U.S. ex rel. Long v. SCS Business & Technical Institute, Inc.

• Decision Date: 30 April 1999
• Docket Number: 98-5149 and 98-5150,Nos. 98-5133,s. 98-5133
• Citation: 173 F.3d 890
• Parties: 15 IER Cases 32 UNITED STATES of America, ex rel. Ronald E. LONG, Appellee/Cross-Appellant, v. SCS BUSINESS & TECHNICAL INSTITUTE, INC., et al., Appellees. State of New York, Appellant/Cross-Appellee. Attorney General of the United States, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 890

173 F.3d 890

15 IER Cases 32

UNITED STATES of America, ex rel. Ronald E. LONG Appellee/Cross-Appellant, v. SCS BUSINESS & TECHNICAL INSTITUTE, INC., et al., Appellees State of New York, Appellant/Cross-Appellee Attorney General of the United States, Intervenor.

Nos. 98-5133, 98-5149 and 98-5150.

United States Court of Appeals District of Columbia Circuit.

April 30, 1999.

Appeals from the United States District Court for the District of Columbia (92cv02092).

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

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

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

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

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

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

Before: WALD, SILBERMAN, and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SUPPLEMENTAL OPINION

SILBERMAN, Circuit Judge:

In the same week that our opinion issued, the Fifth Circuit held that the Eleventh Amendment bars a False Claims Act qui tam suit against a state in federal court. See United States ex rel. Foulds v. Texas Tech University, 171 F.3d 279 (5th Cir.1999). The court thought it was obliged to decide that issue before reaching the question we decided--whether the statute provides for a qui tam action against a state--because the Eleventh Amendment issue is jurisdictional. Although we certainly discussed the serious nature of the Eleventh Amendment issue as it bore on our order of decision, we did not consider whether, as a matter of judicial authority, we too were obliged to decide that issue. Since our sister circuit implicitly challenged our jurisdiction--even though no party before us did--and our mandate has not issued, under these unusual circumstances, we think it appropriate to issue this supplemental opinion to explain why we believe we should stick with the order of decision we adopted.

The Fifth Circuit reasoned as follows: since the question whether a relator can sue a state under the Act is a cause of action or merits question, and since the question whether a federal court can hear such a suit under the Eleventh Amendment is a jurisdictional one, the latter must be resolved before the former. See id. at 286. The principal authority that the Fifth Circuit relied on is Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998), in which the Supreme Court held that a question of Article III standing must be decided before the statutory question whether a cause of action exists. See id. at ---- - ----, 118 S.Ct. at 1012-16. In so holding, the Court rejected the doctrine of "hypothetical jurisdiction," under which lower courts--including this one, see, e.g., Cross-Sound Ferry Servs., Inc. v. ICC, 934 F.2d 327, 333 (D.C.Cir.1991)--had assumed jurisdiction in order to reach the merits, where the merits question was easier and the prevailing party on the merits would be the same as the prevailing party were jurisdiction denied. See Steel Co., 523 U.S. at ----, 118 S.Ct. at 1012 (disapproving of Cross-Sound and other lower court decisions). The doctrine, the Court said, is flatly inconsistent with core principles limiting the role of Article III courts: "For a court to pronounce upon the meaning or the constitutionality of a state or federal law when it has no jurisdiction to do so is, by very definition, for a court to act ultra vires." Id. at ----, 118 S.Ct. at 1016.

We did not address this Steel Co. question in our opinion, we confess, because we did not focus on it. Indeed, New York--whose immunity from suit is at stake--specifically urged us, apparently unlike Texas in Foulds, to decide the statutory question first on the ground that nonconstitutional grounds should be considered before constitutional ones. Admittedly, we ordinarily are obliged to raise jurisdictional questions on our own, so the parties' litigating tactics would not excuse our oversight. Still, the Eleventh Amendment bar on suits against the states in federal court is not a garden variety jurisdictional issue. Although the Amendment speaks in terms of the limits of the judicial power, see U.S. CONST. AMEND. XI ("The Judicial power of the United States shall not be construed to extend...."), a state can waive its Eleventh Amendment defense and consent to suit in federal court, and the Supreme Court has held that there is no obligation for the Court to raise the issue sua sponte. See Wisconsin Dep't of Corrections v. Schacht, 524 U.S. 381, ---- - ----, 118 S.Ct. 2047, 2052-53, 141 L.Ed.2d 364 (1998) (citing Atascadero State Hsp. v. Scanlon, 473 U.S. 234, 241, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985) and Patsy v. Board of Regents of Fla., 457 U.S. 496, 515 n. 19, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982)).

To be sure, the Court has also held that the "Eleventh Amendment defense sufficiently partakes of the nature of a jurisdictional bar so that it need not be raised in the trial court," Edelman v. Jordan, 415 U.S. 651, 678, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); see Burkhart v. Washington Metropolitan Area Transit Authority, 112 F.3d 1207, 1216 (D.C.Cir.1997), and indeed can be raised for the first time in the Supreme Court, see Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 467, 65 S.Ct. 347, 89 L.Ed. 389 (1945). Given these somewhat conflicting rules, see Schacht, 524 U.S. at ----, 118 S.Ct. at 2055 (Kennedy, J., concurring), the Court has frankly recognized that the Eleventh Amendment is a rather peculiar kind of "jurisdictional" issue. See Calderon v. Ashmus, 523 U.S. 740, ---- n. 2, 118 S.Ct. 1694, 1697 n. 2, 140 L.Ed.2d 970 (1998) ("While the Eleventh Amendment is jurisdictional in the sense that it is a limitation on the federal court's judicial power, and therefore can be raised at any stage of the proceedings, we have recognized that it is not coextensive with the limitations on judicial power in Article III."); Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261, 267, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997) ("The Amendment, in other words, enacts a sovereign immunity from suit, rather than a nonwaivable limit on the federal judiciary's subject-matter jurisdiction."). The Court's most recent opinion noted that the question whether Eleventh Amendment immunity is a matter of subject matter jurisdiction is an open one. See Schacht, 524 U.S. at ----, 118 S.Ct. at 2054.

New York's explicit request that we first decide the statutory question could therefore be seen as a kind of agreement to assert its Eleventh Amendment defense only if it loses on the statutory one (a "springing" defense, as it were). As the Supreme Court has recently made clear, "[t]he Eleventh Amendment ... does not automatically destroy original jurisdiction," but instead "grants the State a legal power to assert a sovereign immunity defense should it choose to do so." Schacht, 524 U.S. at ----, 118 S.Ct. at 2052 (emphasis added). A state can waive its immunity from suit in the context of a litigation, see, e.g., Ford Motor Co., 323 U.S. at 467-69, 65 S.Ct. 347, as long as it does so unequivocally, see Atascadero, 473 U.S. at 246-47, 105 S.Ct. 3142. Although there are difficult questions about whether the state's attorneys must be authorized by state law to waive the state's immunity, and about whether such authorization, if needed, has been granted, compare id. (suggesting that such authorization is necessary) with Schacht, 524 U.S. at ---- - ----, 118 S.Ct. at 2055-56 (Kennedy, J., concurring) (questioning whether in the removal context specific authorization is required), it may well be that New York's approach amounts to a partial consent to suit on the statutory question--subject to a later Eleventh Amendment defense. And if so, we might be obligated to decide the statutory question first.

But even if we were not so obligated, we think that we are at least permitted to do so. Had New York chosen not to assert its Eleventh Amendment defense below, or even before us, it would not have been precluded from raising it thereafter. See Calderon, 523 U.S. at ---- n. 2, 118 S.Ct. at 1697 n. 2 (Eleventh Amendment "can be raised at any stage of the proceedings"); but cf. Schacht, 524 U.S. at ----, 118 S.Ct. at 2055 (Kennedy, J., concurring) (criticizing this rule because "permitting the belated assertion of the Eleventh Amendment bar ... allow[s] States to proceed to judgment without facing any real risk of adverse consequences"). Unless that defense is asserted by the state, a court is arguably not obliged to raise the issue itself since the Supreme Court has made clear that the usual obligation to raise jurisdictional issues sua sponte does not apply (at least to the Court itself) in Eleventh Amendment cases. See Patsy, 457 U.S. at 515 n. 19, 102 S.Ct. 2557. ¹ Therefore New York's litigation strategy--an Eleventh Amendment argument in the alternative--suggests that, at least, we are entitled to reverse the Steel Co. order. After all, Steel Co.'s rule is premised on a court's lack of power to reach the merits without establishing its jurisdiction. In the Eleventh Amendment context, where a court lacks power only if a state claims that it does, it is arguable that we have no obligation to decide the Eleventh Amendment issue first if the state does not demand that we do so.

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