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


GALVAN, GILBERT W.

v.

FED PRIS INDUST INC


98-5472a

D.C. Cir. 1999


*	*	*


Williams, Circuit Judge: The False Claims Act encourages  private
parties to help fight fraud on the United States by  giving them the
power to bring civil actions in its name, and  by providing both the
government and the private party-- known as the "relator"--a share of
any financial recovery and  reimbursement for their costs, including
attorneys' fees. 31  U.S.C. ss 3729-3730 (1994). Under the Act any
person who  knowingly presents false or fraudulent claims to an
officer or  employee of the United States may be liable. Id. s
3729(a).  Gilbert W. Galvan, an inmate at the Federal Correctional 
Institution in Oxford, Wisconsin, filed such an action--often  called
by its Latin shorthand, qui tam (an abbreviation of qui  tam pro
domino rege quam pro se ipso in hac parte sequi- tur)1--against his
employer, Federal Prison Industries, Inc.  ("FPI"). He alleged that it
had falsely certified that the  communication cables and weapons parts
that it produced for  the Department of Defense had been adequately
tested and  met the requisite quality standards.


FPI is no ordinary employer; it is a "wholly owned govern- ment
corporation," created to further the Bureau of Prison's  goal of
providing meaningful work for inmates confined in  federal
institutions. See id. s 9101; 28 CFR s 345.10 (1999).  But the suit
had been brought in the name of the govern- ment, 31 U.S.C. s
3730(b)(1), and it is accordingly entitled to  intervene, 31 U.S.C. s
3730(b)(2), which it did here. This put  the Department of Justice in
place as counsel on both sides of 




__________

n 1 Black's Law Dictionary translates the phrase as "who as well  for
the king as for himself sues in this matter." Black's Law  Dictionary
1262 (7th ed. 1999). There are other versions of the  complete Latin
phrase, but none appears meaningfully different.  See, e.g., United
States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 746  n.3 (9th Cir.
1993) ("qui tam pro domino rege quam pro se imposo  sequitur"); Miami
Copper Co. v. State, 149 P. 758, 761 (Ariz. 1915)  ("qui tam pro
domino rege, etc., quam pro se ipso in hac parte  sequitur").


the action. It then moved under s 3730(c)(2)(A) for dismissal  of the
suit, arguing that the court lacked subject matter  jurisdiction
because Galvan's qui tam action pitted the United  States executive
branch against itself. Further, representing  the FPI itself, the
government moved to dismiss on grounds  of sovereign immunity. The
district court accepted the non- justiciability argument, and never
reached the issue of sover- eign immunity. We agree with the
government's sovereign  immunity defense and affirm the dismissal on
that ground,  leaving for another day the question of


Before addressing sovereign immunity we must be sure  that we may
properly do so before deciding whether the suit  presents a case or
controversy. Jurisdiction must be estab- lished before a federal court
may proceed to any other  question. Steel Co. v. Citizens for a Better
Environment, 523  U.S. 83, 94-95 (1998). But later cases make clear
what was  implicit in Steel Co.: There is an array of non-merits ques-
tions that we may decide in any order. Thus in Ruhrgas A.G.  v.
Marathon Oil Co., 119 S. Ct. 1563 (1999), the Court held  that it may
be perfectly proper for a court to resolve personal  jurisdiction,
which is waivable, without having first deter- mined subject matter
jurisdiction. "[T]here is no unyielding  jurisdictional hierarchy."
Id. at 1567. And in In re Minister  Papandreou, 139 F.3d 247, 255
(D.C. Cir. 1998), we consid- ered an immunity defense despite
considerable doubts about  the plaintiffs' standing, saying that "a
court that dismisses on  other non-merits grounds ... makes no
assumption of law- declaring power that violates the separation of


Sovereign immunity questions clearly belong among the  non-merits
decisions that courts may address even where  subject matter
jurisdiction is uncertain. The Supreme Court  has characterized the
defense as jurisdictional, FDIC v. Mey- er, 510 U.S. 471, 475 (1994),
even while recognizing that it can  be waived, id. See also Deaf Smith
County Grain Pro- cessors, Inc. v. Glickman, 162 F.3d 1206 (D.C. Cir.
1998);  First Va. Bank v. Randolph, 110 F.3d 75, 77 (D.C. Cir. 1997).


And in Papandreou itself, we resolved the case on immunity  grounds,
despite the presence of a defense that we assumed  arguendo was a
matter of Article III standing. 139 F.3d at  255. Similarly, we here
address sovereign immunity and do  not reach justiciability.


* * *


Galvan argues that FPI is not entitled to sovereign immu- nity because
it is not, in fact, part of the sovereign. He is  mistaken. A suit is
against the sovereign when "the judg- ment sought would expend itself
on the public treasury or  domain, or interfere with the public
administration." Dugan  v. Rank, 372 U.S. 609, 620 (1963) (quoting
Land v. Dollar, 330  U.S. 731, 738 (1947)). FPI is a wholly owned
Government  corporation, see 31 U.S.C. s 9101, and all money under
FPI's  control is held by the U.S. Treasury to the credit of FPI.  See
18 U.S.C. s 4126(a) (1994). Thus, any judgment in  Galvan's favor
would require FPI to pay damages directly  from the public treasury.
See generally Sprouse v. FPI, 480  F.2d 1, 3 (5th Cir. 1973)
("[T]hough the prisoners vehemently  deny it, 'the conclusion is
inescapable that the suit is essen- tially one designed to reach money
which the government  owns.' " (quoting Mine Safety Appliances Co. v.
Forrestal,  326 U.S. 371, 375, (1945))).


Pointing to 18 U.S.C. s 4126(b), which says that "[a]ll valid  claims
and obligations payable out of said fund [the FPI fund  at Treasury]
shall be assumed by the corporation," Galvan  characterizes the
corporation as "self-sufficient." This is  quite immaterial. "Federal
agencies or instrumentalities per- forming federal functions always
fall on the 'sovereign' side of  [the] fault line" between suits
against the sovereign and suits  against individuals, regardless of
any independence of ac- counts. Auction Co. of America v. FDIC, 132
F.3d 746, 752  (D.C. Cir. 1997). "Diversion of resources from a
private  entity created to advance federal interests has effects
similar  to those of diversion of resources directly from the
Treasury."  Id. In fact, as a government corporation FPI is not only a
 federal instrumentality but is also an "executive agency," 5 


U.S.C. s 105, and on that account deserves sovereign immu- nity in the
absence of congressional waiver. See FDIC v.  Meyer, 510 U.S. 471, 475
(1994) ("Absent a waiver, sovereign  immunity shields the Federal
Government and its agencies  from suit.").


Galvan argues that Congress waived FPI's immunity both  in FPI's
organic statute, 18 U.S.C. s 4121, and in the False  Claims Act, 31
U.S.C. s 3729. We first note the rather steep  incline that the
Supreme Court has said a court must climb  before finding a waiver of
the federal government's sovereign  immunity. Such waivers must be
"unequivocally expressed in  statutory text, and will not be implied."
Lane v. PeNa, 518  U.S. 187, 192 (1996) (internal citations omitted).
If ambigu- ous, statutes must be construed in favor of immunity. See 
United States v. Williams, 514 U.S. 527, 531 (1995). So long  as a
statute supposedly waiving immunity has a "plausible"  non-waiver
reading, a finding of waiver must be rejected.  United States v.
Nordic Village, Inc., 503 U.S. 30, 37 (1992)  ("plausible" alternative
reading is enough to establish that a  "reading imposing monetary
liability on the Government is  not 'unambiguous' and therefore should
not be adopted.").  With this in mind we turn to Galvan's specific


FPI's Organic Statute. Congress established FPI as "a  government
corporation of the District of Columbia." 18  U.S.C. s 4121. Galvan
would have us read this as manifest- ing a congressional intent to
give FPI the legal characteris- tics of an ordinary corporation
established under the general  corporation law of the District of
Columbia. That law states  that such corporations are "capable of
suing and being sued  in any court of law or equity in the District,"
D.C. Code Ann.  s 29-203 (1999),2 language which if applicable would
consti- tute a waiver. See Meyer, 510 U.S. at 480; FHA v. Burr, 309 


On the surface (later we look below the surface) s 4121  seems capable
of the meaning Galvan proposes. But there  are alternative meanings
that seem plausible--namely read- ings of s 4121 as intended to
establish a different kind of link 




__________

n 2 This provision was codified at Code D.C. s 607 when FPI was  first
established.


with the District of Columbia. Thus Congress may have  intended to
specify that the headquarters of FPI should be in  the District (as it
in fact is, see Federal Prison Industries  1996 Annual Report 82).
Congress has so provided, more  specifically to be sure, in other
statutes. See, e.g., 22 U.S.C.  s 2199(a) ("The [Overseas Private
Investment] Corporation  shall have its principal office in the
District of Columbia.");  12 U.S.C. s 4703(a)(1) ("The offices of the
[Community Devel- opment Financial Institutions] Fund shall be in
Washington,  D.C."). Or Congress may have intended to locate FPI in
the  District specifically for purposes of venue, as it has for other 
government corporations. See 22 U.S.C. s 2199(a) (Overseas  Private
Investment Corp. deemed to be a resident of the  District of Columbia
"for purposes of venue in civil actions");  22 U.S.C. s 3611(b)
(Panama Canal Commission "is an inhab- itant and resident of the
District of Columbia"); cf. 7 U.S.C.  s 1506(d) ("Any suit against the
[Federal Crop Insurance]  Corporation shall be brought in the District
of Columbia, or  in the district wherein the plaintiff resides.").
Because 28  U.S.C. s 1391(e) provides venue for suits against "an
agency  of the United States" in any judicial district where the 
defendant "resides," a congressional purpose simply to estab- lish the
central administration in Washington would have the  consequence of
locating venue in the District for any case  against FPI brought under
general waivers of sovereign  immunity such as the Tucker Act, see id.


In deciding on the plausibility of the above interpretations,  it is
worth noting how precisely Congress has spoken in  instances where it
sought to incorporate attributes estab- lished by D.C.'s general
corporation law. See 29 U.S.C.  s 1302(b) ("The [Pension Benefit
Guaranty] corporation has  the powers conferred on a nonprofit
corporation under the  District of Columbia Nonprofit Corporation
Act."); cf. 40  U.S.C. s 875 (allowing Pennsylvania Avenue Development
 Corporation to condemn property under the procedural provi- sions of
a specific subchapter of the D.C. Code). The same is  true of Section
11 of the Shipping Act of Sept. 7, 1916, 39  Stat. 728, 731, which
allowed the United States Shipping  Board to "form under the laws of


one or more corporations." In Sloan Shipyards Corp. v.  United States
Shipping Board Emergency Fleet Corp., 258  U.S. 549 (1922), the Court
found that this provision effected a  waiver. Id. at 565-68. Because
of s 11's much more specific  statutory language, however, Sloan
affords Galvan no aid.3


Looking at the context of s 4121, we find indicators militat- ing
against Galvan's view that Congress's reference to "a  government
corporation of the District of Columbia" was  intended to incorporate
the District's corporate law by refer- ence. Congress purposefully
kept FPI out of the commercial  world and limited its exposure to the
courts. FPI cannot sell  its products to the public in competition
with private enter- prise, and even for its sales to the government
must diversify  its operations to minimize competition with private
industry  and to avoid capturing more than a reasonable share of the 
government market for any specific product. See 18 U.S.C.  s
4122(a)-(b). Purchases of FPI products are considered 
intragovernmental transfers, see id. s 4124(b), and FPI may  borrow
money only from the Treasury itself, see id. s 4129.  When FPI's
government customers challenge the "price,  quality, character, or
suitability" of its products, their only  recourse is to binding
arbitration before the Attorney Gener- al, the Administrator of
General Services, and the President,  or their representatives. See


Other aspects of FPI activity are removed from judicial  influence. The
Attorney General has authority to promulgate  rules and regulations
governing inmates' compensation for 




__________

n 3 The current text of FPI's organic statute was adopted as part  of
the enactment of Title 18 of the United States Code. See Act of  June
25, 1948, Pub. L. No. 80-772, 62 Stat. 683, 683. The language  of the
original act demonstrated even more clearly that Congress  did not
intend to adopt the District's corporation laws. The Act of  June 23,
1934 authorized the President to "create a body corporate  of the
District of Columbia to be known as 'Federal Prison Indus- tries',
which shall be a governmental body." Act of June 23, 1934,  Pub. L.
No. 73-461, 48 Stat. 1211, 1211. Its language reinforces  FPI's status
as a governmental entity and suggests that its status  as a
corporation is generic rather than specific to the District of 


injuries sustained and for work performed in connection with  FPI
activities, see id. s 4126(c)(4). The Attorney General's 
administrative scheme is the workers' exclusive remedy. See  28 CFR s
301.309 (1999); United States v. Demko, 385 U.S.  149, 152 (1966).


Reading s 4121 as literally making FPI a corporation  under the law of
the District of Columbia creates still further  puzzles and
contradictions. First, the management structure  of FPI conflicts
directly with the laws in place when the  current statutory language
was adopted.4 The D.C. Code  requires annual elections for the
corporation's "trustees" (the  District's analogue of a director, see
D.C. Code ss 29-202,  -204), see id. s 29-205, but FPI's board of
directors is  appointed by, and serves at the will of, the President.
See 18  U.S.C. s 4121. The District's laws also require that trustees 
own stock in the company, see D.C. Code s 29-204, whereas  FPI's
operating capital is maintained exclusively by the Trea- sury of the
United States. See 18 U.S.C. s 4126(a). In  addition, in 1948 (the
time of adoption of FPI's organic  statute in approximately its
current form), a majority of a  corporation's trustees were required
to be citizens of the  District, see D.C. Code s 29-204 (1940), but it
seems unlikely  that this rule has bound the President in his


Second, Congress granted FPI considerably fewer powers  than an
ordinary District corporation while simultaneously  imposing extra,
particularly governmental, burdens. For ex- ample, a District
corporation has the specific power to mort- gage its property, see s
29-203, and thus implicit power to  borrow money; but Congress
authorized FPI to borrow  money only in 1988, and in so doing limited




__________

n 4 The following citations refer to the current District of Columbia 
and United States Codes, but each cited provision (with one excep-
tion) is identical in substance to the provision in effect when the 
current version of FPI's organic statute was adopted: 18 U.S.C.  ss
4121-4128 (1948), and D.C. Code s 29-201 to -240 (1940). The 
exception is that D.C. Code s 29-204 (1940) imposed a requirement 
that "trustees" be citizens of the District, whereas the current 


funds to the U.S. Treasury, see Pub. L. No. 100-690, 102 Stat.  4411
(codified at 18 U.S.C. s 4129 (1994)). Similarly, in  employing its
assets, FPI is required to meet the require- ments of a government
agency rather than a District corpora- tion. It can withdraw money
from its accounts "only pursu- ant to accountable warrants or
certificates of settlement  issued by the General Accounting Office,"
18 U.S.C.  s 4126(a), and is required to act "in accordance with the
laws  generally applicable to the expenditures of the several depart-
ments, agencies, and establishments of the Government," id.  s


Finally, the vast majority of the District's rules are either 
indirectly superseded or have no relevance to FPI. For  example, the
District required that shareholders pay 10% of  the capital stock into
the corporate treasury before the  corporation could transact any
business. See D.C. Code  s 29-209. FPI has no such capitalization
requirement. The  other provisions of the D.C. Code concern the
activities of  ordinary corporations. See, e.g., id. ss 29-209 to
-212, -216  to -217, -230 to -235, -239 (capitalization and stock
transac- tions); id. ss 29-218 to -219 (payment of dividends); id.  ss
29-205, -211, -220 to -222 (stockholder liability and voting  rights).
They have no apparent application to FPI. The  dismal fit between FPI
and the sort of private corporation  clearly contemplated by the D.C.
Code makes it vanishingly  improbable that Congress meant to make FPI
a corporation  governed by that code.5


Galvan attempts to save his waiver argument by arguing  that the
typical presumption in favor of sovereign immunity  should not apply
to government corporations, citing Keifer &  Keifer v. Reconstruction
Fin. Corp., 306 U.S. 381 (1939). 




__________

n 5 Section 11 of the Shipping Act of 1916, in contrast, anticipated 
the questions of market capitalization, stock management, and the 
exercise of voting rights. 39 Stat. at 731. The Act also refrained 
from placing governmental burdens on these corporations' spending 
decisions. There may be some incongruities between the manage- ment
structure provisions of s 11 and the D.C. Code, but evidently  none
was brought to the attention of the Supreme Court in Sloan.


There the Court found that in authorizing the Reconstruction  Finance
Corporation ("RFC") to create up to twelve "regional  agricultural
credit corporations" and to appoint their manage- ment, Congress had
not endowed the regional corporations  with sovereign immunity.
Because the parent corporation,  the RFC, was subject to a "sue and be
sued" clause, the  Court found that Congress "naturally assumed" that
the  regional corporations would similarly lack immunity. Id. at 
392-93. "Congress had a right to assume that the character- istic
energies for corporate enterprise with which a few  months previously
it had endowed [the RFC] would now  radiate through [the RFC] to [the
regional corporations]."  Id. at 393-94. Because FPI is by no means
the offspring of a  non-immune government entity, the grounds for the
inference  drawn in Keifer are absent here.


Moreover, the Supreme Court seems to have abandoned  Keifer's
fundamental premises. The Keifer Court said that  "the government does
not become the conduit of its immunity  in suits against its ...
instrumentalities merely because they  do its work." Id. at 388. More
recent cases have taken the  opposite view. See FDIC v. Meyer, 510
U.S. at 475 ("Absent  a waiver, sovereign immunity shields the Federal
Govern- ment and its agencies from suit."); Auction Co. of America, 
132 F.3d at 752 ("Federal agencies or instrumentalities per- forming
federal functions always fall on the 'sovereign' side of  th[e] fault
line."). One treatise classifies Keifer as part of the  Supreme
Court's "halting and irregular" pronouncements of  its doubts about
sovereign immunity, standing in contrast to  the "regular reiterations
... of the conventional position,  which has been dominant in most
recent Supreme Court  decisions." Richard H. Fallon, Jr. et al., Hart
& Wechsler's  The Federal Courts and the Federal System 1040 (4th ed. 
1996). Obviously we must apply the currently "conventional" 


In short, reading s 4121 as an incorporation of the details  of the
District's general corporation law (including its "sue  and be sued"
clause) is not especially plausible. That law has  a variety of
specific features that are either irrelevant to FPI  or contradict
provisions in its organic statute; the organic 


statute contemplates intra-governmental resolution of con- flicts with
FPI's primary customers; and the language of  s 4121 is nowhere near
as specific as in the recognized  instances of such incorporation.
More limited readings than  Galvan's, simply locating FPI in the
District, are at least as  plausible. We find no waiver here.


The False Claims Act. Nor can we find a waiver in the  False Claims
Act. The Act establishes liability for any  "person" who knowingly
presents false or fraudulent claims.  31 U.S.C. s 3729. The term
"person," however, is not de- fined for the relevant sections of the
statute. Galvan con- tends that the term "person" should include
government  corporations because 1 U.S.C. s 1 provides that the word 
"person" is to include "corporations" unless "the context  indicates
otherwise." The government responds by invoking  the counter canon
that the term "person" does not ordinarily  include the sovereign. See
Will v. Michigan Dep't of State  Police, 491 U.S. 58, 64 (1989)
(citing Wilson v. Omaha Indian  Tribe, 442 U.S. 653, 667 (1979)).


The parties also point to specific contextual elements. Gal- van urges
that the language of 31 U.S.C. s 3730(b)(5), saying  that "no person
other than the Government may intervene,"  implies that the term
"person" includes the government and  thus resolves any ambiguity. He
also argues that the exemp- tion of certain officials from liability
under s 3730(e)(2)(A)  implies that all other government entities are
suable, and that  therefore government corporations fall within the
definition of  person in 1 U.S.C. s 1. The government points to  s
3730(d)(2), which makes the "defendant" liable for a pre- vailing
relator's expenses, and s 3730(f), which states that the  government
cannot be found liable for the relator's expenses;  taken together,
these provisions arguably imply that "the  government" cannot be the


There are answers to each of these arguments. That  s 3730(b)(5) uses
the term "person" in excluding all possible  intervenors other than
"the Government" sheds little light on  the congressional view of
proper defendants. Section  3730(e)(2)(A)'s explicit but limited
immunity for individuals 


holding specified offices is completely consistent with an  assumed
immunity for government entities themselves; re- covery from
fraudulent individuals would not involve two  branches of the federal
government running up litigation  costs so that one can collect from
another. And the statutory  combination cited by the government,
creating "defendant"  liability for attorneys' fees while protecting
"the Government"  from such liability, can be explained by limiting
the govern- ment's exemption to appearances in its capacity as
intervenor.  In the end, none of these contextual arguments seems to
offer  any strong ground for interpretation of "person" one way or 


We note that the circuits have split over whether "person"  under the
False Claims Act includes states. Compare United  States ex rel. Long
v. SCS Business & Tech. Inst., 173 F.3d  870 (D.C. Cir. 1999) (finding
that it does not), with United  States ex rel. Stevens v. Vermont
Agency of Natural Re- sources, 162 F.3d 195 (2d Cir. 1998), cert.
granted, 119 S. Ct.  2391 (June 24, 1999) (finding that it does), and
United States  ex rel. Zissler v. Regents of the Univ. of Minn., 154
F.3d 870  (8th Cir. 1998) (same).6 The courts have necessarily
resolved  this question under the presumption established in the Will 
and Wilson cases; that two circuits found the presumption  overcome in
that context is a source of caution. But for state  liability there
was a stronger basis in the overall purpose and  legislative history
for inclusion, see, e.g., Long, 173 F.3d at  875-81, and the analysis
was not subject to any interpretive  guidance as strong as Nordic
Village's instruction that the  presence of a "plausible" non-waiver
interpretation compels  rejection of a waiver interpretation. Because
the reading of  "person" to exclude agencies of the federal government
is at  least plausible, we find no waiver.




__________

n 6 Since granting certiorari in Stevens, the Supreme Court has  added
the broader question of whether a private person can have  standing to
bring a qui tam action in the absence of particularized  injury
attributable to the defendant's actions. See Stevens, 1999  WL
1045146, at *1 (U.S. Nov. 19, 1999) (adding standing question).


At oral argument, Galvan's counsel attempted to raise an  additional
theory under which Galvan could recover pursuant  to the False Claims
Act. He argued that the Tucker Act, 28  U.S.C. s 1491--and the Little
Tucker Act, id. s 1346(a)(2), to  the extent that the claim did not
exceed $10,000--waived  sovereign immunity: s 1491(a)(1) waives for a
claim "founded  ... upon ... any Act of Congress," and the Supreme
Court  has understood that to encompass any statute that "can fairly 
be interpreted as mandating compensation by the Federal  Government
for the damages sustained." United States v.  Mitchell, 463 U.S. 206,
218 (1983). The False Claims Act,  says Galvan, is such an act. As the
False Claims Act does  not specifically impose any obligation on a
branch of the  United States, Galvan's argument seems quite a stretch
of the  Mitchell principle. But we shall not explore Galvan's argu-
ment because it was not raised before the district court or in 
Galvan's submissions to this court. We do not normally  "consider all
the implications of a theory vaguely raised for  the first time at
oral argument on appeal." Tarpley v.  Greene, 684 F.2d 1, 7 n.17 (D.C.


Galvan's claim must be dismissed because the FPI enjoyed  an unwaived
sovereignty immunity; the judgment of the  district court is


Affirmed.