(a)(1)(B) in every FCA case. The purpose of the
extended 60-day limit in cases where the United States is
a party, he claims, is to provide the Government with
sufficient time to review a case and decide whether to
appeal. Petitioner contends that, even in cases where the
Government did not intervene before the district court
issued its decision, the Government may want to intervene
for purposes of appeal, and should have the full 60 days to
decide. But regardless of the purpose of Rule 4(a)(1)(B)
and the convenience that additional time may provide to
the Government, this Court cannot ignore the Rule’s text,
which hinges the applicability of the 60-day period on the
requirement that the United States be a “party” to the
Cite as: 556 U. S. ____ (2009) 9
Opinion of the Court
action.4
III
We hold that when the United States has declined to
intervene in a privately initiated FCA action, it is not a
“party” to the litigation for purposes of either §2107 or
Federal Rule of Appellate Procedure 4. Because peti
tioner’s time for filing a notice of appeal in this case was
therefore 30 days, his appeal was untimely. The judgment
of the Court of Appeals is affirmed.
It is so ordered.
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4 Petitioner contends that the uncertainty regarding Rule 4(a)(1)(B)
has created a “tra[p] for the unwary,” and that our decision will un
fairly punish those who relied on the holdings of courts adopting the 60
day limit in cases in which the United States was not a party. See
Brief for Petitioner 25–27. As an initial matter, it is unclear how many
pending cases are implicated by petitioner’s concern as such cases
would have to involve parties who waited more than 30 days to appeal
from the judgment in an FCA case in which the United States declined
to intervene. But to the extent that there are such cases, the Court
must nonetheless decide the jurisdictional question before it irrespec
tive of the possibility of harsh consequences. See Torres v. Oakland
Scavenger Co., 487 U.S. 312, 318 (1988) (“We recognize that construing
Rule3(c) [of the Federal Rules of Appellate Procedure] as a jurisdic
tional prerequisite leads to a harsh result in this case, but we are
convinced that the harshness of our construction is ‘imposed by the
legislature and not the judicial process’ ” (quoting Schiavone v. Fortune,
477 U.S. 21, 31 (1986))).