Qui Tam

Supreme Court rules on appeal time limits for qui tam cases

By Brian F. LaBovick

Today, Justice Thomas delivered the opinion in the much anticipated case United States,  ex rel. Irwin Eisenstein, Petitioner, v. City of New York, et, al..  Unfortunately, the opinion, was a fatal blow for the Relator, Irwin Eisenstein, since the lower court's decision was affirmed that there is only a 30 day time limit for appeal on qui tam cases where the government decides not to intervene.

 In his opinion, Supreme Court Justice Thomas wrote:

"The question presented is whether the 30-day time limit to file a notice of appeal in Federal Rule of Appellate Procedure 4(a)(1)(A) or the 60-day time limit in Rule 4(a)(1)(B) applies when the United States declines to formally intervene in a qui tam action brought under the False Claims Act (FCA), 31 U. S. C. §3729. The United States Court of Appeals for the Second Circuit held that the 30-day limit applies. We affirm."

Petitioner filed a notice of appeal 54 days later. While the appeal was pending, the Court of Appeals sua sponte ordered the parties to brief the issue whether the notice of appeal had been timely filed. Federal Rule of Appellate Procedure 4(a)(1)(A)–(B) and 28 U. S. C. §§2107(a)–(b) generally require that a notice of appeal be filed within 30 days of the entry of judgment but extend the period to 60 days when 'the United States or an officer or agency thereof is a party,' §2107(b). Petitioner argued that his appeal was timely filed under the 60-day limit because the United States is a 'party' to every FCA suit. Respondents countered that the appeal was untimely under the 30-day limit because the United States is not a party to an FCA action absent formal intervention or other meaningful participation.

The Court of Appeals agreed with respondents that the 30-day limit applied and dismissed the appeal as untimely. See 540 F. 3d 94 (CA2 2008). We granted certiorari, 555 U. S. ___ (2009), to resolve division in the courts of appeals on the question,1 and now affirm."

One question at the forefront of everyone's mind is, why shouldn't all cases have 60 days to appeal? Relators without government intervention in the qui tam case have only 30 days to appeal. However, when the government decides to intervene in the case, there is a 60 day time limit for an appeal. Since the government is the beneficiary of successful qui tam litigation, doesn't it make sense to give more time to bring an appeal, whether or not the government intervenes?

According to the President of the National Whistleblowers Center, Stephen Kohn:

"The Supreme Court in Eisenstein has once again chipped away at the ability of whistleblowers to challenge corrupt contracting practices under the False Claims Act. The ruling demonstrates a fundamental misconception of the purposes behind the False Claims Act, the most important anti-fraud law in the United States. The Court ruled that FCA cases pursued by whistleblowers are similar to private lawsuits. This is wrong. Whistleblowers under the FCA have a powerful right to file cases on behalf of the United States, and the vast majority of any recovery in these cases is paid to the U.S. Treasury -- not the whistleblower. Taxpayers are the main beneficiaries of these cases -- the rules concerning filing deadlines should reflect the intent of the law, and should also reflect the fact that the United States, recovers no less then 70% of all monies obtained in an FCA case. In today's environment, the Supreme Court should be strengthening anti-fraud laws, not continuously chipping away at the ability of whistleblowers to present their cases."

Time will tell if this decision will affect other qui tam litigation pending appeal. Maybe we should seek relief from the legisature to help increase the time limit in bringing a False Claims Act Appeal for Relators. As a nation, we can't afford to allow the guilty to get away with fraud and use loop holes in the court to escape justice.  Let's hope that this case will help raise awareness that we need to continue to strengthen our False Claims Act, not "Chip away at it".

Full post as published by Whistleblower Law Blog on June 08, 2009 (boomark / email).