UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


UNITED STATES/LONG, RONALD E.

v.

STATE OF NEW YORK


98-5133a

D.C. Cir. 1999


*	*	*


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


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


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


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




__________

n 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


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 




__________

n 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




__________

n 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




__________

n 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




__________

n 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 




__________

n 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




__________

n 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




__________

n 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


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 




__________

n 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 




__________

n 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.


(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




__________

n 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


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




__________

n 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


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


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


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




__________

n 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 


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.




__________

n 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


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


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




__________

n 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




__________

n 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


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


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




__________

n 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 




__________

n 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 


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


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.




__________

n 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.