 
                        United States Court of Appeals



                     FOR THE DISTRICT OF COLUMBIA CIRCUIT



              Argued January 14, 1999     Decided April 2, 1999 



                                 No. 98-5133



              United States of America, ex rel. Ronald E. Long, 

                          Appellee/Cross-Appellant,


                                      v.


              SCS Business & Technical Institute, Inc., et al., 

                                  Appellees



                             State of New York, 

                           Appellant/Cross-Appellee


                   Attorney General of the United States, 

                                  Intervenor

                              Consolidated with 

                              98-5149 & 98-5150

                                         ----------

                Appeals from the United States District Court 

                        for the District of Columbia 

                                 (92cv02092)


     Howard L. Zwickel, Assistant Attorney General, State of 
New York, argued the cause for appellant/cross-appellee.
With him on the briefs was Peter H. Schiff, Deputy Solicitor 
General.

     Ronald A. Shems, Assistant Attorney General, State of 
Vermont, argued the cause for amici curiae State of Ver-
mont, et al.  With him on the brief was William H. Sorrell, 
Attorney General.

     Douglas N. Letter, Appellate Litigation Counsel, United 
States Department of Justice, argued the cause for United 
States as intervenor.  With him on the briefs were Frank W. 
Hunger, Assistant Attorney General, and Wilma A. Lewis, 
United States Attorney.  Richard L. Cys entered an appear-
ance.

     Stuart F. Pierson argued the cause and filed the briefs for 
appellee/cross-appellant.

     Jill A. Dunn was on the notice of joinder in brief for 
appellant Joseph P. Frey.

     Mark B. Rotenberg was on the brief for amicus curiae The 
Regents of the University of Minnesota.

     Before:  Wald, Silberman, and Sentelle, Circuit Judges.

           Opinion for the Court filed by Circuit Judge Silberman.

     Silberman, Circuit Judge:  The question presented in this 
appeal is whether states are defendant persons under the 
False Claims Act.  Contrary to the decisions of the Second 
and Eighth Circuits, see United States ex rel. Stevens v. 
Vermont Agency of Natural Resources, 162 F.3d 195 (2d Cir. 
1998);  United States ex rel. Zissler v. Regents of the Univ. of 
Minn., 154 F.3d 870 (8th Cir. 1998), we hold that they are 
not.



                                    I.


     Ronald Long was the Coordinator of Investigations and 
Audit for the Bureau of Proprietary School Supervision of the 
New York State Department of Education, the state agency 
that regulates proprietary schools.  In 1989, he conducted an 
investigation of SCS Business and Technical Institute, which 
operates five business and technical schools in New York 
City, and discovered that SCS allegedly had made false and 
fraudulent claims to the federal government in return for 
federal funding for students attending SCS schools under 
tuition assistance programs.  He also determined, according 
to his complaint subsequently filed in district court, that 
Joseph P. Frey, his supervisor at the Bureau, and other 
officials in the State Department of Education, knew about 
SCS' fraudulent claims and conspired with SCS to conceal the 
fraud in order to secure further federal funding for SCS.  
They did so because, after a 1990 change in New York State 
law, the Bureau's funding depended in substantial part on 
tuition assessments and fines that SCS paid to the Bureau.  
Long's theory was that since the Bureau received a share of 
the federal funds that SCS fraudulently obtained from the 
United States, the Bureau had every incentive to see that 
fraud continue.  He claims that after he reported the results 
of his investigation to state and federal authorities, Frey and 
other state officials took actions to limit and subvert his 
investigation.

     Long was taken off the investigation and then fired in 1992, 
shortly after SCS settled administrative charges brought 
against one of SCS' schools by the state education depart-
ment.  According to him, the settlement agreement, which 
did not benefit the United States in any way and grossly 
understated the extent of SCS' fraudulent practices, was a 
sweetheart deal that was but another instance of the state's 
conspiracy with SCS to conceal and perpetuate SCS' fraud--a 
conspiracy that he alleges continued until SCS filed for 
bankruptcy in 1995.  He alleges that after the settlement, 
New York ignored evidence of SCS' continuing fraud and 
falsely represented to the United States that SCS' fraud had 
ceased and that it was actively monitoring SCS.


     Long filed a complaint in the district court against Frey, 
other state officials, the State of New York, SCS, and various 
SCS officials.  He brought his case as a qui tam relator 
under the False Claims Act, 31 U.S.C. ss 3729 et seq. (1994), 
suing in the name of the United States for the benefit of the 
United States and himself.  He contended that the state 
defendants violated the Act by conspiring with SCS to have 
false claims submitted to the United States and by causing 
false claims to be submitted.  The state defendants were also 
alleged to have violated the whistle-blower provision of the 
Act by harassing and wrongfully discharging Long, and to 
have been unjustly enriched under state common law.  The 
United States (the government) subsequently intervened in 
the case against the SCS defendants, but declined to inter-
vene against the state defendants.  The state defendants 
moved to dismiss the complaint on the grounds that states 
are not defendant persons under the Act and that, even if 
they were, the Eleventh Amendment to the United States 
Constitution would bar the suit.  It was also asserted that 
Long's suit against the state defendants was barred by the 
Act because the allegations of fraud had been publicly dis-
closed and because Long was not an "original source" of the 
information.

     The district court denied in part the state defendants' 
motion to dismiss, concluding that states are defendant per-
sons under the Act and that the Eleventh Amendment does 
not bar the suit.  See United States ex rel. Long v. SCS Bus. 
& Technical Inst., 999 F. Supp. 78 (D.D.C. 1998).1  The state 
defendants filed an interlocutory appeal challenging the dis-
trict court's rejection of their Eleventh Amendment defense, 
over which we have jurisdiction under 28 U.S.C. s 1291 (1994) 
and the collateral order doctrine.  See Puerto Rico Aqueduct 

__________
     1 The district court granted the motion to dismiss Long's whistle-
blower and unjust enrichment claims, the former because the 
Eleventh Amendment bars private suits brought against the state 
(although it does not bar Long's claim for prospective relief against 
Frey, a state official), and the latter because Long has no standing 
to assert the government's claim of unjust enrichment under state 
common law.  See Long, 999 F. Supp. at 91-93.



& Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144-45 
(1993).  We exercise pendent appellate jurisdiction over the 
"inextricably intertwined" statutory question, Gilda Marx, 
Inc. v. Wildwood Exercise, Inc., 85 F.3d 675, 679 (D.C. Cir. 
1996) (quoting Swint v. Chambers County Comm'n, 514 U.S. 
35, 51 (1995)), of whether states are defendant persons under 
the Act.2  Thirty-six states join as amici curiae in support of 
appellant New York's statutory and Eleventh Amendment 
arguments, and appellee Long, the relator, is joined by the 
government as intervenor defending the constitutionality of 
the Act.

                                     II.


     To persuade us to uphold the decision below, appellees 
Long and the government must demonstrate that the district 
court correctly interpreted the term "person" (liable for 

__________
     2 The district court also concluded that Long's suit was not 
barred by the public disclosure and original source provisions of the 
Act.  See Long, 999 F. Supp. at 87-89.  Although the parties 
challenge aspects of those rulings on appeal, we need not address 
them further given our resolution of the case in favor of New York.  
We also decline to exercise pendent appellate jurisdiction over the 
statutory whistle-blower and constitutional claims against appellant 
Frey in his individual capacity.  Although these claims are not 
foreclosed by anything in our opinion, they are not in any way 
related to the Eleventh Amendment and statutory construction 
questions that we decide today.  And although an inextricable 
relation between claims is not a necessary condition for pendent 
appellate jurisdiction, see Jungquist v. Sheikh Sultan Bin Khalifa 
Al Nahyan, 115 F.3d 1020, 1027 (D.C. Cir. 1997), and efficiency 
interests might counsel in favor of resolving these claims now, we 
could not possibly terminate the entire case against Frey--even if 
we agreed with him--because Long also asserted s 1983 claims 
against him that the district court did not dismiss and from which 
Frey does not now seek to appeal.  That, coupled with the other-
wise unappealable nature of the order as to Frey, a separate 
appellant, see Gilda Marx, 85 F.3d at 678, and the presence of 
factual disputes in the briefs on the "original source" and "public 
disclosure" questions, see id. at 679, leads us to reject Frey's 
request that we resolve these claims now.


making a false claim) in s 3729(a) of the False Claims Act to 
include states.3  In that respect, they have no little burden 
because the statute does not define the term "person" and, as 
the Supreme Court has remarked before, "in common usage, 
the term 'person' does not include the sovereign, [and] stat-
utes employing the [word] are ordinarily construed to exclude 
it."  Will v. Michigan Dep't of State Police, 491 U.S. 58, 64 
(1989) (quoting Wilson v. Omaha Indian Tribe, 442 U.S. 653, 
667 (1979) (quoting United States v. Cooper Corp., 312 U.S. 
600, 604 (1941))) (alteration in original);  see also, e.g., Georgia 
v. Evans, 316 U.S. 159, 161-62 (1942).4

     This "often-expressed understanding," Will, 491 U.S. at 64, 
is not a "hard and fast rule of exclusion," Wilson, 442 U.S. at 
667 (quoting Cooper, 312 U.S. at 604-05), and depends in 
important part on the "context, the subject matter, legislative 
history, and executive interpretation," id.--which sounds like 
rather garden variety statutory interpretation.  But if the 
Will-Wilson rule has any meaning at all, it must create at 
minimum a default rule;  states are excluded from the term 
person absent an affirmative contrary showing.  See Interna-

__________
     3 The statute provides, in relevant part:
     (a) Liability for certain acts.  Any person who--
          ...
          (2) knowingly makes, uses, or causes to be made or used, a 
     false record or statement to get a false or fraudulent claim paid 
     or approved by the Government;
          (3) conspires to defraud the Government by getting a false 
     claim allowed or paid ...
     is liable to the United States Government....

31 U.S.C. s 3729 (1994).

     4 As appellees observe, the Eighth Circuit rejected application of 
this rule in interpreting the False Claims Act on the ground that 
the presumption of sovereign exclusion applies only to the enacting 
sovereign.  See Zissler, 154 F.3d at 874.  However, the Court in 
Will applied this rule even though the enacting sovereign (the 
United States) was different from the state sovereigns excluded 
from the term person, see Will, 491 U.S. at 64, implicitly rejecting 
the Eighth Circuit's position as it was then articulated in Justice 
Brennan's dissent, see id. at 73 (Brennan, J., dissenting).


tional Primate Protection League v. Administrators of Tu-
lane Educ. Fund, 500 U.S. 72, 83 (1991) (noting that the 
"conventional reading" of person to exclude states may be 
"disregarded" if there is an affirmative showing of Congress' 
intent to include them).  This interpretive principle, the Su-
preme Court tells us, is "particularly applicable" where, as 
here, "it is claimed that Congress has subjected the states to 
liability to which they had not been subject before." Will, 491 
U.S. at 64;  see also Wilson, 442 U.S. at 667.  We think, 
therefore, that the district court had it backwards when it 
concluded that it found "no indication that Congress sought to 
create an exception for state actors to perpetrate fraud upon 
the federal government."  Long, 999 F. Supp. at 85.5

     Our review of the "legislative environment," Evans, 316 
U.S. at 161, leads us to doubt appellees have met their 
burden.  As we noted, neither the Act as currently written 
nor as originally passed in 1863 defines the term person.  
Indeed, the original Act distinguished for punishment pur-
poses between fraudulent acts committed by "any person in 
the land or naval forces of the United States," Act of March 2, 
1863, 37th Cong., 3d Sess., ch. 67, s 1, 12 Stat. 696, and "any 
person not in the military or naval forces of the United 
States," id. at s 3, 12 Stat. 698.  Since states would not have 
been thought to fall within either classification, that Act can 
hardly be said to supply facially the requisite affirmative 
showing that the Will-Wilson default rule requires.6

__________
     5 In reaching this conclusion, the district court was guided by its 
assumption that the "clear statement" rule of Will, 491 U.S. at 65, 
did not apply--an issue which we take up below.  But the district 
court incorrectly equated Will's "clear statement" rule with the 
traditional rule presuming that the term person does not include 
states.  Compare Will, 491 U.S. at 65 (clear statement rule), with 
id. at 64 (default rule that person does not include states).  Even if 
the former rule were not implicated here, the latter rule--which all 
parties concede applies-dictates a presumption opposite to the one 
the district court applied.

     6 The Second Circuit explained this problem away by reasoning 
that the Congress' undeniable intent to include military contractors 
in the Act refuted any attempt to read "persons not in the military" 


     Appellees nevertheless invoke the broad purposes and leg-
islative history of the Civil War statute.  We think that is not 
helpful because, as the Supreme Court has said, Congress' 
primary concern at the time--admittedly not its exclusive 
one--was to put an end to "frauds perpetrated by large 
[military] contractors during the Civil War."  United States v. 
Bornstein, 423 U.S. 303, 309 (1976);  see United States ex rel. 
Graber v. City of New York, 8 F. Supp. 2d 343, 352 (S.D.N.Y. 
1998).7  Appellees point to the Supreme Court's statement 
that Congress sought to "reach all types of fraud, without 
qualification, that might result in financial loss to the Govern-
ment."  United States v. Neifert-White Co., 390 U.S. 228, 232 
(1968) (holding that the term "claim" was not limited to claims 
submitted for payments due and owing from the government, 
but included claims for favorable action by the government 
upon applications for loans).  But we think that description is 
too general--it was also made in an entirely different con-
text--to answer the serious question whether states were 
made potential defendants under the Act.  (According to 
appellees' reasoning, foreign governments that entered into 
commercial dealings with the United States would also be 
potential defendants.)  Similarly unpersuasive is the policy 
proposition put forward by the Eighth Circuit, see Zissler, 
154 F.3d at 874, that a truly effective anti-fraud statute would 
subject states to liability since states receive substantial 
amounts of money from the federal government.  See also 
John T. Boese, Civil False Claims and Qui Tam Actions, at 2-

__________
as impliedly referring only to natural, as opposed to corporate, 
persons.  See Stevens, 162 F.3d at 205-06.  The default rule of 
statutory construction governing corporations as "persons," howev-
er, is precisely the opposite of the default rule that we must apply 
in this case.  See Wilson, 442 U.S. at 666 (stating that the "word 
'person' for purposes of statutory construction, unless the context 
indicates to the contrary, is normally construed to include" corpora-
tions).  Since we must look for an affirmative intent to include 
states, that contractors, under the default rule for corporations, 
could have been thought to be "person[s] not in the military" is 
hardly supportive of appellees' case.

     7 Of course, Stevens, not Graber, is Second Circuit law.



91 (1993) (stating that states can be defendant persons be-
cause they are "major recipients of federal funds").  A court 
looks to legislative purpose under the default rule in order to 
locate a congressional intent "to bring state or nation within 
the scope of the law," Cooper, 312 U.S. at 605, not to "engraft 
on a statute additions which [the court] think[s] the legisla-
ture logically might or should have made," id.  Even if one 
assumes that states commit a good deal of fraud against the 
federal government, it cannot seriously be argued that the 
very purpose of the Act would be thwarted if states were not 
liable under the Act.  Compare California v. United States, 
320 U.S. 577, 585 (1944).8

     That takes us to the legislative history.  Appellees point us 
first to an 1862 House Committee Report that, in discussing 
various frauds committed during the Civil War, referred to 
certain state officials that had used war contracts for personal 
profit.  See H.R. Rep. No. 2, 37th Cong., 2d Sess., at xxxviii-
xxxix (1862).  But the report specifically stated that these 
examples of fraud were not committed against the United 
States government.  See id. at xxxviii.  So the prior report is 
a rather tenuous link to the Act Congress passed one year 
later.  But see Stevens, 162 F.3d at 206 (concluding that "it is 
difficult to suppose" that Congress "had forgotten the results 
of this extensive investigation" when it passed the False 
Claims Act) (emphasis added).  Even if there were a stronger 
tie, the Supreme Court has held that legislative history 

__________
     8 In Zissler, 154 F.3d at 874, the Eighth Circuit relied on United 
States v. California, 297 U.S. 175, 186 (1936), for the proposition 
that it would be a mistake to exclude the states from an "act of 
Congress, all-embracing in scope and national in its purpose, which 
is as capable of being obstructed by state as by individual action," 
id. But the Supreme Court made that statement only after it had 
"fairly ... inferred" that the purpose of the Federal Safety Appli-
ance Act, albeit implicit, was to subject state-run railroads to 
liability.  See id. If the mere use of the term person in a broad 
statute with national purposes, which states were equally capable of 
violating, were sufficient to bring the states within the statute's 
scope, the interpretive rule presuming the opposite would be largely 
ineffectual, if not wholly eviscerated.



indicating an intent to impose liability on state officials is not 
evidence of an intent to subject the states themselves to 
liability.  See Will, 491 U.S. at 68-69.  The bottom line is that 
appellees have not pointed to anything in the legislative 
history of the 1863 Act, or in the events leading up to it, 
indicating that Congress actually contemplated imposing lia-
bility on the states.

     Because the enacting Congress' intent is, to be charitable, 
rather opaque, appellees turn our attention to the 1986 
amendments to the False Claims Act and to a related statute 
also passed in 1986.  The provision of the 1986 amendments 
that changed 31 U.S.C. s 3729(a) from imposing liability on 
"[a] person not a member of an armed force of the United 
States" to "[a]ny person" did not, however, substantively 
expand the meaning of defendant persons under the Act.  See 
Stevens, 162 F.3d at 206-07 (holding that states are persons 
but conceding that this change was not "envisioned as broad-
ening the class of persons who could be held liable under the 
Act");  Graber, 8 F. Supp. 2d at 354-55.  It is true that the 
amendment expanded the types of individuals subject to the 
Act to include those in the military.  Still, that change tells 
one nothing about the basic meaning of the term person, or 
more specifically, whether Congress intended to include 
states within that term.  The legislative history accompany-
ing the amendment reveals Congress' extremely limited ob-
jective.  See S. Rep. No. 345, 99th Cong., 2d Sess., at 17-18 
(1986), reprinted in U.S.C.C.A.N. 5266, 5282-83 (explaining 
that the alteration of s 3729(a) was intended to provide for 
monetary recovery against persons in the military and that, 
prior to 1986, a court martial was the only available remedy).9  
It is understandable, therefore, why appellees do not actually 
claim that states were made defendant persons by virtue of 

__________
     9 The Eighth Circuit thought that this amendment more broadly 
"evidenced consideration of whom to hold liable" under the amend-
ed Act.  Zissler, 154 F.3d at 874.  But there is nothing in the text 
of the statute or in any of the legislative history indicating that 
Congress' consideration of "whom to hold liable" extended beyond 
its intent, expressed in the statute, to bring military persons within 
the scope of the Act.



the 1986 amendment to s 3729(a).  Instead, their argument is 
that states have been defendant persons all along;  various 
provisions added by the 1986 Congress--which we discuss 
below--simply make that clear.  In other words, appellees, 
by relying on these recent amendments, seek to illuminate 
the 1863 Congress' "original intent."  We are rather dubious 
about such an approach.  As the Supreme Court has ob-
served, such subsequent provisions are really "beside the 
point" because they do not "reflect any direct focus by 
Congress upon the meaning of the earlier enacted provi-
sions."  Almendarez-Torres v. United States, 118 S. Ct. 1219, 
1227 (1998);  Atkinson v. Inter-American Dev. Bank, 156 
F.3d 1335, 1342 (D.C. Cir. 1998).

     Be that as it may, we are not persuaded that these added 
provisions can bear the weight appellees would place on them.  
Appellees argue that Congress' decision to define "person" to 
include states in the Civil Investigative Demand section of the 
Act, see 31 U.S.C. s 3733(1)(4) (1994), indicates (some) Con-
gress' intent to include states as persons throughout the 
whole Act,10 even though this provision applies only to the 
Civil Investigative Demand section.  See 31 U.S.C. s 3733(l ) 
(For purposes of this section ...) (emphasis added).  Appel-
lees question why Congress would create a discovery tool to 
be used to gain information possessed by states if the Act did 
not already authorize false claims actions against them.  See 
also Stevens, 162 F.3d at 207.  It seems rather obvious, 
however, that states could provide useful evidence to establish 
that private contractors, for example, made false claims.  Nor 
do appellees gain very much by pointing to the Program 
Fraud Civil Remedies Act, 31 U.S.C. s 3801 et seq. (1994), 
which Congress also passed in 1986 to create an alternative 
administrative remedy to lawsuits under the False Claims 
Act.  Unlike the False Claims Act, this Act expressly defined 
the persons subjected to administrative liability yet omitted 

__________
     10 The CID section permits the government to conduct discovery 
of persons who "may be in possession, custody, or control of any 
documentary material or information relevant to a false claims 
investigation."  31 U.S.C. s 3733(a)(1).



states from the definition.  See id. at s 3801(a)(6).  Appellees 
suggest that the exclusion of states from s 3801(a)(6) compels 
an inference that s 3729(a) includes states.  We do not agree 
because the two provisions are not part of the same legisla-
tive enactment (not even the same century).  See Halverson 
v. Slater, 129 F.3d 180, 186 (D.C. Cir. 1997) (citing Russello v. 
United States, 464 U.S. 16, 23 (1983)).  We share appellant's 
view, moreover, that, since both acts proscribe essentially the 
same conduct, compare 31 U.S.C. s 3802(a)(1)-(2) with 31 
U.S.C. s 3729(a), it would have been quite bizarre for Con-
gress to exempt states from administrative liability if it had 
thought that states already were subject to the more onerous 
False Claims Act liability of treble damages and penalties.  
In sum, we are inclined to view the omission of states from 
the definition of person in the administrative act, to the 
extent it is relevant at all, as more supportive of New York's 
argument.

     Indeed, appellant and its amici, turning the blade, point 
out that the 1986 amendments, which increased liability from 
double to treble damages and increased the civil penalty, see 
31 U.S.C. s 3729(a), created a form of punitive damages that 
would be palpably inconsistent with state liability.  Congress 
is not thought to impose punitive damages on public entities 
lightly.  Imposition of such a penalty has been held to be 
inconsistent with public policy since it gives the plaintiff a 
windfall at the expense of the blameless or unknowing tax-
payers who must foot the bill for the government's transgres-
sions.  See City of Newport v. Fact Concerts, Inc., 453 U.S. 
247, 258-71 (1981).  It is true that the Supreme Court has 
already analyzed the Act in a related context and concluded 
that the statute is remedial in nature, see, e.g., Bornstein, 423 
U.S. at 314-15, but as appellant rightly points out, it did so 
when the statute provided for double damages of which the 
government received a one-half share, so that the statute at 
that time truly did no more than make the government whole, 
see Graber, 8 F. Supp. 2d at 349 n.3.  Even assuming that it 
is possible to characterize the increased liability imposed by 
the 1986 amendments as remedial, that would only indicate at 
best that in this respect the 1986 Congress legislated in such 



a way that would have been consistent with state liability.  
The 1863 Congress, by contrast, made clear as day that it 
intended criminal, and a fortiori punitive, sanctions:  the 
original statute provided for criminal penalties, including 
imprisonment for one to five years, for non-military persons 
(the class of persons said to include states) convicted under 
the Act, as well as fines.  See s 3, 12 Stat. at 698.  Those 
provisions are surely inconsistent with the concept of state 
liability.

     Appellees' last sortie into the background of the 1986 
amendments uncovered a piece of legislative history that they 
regard as the "smoking gun."  They point to a Senate Report 
issued at the time Congress amended certain provisions of 
the Act that includes a section entitled "History of the False 
Claims Act and Court Interpretations."  See S. Rep. No. 345, 
99th Cong., 2d Sess., at 8 (1986), reprinted in U.S.C.C.A.N. 
5266, 5273.  As part of what purported to be purely descrip-
tive history, see id. ("In its present form, the False Claims 
Act....  "), the Report states:

     The False Claims Act reaches all parties who may submit 
     false claims.  The term "person" is used in its broad 
     sense to include partnerships, associations, and corpora-
     tions ... as well as States and political subdivisions 
     thereof.  Cf. Ohio v. Helvering, 292 U.S. 360, 370 (1934);  
     Georgia v. Evans, 316 U.S. 153, 161 (1942);  Monell v. 
     Department of Social Services of the City of New York, 
     436 U.S. 658 (1978).

Id. (emphasis added) (footnote omitted).

     According to appellees, the Report confirms that the Con-
gress of 1863, over a hundred years before, intended to 
include states as defendant persons--an argument that two of 
our sister circuits and the district court below accepted.  See 
Stevens, 162 F.3d at 206-07;  Zissler, 154 F.3d at 874-75;  
Long, 999 F. Supp. at 84-85.  This portion of the Report, it 
should be understood, is not linked with any of the substan-
tive amendments made by the 1986 Congress.  It is instead a 
legislative observation about what s 3729(a), enacted by an 
earlier Congress, means.  Courts sensibly accord such "post-



enactment legislative history," arguably an outright "contra-
diction in terms," Sullivan v. Finklestein, 496 U.S. 617, 631 
(1990) (Scalia, J., concurring), only marginal, if any, value, see 
Wright v. West, 505 U.S. 277, 295 n.9 (1992) ("[T]he views of a 
subsequent Congress form a hazardous basis for inferring the 
intent of an earlier one.") (quoting Consumer Product Safety 
Comm'n v, GTE Sylvania, Inc., 447 U.S. 102, 117 (1980) 
(quoting United States v. Price, 361 U.S. 304, 313 (1960))).11 
Post-enactment legislative history--perhaps better referred 
to as "legislative future"--becomes of absolutely no signifi-
cance when the subsequent Congress (or more precisely, a 
committee of one House) takes on the role of a court and in 
its reports asserts the meaning of a prior statute.  See Pierce 
v. Underwood, 487 U.S. 552, 566 (1988);  In re North, 50 F.3d 
42, 45-46 (D.C. Cir. 1995).  The Senate Report actually was 
more modest;  it appeared only to describe the way in which 
the Supreme Court had interpreted the Act.  Still, its author 
either did not read the cited cases very carefully, or perhaps 
more likely, made an unforgivably misleading use of the "cf." 
signal.  None of the cases interpreted the term "person" 
under the False Claims Act, and all three stand for the 
unremarkable proposition that governmental entities can be 
included in the term person when Congress so intends.12  In 

__________
     11 It is unclear what appellees think they add by pointing to a 
1981 General Accounting Office Report that documented recent 
instances of state officials defrauding the United States govern-
ment--of which the Senate apparently was aware when amending 
the statute in 1986.  See S. Rep. No. 345, 99th Cong., 2d Sess., at 2 
& n.1 (1986) (citing GAO Report to Congress, Fraud in Government 
Programs:  How Extensive Is It?  How Can It Be Controlled?  
(1981)).  Not only is evidence of an intent to impose liability on 
state officials (which itself would be a tenuous inference from this 
report) distinct from an intent to impose liability on the states 
themselves, see Will, 491 U.S. at 68-69, but a report documenting 
contemporary instances of state fraud could hardly be thought to 
illuminate the intent of the enacting Congress in 1863.

     12 The Report's resort to these inapposite cases is unsurprising 
since, at the time of the 1986 amendments, only one decision 
involved a qui tam suit against the state, and that decision held that 



short, the Report is of no legal significance.  Accord United 
States ex rel Graber, 8 F. Supp.2d at 354-55.13

     Nevertheless, appellees contend that we have asked the 
wrong question in searching the legislative materials for 
affirmative indications that Congress intended to include 
states as defendant persons in s 3729(a).  Instead, they 
would have us start with the presumption that states are 
defendant persons and look only for some indication that 
Congress intended to exclude states.  They justify this ap-
proach by arguing that states can be plaintiffs under 
s 3730(b)(1) (providing that "[a] person may bring a civil 
action for a violation of section 3729 for the person and for 
the United States Government"), and that the same statutory 
term, person, is used to describe the eligible class of plain-
tiffs.14  The word person is presumed to have the same 
meaning in different sections of the same statute.  See, e.g., 
Commissioner v. Lundy, 516 U.S. 235, 250 (1996).  Appellees, 
then, would use the canon of consistent meaning (following 
the Second and Eighth Circuits) to trump the Will-Wilson 

__________
states were not persons under the Act.  See United States ex rel. 
Weinberger v. Florida, 615 F.2d 1370, 1371 (5th Cir. 1980) (describ-
ing district court's decision to that effect and vacating on the 
ground that, under an older and since modified version of the 
present 31 U.S.C. s 3730, the district court lacked subject matter 
jurisdiction because the federal government had knowledge of the 
facts underlying the relator's suit).

     13 The Eighth Circuit thought that 1986 amendments to s 3729(a) 
warranted giving the 1986 Report greater interpretive weight, even 
on the assumption that the Report's understanding of the pre-1986 
caselaw was incorrect.  See Zissler, 154 F.3d at 874.  Again, the 
change to s 3729(a) had nothing to do with the meaning of the term 
person.  The portion of the Report in question, moreover, makes no 
reference whatsoever to the slight alteration actually made to 
s 3729(a).  It is merely a commentary on the past.

     14 Although New York seemed insistent that it can have it both 
ways--that it can be a plaintiff but not a defendant--the states, 
appearing as amici, seemed quite prepared to abandon any claim 
that they could sue as plaintiffs;  the threat of being a qui tam 
defendant apparently "concentrated their minds."


default rule.  See Stevens, 162 F.3d at 205;  Zissler, 154 F.3d 
at 875;  see also Boese, supra, at 2-92 (reasoning that states 
are defendant persons under the Act because they are proper 
qui tam plaintiffs).

     The consistent meaning canon is brandished as if the 
question whether states could be qui tam relators were a 
statutory given.  But it is not.  We recognize that other 
courts have assumed that states can be qui tam relators, see, 
e.g., United States ex rel. Woodard v. Country View Care 
Ctr., Inc, 797 F.2d 888 (10th Cir. 1986);  United States ex rel. 
Wisconsin v. Dean, 729 F.2d 1100 (7th Cir. 1984), even 
though the term person under s 3730(b)(1) is no more clearly 
defined than it is under s 3729(a).  The argument that states 
are plaintiffs is based on a provision passed in 1986 conferring 
jurisdiction on the district courts "over any action brought 
under the laws of any State for the recovery of funds paid by 
a State or local government if the action arises from the same 
transaction or occurrences as [a qui tam suit] brought under 
Section 3730."  31 U.S.C. s 3732(b).  If states are the only 
parties who could bring a state law suit to recover state 
funds, the argument goes, and if a state is forbidden by 
s 3730(b)(5) from intervening in another party's qui tam suit, 
see id. at s 3730(b)(5) (providing that "[w]hen a person brings 
an action under this subsection no person other than the 
Government may intervene or bring a related action based on 
the facts underlying the pending action"), it seems to follow 
that the Congress which enacted s 3732(b) intended states to 
be qui tam relators under the Act.  Otherwise, it is argued, 
the provision conferring jurisdiction over the state's claim 
under state law has little meaning.  The legislative history 
lends some support to this reasoning.  See S. Rep. No. 345, 
99th Cong., 2d Sess., at 16 (1986), reprinted in 1986 
U.S.C.C.A.N. 5266, 5281 (explaining that the provision was 
enacted in response to comments from the National Associa-
tion of Attorneys General and was intended to allow "State 
and local governments to join State law actions with False 
Claims Act actions brought in Federal district court if such 
actions grow out of the same transaction or occurrence");  see 
also id. at 12-13, reprinted in 1986 U.S.C.C.A.N. at 5277-78 



(disapproving of Dean decision on unrelated jurisdictional 
grounds but not questioning the State of Wisconsin's ability 
to be a qui tam plaintiff);  Stevens, 162 F.3d at 204-05 
(discussing Senate Report).

     The more obvious reading of s 3732(b), however, is that it 
authorizes permissive intervention by states for recovery of 
state funds (creating what is in effect an exception to 
s 3730(b)(5)'s apparent general bar on intervention by all 
other parties except for the United States).  See Boese, 
supra, at 4-13 (explaining that s 3732(b) "does not require 
the state to be a relator for jurisdiction to exist," noting the 
possibility that it permits intervention by states, but making 
no reference to s 3730(b)(5)).  Or Congress might even have 
meant s 3732(b) to provide supplemental jurisdiction for a 
non-state relator to join a federal false claim action with an 
action to recover state funds under a state qui tam statute, 
which several states have enacted.  See, e.g., Cal. Gov't Code 
s  12650 et seq. (West 1998);  Fla. Stat Ann. s 68.081-092 
(West 1998).

     In any event, the argument that states are relators under 
s 3730(b)(1) is rather strained.  To the extent it relies on the 
Senate Report author's knowledge of one suit by a state 
relator, it is no more persuasive than the analogous argument 
based on the Report's "recognition" of prior suits against 
state defendants.  The argument, moreover, depends on the 
proposition that s 3730(b)(5) prevents all parties, except for 
the United States, from intervening in another relator's qui 
tam action.  Yet it is not at all clear that this provision 
precludes all forms of party joinder, which would effectively 
limit qui tam actions to single relators.  See United States ex 
rel. Precision Co. v. Koch Indus., Inc., 31 F.3d 1015, 1017 
(10th Cir. 1994) (holding that s 3730(b)(5) does not prohibit 
all forms of joinder but only prevents permissive intervention 
in a relator's suit by unrelated parties under Fed. R. Civ. P. 
24(b)(2)).  If states could join as co-plaintiffs with private 
relators or the federal government, then s 3732(b) could be 
given full meaning without reading s 3730(b)(1) to include 
states as relators.



     It should be apparent, then, that whether states can be qui 
tam relators presents an extraordinarily difficult question of 
statutory interpretation in its own right.  Although appellees 
do not acknowledge it, their argument would require us to 
puzzle through that question--not squarely presented to us--
in order to resolve the actual question before us (itself no 
easy one) in their favor.  The consistent meaning canon does 
not have much usefulness if in order to apply it a court has to 
struggle that hard to determine the second meaning, against 
which the first is to be compared.  Given the uncertainty 
governing the question whether states can be relators, we 
think the proper course is to decide only the issue before us.15

__________
     15 Even assuming arguendo that states can be relators, we doubt 
that the consistent meaning canon is appropriately applied in this 
case.  The canon itself has an important exception "[w]here the 
subject-matter to which the words refer is not the same in the 
several places where they are used."  Atlantic Cleaners & Dyers, 
Inc. v. United States, 286 U.S. 427, 433 (1932).  Imposing liability is 
quite different from conferring a right to sue, and as we noted 
above, the Will-Wilson default rule has added force when the 
question is whether states are subject to liability as persons.  See 
Will, 491 U.S. at 64.  The canon also encounters potentially insur-
mountable difficulties when the "meanings" are enacted by two 
different Congresses--which is an obvious flaw in appellees' effort 
to use the 1986 amendments' effect on the term person in 
s 3730(b)(1) to give consistent meaning to the term person in 
s 3729(a), which was enacted by the 1863 Congress.

 It might be argued that the 1986 amendments merely clarified 
that Congress has intended states to be relators since 1863, and 
that the consistent meaning canon really applies to the 1863 Con-
gress alone.  But this theory would require us, quite illogically, to 
interpret the 1986 legislative action as a declaration of what a 
Congress over a century earlier intended.  The action of the 1986 
Congress tells us, at most, what the 1986 Congress thought about 
states as qui tam relators (and as we noted above, it does not tell us 
very much);  it does not purport to tell us, nor could it, what the 
1863 Congress intended.  See Rainwater v. United States, 356 U.S. 
590, 593 (1958) (stating that 1918 amendment to the criminal 
provisions of the False Claims Act was at most "merely an expres-
sion of how the 1918 Congress interpreted a statute passed by 


                                     III.


     Appellees have not persuasively demonstrated a congres-
sional intent to include states as defendant persons under the 
False Claims Act.  That being so, the default rule would seem 
to dictate that they are not.  We hesitate in resting solely on 
this ground, however, since the Supreme Court has never 
explained just how much of a showing suffices to overcome 
the presumption against interpreting persons to include 
states, and indeed on occasion has employed the rule in a 
somewhat diluted fashion.  See, e.g., Sims v. United States, 
359 U.S. 108, 111-12 (1959);  United States v. California, 297 
U.S. 175, 186 (1936);  Ohio v. Helvering, 292 U.S. at 370-71.  
We think there are additional considerations, however, that 
resolve all doubts in New York's favor.

__________
another Congress more than a half century before" and had "very 
little, if any, significance" in interpreting the original Act's civil 
provisions).  Although the Supreme Court occasionally says that 
"[s]ubsequent legislation which declares the intent of an earlier law 
is entitled to great weight in statutory construction," Loving v. 
United States, 517 U.S. 748, 770 (1996) (quoting Consumer Product 
Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 118 n.3 (1980) 
(quoting Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 380-81 
(1969))), the Supreme Court's application of that principle has been 
rather inconsistent, see Paramount Health Sys., Inc. v. Wright, 138 
F.3d 706, 709-11 (7th Cir. 1998) (comparing this rule with the 
competing rule that the views of a subsequent Congress in legisla-
tive history form a hazardous basis for inferring the intent of an 
earlier one).  And we are unaware of any Supreme Court holding in 
which a subsequent declaration has been used, not to discern the 
current meaning of a statute post-declaration, see, e.g., Seatrain 
Shipbuilding Corp. v. Shell Oil Co., 444 U.S. 572, 595-96 (1980);  
Red Lion Broadcasting, 395 U.S. at 380-81, but instead to interpret 
the meaning of a statute prior to the declaration.  Appellees' 
attempt to apply the consistent meaning canon to the 1863 Con-
gress depends on precisely such a "retroactive clarification."



                                      A.


     Were we to agree with appellees that states can be defen-
dants under the False Claims Act, we would be obliged to 
decide whether, as appellant New York contends, the Elev-
enth Amendment bars a qui tam suit by a private relator 
against a state in federal court.  The Amendment states that 
"[t]he 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."  U.S. Const. amend. XI.  Although it has been read to 
bar suits by plaintiffs not identified in the text of the amend-
ment itself, such as citizens of the state being sued, see Hans 
v. Louisiana, 134 U.S. 1, 10-11 (1890), and foreign sover-
eigns, see Principality of Monaco v. Mississippi, 290 U.S. 
313, 330-32 (1934), it is well settled that it poses no bar to a 
suit by the United States against a state in federal court.  
The states' consent to such suits is thought to be inherent in 
the constitutional plan and necessary to the very permanence 
of the Union.  See, e.g., West Virginia v. United States, 479 
U.S. 305, 311 (1987);  Monaco, 292 U.S. at 329;  United States 
v. Texas, 143 U.S. 621, 641-46 (1892).  Reasoning from this 
unobjectionable proposition, three of our sister circuits have 
held that, since a qui tam suit against a state is essentially a 
suit by and for the United States, the Eleventh Amendment 
does not preclude a qui tam suit in federal court.  See 
Stevens, 162 F.3d at 201-03;  United States ex rel. Rodgers v. 
Arkansas, 154 F.3d 865, 868 (8th Cir. 1998);  United States ex 
rel. Milam v. University of Texas M.D. Anderson Cancer 
Ctr., 961 F.2d 46, 50 (4th Cir. 1992);  see also United States ex 
rel. Fine v. Chevron, U.S.A., Inc., 39 F.3d 957, 962-63 (9th 
Cir. 1994), vacated on other grounds, 72 F.3d 740 (9th Cir. 
1995) (en banc).

     We think our sister circuits have paid insufficient attention 
to the Supreme Court's decision in Blatchford v. Native 
Village of Noatak, 501 U.S. 775 (1991).  In Blatchford, the 
Court held that a statute giving federal district courts original 
jurisdiction of suits brought by an Indian tribe involving 
federal law did not constitute a delegation to the tribes of the 



United States' ability, free from the Eleventh Amendment 
bar, to sue the states as the tribes' trustee.  See id. at 785-86.  
Although the Court held that Congress intended no delega-
tion in the jurisdictional statute, the Court was dubious that 
such a delegation would have been constitutionally permissi-
ble:

     We doubt ... that that sovereign exemption can be 
     delegated-even if one limits the permissibility of delega-
     tion ... to persons on whose behalf the United States 
     itself might sue.  The consent, "inherent in the conven-
     tion," 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;  and even consent to suit by the United States for 
     a particular persons's benefit is not consent to suit by 
     that person himself.

Id. at 785 (emphasis added).

     It seems to us that permitting a qui tam relator to sue a 
state in federal court based on the government's exemption 
from the Eleventh Amendment bar involves just the kind of 
delegation that Blatchford so plainly questioned.  See Rodg-
ers, 154 F.3d at 869 (Panner, J., dissenting).  Nor are we 
persuaded by the argument that the Court in Blatchford was 
concerned about a possible delegation of the United States' 
Eleventh Amendment exemption just because the injury to be 
remedied was the tribe's and not the United States'.  See 
Stevens, 162 F.3d at 203.  The problems inherent in expand-
ing the states' consent to suit by the United States to suits 
"by anyone whom the United States might select," Blatch-
ford, 501 U.S. at 785, are no less troublesome where, as here, 
the injury on which the suit is premised is a pecuniary injury 
to the United States.  One should bear in mind that the 
United States' ability to sue is broad;  it is not limited to suits 
to protect the federal fisc.  See, e.g., In re Debs, 158 U.S. 564, 
584 (1895), disapproved of on other grounds Bloom v. Illinois, 
391 U.S. 194, 208 (1968).  Indeed, the United States' very 
ability to sue as the tribes' trustee, which was unquestioned in 
Blatchford, depended on an injury to the United States as 



sovereign when injury was inflicted on the tribes.  See United 
States v. Minnesota, 270 U.S. 181, 194 (1926).  It does not 
seem reasonable, therefore, to distinguish Blatchford as an 
anti-delegation principle applicable only where the "injury" is 
an injury to someone other than the United States.  The 
problem in either case is whether, consistent with the consti-
tutional plan, the United States can delegate its own exemp-
tion from the Eleventh Amendment bar to another party.

     Whatever the ultimate resolution of the question, we think 
it presents a serious constitutional issue.  It is quite a stretch 
to claim that such a delegation was part of the inherent 
constitutional design, or that the permanence of the union 
somehow depends on giving the United States broad latitude 
to permit private parties to sue the states in the federal 
courts on the United States' behalf.  Compare United States 
v. Texas, 143 U.S. at 644-45.  To assume that the United 
States possesses plenary power to do what it will with its 
Eleventh Amendment exemption is to acknowledge that Con-
gress can make an end-run around the limits that that 
Amendment imposes on its legislative choices.  Imagine that 
Congress is contemplating a new statute, to be enacted 
pursuant to its Article I powers, which would create a private 
cause of action against the states in federal court.  Since the 
Court's decision in Seminole Tribe of Florida v. Florida, 517 
U.S. 44 (1996), Congress would not be able to enact such a 
statute, irrespective of its clarity in imposing liability against 
the states, because Congress is without constitutional power 
to abrogate the states' Eleventh Amendment immunity under 
its Article I powers.  See id. at 57-73.  Yet if Congress is 
permitted to use the qui tam device to create a private cause 
of action against the states brought on behalf and in the name 
of the United States, it can reach precisely the same end 
without constitutional impediment.  See Jonathan R. Siegel, 
The Hidden Source of Congress's Power to Abrogate State 
Sovereign Immunity, 73 Tex. L. Rev. 539, 556-64 (1995) 
(approving of this outcome);  see also Blatchford, 501 U.S. at 
785-86 (noting that the tribe's "delegation theory" was de-
signed to avoid the constraints on congressional abrogation of 
the states' Eleventh Amendment immunity).  Admittedly, 



Congress could have imposed liability against the states if it 
chose to put enforcement of the statute "at the instance and 
under the control of responsible federal officers."  Blatchford, 
501 U.S. at 785;  see also Seminole Tribe, 517 U.S. at 71 n.14.  
But the quite different legislative choice of authorizing pri-
vate parties to haul sovereign states into federal court against 
their will, ordinarily foreclosed unless Congress successfully 
abrogates the states' immunity, suddenly becomes an all too 
easy legislative option.

     Long and the government would avoid the Blatchford 
delegation difficulty by asserting that in qui tam suits the 
United States is the real party in interest;  a qui tam suit is 
therefore essentially a suit by and for the United States.  
See, e.g., Stevens, 162 F.3d at 202;  Milam, 961 F.2d at 49 
(concluding that the United States is the real party in interest 
because of "the structure of the qui tam procedure, the 
extensive benefit flowing to the government from any recov-
ery, and the extensive power the government has to control 
the litigation").  This argument appears to us merely to 
sidestep the core problem because it ignores the relator's 
undisputed role as a party with a cause of action under the 
Act.  The "real party in interest" rule ordinarily requires that 
the suit be brought by the "person who, according to the 
governing substantive law, is entitled to enforce the right."  
6A Charles Alan Wright et al., Federal Practice & Proce-
dure s 1543, at 334 (2d ed. 1990);  see Fed R. Civ. P. 17(a) 
(stating that "every action shall be prosecuted in the name of 
the real party in interest").  There is no question that the 
False Claims Act gives such a right to the relator, see 31 
U.S.C. s 3730(b) ("A person may bring a civil action for a 
violation of section 3729 for the person and for the United 
States Government.") (emphasis added), and the statutory 
right to bring suit is sufficient to satisfy the real party in 
interest requirement, even if the suit is brought for the 
benefit of some other party, see Fed. R. Civ. P. 17(a) (second 
sentence);  Wright et al., s 1550, at 384.  In any event, 
contrary to the suggestion of the district court, see Long, 999 
F. Supp. at 83-84, a qui tam action is brought for the benefit 
of both the relator and the United States, not for the benefit 
of the United States alone.  See 31 U.S.C. s 3730(b) (autho-



rizing qui tam suit "for the person and for the United States 
Government").  Nor does it make any difference that the 
False Claims Act requires the relator to sue "in the name of 
the Government," 31 U.S.C. s 3730(b), because the procedur-
al question of in whose name the suit must be brought is 
distinct from the substantive legal question whether the 
plaintiff has a cause of action.  See Wright Et Al. s 1544, at 
340.16

     Accordingly, we do not think the relator's technical status 
as a "real party in interest" is inconsistent with the conclusion 
of our sister circuits that the United States is a "real party in 
interest" as well.  See, e.g., Stevens, 162 F.3d at 202;  Rodg-
ers, 154 F.3d at 868;  United States ex rel. Hyatt v. Northrop 
Corp., 91 F.3d 1211, 1217 n.8 (9th Cir. 1996);  Milam, 961 
F.2d at 49.  It is, after all, not unheard of for there to be two 
real parties in interest to a cause of action.  See Wright et al., 
s 1545, at 351-53 (in cases of partial assignments, the assign-
or and assignee are both real parties in interest);  id. s 1546, 
at 360 (same for partial subrogation).  More important, al-
though we are aware of a variant of the doctrine used in a 
related Eleventh Amendment context, see, e.g., Ford Motor 
Co. v. Department of Treasury, 323 U.S. 459, 464 (1945) 
(analyzing whether a state defendant is the "real party in 
interest" such that a suit against a state entity, though not 
nominally against the state, would be barred by the Eleventh 
Amendment), we do not see how the doctrine can be used to 
convert a party with a statutory cause of action into a 
"nonparty-party."17  In short, we think the real party in 

__________
     16 The district court concluded that Long's claim under the whis-
tle-blower provision of the False Claims Act, 31 U.S.C. s 3730(h), 
was barred by the Eleventh Amendment because, unlike a qui tam 
suit under s 3730(b) brought in the name of the United States, a 
claim under s 3730(h) is a true "private right of action."  Long, 999 
F. Supp. at 92.  We disagree;  a qui tam suit under s 3730(b) is no 
less a cause of action, and the relator is no less a party prosecuting 
that action, because the action is brought in the name of the United 
States.

     17 One of the principal concerns motivating the Eleventh Amend-
ment inquiry into whether the state is the "real party in interest" 


interest doctrine is plainly irrelevant to the Eleventh Amend-
ment question presented in this case.  See Rodgers, 154 F.3d 
at 869 (Panner, J., dissenting).

     Nor do we think, as appellees suggest, that the govern-
ment's control over a relator's suit alters the result.  We 
acknowledge that the government takes the greater share of 
any recovery, see 31 U.S.C. s 3730(d)(1),(2), and that the 
statute gives the United States considerable control over the 
relator's suit, see, e.g., id. at s 3730(b)(2)(providing that the 
government can intervene in the suit as of right within sixty 
days after receiving the relator's complaint, evidence, and 
information);  id. at s 3730(b)(1) (relator cannot dismiss his 
own suit without written consent of the court and the Attor-
ney General);  id. at s 3730(c)(3)-(4) (even if the government 
does not intervene, it may monitor the proceedings and stay 
discovery in certain situations);  id. at 3730(c)(3) (government 
can intervene at any time upon a showing of good cause);  id. 
s at 3730(c)(2)(A) (government may dismiss the suit after 
notice to the relator and a hearing);  id. at s 3730(c)(2)(B) 
(government may settle the suit with the defendant over the 
relator's objection if the court approves after a hearing).18  
Still, we simply do not see how the government's potential 
exercise of its power renders the relator any less a party.  
Whatever the degree of control the United States exercises, 
we think it is telling that, although there are some intimations 
to that effect, no court has actually held that the relator is not 
a party to the qui tam suit merely because of the United 
States' potential ability to control the prosecution of the suit.

__________
defendant (or in other words that the actual defendant is an "arm of 
the state") is that an individual plaintiff's recovery will be paid out 
of the state treasury.  See Regents of the University of California 
v. Doe, 117 S. Ct. 900, 904 (1997).  That is the precise concern 
presented by a private relator recovering against a state defendant 
in a qui tam suit.

     18 There are, however, substantial restrictions on the United 
States' power incorporated within these provisions.  See Stevens, 
162 F.3d at 223-24 (Weinstein, J., dissenting).



     The relator appears to remain a party whether or not the 
United States intervenes.  In either situation, the relator's 
rights must be protected under the statute.  See 31 U.S.C. 
s 3730(c)(3) (providing that the court may permit the United 
States to intervene for good cause but must not "limit[ ] the 
status and rights of the person initiating the action");  id. at 
s 3730(c)(1) (providing that the relator "shall have the right 
to continue as a party to the action," subject to certain 
limitations, even after the United States intervenes).  This is 
important because the Eleventh Amendment must be satis-
fied for every claim in the suit, see Pennhurst State Sch. & 
Hosp. v. Halderman, 465 U.S. 89, 121 (1984), and the pres-
ence of the United States as a co-plaintiff does not ordinarily 
remove the Eleventh Amendment bar for claims by other 
plaintiffs, see id. at 103 n.12;  but see Rodgers, 154 F.3d at 870 
(Panner, J., dissenting) (distinguishing for Eleventh Amend-
ment purposes between cases in which the United States 
intervenes from those in which it does not).  But assuming 
arguendo that the Eleventh Amendment would not pose a 
problem in cases in which the United States actually inter-
venes in a suit against a state, the government did not do so 
in the present case.  That fact, coupled with the government's 
intervention limited to the claim against the private defen-
dants, suggests that the government does not lightly take on 
the task of probing into the internal operations of the sover-
eign states, and may well think it better to leave such 
politically unpalatable tasks for the qui tam relators of the 
world.  Yet, the government wishes the option to sit back 
while the relator brings an action against a state, thus 
removing itself from direct accountability and from the subtle 
political pressures that might have precluded the lawsuit in 
the first place had the United States been more actively 
involved from the start.  See Stevens, 162 F.3d at 225-29 
(Weinstein, J., dissenting).  That seems quite at odds with the 
obvious purpose of the Eleventh Amendment since such a suit 
is emphatically not one brought "at the instance and under 
the control of responsible federal officers."  Blatchford, 501 
U.S. at 785.  We seriously doubt that the government, under 
the Eleventh Amendment, is entitled to transfer all of the 



benefits that accrue to it as a plaintiff in the federal courts 
when it chooses to watch from the sidelines.  That could be 
described as allowing the government to have its constitution-
al cake and eat it too.

     It has also been contended that, despite the clear statutory 
language giving relators a cause of action and treating them 
as parties vested with rights and protections, relators should 
be seen instead as self-appointed government counsel.  See 
Stevens, 162 F.3d at 202;  Milam, 961 F.2d at 49 ("Congress 
has let loose a posse of ad hoc deputies to uncover and 
prosecute frauds against the government.");  Siegel, supra, 73 
Tex. L. Rev. at 556-57;  Evan Caminker, The Constitutionali-
ty of Qui Tam Actions, 99 Yale L. J. 341, 353 (1989).  It has 
even been suggested that the relator's economic interest in 
the lawsuit makes him more like a contingency fee lawyer 
than a party.  See Stevens, 162 F.3d at 202 (acknowledging 
that the qui tam plaintiff has an interest in the action's 
outcome, but stating that "his interest is less like that of a 
party than that of an attorney working for a contingent fee" 
and citing cases noting that relators' primary motivation is a 
monetary reward and not the public good).  We simply do not 
understand the analogy;  typically both the client and the 
attorney have an economic interest in litigation.  In this 
sense, a relator looks no different to us than, let us say, an 
applicant for a broadcast license.  It is therefore not possible 
to contend that the False Claims Act is an open-ended letter 
of engagement from the government as client to a posse of 
prospective attorneys.  See United States ex rel. Farrell v. 
SKF, USA, Inc., 32 F. Supp. 2d 617, 617-18 (W.D.N.Y. 1999) 
(rejecting contention by qui tam defendant that, since the 
relator is only the United States' lawyer and the United 
States always remains a party litigant, the defendant was 
entitled to discovery from the United States even though the 
United States had not intervened in the suit).  To accept the 
"private Attorneys General" characterization as anything 
more than an inapt convention would run headlong into the 
problems of how a party with a statutory right to sue on his 
own behalf can be thought to be acting in a representational 
capacity, see 31 U.S.C. s 3730(b), why the client would need 



the court's permission to intervene in his own suit, see id. at 
s 3730(c)(3), or to dismiss the lawyer's "suit," see id. at 
s 3730(c)(2)(A), and why the lawyer's "status and rights" 
would be worthy of statutory protection in the event the 
client chooses to intervene in the lawyer's action, see id. at 
s 3730(c)(3).19

                                      B.


     Although, as we have indicated, we have profound doubts 
that the Eleventh Amendment permits this lawsuit against 
New York even if Congress implicitly authorized relators to 
bring suits against the states, we do not rest our decision on 
an interpretation of the Constitution.  Instead, bearing in 
mind that we must decide this difficult constitutional issue 
only if the term person in the Act is interpreted as including 
states, and that it seems quite dubious that Congress intend-
ed that result, the appropriate course seems to us to interpret 
"person" as not including states.

     The venerable doctrine of construing statutes in such a way 
as to avoid serious constitutional questions has two important 
prerequisites.  First, the "statute must be genuinely suscepti-
ble to two constructions," and this determination must be 
made "after, and not before, [the statute's] complexities are 
unraveled."  Almendarez-Torres, 118 S. Ct. at 1228;  see also 
United States v. Espy, 145 F.3d 1369, 1372 (D.C. Cir. 1998);  
Association of Am. Physicians & Surgeons, Inc. v. Clinton, 
997 F.2d 898, 906, 910-11 (D.C. Cir. 1993).  Furthermore, the 
constitutional question must be one that presents a "serious 
likelihood that the statute will be held unconstitutional."  
Almendarez-Torres, 118 S.Ct. at 1228;  see also Association of 
Am. Physicians & Surgeons, 997 F.2d at 906 (constitutional 
question must be a "grave" one);  Espy, 145 F.3d at 1372.

__________
     19 Of course, if the government actually hired a lawyer to bring its 
own cause of action, the Blatchford delegation problem would not 
arise.  But as we have explained at length, that is not what the 
False Claims Act does.



     It is obvious from what we have said already that these 
requirements are satisfied in this case.  As we have just 
explained at length, the Eleventh Amendment question is, at 
bare minimum, a serious one.  It could not be suggested, 
moreover, that we are distorting the language of the statute 
in order to avoid a constitutional question.  The more obvious 
reading is to exclude states from "person."  The more diffi-
cult task is to demonstrate that the inclusion of states as 
defendant persons is a fair reading of the statute.  There can 
be no objection to avoiding a constitutional question that is 
implicated only by a rather strained reading of the statute.

     We think it relevant--if not decisive--to observe that the 
avoidance canon coincides in this case with two additional 
related canons of construction that impose upon Congress an 
obligation of specificity.  When "Congress intends to alter the 
'usual constitutional balance between the States and the 
Federal Government,' " federal courts insist that Congress 
"make its intention to do so 'unmistakably clear in the 
language of the statute.' "  Will, 491 U.S. at 65 (quoting 
Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242 (1985));  
see also Gregory v. Ashcroft, 501 U.S. 452, 464 (1991) (linking 
clear statement rule with constitutional avoidance canon).  
The Court in Will derived this "clear statement" rule from 
the Eleventh Amendment cases requiring an explicit textual 
intent to abrogate a state's Eleventh Amendment immunity, 
but noted its applicability in a range of contexts in which 
Congress alters the federal-state balance of power.  See Will, 
491 U.S. at 65.20  In Gregory, the Court applied this "plain 
statement" principle where Congress' imposition of liability 
under the Age Discrimination in Employment Act would 
"upset the usual constitutional balance" by interfering with 
the states' fundamental role in defining the qualifications of 
their state judges.  Id. at 460-61;  see id. at 464-67 (holding 
that Congress did not make a sufficiently clear statement in 

__________
     20 Indeed, in Will itself the Eleventh Amendment was not a 
concern because the question whether states were persons under 
s 1983 arose in the context of a state court case, and the Eleventh 
Amendment does not apply in state courts.  See Will, 491 U.S. at 
63-64.



the ADEA that state judges are within the Act's coverage).  
It cannot seriously be disputed that if Congress were re-
quired to make its intentions "clear and manifest," Will, 491 
U.S. at 65, in order to impose False Claims Act liability on 
the states, it has failed to do so.

     Appellees contend that there is no justification for applying 
this clear statement rule of Will or Gregory because treating 
states as defendant persons would not actually alter the 
constitutional balance of powers between the federal and 
state governments.  Such an alteration occurs, for example, 
when Congress seeks to remove the states' sovereign immuni-
ty in their own courts, as in Will, 491 U.S. at 67, or when 
Congress attempts to interfere with an essential governmen-
tal function, as in Gregory, 501 U.S. at 460.  Since this case 
arose in federal court and because the fraudulent conduct 
proscribed cannot be thought an essential governmental func-
tion, appellees argue that neither Will nor Gregory apply.

     We are unpersuaded by various crabbed analyses of the 
Court's "clear statement" jurisprudence that we have seen.  
To characterize the relevant state function at issue, as the 
Second Circuit did, as fraudulent conduct, see, e.g., Stevens, 
162 F.3d at 204 ("The States have no right or authority, 
traditional or otherwise, to engage in [fraudulent] conduct."), 
is to assume the conclusion that the function is not an 
essential one.  Using that logic, the Court in Gregory would 
have declined to apply a clear statement rule because it is not 
essential for the state to discriminate against elderly judges.  
Appellees, for their part, describe the governmental function 
at issue in this case as the process by which a state receives 
federal funding-which they argue cannot possibly be de-
scribed as an essential state function.  The state, in other 
words, is simply a supplicant coming to the federal sovereign.  
That characterization, in our view, is still too narrow because 
the Act's imposition of liability necessarily interferes with a 
state's sovereign performance of a range of indisputably 
essential functions, such as the administration of a state 
education department involved in the present case.  See 
Ambach v. Norwick, 441 U.S. 68, 76 (1979) ("Public education, 
like the police function, 'fulfills a most fundamental obligation 



of government to its constituency.' ") (quoting Foley v. Conne-
lie, 435 U.S. 291, 297 (1978));  Brown v. Board of Educ., 347 
U.S. 483, 493 (1954) ("[E]ducation is perhaps the most impor-
tant function of state and local governments.").  That the 
federal government funds in part that function does not 
destroy its essentiality to the state.  To accept that hypothe-
sis, given present tax and spending mechanisms, would go a 
long way toward burying federalism.

     The Supreme Court has applied Gregory as we do, focusing 
on the state functions necessarily affected by operation of the 
statute, and not exclusively on the actual conduct proscribed 
by Congress.  See Gregory, 501 U.S. at 463 (essential state 
function with which ADEA liability would interfere was the 
"authority of the people of the States to determine the 
qualifications of their most important government officials" in 
their state Constitutions);  see also Pennsylvania Dep't of 
Corrections v. Yeskey, 118 S. Ct. 1952, 1953-54 (1998) (assum-
ing that imposition of ADA liability against state prisons 
would interfere with the essential state function of "exercising 
ultimate control over the management of state prisons");  
BFP v. Resolution Trust Corp., 511 U.S. 531, 544 & n.8 (1994) 
(applying Gregory to Bankruptcy Code provisions governing 
constructively fraudulent transfers, and explaining that the 
state function was not general authority over debtor-creditor 
law, but the "essential sovereign interest in the security and 
stability of title to land" necessarily affected by application of 
the Bankruptcy Code to foreclosure sales).  We thus do not 
think it is appropriate to look myopically only to the state's 
formal submission of the claim to the government and to 
ignore the underlying governmental functions to which the 
claim relates.21

__________
     21 It could be argued, we suppose, that because False Claims Act 
liability is only triggered when the state requests money from the 
federal government, it brings any interference with its essential 
functions on itself.  But we do not see any basis in Gregory for 
eliminating the need for a clear statement simply because the 
liability imposed is conditioned on a voluntary act by the state.  The 
clear statement rule of Pennhurst State School and Hospital v. 
Halderman, 451 U.S. 1, 17 (1981)--which requires a clear statement 



     Appellees similarly give an overly restrictive reading of 
Will.  It is true that the Court in Will pointed to the states' 
sovereign immunity in their own courts as a supporting 
reason for concluding that Congress did not intend to make 
states persons under 42 U.S.C. s 1983.  See Will, 491 U.S. at 
66-67.  But the Court nowhere even suggested that abroga-
tion of state sovereign immunity was the only alteration of 
the constitutional balance that justified use of the clear 
statement rule, nor did it rely on the idea of essential state 
functions implicit in the later decision in Gregory.  Will could 
be read to suggest--although we are uncertain of this--that it 
was the very imposition of a new liability against the state 
that would have altered the constitutional balance of powers.

     Whether or not Will or Gregory can be taken as far as we 
have suggested,22 there is a second related clear statement 

__________
when Congress imposes conditions on grants of federal money--
seems flatly inconsistent with such an argument.

     22 The government would have us instead limit the Court's clear 
statement rules because of the significant reliance interests created 
by Congress' and the federal agencies' assumption that states, to 
whom they entrusted large sums of money, are covered by the Act.  
For the proposition that reliance interests can trump clear state-
ment rules, the government relies on Hilton v. South Carolina 
Public Railways Comm'n, 502 U.S. 197, 205-07 (1991) (holding that 
Will is a rule of statutory construction, not of constitutional law, 
and that the reliance interests created by the Court's prior decision 
interpreting the Federal Employers' Liability Act to include state-
owned railroads warranted adherence to stare decisis rather than to 
the clear statement rule).  That the Court feels obliged to disregard 
the clear statement rule because of reliance interests that it created 
through its own precedent is of course quite different from the 
government's contention.  Any reliance interests in this case are 
not the judiciary's doing, but rather stem from the legislature's and 
the federal agencies' assumption, based on weak post-enactment 
legislative history, that states were, or ought to be, covered by the 
Act.  Since Congress easily could have included states within the 
definition of person if it so intended, the government can hardly be 
heard to complain now (on behalf of Congress) that Congress, in 
effect, wrote the states a blank check.



canon that bears on our case.  In cases involving congression-
al abrogation of a state's Eleventh Amendment immunity, the 
applicability of the clear statement rule is well-established 
and the uncertainties in defining the scope of the Will and 
Gregory versions of that rule disappear.  See Dellmuth v. 
Muth, 491 U.S. 223, 230 (1989).  Appellees contend that that 
rule does not apply, however, because they conclude that the 
Eleventh Amendment is not a bar to a qui tam suit (and thus 
that no abrogation is necessary).  But it seems highly artifi-
cial to conclude that Congress labors under an obligation of 
utmost textual specificity when it seeks to abrogate the 
states' Eleventh Amendment immunity when that immunity is 
otherwise certain, but that liability against the states--poten-
tially implicating the Eleventh Amendment--can be imposed 
willy-nilly, using as imprecise a term as "person."  We think 
there is significant conceptual overlap--though admittedly 
not an identity--between the abrogation inquiry and the 
statutory construction question whether Congress intended to 
include states as defendant persons.  The Supreme Court's 
conclusion that Congress has failed to abrogate with the 
requisite specificity is often based on Congress' failure explic-
itly to provide for suits against the states in federal court--
the precise failing of the False Claims Act that raises the 
question in this appeal.  See, e.g., Dellmuth, 491 U.S. at 231-
32;  Atascadero State Hosp., 473 U.S. at 245-46.  So although 
we recognize that the Eleventh Amendment's clear statement 
rule has always been applied to an abrogation inquiry--rather 
than to a threshold question as to whether the Eleventh 
Amendment applies--we do not think it wholly irrelevant to 
the latter.

     Appellees' argument against using the Eleventh Amend-
ment's clear statement rule follows from their prior conclu-
sion that the Eleventh Amendment does not apply to this 
case.  Appellees therefore assume that states are persons for 
the purpose of rejecting New York's Eleventh Amendment 
defense, and then proceed to reject the Eleventh Amend-
ment's clear statement rule when actually interpreting the 
statute previously assumed to include states--sort of a divide 
and conquer strategy.  The statutory construction issue is, 



however, inextricably linked with the jurisdictional one, which 
is precisely why we decline to assume that states are persons 
in order to conduct an Eleventh Amendment inquiry that 
could be avoided if the assumption were not made in the first 
place.  We think the correct resolution is to read the Act in 
such a way that avoids the serious constitutional question 
whether the Eleventh Amendment bars qui tam suits against 
the state in federal court.  In so doing, we rely on the 
constitutional avoidance canon buttressed by the family of 
"clear statement" rules applicable when Congress attempts to 
legislate in the way that appellees contend it has legislated.23

                                   * * * *


     In the end it comes to this:  if we must decide whether 
states constitutionally can be defendants in federal court 
under the Act, Congress must make its intent clear.  The 
decision of the district court is therefore reversed.
                                                                                            So ordered.

__________
     23 New York would also have us apply the clear statement rule of 
Pennhurst, 451 U.S. at 17, under which Congress must unambigu-
ously set forth conditions it imposes on the grant of federal money 
when it exercises its spending power.  Because we have enough--
more than enough--clear statement rules to resolve this case, we 
need not decide whether False Claims Act liability can be seen as a 
condition imposed on a grant of federal money.

                                                                     
