U.S. ex rel. Eisenstein v. City of New York

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Authorship: LA Akin Gump associate Scott Street

Contents

[edit] Briefs and Documents

Docket: 08-660

Issue: Whether the 30-day time limit in Federal Rule of Appellate Procedure 4(a)(1)(A) for filing a notice of appeal, or the 60-day time limit in Rule 4(a)(1)(B), applies to a qui tam action under the False Claims Act.

Merit briefs

Amicus briefs

Oral Argument: Transcript

Decision: Affirmed in an opinion by Justice Thomas

[edit] Pre-Argument Articles

Hi - I am eisenstein at Ironstone44@gmail.com - there are some missing items and also some errors in the court reporting in the us reports. 

  the case was not granted Cert until after the third circuit came out with an opinion that was opposite to teh second circuit.  At that time another brief was submitted to SCOTUS
    Only after notifying scotus of the conflict did scotus grant cert.  at the time that cert was granted 4 circuits allowed 60 days as the time to file notice of appeal, and only two circuits said that the 30 days should be used.  
     Several issues and facts were not raised or decided by the court decision.  It appears that the second circuit and Scotus - heard a minor issue but skipped the issues raised in the original complaint.  
    if you want to email me and speak about it... first email, and then I will give you my home phone - I still have a land line.  the lawyer who argued before the second circuit was not the same lawyer who argued before SCOTUS.  He changed firms and the parnter rather than the original pro bono lawyer argued.   he was assigned second chair.  too bad.  there were items that were not noted in the briefs based on issue limitations and best guess as to what the court would accept.  

    Several other issues were raised by the Second circuit that were not addressed by this scotus decision 
               Hope to hear from you    Irwin R. Eisenstein


[edit] Argument Preview

In U.S. ex rel. Eisenstein v. City of New York, No. 08-660, the Supreme Court will decide how long a private False Claims Act plaintiff has to file a notice of appeal when the government declines to intervene in the case.

[edit] Background

Eisenstein arose out of New York City’s decision to require government employees who do not live in the City to pay a fee equivalent to the municipal income taxes paid by employees who do live there. Eisenstein and four other city employees who do not live in New York sued the city, pro se, alleging that the policy violated – among other things – the federal False Claims Act, which imposes civil liability on any person who “knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval.” The False Claims Act is unique because, while the federal government is always the real party in interest (as the one allegedly being defrauded), the statute allows a private plaintiff to sue qui tam (on the government’s behalf). The United States does not even need to participate in the litigation—the government can choose to intervene and take over the litigation if it wishes but, even if it decides not to do so, it has a right to be involved in the action and receives the bulk of any monetary recovery. The government also has a right to intervene later, if it can show good cause for doing so.

The district court dismissed Eisenstein’s claim for failure to state a claim and entered final judgment in favor of the City. Eisenstein filed his notice of appeal from that judgment 54 days later. Six months after Eisenstein filed his notice of appeal, the Second Circuit ordered the parties to brief the issue of what time limit for filing the notice of appeal applied in this case, where the action was conducted in the name of the United States but the government had declined to intervene. Rule 4(a)(1)(A) of the Federal Rules of Appellate Procedure gives a party thirty days to appeal in a civil case but Rule 4(a)(1)(B) gives “any party” sixty days to appeal when the United States is a party to the action. A month later, the City filed a motion to dismiss the appeal as untimely.

The Second Circuit ultimately decided that, because the United States was not a “party” to the action, the special sixty-day time limit did not apply. Therefore, it dismissed the appeal as untimely.

[edit] Petition for Certiorari

The Second Circuit appointed pro bono counsel for Eisenstein to address the timeliness issue, and the same attorneys filed a petition for certiorari with the Supreme Court.

The petition argued that: (1) the Second Circuit’s decision violated the principle that procedural rules should be given their plain meaning to avoid confusing litigants (especially those proceeding pro se); and (2) the Second Circuit’s decision created a circuit conflict requiring Supreme Court review, especially because of the importance that jurisdictional rules like time limits have in federal court litigation. On this latter point, the petition noted that three of the four other circuits that had considered the question at the time (the Fifth, Seventh, and Ninth Circuits) had found that the sixty-day rule applied even when the government chose not to intervene in the action (in 2008, the Third Circuit reached the same conclusion). Only the Tenth Circuit – in a divided opinion that pre-dated the most recent amendments to the FCA – had found that the thirty-day rule applied.

The City opposed the petition, but it did not dispute the existence of a circuit conflict. Instead, it argued that the Second Circuit reached the right result in the case, and it attacked the reasoning of the Fifth, Seventh, and Ninth Circuits in applying the sixty-day time limit.

The Court granted the petition for certiorari in January 2009.

[edit] Merits Briefs

The parties have always agreed that the United States is the “real party in interest” in a qui tam FCA action, even when it declines to intervene in the action. But they disagree about whether the United States qualifies as a “party” under Rule 4(a) of the FRAP in such a case, and the Supreme Court briefing focuses on that dispute.

[edit] Petitioner’s Brief

Eisenstein argues that the only condition for obtaining “party” status is compliance with Federal Rule of Civil Procedure 17(a), which requires that the action be brought “in the name of the United States.” According to Eisenstein, the combination of the naming requirement and the government’s status as the real party in interest ensures that the United States will be bound by the judgment and protects the defendant from subsequent litigation.

The Second Circuit rejected that argument, concluding instead that a “party” could only be the person who participated in the proceedings and controlled the litigation. Eisenstein offers a number of reasons for the Court to disregard that finding. First, he notes that the qui tam action must be brought in the government’s name and may not be dismissed without the Attorney General’s consent. The AG also has a special right to review the complaint, under seal, for sixty days before deciding how to proceed. If it declines to take over the proceedings, the government may still request service of the pleadings and deposition transcripts, and it may intervene later if it can show good cause for doing so. The government may seek a stay of discovery if it would interfere with certain government investigations. And, most notably, the government receives at least seventy percent of any monetary recovery, only slightly less than the minimum of seventy-five percent it would receive if it conducts the action on its own. Eisenstein also notes that the Court has found that the Article III injury underlying a FCA claim always belongs to the federal government—thus, it has recognized plaintiffs who sue qui tam as partial assignees of the government’s claim rather than individuals with their own standing to sue.

Eisenstein also challenges the Second Circuit’s “participation” test as unworkable, querying to what extent the government must be involved before it can be considered a party under FRAP 4(a). He attacks the Second Circuit’s reliance on government intervention as a measure of party status. And he challenges the court’s use of legislative history suggesting that the sixty-day window to appeal was included because of the extra time it takes to make decisions within the federal bureaucracy.

But Eisenstein’s best argument—and the one on which the courts that have applied the sixty-day rule in this context have relied—urges the Court to adopt a literal reading of FRAP 4(a) to avoid confusing litigants and setting “traps for the wary,” especially pro se litigants who will just read the rules to figure out how long they have to file an appeal. Because the United States must be named as the plaintiff in the caption of a qui tam action, Eisenstein contends that applying the sixty-day rule will simplify matters without causing any prejudice to the opposing party, who would have to wait sixty days if the government had taken over the proceedings anyway.

[edit] Amicus Briefs in Support of Petitioner

Two amicus briefs have been filed in support of Eisenstein.

Patricia Haight and In Defense of Animals filed an amicus brief to argue that, first, in light of the clear language of Rule 4(a)(1)(b), applying the thirty-day time period would confuse unwary litigants and therefore violate the principle that procedural rules be easy to understand. Second, Haight argues that if the Court did adopt the thirty-day rule, it should only apply it prospectively.

The Taxpayers Against Fraud Education Fund also filed an amicus brief in which they argue (1) that the United States has a unique role in FCA claims, regardless of whether it actively participates in the case, and always remains the real party in interest; and (2) applying the sixty-day rule serves the purposes of both the FCA (by protecting the government’s interest in the action) and the Federal Rules of Civil Procedure (by preventing the confusion of litigants). Moreover, they argue that “[a]pplying the sixty-day rule, as most appellate courts have done . . . causes no harm to other parties because all parties receive the benefit of the sixty-day rule.”

[edit] Respondent’s Brief

The City of New York’s merits brief tracks the arguments made in its opposition to the cert. petition.

In sum, the City believes that the meaning of Rule 4(a) turns on a technical interpretation of the term “party,” which should be read narrowly. In the City’s view, only individuals or entities that actually participate in and control the litigation can qualify as “parties” to an action. Here, the Government neither intervened nor participated in the qui tam action, and it could not have appealed the decision without first seeking leave to do so. Thus, the City sees no reason to apply the time-period for appealing when the Government is a party, a view it says is supported by the history of the 60-day provision, which Congress drafted to accommodate the Government’s slow, institutional decision-making process.

Furthermore, the City rejects Eisenstein’s argument that the Court should apply the 60-day time period here to make it easier for litigants to calculate their time to appeal, arguing that “[f]ederal court jurisdiction should not be based upon the convenience of the litigants.”

[edit] Amicus Briefs in Support of Respondent

The United States makes similar arguments in its amicus brief supporting the City. Moreover, the Government views intervention, rather than its status as the real party in interest or the presence of its name in the caption, as the key to determining whether it is a party to a qui tam action. Like the City, the Government also argues that it can become a party, even without formally intervening in the action, “by asserting particular rights” or by “actively participat[ing]” in the action. However, it explains, such circumstances are “rare” and should be limited to situations in which the Government “assert[s] its rights under the FCA to direct the disposition of the lawsuit,” such as dismissing a qui tam action and vetoing a proposed settlement and voluntary dismissal of the lawsuit, circumstances where the Government takes a position adverse to the relator who is asserting its interests.

Finally the Solicitor General sees no reason to construe Rule 4(a) in the broadest terms possible “simply because some litigants might misunderstand the law.”

[edit] Oral Argument Recap

Although a sizable chunk of the oral argument in United States ex rel. Eisenstein v. City of New York focused on statutory interpretation--whether the United States qualifies as a "party" under Federal Rule of Appellate Procedure 4(a) when it does not intervene in a qui tam False Claims Act action--the Justices seemed more concerned about the consequences of their interpretation than with the "right" answer.

To begin, the oral argument showed that there is no clear answer to whether the United States is a "party" to a qui tam action when it declines to intervene. As both parties point out in their briefing, a qui tam action is unique and the Government has unique rights, even when it declines to intervene. It is not a stranger to the litigation. It is the real party in interest. It is named in the caption of the case. It receives the bulk of any monetary recovery. It has certain rights to participate in discovery--although, as the Solicitor General and the City pointed out, the FCA generally exempts the Government from the discovery process. In sum, the United States bears some of the characteristics of a party and some characteristics of a non-party.

Eisenstein, of course, urged the Court to focus on the party characteristics. The City and the Solicitor General urged the Court to focus on the non-party characteristics, particularly the discovery exemption. And the Solicitor General again argued that Congress enacted the 60-day time period for filing a notice of appeal to accommodate the Government's slow, institutional decision-making process.

Interestingly, Rule 4(a)(1)(B) does not just give the United States 60 days to appeal an adverse judgment. It gives "any party" 60 days to appeal when "the United States or its officer or agency is a party." Thus, as Eisenstein has pointed out in his briefs, if the United States had intervened in this action and won, the defendant would have had 60 days to appeal even though the Government's institutional decision-making process had nothing to digest. That conflicts with the Solicitor General's rigid interpretation of Rule 4(a)(1)(B). But the Justices did not pick up on that point.

Instead, the Justices focused on the consequences of their decision and seemed determined to pick the most reasonable interpretation of Rule 4(a). The Chief Justice captured this dilemma perfectly. On the one hand, he wondered, "if the inquiry says it's hard to tell, there's a 30-day limit and there's a 60-day limit, I don't know of any responsible counsel who wouldn't file within 30 days," particularly since it is so easy to file the single-page notice of appeal. On the other hand, "what's the big deal with letting them have for 60 ... which also solves the problem of the potential trap for the unwary?" Several Justices, including the Chief Justice and Justice Stevens, seemed especially concerned with applying the 30-day rule because it would require dismissing all of those appeals that had been filed outside of 30 days, but within 60, in reliance on multiple circuit court decisions.

The Solicitor General tried to rebut that concern by arguing that applying the 60-day rule "could also [make] the Government a party under the other rule[s]," principally the discovery rules that the FCA exempts the Government from. But the Chief Justice said that the Court could simply limit its decision to Rule 4(a), erring on the side of caution because it prefers to make the FRAP as easy to understand as possible, especially when construing a jurisdictional rule like FRAP 4(a).

That would cause the least amount of harm, a goal on which the Chief Justice and Justice Stevens seemed fixated. And, as they pointed out, if Congress disagrees with the interpretation, it can rewrite the Rules to make it clear that the 60-day provision does not apply to qui tam actions in which the United States does not intervene. With the possible exception of Justice Ginsburg, who seemed inclined to adopt a hyper-technical interpretation of the term "party" in Rule 4(a), that result would appeal to most of the Justices and would create the least amount of chaos in the lower courts--something the Court has become increasingly aware of in recent years.

[edit] Opinion Analysis

When the Supreme Court heard oral argument in Eisenstein on April 21, only Justice Ginsburg seemed inclined to adopt a strict reading of Federal Rule of Appellate Procedure 4(a)(1) and provide a sixty-day window to appeal only when the United States actually intervenes in a qui tam action under the False Claims Act. After all, although they emphasized intervention during oral argument, even the City of New York and the Solicitor General argued that, because of the unique nature of the FCA, the sixty-day limit should apply when the government does not formally intervene but asserts “particular rights” or “actively participates” in the action.

But the Court nevertheless took the narrow route, holding unanimously that the sixty-day window for filing a notice of appeal only applies when the United States has formally intervened in the action. I suspect that neither the City nor the Solicitor General expected the Court to go that far.

On the one hand, it is not surprising that the Court avoided the “active participation” test that the Second Circuit applied in Eisenstein. That standard would have been too difficult and time-consuming to apply in this procedural context. But given the unique nature of the FCA—a distinction that the City and the Solicitor General also stressed before the Court—and the goal of making procedural rules easy to understand, the Court easily could have adopted the sixty-day rule, which – as the Chief Justice noted during oral argument – would have caused the least amount of prejudice to the parties. Instead, the Court focused on dictionary and statutory definitions of the terms “party” and “intervention” and largely minimized the unique rights that the federal government possesses in these qui tam actions.

Here, the Court’s decision was a blow to the relator, Eisenstein, who filed his notice of appeal fifty-four days after the entry of judgment. The Court has dismissed his appeal. But, ironically, the Court’s decision may put a greater burden on the United States than relators in the future. Now, relators know to file their notices of appeal within thirty days of the entry of judgment no matter who is involved in the litigation. The federal government, on the other hand, will have to think more carefully and more quickly about whether it wants to intervene in a qui tam action. Putting aside the intellectual question of what interpretation of FRAP 4(a)(1) is “correct,” I have always wondered why the government wanted the thirty-day time period to apply. It may have to ask itself the same question now.

[edit] Links and further information

Some history on the action. Eisenstein had moved to Florida to go to law school. Barry University law in Orlando. When the district court sent out their order and opinion it did not use the address that was submitted as a modification. it used the Brooklyn address that was not valid. Eisenstein did not receive the order and opinion until about 18 days after it was issued. If one takes those 18 days from the 54 days, the notice of appeal was filed after 36 days not 54 days. 

    There were other factors....   The district court took more than three years to issue an opinion on this case.    More than 1000 days.  Eisenstein (me) was in school and was not sure that I wanted to file an appeal since I had exams and classes.  I did read the law and the cases and recognized that the law allowed sixty days to file when the United States was a party.   It did not qualify - saying only when there was intervention.  
    In several other laws... individuals were given 60 days to file a notice of appeal even when the government was not an active participant... I believe when there are or were issues under the Miller act... a sub contractor sues a contractor - the subcontractor got the 60 days to appeal.   
     There were other issues that were never raised or the court decided not to consider.   Although this action was about a small procedural issue the cost to bring this action was more than $250k and if it were not done pro bono... most could not afford the expense.   I could have taken it and briefed the case - and come pretty close to what was submitted as the final brief.   I also would have argued a little differently - since i had a different prospective than Mr. Shaw Esq. who did argue the case.  
      When you have a lawyer arguing it does not place the action in the prospective of a non-lawyer (even a law student- who now has a JD and passed the Florida Bar- awaiting approval ) 
   another issue, that was not raised before scotus - was that the second circuit limited FCA actions so that only attorneys could file them for the US.  This, historically, is way off base.  although other circuits have come to the same conclusion, I believe that this issue was/is just as important and should have also been before the court.******
 In any case, there are other issues with the decision, and the facts that were not raised at the SCOTUS level.   They should have been raised but scotus would not have heard a case with several issues???      Ironstone44@gmail.com
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