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

• Decision Date: 19 August 2008
• Docket Number: Docket No. 06-3329-cv.
• Citation: 540 F.3d 94
• Parties: UNITED STATES of America, ex rel. Irwin EISENSTEIN, Plaintiff-Appellant, v. CITY OF NEW YORK, Michael Bloomberg, John Doe, Jane Doe, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

540 F.3d 94

UNITED STATES of America, ex rel. Irwin EISENSTEIN, Plaintiff-Appellant, v. CITY OF NEW YORK, Michael Bloomberg, John Doe, Jane Doe, Defendants-Appellees.

Docket No. 06-3329-cv.

United States Court of Appeals, Second Circuit.

Argued: June 24, 2008.

Decided: August 19, 2008.

Lewis D. Zirogiannis (Marc A. Weinstein on the brief), Hughes Hubbard & Reed LLP, New York, NY, for Plaintiff-Appellant.

Andrew G. Lipkin, of counsel (Michael A. Cardozo, Corporation Counsel of the City of New York) New York, NY, for Defendant-Appellees.

Michael J. Garcia, United States Attorney for the Southern District of New York (Sheila M. Gowan and Jeffrey S. Oestericher, Assistant United States Attorneys, on the brief) New York, NY, for amicus curiae, the United States of America.

Before: WINTER, MINER, and CABRANES, Circuit Judges.

WINTER, Circuit Judge:

Irwin Eisenstein appeals from the dismissal of his complaint by Judge Batts. The City of New York has moved to dismiss the appeal, asserting that the notice of appeal was untimely. The issue is whether a private party bringing a False Claims Act qui tam action must file a notice of appeal within the 30 days after judgment applicable to civil actions generally, Fed. R.App. P. 4(a)(1)(A), or within the 60 days applicable when the United States is a party, Fed. R.App. P. 4(a)(1)(B). We hold that, where the United States has declined to intervene in a False Claims action, the United States is not a party to the action within the meaning of Rule 4(a)(1), and, therefore, a notice of appeal must be filed within 30 days. Because Eisenstein filed his notice of appeal more than 30 days after the entry of judgment, his appeal is untimely, and we are without jurisdiction to consider it.¹

On January 17, 2003, Eisenstein and four City employees, proceeding pro se, filed this action against the City and various municipal officials. The gravamen of the complaint is that it is unlawful for the City, as a condition of employment, to require non-resident City-employees to pay a fee equivalent to the municipal income taxes paid by resident City-employees. The complaint alleges that this practice is actionable under various theories of liability, most notably as a violation of the False Claims Act, 31 U.S.C. §§ 3729-3733.² Eisenstein contends that because non-resident employees are able to deduct this fee as an expense for federal income tax purposes, their taxable income is less than it might otherwise be, and in this way, the City is depriving the federal government of tax revenue. The complaint initiates a qui tam action, in which the plaintiffs are to serve as relators, suing the City in the name of the United States. The United States declined to intervene.³

The City moved to dismiss the complaint for failure to state a claim. On March 31, 2006, the district court granted the motion to dismiss, and, on April 12, 2006, rendered final judgment for the City. On June 5, 2006, or 54 days later, Eisenstein filed his notice of appeal.⁴

On December 26, 2006, we ordered Eisenstein and the City "to brief the issue of whether the thirty-day time limit for filing a notice of appeal ... or the sixty-day time limit for filing a notice of appeal ..., which applies when the United States is a party, applies to a qui tam action where the United States declines to intervene in the proceedings." United States ex. rel. Eisenstein v. City of New York, No. 06-3329 (2d Cir. Dec. 26, 2006). We also ordered the United States to brief this issue as amicus curiae. On January 25, 2007, the City filed the present motion to dismiss, based on, inter alia, the timeliness issue. Thereafter, we appointed pro bono counsel for Eisenstein, solely to address the City's motion to dismiss.

The government played no role in this litigation until filing an amicus brief as ordered by the court.⁵ Because we conclude that the United States is not a "party" to this action for the purposes of Fed. R.App. P. 4(a)(1)(A) and (B), we further conclude that Eisenstein's notice of appeal was untimely. We are therefore without jurisdiction, and the City's motion is granted.

"[I]n a civil case, ... the notice of appeal ... must be filed with the district clerk within 30 days after the judgment or order appealed from is entered." Fed. R.App. P. 4(a)(1)(A); see 28 U.S.C. § 2107(a) (prescribing that "no appeal shall bring any judgment ... of a civil nature before a court of appeals for review unless notice of appeal is filed, within thirty days after the entry of such judgment"). However, "[w]hen the United States or its officer or agency is a party, the notice of appeal may be filed by any party within 60 days after the judgment or order appealed from is entered." Fed. R.App. P. 4(a)(1)(B); see 28 U.S.C. § 2107(b) (providing that "[i]n any [civil] action ... in which the United States or an officer or agency thereof is a party, the time as to all parties shall be sixty days from such entry"). The term "party" is not expressly defined for these purposes by either statute or the appellate rules.⁶

When interpreting a rule of procedure, we review the text for its "plain meaning." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 391, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990); see also United States v. Capoccia, 503 F.3d 103, 109 (2d Cir.2007). To the extent that the text is ambiguous, we seek to determine the intent by looking to other materials, such as the Advisory Committee Notes that often accompany the rules. See Sorensen v. City of New York, 413 F.3d 292, 296 (2d Cir.2005).

In the present case, the language of Rule 4(a)(1)(B) does not support Eisenstein's contention that he was entitled to file his notice of appeal within 60 days of the rendering of judgment. The text of Rule 4(a)(1)(B) states that the extended filing period applies when the United States is a "party" to the action. We hold that the United States is not a "party" to this action for the purposes of the deadline for filing a notice of appeal.

In our view, the United States is not a party for these purposes to a qui tam action when the government fails to intervene or to raise or resist any legal claim. Where a private person brings suit under the False Claims Act, the Act allows the government "to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information." 31 U.S.C. § 3730(b)(2). Before that 60-day period expires, the Act mandates that the government carry out one of two choices: "(A) proceed with the action, in which case the action shall be conducted by the Government; or (B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action." Id. § 3730(b)(4). While the Act allows the Government to intervene at a later date, it may do so only upon a showing of good cause. Id. § 3730(c)(3). When the Government declines to intervene, the Act specifies that the person who brought the suit has the "right to conduct the action." See id. § 3730(c)(3). Absent a specific request, the government need not be served with the pleadings thereafter filed by litigants. Id. § 3730(c)(3). Moreover, the United States "is not liable for expenses which a person incurs in bringing an action under" the Act, id. § 3730(f), notwithstanding the fact that the claim is that of the United States and that such actions are brought in the name of the United States. See 31 U.S.C. § 3730(b); see also Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 774, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) (describing claims under the Act as belonging to the United States). And while under the Act, the government must consent to any settlement that would call for the dismissal of a qui tam action, see id., this is surely a sensible requirement, inasmuch as the United States, is the "real party in interest," and is otherwise bound by the relator's actions for purposes of res judicata and collateral estoppel. See Stoner v. Santa Clara County Office of Educ., 502 F.3d 1116, 1126 (9th Cir.2007).

These provisions indicate that the United States is not a party to litigation for all purposes brought by private persons under the Act, absent an election to intervene. As used in Rule 4(a)(1), the word "party" refers to the person participating in the proceedings with control over litigation. The government, once having declined to intervene at the outset of an action may not participate in it, save for asking that it be served with pleadings and for approving any withdrawal with prejudice, without moving to intervene upon a showing of good cause. The inability to participate without moving to intervene is simply not consistent with the principal characteristics of being a party to litigation.

Eisenstein argues that the extended 60-day filing period applies here because the United States is a "real party in interest" in False Claims Act qui tam actions. See United States ex rel. Stevens v. Vt. Agency of Natural Res., 162 F.3d 195, 202 (2d Cir.1998), rev'd on other grounds, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). This argument assumes that the United States' status as a "real party in interest" is equivalent to the status of a "party" to litigation as contemplated by the drafters of Rule 4(a). We find this assumption faulty. "Generally, the `real party in interest' is the one who, under the applicable substantive law, has the legal right which is sought to be enforced or is the party entitled to bring suit." In re Comcoach Corp., 698 F.2d 571, 573 (2d Cir.1983). The litigation status of a real party in interest and a "party" to litigation may overlap for some purposes while being quite distinct for others. See, e.g., Arkwright-Boston Mfrs. Mut. Ins. Co. v. New York, 762 F.2d 205, 209 (2d Cir.1985) (concluding it was not error to fail to join a real party in interest as a plaintiff to a diversity action). Indeed, the term ...