Whistleblowers_and_qui_tam_for_tax_1998 and Citizen Suits and Qui Tam Actions Private Enforcement...

7/27/2019 Whistleblowers_and_qui_tam_for_tax_1998 and Citizen Suits and Qui Tam Actions Private Enforcement 1996

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WHISTLEBLOWERS AND QUI TAMFOR TAX 357

Whistleblowers and Qui Tam for Tax

DENNIS J. VENTR, JR.*

TABLE OF CONTENTS

I. I ............................................................................ 357II. W N? ............................................................................ 360

III. W A C? ................................................. 362

IV. W W B? ............................................................ 368

V. WQui Tam T? ............................................................ 370A. I T P E ............ 371B. T P H C ..................... 372C. R C C C

R I G ........................................ 376

VI. F-TQui Tam T W.......................... 383A. T P F C ............................. 384B. W P ................................................ 386C. C I S J

T W .................................................... 389

VII. D P V D D ................................. 390

A. M W: T D PC I .................................................. 390B. E W: S-O

F R L ........................................... 393

VIII. C.............................................................................. 406


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358 SECTION OF TAXATION

1S H R (D-NV) . I

, S . R R R P, R C S , , , .2

R , , j , , , , .3 R .

N , M 2007, S C G (R-IA) R. R S , , G .4T , G , ,

, A , .5 G NW W. B tax-, 20046 S W O T R H C A 20067 , S .8

T A W O. I - , C

qui tam


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.9 O -

, F C A (FCA),10

qui tam .11 T FCA, , . B , FCA - qui tam . T A

FCA , qui tam .T FCA

12 , , . C , . T 2006 , . I , . Equi tam -, .

P II A , 2006 . P III C ,

, ,13 . P IV

9Qui tam qui tam pro domino rege quam pro se ipse


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, , F C A. P V -

qui tam . I , (1) ; (2) - ; (3)

; (4) ; (5) , . P VI - , , , .

F, P VII - . R S-O

A 2002, 2005, j . T, , . B - qui tam , - .

II. Whats New?

A 1867,


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$60 .16 T -

C 3792 R A 1934, .17 I 1954, 7623, ,, .18

T 2006 19 7623 .

F, S W O20 , -- , .21 T S , S . I , , SD D . T F 2007, S O P R, S W, D-.22 E - , , .23 I, , W , .24 O , O2007, W O $1 , -

16See://../_761567354_18/C_W..17R A 1934 3792 48 S 680


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$2 .25

N . T 2006 7623 , A , - .26 U , S 15% 30% , , , ,

.

27

P -, D D [] , 15% .28 P $2 ( $50,000 1989),29 . T , .30 I , W O .

A W O .31 I , -

-- .32

III. What Animated the Changes?

T S . F, . I J 2006,

T I G T A (TIGTA) S I R P-,


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7623.33 T , ,

S , , , . I ,TIGTA S , - .34 F , I C E (ICE)

, , . M-, S , .TIGTA 45% - , . I 32% , ICE j .

A j , TIGTA 76% j .

I , TIGTA - j . O 7.5 . U

, TIGTA ,

.35 F , . T S ,

, .36

A FTC C W K, -


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, , , -

, . U 1989, $50,000.38 I 2004, S $2 $10 , .39

E , . B1989 1998, 95,105 S- , 6,310 (6.63% ) $29,227,222 $1,450,808,529 (2.01% ).40 C , S - . D 1989 1998, - F C A $2,300,589,823, $360,573,093 , 15.7%.41I , S $100 ,42 FCA, $1.4 2006.43

38See supra 29.39See1 IRS O, I.R.M. (CCH), 795 2389 (2007).40T G, IRS Informants Reward Program: Is It Fair?, 84 Tax Notes (TA) 1203,

1205 .1 (A. 23, 1999). F . B 1982 1986, 34,123 , 3,516

(10% ), $5,056,122 $392,038,826 (1.3% ). M U, Finan-cial Rewards for Ratting on Tax Cheats Are Small and Rare, 37 Tax Notes (TA) 1300, 1301(D. 28, 1987). C . A (seesupra 35)


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G , S

j . C . A 1941 1998 S ( 19) .44 I ,

S 45 .46 M, , ; ( 7623, , S ) ( ) .47

T C S

.

44G, supra 40, 1205-06.45See, e.g., K . U S, 168 F.3 1307, 1309 (F. C. 1999) (

j , , S ); S . U

S, 508 F.2 1333, 1336 (C. C. 1975) (S D D ).

46See, e.g., K . U S, 36 F. S. 1023, 1023 (C. C. 1941), cert. denied, 314U.S. 620 (1941) ( C );Saracena, 508 F.2 1336 ( , D D )


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T TIGTA J 2006

, I R P - IRS , P .48 T ( ) S .49 T - C .50 I 2006, S $350 2001,51 83.7%.52 A

48SeeTIGTA, supra 33, 1.49T S D I F (DIF) . DIF

. SeeTIGTA, supra 33, 1-2 4-5. I - , , always DIF . T S , DIF . T, - DIF S. I S W

.50See supra 13. C

, T D -. See, e.g., James M. Bickley, Congressional Research Service, Tax Gap andTax Enforcement, CRS RL338882 (A. 13, 2007); Internal Revenue Service andDepartment of the Treasury Reducing the Federal Tax Gap: A Report on Improving


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, $350 2001 $400

2006.53

A C , $400 , - .54G - ($1 $2 ) W- O ,55 , .

F, C S S G. G, , 1986 F C A, .56 M, 2004, G S .57 F, TIGTA 2006 I RP, G C S .58 A 2006, G W O

.59

( ) 4.5%.InternalRevenue Service, Tax Gap Figures (2006), available at://..//-/__.. C, j - , , 53.9%.Id. T,


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I, G

. A - - ,60 , : F C A.

IV. Whats Worked Before?

T F C A , .61 S 1986, C FCA,62 , 1987 $1.4 2006.63 L, FCA D J, . I , , , -.64 A FCA

.65 M, .66 T A G D J67 .68 I ,

qui tam .69 H, A G .70


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A FCA j

, , .71

W , , . . . 15 25 .72 I , - . I - , , .73 T - .74 I not , , 25% 30% .75

A, , .

U , . F,

, - - .76 F,

, .77 I , qui tam , defendant


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C. F,

j A G- .79 A , qui tam.80 T j qui tam , qui tam .81R, S C FCA , qui tam .82

T qui tam . T FCA , , I R C 1986.83 T, S G qui tam , .

S 7623 I R P . I 2006,C , .84

V. WhyQui Tam for Tax?

T 7623 SW O

. A , - . B


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, , . T

, X . A , , . I , ? F , , .

A. Increasing Transparency with Private Enforcement

P -, , . I

, - . T , . I -- , P

M G .85 I, FTC C K , [] [] .86 P, K , ;87

.88 P J R - qui tam - . A qui tam , R

, F C A, qui tam A


16/156


, qui tam

.A , 7623 , qui tam

. I . B FCA, , . T A qui tam , , - . I qui tam . W - Sj FCA

D J A qui tam .

B. Taxpayer Privacy and Harassment Concerns

T -

, qui tam , - . S 6103 S .90 T , ; ; ( ,

, , ); C; P W H ; TD D J .T qui tam


17/156


S

, not . A - 6103.E ,

qui tam - . T , -. F , C I R M E S E C C C C 6103 .91 I , E

,92 ,93 C.94 M, ,95 - . A, qui tam ,

- .96 I, - S ,

91D S, SEC, IRS Discuss Making More Corporate Tax Data Public, Cox Says, 81Highlights & Doc. 794 (M 2, 2006).

92D S, Everson Makes Another Pitch for Transparency, 2006Tax Notes Today241 2 (D 15 2006); D S A K Everson Calls for Debate on Making


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.97 F,

C C FCA 1986, I R S I.R.C. , .98 T, C qui tam S, , .

H . T qui tam - , , C , , , C . S, qui tam

, . C qui tam S C 1992 INDOPCO v. Commissioner99 T D 2002 .100 I , qui tam

. T , ( - ) (INDOPCO ). W ,

. Qui

tam .

97SeeC S. R, Taxpayer Privacy and Disclosure Issues Will Continue to Touch UsAll in The Future of American Taxation: Essays Commemorating the 30th Anniversary


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C qui tam , , . F, C FCA S qui tam ( FCA A G).101I T , - qui tam , C .102 E, S

: (1) ;(2) ; (3) qui tam , j FCA .103

S, INDOPCO C , qui tam -. U , INDOPCO , qui tam - j .

T, C qui tam - . C -

$200,000 , , $2,000,000.104 I C , qui tam .

F, quitam , C S

qui tam . I , , - S C FCA

.105 I , S -


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. W D J , qui tam . M, qui tam qui tam j. B1987 2006, j 3.6% qui tam j qui tam , 2006, qui tam 1.17% qui tam .107 T FCA qui tam , , .108

C. Recalculating the Compliance Calculus and Closing the Resourceand Information Gaps

T qui tam . T qui tam , , . T qui tam . M,

.109P . B , , .110

107C U.S. Department of Justice, supra 41.108T qui tam


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I , quitam . I 2006, S ,111 .112 T 99% , . I , , . I 2006, $10 7.5%, 18.6%, $250 25%, 35.3%.113 E j , S

Compliance, 41 Natl Tax J. 61 (1988); J A. D, M J. G L L. W,Are We a Nation of Tax Cheaters?: New Econometric Evidence on Tax Compliance, 77 Am. Econ.Rev. 240 (1987). I , , increase . SeeV B,Dancing with Tax Authorities: Motivational Postures and Non-compliant Actions, in TaxingDemocracy: Understanding Tax Avoidance and Evasion 15 (V B .

2003); D MB, When Compliance Is Not the Solution but the Problem: From Changesin Law to Changes in Attitude, in Taxing Democracy: Understanding Tax Avoidance andEvasion229 (V B . 2003); M L J T. S, Cooperation,Reciprocity, and the Collective-Action Heuristic, 45 Am. J. Pol. Sci. 160 (2001); B F,A Constitution for Knaves Crowds Out Civic Virtues, 107 Econ. J. 1043 (1997). I , . M, ,

. SeeM S.K,Alternative Sanctions and the Federal Tax Law: Symbols, Shaming, and Social Norm Man-agement as a Substitute for Effective Tax Policy, 89 Iowa L. Rev. 863, 916-21 (2004); L,supra 96; M B, C C J S, Do Normative AppealsAffect Tax Compliance? Evidence from a Controlled Experiment in Minnesota, 54 Natl Tax J.125 (2001); D M K Trust Collective Action and Law 81 B U L Rev 333 (2001);


22/156


- , ,114 ,115 .116 F, ,117 S .T S 50% 1997 2006.118F , -, - S 2006 1997.119 I , S ,120 .121 P qui tam , -

.Qui tam

. I , , S , , .122T . B 1996 2003,

114R, supra 89, 189.115G S. C, Analyzing Corporate Tax Evasion, 50 Tax L. Rev. 33, 100 (1994)

( - ).116

Joint Committee on Taxation, Study of Present Law Penalty and InterestProvisions, as Required by Section 3801 of the Internal Revenue ServiceRestructuring and Reform Act of1998, JCS-3-99 (1999), 212.

117B 2001 2006, S 40%, $33.8 2001 $48.7 2006. IR-N R. 2006-28 (2006); J, supra 111


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S , 36% .123 D- , , , 40% 50%, .124 M, S j , 115 1995 132 2006.125

S . B - .126 O 20 , - - . I , -

, did, 127 ( ), , .128 O

, , , - . I , 40% 50% , 70% 90%.129 P J B N . I

, B , , T IRS [] [ ] .130 F, ,


24/156


. T , - $100 .131

T S . T C C D K - . F , K ,G P S S.132 K , C C IRS.133 B , . I 2006 2007, C C O 3000 , 150 , 60

2005.134W

S S , . F , C C O . M ,

D S, D CL S. W , S ,


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, .135

E , , , S . S S, . I, , . S -

, , S .136

Qui tam . A , , -

. I , - qui tam , S

W O. I ,

qui tam , .I , qui tam . I ,

135S, supra 122, 333, 346-52. T . A J B, N IRS. Braithwaite, supra 130, 133. F - P R


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27/156


28/156


FCA ,146 . F, qui tam , . I , , .

W C S qui tam, - , (1) ; (2) ; (3) ; (4) ; (5) j -

. T P .

A. Taxpayer Privacy and Frivolous Claims

C - . I ,

, W O.147 M-, , , .148

T .W , , S .149 T,


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, . M, - , . T quitam qui tam , C 6103 , .150

R , D W

- .151 I , S WO - .152 T - 7623 $200,000 , ,

$2,000,000.153 T, , .M, . T F C A

, , -.154 I , , W O ,

qui tam . R


30/156


, , .155 M, - , .156

B. Whistleblower Protections

W qui tam , qui

tam . T 7623 , . L - , . T F C A

, , , -

qui tam . I , FCA, , , , , , , .157

F S . S 806 S-O A158 , W- P E P T C, - , SEC , F

.159

U , , , , , , .160 E


31/156


, ; ; ; - , , .161 S 1107 S-O

any .162 E 1107 S-O j .163

T 806 1107 S-O, , , , - . F , , 1107, D J.164 I , 1,000 806 S-O J 2007,

. I , 947 - D L (DOL) OS H A, j .165 T DOL 665 , 138 DOL , 126

( ).166

O 17

161Id. 1514A().162Id. 1513(). T ,

, , , :

W , , -, , F , 10 , .


32/156


DOL , ( DOL j).167 O (j 0.7% 806), , DOL A R B, , .168

P R M S-O .A 806, M

DOL -.169M S-O -, DOL , A -

any .170 T C S-O , .171 O -

C -. T S-O - , qui tam

S-O , S . L S C., N. 419398, 2004WL 2418291 (C C A 2004) ( L S C


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.172 T A, qui tam , , , - .

C. Connected Informants and Streamlining Jurisdiction over TaxWhistleblowers

I ,

. S 7623()(3) ,

W O [] .173T

.174 I , F C A, - . T FCA FCA. I ,

, .175 N , , . I FCA, -

.176

T , qui tam .177 U,


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S US T C,178

. T - S ,C j - .

VII. Duty to Protect Versus Duty to Disclose

T - . B , , - - . W A

qui tam , . I ,

, , .179 I , -

T D , - .180 M, C, , D J

- , -

.181

T A - quitam ,

391


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CPA

. , B WR , j , .182 I , R R ,

.183 A , .

D . F -, , . I , 7216 -

, .184 M, C 230, T ,185 S ; -, ,

. F, , A I C P A (AICPA)C P C CPA 186 I ABA M R

392


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, ,188

,189 .190 I , M R ,

, j .191 U , , .192

I ,

, j , ,193 C.194 S j , .195

G - -

, . A , - -. B ,

, ( ) - . R , ,30% 196 I

WHISTLEBLOWERS AND QUI TAM FOR TAX 393


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, ,

.197 T, , .

B. Enabling the Whistleblower: Sarbanes-Oxley and the Federal Regulation ofLawyers

P - . N .198 I ,

. W -, , ? C CPA - CPA . C CPA - ? C ,

?199

I , AICPA R C, CPA .200 B , - ? C,, C . C 7525,201 1998,

- .202 T -



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.203 H, C , S,204 , , ,205 ,206 -.207 F, 7216

- , .208 H, ,209 , 7623.

C -

. A , , qui tam F C A.210 T FCA qui tam . A ,

. B ( - ,211

203Id. 7525()(1).204See, e.g., D M. S D L. K, What Remains of the Federal Tax Prac-

titioner Privilege Established Under Internal Revenue Code Section 7525?, Daily Tax Rep. (BNA),

J 9, 2006, J-1; A S. G, Selective Waiver and the Tax Practitioner Privilege,112 Tax Notes (TA) 1139 (S. 25, 2006); S S, Lawyers Discuss Postshelter Assaulton Privilege, 107 Tax Notes (TA) 289 (A. 18, 2005).

205SeeU S . BDO S, 337 F.3 802 (7 C. 2003).206SeeU S . KPMG, 237 F. S. 2 35, 39 (D.D.C. 2002); U S .

F 182 F 3 496 502 (7 C 1999) ( di ta 7525



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- , M R, ),212

FCA .213

I, . T

I j. T .

B - [] , Weil v.

Investment/Indicators, Research & Management, Inc., 647 F.2 18, 24 (9 C. 1981), - , In reHorowitz, 482 F.2 72,81 (2 C. 1973), cert. denied, 414 U.S. 867 (1973), . T, -- ( Upjohn, 449 U.S. 396-97) :

(1) ; (2) () ,

, () ;(3) () () () () () , () ; (4) () () .

U S . U S M. C., 89 F. S. 357, 358-59 (D. M. 1950), overruled

on other grounds byA. S, I. . P, I., 828 F.2 734 (F. C. 1987).T : (1) (2) . F , Cl k U it d St t [ ]


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41/156


CEO 221 ,

, , . I , , without the consent of her client, (1) j

; (2) - j SEC ; (3) , , - j .222T

SEC , , SEC , .223

221A , , , , , id. 205.2()(1); , , , id. 205.2()(2); - , - , id. 205.2()(3).

222

Id. 205.3()(2) ( ). T SEC - 205.3() - , SEC , SEC . T , SEC



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9

I , . M,

, , . N , -- - .224C

.225 B C .226 T . T ,, . A

; , . T , .

T , - , . E ABA M R,

224See, e.g., S J. S, Sarbanes-Oxleys Rules of Professional Responsibility Viewed througha Sextonian Lens, 60 N..U. Ann. Surv. Am. L. 31 (2004); T P. G, One Privilege toRule Them All?: Some Post-Sarbanes-Oxley and Other Reflections on a Federally Codified Attorney-Client Privilege, 38 Loy. L.A. L. Rev. 597 (2004); S M. B C J.J,Managerialism, Legal Ethics, and Sarbanes-Oxley Section 307, Mich. St. L. Rev. 299(2004); M E N Tension Among Section 307 of the Sarbanes Oxley Act of 2002



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Q

,227 .228 I , 2003,

ABA SEC - M R -.229 S, ABA R 1.6

1.13, , ,

227SeeModel Rules of Profl Conduct R. 1.6 . 2 (2003).

A - ,

, - . . . . T -. T - j . T ,, , .

Id.228Seeid. R. 1.6()(1) ( ); id. R.

1.6()(2) ( ); id. R. 1.6()(3) ( ); id. R. 1.6()(5) ( ); id. R. 1.6()(6) ( ); id. R. 1.13 ( - j ); id. R. 3.3() . [10] [11] (

, , , ); id. R. 4.1() . [3] ( , ,, .).

229A B A R A R 1 6 M R



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- .230

A M R , , , , j- . T , , . M, M R , - ,

SEC, -

, C- , .231 T ABA

R 1.13 .232 I , . . . , .233 B , SEC

,234 , - .235 F, SEC ,236 M R1.13

.

237

I ABA MR , -



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.238 R SEC requires

,239 permits - .240 T SEC U S , U S

, U S .241 T SEC - , , , , .242 U , . B -

SEC . M, ABA .243

T -

. T , , , .244 I, SEC

238See17 C.F.R. 205.1; supra 223 .239Seesupra 217-21 .240S 222



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any SEC

. I ,S-O , .

A S-O - , ,245

. C - , . B

T , , ,

?246

S , S-O . B S - qui tam . E . I , M R

.247

T, qui tam . H, - . A supra,248 - . S - .



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R -

, . C S-O [] , , .249 I , SEC C , ,250

j .251 R C 230 - 252 .253 B S-O C 230

249148 Cong. Rec. S6551 ( . J 10, 2002) ( S. E); see alsoH L. P,SEC C, R B A M A B A- B L S (A. 12, 2002), available at://..///579. ( , , .).

250

Supra 231 ; see also 148 Cong. Rec. S6555 ( . J10, 2002) ( S. E) (I S j. H, , S . T -. E , .); see generallyS P. K, When the Hurlyburlys Done: The Bars Struggle with the SEC, 103 Colum. L.Rev. 1236, 278-80 (2003); S P. K, Corporate Fraud: See, Lawyers, 26 Harv. J.L. &Pub. Poly 195, 216, 225-26 (2003).

251SeeAmerican Bar Association, Independence of the Legal Profession: Section307 of the Sarbanes-Oxley Act (D. 1, 2004), available at://..///. (S , . T , )



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.254 S ,

-, , , .255 M, S-O -, .256 T S-O - 307 , , .257

T S-O .258 S-O - (i.e., ) (i.e., ). T, S-O ,

, . I , , . I , . H-,

. F, -; , ( S , , ) ( ). S, - ,



49/156

. F, , -

, , .

T - . R, D

J

. F , DOJ FCA, - .259 V ; ,

.260 C, , - .261

S-O, C 230, G- G-.262 M, S-O - , , , . I, , , - .


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PREFACE


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S I I I c l r ~ i i1111 ;~ct io l ls .ultl t llesc* .\\,t~~ r o i w II .(-1 c 0 p v i ~ ~ c i l x ~ lc)cusI I I O I I ~ ~ ~ ~ I ~ ) ~ ~ .~ I c -I I I ~ ~ I O ~ So ~ r t v i i ) ~ ~ t i ~ t g~ I ; ~ ~ I I ( T So tlris \ v o I - ! ~rtAx ( a t l ~ ~ s ~ w r l sI I I ( I llit\,18 l o ~ ~ t ,~ I I ~ ~ t s ~ , ~ ~ r ( l i r ~ < ~ o l ) .\ ' ( . a arc itlso gr:lt(-li~l, I l l tar \ t ~ l l r . r r ( ~ ~; ( ~ l l ( ~ l ~ ; l lIl(.l< l ~ ~ l o l ~ l l l ~ l l l ~ g l l .1 l r l c ~ l l l t r ~ ~ ~ ~,/ ' S l ~ C ~ 1 ' 1 ' ~

, ., 3 , . . . , .it' . . lk~ctiorr.\l l ( ; ( ~ l~ l c l . .I. il is 1 1 t 1 tI 111igIltc~11

CITIZEN SUITSAND

-KF 850 B 5 9 2 ~ 996 Copy 2 'Blanch, James T.C i t i z e n s u i t s and q u i tamact ions

UNITED STATES COURTS LIBRARYEastern District of Ne w YorkUnited Sta tes Courthouse225 Cadman Plaza EastBrooklyn, New York 11201

QUI TAM ACTIONS:PRIVATE ENFORCEMENT

OF PUBLIC POLICY

~ I I i1i.scbct ill(.I Legi~I1111l)l i(:

NL,( :PI

:tcrC ; c . r ~ t o ~ .

JAMES T. BLANCHBENEDICT S. COHENSTUART M. GERSON- -EVAN SLAVITT

DICK THORNBURGHRoger CleggJames L.J. NuzzoEDITORS

m@?)tftTrF THE UNITED S T A T l t S

TABLE OF CONTENTS


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Center for the Public Interest is a tax-interest law foundation. dul incorporatedof Columbia to provid nonpartisanlegal information and services to the public at large. NLCPI isqualified to receive tax-deductible contributions under I.R.C.Sec. 501(c)(3).

Price $17.50

THE NATIONAL LEG AL CENTERFOR THE PUBLIC INTEREST1000-16th Street, N.W., Suite 301Washington, D.C. 20036Tel: (202) 296-16830 1996 National Legal Center for the Public Inter estLibrary of Congress Catalog Card Number 96-068831ISBN 0-937299-44-8Published July 1996

PREFACE.....................................................rnest B. Hueter Inside Front Cover.................................ETAILED TABLE OF CONTENTS Page v

...........................................................XECUTIVE SUMMARY Page 1INTRODUCTION............................................................................ick Thornburgh Page 3

Part I: ENVIRONMENTAL CITIZEN SUITSCHAPTER 1STATUTORY DEADLINES, CITIZEN SUITS, ANDEXECUTIVE POWER.....................................................................................van Slavitt Page 9CHAPTER 2ENVIRONMENTAL CITIZEN SUITS:STANDING AND THE PROPER SCOPE OF RELIEF...................... ...........enedid S. Cohen and Dirk D. aire .. Page 21

Part 1: QUI TAM ACTIONSCHAPTER 3THE CONSTITUTIONALITY OF THEFALSE CLAIMS ACTS QUI TAM PROVISIONS....................... .............................................amesT. lanch .. Page 55CHAPTER 4ISSUES AN D DEVELOPMENTS IN QUI TAM SUITSUNDER THE FEDERAL FALSE CLAIMS ACT.....................................................................tuart M. Gerson Page 118

CITIZEN SUITS AN D QU1 TA M ACTIONS

APPENDIXMEMORANDUM TO DICK TH ORNBURGH,ATTORNEY GENERAL, RE: CONSTITUTIONALITYOF THE QUI TAM PROVISIONS OF T HE DETAILED TABLE OF


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FALSE CLAIMS ACTWilliam P. Barr ...................... , ....... .............................Page 161AUTHORS ........................ , ...................................... age 199THE MISSION OF THENATIONAL LEGAL CENTER .......................... ...Inside Back Cover

CONTENTS

PREFACEErnest B. Hueter .............................................. Inside Front CoverTABLE OF CONTENTS ................................ .,................Page iiiEXECUTIV E SUMMARY . . .. ... . . . .. . Page 1INTRODUCTIONDick Thornburgh ......................................... . . . . . . . . . . . . .Page 3

Part I: ENVIRONMENTAL CITIZEN SUITSCHAPTER 1STATUTORY DEADLINES, CITIZEN SUITS, ANDEXECUTIVE POWEREvan Slavitt ...................................................................... Page 9I. INTRODUCTION.............. .................. . .. . . . . Page 911. LEGAL RAMEWORK:TYPICALAS E ....,......................Page 10111. CONSTITUTIONALMPLICATIONS........................................ Page 13The Intent of Congress ............................. ................ age 13

The Efects of Enforceable Statutory Deadtnes ......, .....Page 15IV. CONCLUSION................................ .......... . . .. . . . . . Page 18CHAPTER 2ENVIRONMENTAL CITIZEN SUITS:STANDING AND THE PROPER SCOPE OF RELIEFBenedict S. Cohen and Dirk D. Haire . .................................. Page 21I. INTRODUCTION............................. ........ . . . . . Page 2111. CONSTITUTIONALSSUES....... ........................ . . . . . . Page 22Article 111 ......................................... . ............... Page 22

Standing G enerally ......................................................Page 22A Note on Environmental Injury-in-Fact ....................Page 24

CITIZEN SUlTS AND QUI TAM ACTIONS

..............Redressability in the Environmental Context Page 26Standing for Retrospective Citizen Suits .....................Page 28Artfcle II ......................................................................... Page 31

DETAILED TABLE OF CONTENTS

111 THEAPPOINTMENTSLAUSERGUMENT..........................Page 88......................................he Appointments C h e ..age 88The Appointments Clause and the FCA ......................... Page 89Buckley o VaIeo ........................,............................. Page 89


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..........................................................................11. LITIGATION Page 34.........Cttfzen-Plaintiff tanding for Environmental Suits Page 34

.............................................epresentational Standing Page 34...ujan and the Pleading of Environmental Standing Page 35

Further Questions Concerning Wholly Past Violationsand Gwaltney I: Whole Permit uersus...........................Parameter-by-Parameter Approaches Page 37

............Civil Penalty Claims and the Mootness Doctrine Page 40............................................................V. LEGISLATIVESSUES Page 41

..................................................................Policy Ovemiew Page 42........................linton Administration Legislatice Policy Page 45

.............................................................lean Air Act Page 46............. ..........................................lean Water Act : Page 47Emergency Planning And Community

.....................................................Right-to-Know Act Page 48V. CONCLUSION....................................................................... Page 50

Part 11: QUI TAM ACTIONSCHAPTER 3THE CONSTITUTIONALITY OF THEFALSE CLAIMS ACT'S QUI TAM PROVISIONSJames T. Blanch ........................................................................... Page 55

..........I THESTRUCTUREF THE FCA QUITAM ROVISION Page 57...................................................mendments to the FCA Page 58

......he Respective Roles of DO] and Qui Tam Relators Page 59I1. THESTANDINGRGUMENT................................................age 62

........................................................rticle III Standing Page 63...........................................................rudential Standing Page 64

....Theories to Support the Standfng of Qui Tam W o n Page 66The "Statutory Right" Argument ..................................age 67........................................he "Assignment" Argument Page 69

...............................................he "History" Argument Page 72...............................he "Statutory Bounty" Argument Page 76

.........................................The "Retaliation" Argument Page 80A Comparison of the Fahe Claims Act and theEndnn~eredSvedesAct ................................................Page 83

Freytag v Commfsstoner of Internal Revenue ............ Page 92~uft*mordt. Hedden ............................................... Page 93Qui Tam Relators as Agents ....................................... Page 95

IV. THE SEPARATIONF POWERS"(TAKE ARE LAUSE)RGUMENT .................................... Page 98General Principles ............................... .................... Page 98The Executive Branch's Litigdfve Function andMomson v.Olson ..........................,,........................ Page 100The FCA Quf Tam Provision and the "Control" Test ... Page 104......nitiating the Suit ........................... Page 105Conducting the Litigation When DOJ Elects toIntervene ........................................................... Page 108Conducting the Litigation When DOJ Elects N o t toIntervene ................................................................. Page 111

..........................................erminating the Litigation Page 114V. CONCLUSION..................................................................... Page 116CHAPTER 4ISSUES AND DEVELOPMENTS IN QU I TAM SUITSUNDER THE FEDERAL FALSE C M M S ACTStuart M.Gerson ........................................age 119I. OVERVIEW Page 120The Histonj o Quf Tam Actions ................................ Page 120The Current False Claims Act .......................................Page 122I1. THECONSTITUTIONALITYF THEQUITAM MENDMENTS................................................... Page 124Arguments against the Constitutionality of the

Qui Tam Amendments ................................................Page 124Standing ........................................................................age 125Appointments Clause ............................................... Page 126.ake Care Clause Page 127Arguments Favoring the ConstitutfonalftyoftheQuf Tam Amendments ........................... .............Page 129

........................................................................tanding Page 129......................................ppoinhents Clause ..age 132Take care Clause ....................................................... Page 133

. ..................................................................11 ~ E T ROA ~ T IWTY Page 136

CITIZEN SUITS A N D Q U I TA M ACTIONS

IV. BURDENSND EFFICIENCIES:RENDSND..............................................OME OSSIBLEEFORMS Page 139.....................ata Trends Since the 1986 Atnendmen ts Page 140The Slzij3 in Relators' Claims to the Health-Care

DETAILED TABLE OF CONTENTS

IV. H I ~ O R YOESNOTVALIDATEUITAM......................... Page 188V THESOLICITORENERAL'SNWISE TRATEGY...............Page 195VI. CONCLUSION................................................................... Page 197


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Industry ..................................................................Page 142Identify fng and Overcoming lnequit fes and Inefficiendes:Some General Issues and Reforms ..............................Page 143Parasites and Related Lije Forms ................................ Page 147Parasitism Generally and the 1986 Amendments ...... Page 147Government Employee Relators ............................... Page 149Voluntary Disclosure Free-Riders .............................Page 151........lanners and Initiators ;................ ..,.................Page 152The Latest Attempts at Legislatioe Change ...................Page 153Dismissal .................................................................... Page 155Government Employee Relators ............................... Page 155Pnrasites and the Jurisdictional Bar .......................... Page 156Whistleblower Protections ........................................ Page 157"Persons" Defined ................................................ Page 158Statute of Limitations .................................................. age 158Retroactivity ................................................................ Page 158

V CONCLUSION.....................................................................age 159APPENDIXMEMORANDUM TO DICK THORNBURGH.ATTORNEY GENERAL. RE: CONSTITUTIONALITYOF TH E QU I TAM PROVISIONS O F THEFALSE CLAIMS ACTWiiam P. Barr ....................................................................... Page 161I. OVERVIEWND SUMMARY................................................ age 161A . The Iswe ..............................................................Page 161

B Background ................................................................Page 162C Qul Tam's Unconstitutionality ................................... age 163D Reasons for Oppos ing Qu i Ta m ............................... Page 164E The Sobdtor General's Posttion ................................. age 166I1 THE TATUTEND ITS MPACT........................................Page 169

A The Statute ................ ........................................... age 169B The Statute's Impact ............................................... Page 1711 The Government's Enforcement Role ...................Page 1712.The Government as Contractor ............................ Page 175

111 QUITAM UITS REUNCONSTITUTIONAL........................ Page 175.......... Appointments Clause Violation ...................... Page 175B Article I1 1 Standing ................................................... Page 179C Encroachment on Executive Powers ..........................Page 184

..........................UTHORS ......................................... Page 199THE MISSION OF THENATIONAL LEGAL CENTER .......................... Inside Back Cover

EXECUTIVE SUMMARY

As former U.S. Attorney General Dick Thornburgh points out in his


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introduction, the overarching theme of this monograph is the way theprinciple of separation of powers has been abrogated in two critical areasof litigation, namely environmental citizen suits and qui tam actions.

Citizen suits are intended to be actions by "private attorneys generalw-that is, lawsuits brought in the public interest by citizens seeking tovindicate important national priorities. Congress in its wisdom apparentlywished to relax the usual standing requirements in such instances and tobroaden the kinds of relief available. Unfortunately, but not surprisingly,the citizens bringing such actions frequently have been special-interestorganizations with agendas of their own. The most notorious have beenenvironmental groups, always eager to push the outside of any envelopelimiting the scope of environmental laws, often at the expense of industryand the private sector.

Chapter one provides an overview of the typical environmental-lawcase before turning to a specific area of litigation abuse by environmentalgroups, namely their attempt to use the judiciary to set the administrativeschedules of regulatory agencies. This micromanagement of the executivebranch through the judicial branch by means of an enactment of thelegislative branch raises obvious and disturbing separation-of-powersissues.

Chapter two also discusses constitutional problems with environmentalcitizen-suits, focusing on the kinds of relief typically sought. Broad injunc-tions and civil penalties are generally available only to the federal govem-ment, and adding them to the arsenal of private litigants-especially inthe context of wholly past violations-creates standing problems underArticle I11 of the Constitution. It also arguably violates Article 11's assign-ment of law-enforcement responsibility to the executive branch. Chaptertwo also discusses recent activities in the Clinton administration and inCongress relevant to the citizen-suit environmental statutes. The chapterconcludes that these statutes have compounded the problem of environ-mental overregulation of the private sector.

The second part of the monograph focuses on another species of privateenforcement action-the "qui tam" suit. The term derives from the Latinphrase "qui tam pro domino rege quam pro"he who brings the action as well for theidea was simple: where an entity has defrauded the federal government,a private party should be able to bring suit against the malefactor and

CITIZEN SUITS AND QUI TAM ACTIONS

share in the government's recovery-like a bounty hunter. The constitu-tional and policy problems have arisen because Congress's stahtoryscheme t m often has allowed private parties to supplant the executive-INTRODUCTION

DICK THORNBURGH


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branch o fficials constitutionally charg ed with litigating on behalf of thegovernment.Chap ter three carefully documents how Article Ill's standing require-ments and Article 11's Appointments Clause and Take C are C lause areeach violated by the current qui tam sta tute. It notes tha t a m ore straight-fonvard "bounty" system, without a role for the whistleblower in actuallyconducting a lawsuit. would address these constitutional concerns.In cha pter fou r. Stuart Gerson first briefly explains why he agrees withthe preceding chapter's constitutional assessment, but points out that.unfortunately, neither the courts nor Congress so far has shown anyinclination to follow these arguments. Thus, any progress in this area willhave to be made incrementally through litigation or legislation. Mr. Ger-son provides his own practical assessment of how this might be done.Th e mono graph concludes with an a ppendix: William P. Barfs memo-randum to then-Attorney General Thomburg h regarding the constitu-tionality-or, rath er, unconstitutionality-of the qui tam statu te. At thetime, Mr. Barr was the head of the justice Department's Office of LegalCounsel: he went on to succeed Mr. Thomburgh as Attorney General.Th e following monograph, then . provides a comprehensive andthoughtful discussion of a troubling phenomenon in our legal system-the assignmen t of the executive branch's law-e nforce men t responsibilityto private parties, who are thereby given quasi-governm ental authority topursue th eir own narrow interests at the expense of othe r private parties.

~onstitutionalhe0 has, unfortunately, become identified with3vory-tower intellectu ism. It shouldn't be, because the underlyingprinciples of our Constitution have (and were inten ded to have) avery practical, down-to-earth impact. The creation of three separatebranches in our federal government-legislative, executive, andjudicial-is a cas e in point. Th e Fram ers intended the separationof powers in the C onstitution to protect Americans from the abuseof authority they feared would result if powers could be concen-trated. There was nothing academic about this fear, and there wascertainly nothing impractical about the way th e F ramers addressedit by separating governmental authority into three branches.Th e overarching theme of this monograph is the way the rinci-ple of separation of powers has been abrogated in two critic areasJof litigation, with precisely the results for rivate citizens that th eFramers would have feared and redictedlThe first part of the mo nograph eatures two chapters on environ-mental "citizen suits." Citizen suits are intended to be ac tions by"private attorneys generalw-that is, lawsuits brought in the pub licinterest by citirens seeking to vindicate important national pnorit-ies. Congress in its wisdom apparently wished to relax the usualstandin requirements in such instances and to broaden the kindsof relie available.Unfortunately, but not surprisingly, the citizens bringing suchactions fre uently have been special-interest organizations withriorities o their own, often not consistent with those delineatedCongress. The most visible have been environmental groups,

Jways eager to iden* the outermost limits of the scope ofenviron-mental laws, often at the e the private sector,and the p riorities point in this intro-duction is not to unjustified in theirinterpretation of out that a healthyskepticism about regimeis a propriate.\T e two chapters in part on e do a n execUent job of marshaling, the evidence on behalf of such skepticism. Th e author of chap teron e is Evan Slavitt, whose practice has made him an expert onpolicy-related litigation in general and environmental litigation in

particular. He provides a useful ovezview of the ical envimnm en-tal-law case befo re turning to a s ecific area o 'tigation abuse byR 2environmental groups, namely t e i r attempt to use th e judiciary

to set the administrative schedules of regulatory agencies. Thismicromanagement of the executive branch through th ebranch by means of an enactment of the legislative branc ra se sobvious and disturbing separation-of-powers issues.ltdifid

The constitutional problems with these suits are further dis-cussed in chapter MO, which focuses on the kinds of relief sought

Clause are each violated by the curre nt qui tam statute. The chap-ter's author, James Blanch, notes that a more straightforward"bounty" system, without a role for the whistleblower in actuallyconductin a lawsuit, would address these constitutional concerns.Mr. Blanc is an accomplished litigator and writer on qui tammatters. %The same is true of the author of chapter four, my former


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in citizen suits. Broad injunctions and civil penalties are generallyavailable only to the federal government, and adding them to thearsenal of private litigants-especially in the context of whollypast violations-creates standin g proble ms und er Article 111of theCo nstitu tion i t also arguabl violates Article 11's assign men t oflaw-enforcement responsibi ity to the executive branch. Theseissues are ably discussed by Benedict Cohen and Dirk Haire-two expe rts on environme ntal law and policy-who also doc ume ntrecent activities in the administration and in Congress relevant tothe citizen-suit environmental statutes. They conclude that thesestatutes have compounded th e problem of environme ntal ovetregu--..lation of the rivite sector.'The secon$ art of the.monogra h focuses on another speciesgf private enforc eme nt action-t e "qui tam" suit. Th e termderives from the Latin phrase "qui tam pro domino rege quampm se imposo sequihrr," meaning, "he who brings the action aswell for the king as himself." The original idea was simple: wherean entitas defrauded the federal overnment, a private partyk Lhould e able to bring suit a ainst e malefactor and share inthe governme nt's recovery-li e a bounty hunter. The constitu -tional and policy problems have arisen becau se Cong ress's statutoryscheme has too often allowed private parties to supplant the execu-tive-branch officials constitutionally charged with litigating onbehalf of the government.Chapter three carefully documents how Article III's standingrequirements a nd Article 11's Appointme nts Clause and T ake C are

"'[Slome . . .might claim that Congress has impermissibly sought to enlist thefederal courts on its side of the sepnration of powers wars by creating new causesof action nnd occasions for citizen standing that permit inaperopriatel broadfederal 'udicid review of executive law enforce ment discretion. Steven &.Cab-s'resi, ome Nonnatiw A trnlents for a Unitary Executioe. 48 ARK. REV.23,33 (19%) (citing Lu'an v. %fend en of Wildlife, 112 S Ct. 2130.2 142 46 (1992);Harold J. Krent & b a n 6 .Shenkman, Of C i f i z n Sutb and Cittzen Sunstein.91 MICH.L EV. 793 (1893)).See also Statement of Theodore B. Olson Concem -ing Civil Justice Reform before the U.S. Senate Sub mmm. on Consumer Affairs.Fnreim Commerce.rind Tourism of the Comm. on Commerce, Science, and~ ra n 5o rt at io n - 1 0 ' ( ~ ~ r .. 1995).ISee&O Memorandum from JonathanAdler (Competitive Ente?ise Institute)to Interested Congresd onal Staff (Aug. 14, 1885) (Lting 'sug g? ons on how tolimit excessive citizen suits that are not respondinpl to actud envlmnmentd laws.with a particular emphasis on above cast attorneys fees").

colleague at the U.S.Depa rtment of Justice, Stuart Gerson. In hischapter, Mr. Gerson first briefly explains why he a rees withMr. Blanch's constitutional assessment, but paints out at. unfor-8unately, neither the courts nor Congress so far has shown anyinclination to follow these arguments. Thus, any progress in thisarea will have to be made increm entally through litigation or legisla-tion. Mr. Gerson provides his own practical assessment of how thismight be done.The monograph concludes with an appendix that I found veryfamiliar: William P. Barr's mem orandum to me when IwasAttorneyGeneral regarding the constitutionality--or, rather, unconstitu-tionali - o f the qui tam statute. At the time, Mr. Barr was th ehead o1!he Justice Department's Office of Legal Counsel: he wenton, of course, to succeed me as Attorney GeneraL3The following chapters, then, provide a comprehensive andthoughtful discussion of a troubling phenomenon in ou r legal sys-tem, namely the assignment of the exec utive branch's law-enforce-men t responsibili to private parties-parties who ar e given uasi-governmental aug rity to ursue their own interests, whic areK 1ecessarily narrow er than t ose of the executive branch , all at theexpense of other private parties.None of this is to say that citizens damaged b pollution shouldnot be able to sue olluters or that employees w o observe corpo-K Zate wrongdoing s ould not be e ncouraged to blow the whistle-of course they should. Nor, in the latter instance, is it to say thatsometimes more than a ateful pat on the back might be necessaryeco induce such whistleb owing. AAer dl , the risk to th e employee's'ob and career will often be high, and so a monetary rew ard mightLe altogether appropriate.-.Khe point is,however, that the incentives can-must-be struc-tured in a way that is consistent with the Constitution and soundpolicy. The constitutional principle of se aration ofpowers requiresthat the executive branch retain contro over litigation brought inPTh e recent excesses of ui tam actions a n d p b l e reforms have s m e d tosurfwe in the l e d press. Be , e .g.,Haw Ber an, ~ p ? ( l r o B o u n f i n t e n ,Federal Conhoaon Gripe. N A ~ L.J.. z m . 1.1996, t 81; inda 8.Robuonet d..Quf Tam Plainti Abound, NATLL.J., r. 24,1995, t B9:U a Hwelron,Qui Tam: A V i c t fa$uccess, LEU TIMES,ec.20, lW3, at 26.


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ClTlZEN SUITS AN D QU I TAM ACTIONS

The Clean Air Act.' as amend ed in 1990: exemp lifies th e type

STATWRY DEADLINES. CITIZEN SUITS. AN D W(ECmm POWER

through the m c e f Management and Budget (OMB);and (8)promulgate the final regulations together with anexplana-tion of all changes and a response to the comments that werefiled in the administrative record. The above description does not


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of statutory deadline at issue.' As part of the Clean Air Act, EPAmust iden tie pollutants that endanger the public health or welfareand po mul gate certain air quality standards." The responsibilityfor ensurin that the air meets such standards is imposed on t hestates, whica must put in place a plan6 to come in to complianc ewith the air standards Because many states had not achievedcompliance by the time th e Clean Air Act was amen ded in 1990.Congress directed the states to adopt revised plans which, amonother things, would require states in noncompliance to establismotor vehicle ins ection and maintenance rograms?PI

In order to ma e sure that th e states wo$d do their jobs, Con-gress im osed an obligation on EPA to promulgate regulationsthat wou7 represent m inimum criteria for the various inspectionand maintenance pro rams." Specifically, Congress required that,"[w lith in ~ e l v e ont s after. . . [Novemb er 15; 19901, he Admin-istrator shall" publish the required guidelines for the states. Thus.in addition to everythin else EPA was re uired to do by the 1990k 3mendments, and by a1 the othe r feder environmental laws, ithad exactly one ear to: (1)develop the full range of fundamentalcriteria for a mu tiplici of inspection and main tenan ce program s:X2) translate those tee nic d criteria into formal re latory lan-guage: (3)dnfi he text of the full rcgulatov pre am bl eF 4) promul-ate the regulations in draft form to allow for public comment:f5 ) review all of the public comments that came in during thecomment period: (6) analyze the comments and make the appro-priate changes needed to the draft regulations:(5 )clear the revised

'42 U.S.C. P i 7401-7671( ) (1995).m e lean Air Act was su%otantidy mended in ~ov em be r 990. Pub. L. No.101-549, 104 Stat. 2389 (1990).'Other euu npleS an be found in the comprehensive Envim nmentd Response,Com pensatio n, and Liabili Act, 42 U.S.C. ( 9601 et seq. (1995). and the solidWwte Dirposd Act. 12 U%.C. ( 6801 et seq. (1995).Thes e stMdards are refme a to ns National Ambient Air Qudity Standarb(NAAQS).mesere State Im lementntion Plans (SIPS).9'42 U.S.C. $( 7511(a), 751 (a) (1995). The scope of these programs de pe nbon haw far the states ore out of compliance,Q 7511(a)(2)(B)(ii).wenPA-or any regula tory agenCy --pmmul the draft rePons*they are preceded by an oxpIanatory text or re a m h . This text sets orth thes t a ~ u t o ~uthoriv for the re ation, ide nti ks the gods and purposes of theregation, expldnshow ~ P A g l i e w she re lntion .will work mdwill be inter-preted, and mq, include a discussion of$exnative approac hes. For newI a * -- P rhn oreamble can be extremely k3n@hy, consuming

include a variety of other tasks that are often necessary, includingliaison with other a encies or departments that mi ht have anBnterest in the re@ ations;1 interaction u ith the A t e House,with Congress. and with other portions of EPA; and compliancewith the Pa envork Reduction Act.Fn fight 0 dl this, the most generous view of the congressionallyimposed deadline is that it was naively optimist ic. ~ u this is toocharitable, since at the time Congress imposed the deadline, thelegislators and the ir staff me mbe rs were sufficiently well-versedin administrative procedure and the technical is s ~ e s - ~ ~ d t hEPAS oth er obligations-to realize that the deadline was simplyunrealist ic and could not , in practice, be met. ~ o tutherefore, November 15. 1991 ( the deadl ine under l ;ke 1990amendments) . came and went without the regulat ions beingpromulgated.V

- did not have to wait very Ion for the resulta nt lawsuit.Soon after the deadline, EPA was sue by the Natural Resourcesfefense Council. Inc. (NRDC), the City of New York, and theState of New York, as a result of its failure to promulgate theregulations.ll These arties had standing to bring suit pursuant to42 U.S.C. 9 7604(aP which states that a citizens enforcementaction under the Clean Air Act may be brought by any person onhis own behalf.12 Th e very sam e section also con ferred jurisdiction0" the federal court to o rder th e Administrator of EPA to performany nondiscretionarv du ~ . l 3- -1n these lawsuits: ther e is little room to dispu te the laintiffs*prima facie case. The regulation either has been mm u gated or

$ Pt has not.I4 Instea d, th e only real issue for the ju ge to consid eris how much additional time to allow EPA to promulgate therequired regulatior~before the murt will invoke its powers of10sce.e.g..42 U.S.C. ( 7417(e) (1995).I 1Natura l Resources De fense counci l , Ine . v. EPA. 79 7 F. supp . 194(E.D.N.Y. 1992).Issee siem club V. Mo fion. 405 U.S. 727, 732-33 (1975); Con semtjo nFO1md.* nc. v*Mosbacher.966F.2d 39 (1st ~ i r .992); S ie m Club v. Ru& elshaus,602 F. Supp. 892. 896-97 N.D. d . 1 g a ) .Issee NNurtd Resources Defense Council, Inc. v. Train, 510 F.U. 692, 705(D.c. Cir. 1975).muas not have the d l o h l y o review the substantive

of thelatiOns- S ie m Club v. Ruckelshaus. 602 F up gm, 97 (N . D a,g a )('' no jufid ctio n to evaluate the heA& , . or to mview thedequacy or even the need for rngulati~,~:~).


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environm ental law, the le 'slative branch has fundamen tally mis-trusted the executive. &le it is far beyond the smp e of thischapter to exlore this distrust in detail, it derives in part fromthe tradition tension between the two branches of governme nt,in part from the partisan differences that have exacerbated this

1"' u STATUTORY DEADLINES, CITIZEN SUITS. AND EXECUTIVE POWENI -CCoPgress's powers of investigation and oversight-traditionallyuse J in hearings that also take up legislators' time-now are dele-ilted to the federal courts. Instead of leaving them to determ inekw and try cases, Congress has attempted to convert judges intocounsel to various subcommittees.


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tension in recent ears,25and in art from the general distrustrroenvironm ental egislators hold P r all those who have differingsets of priorities. The result was a legislative branch that clearlyhad an explicit motive to trench on executive privilege to themaximum extent p~ssible. '~But lack of trust was not the only force behind creation ofenforceable statutory deadlines. Indeed, it may not even havebeen the primary motivation. Instead, the deadlines also can beattributed to the fundamental institutional drive of any entity toexpand its share of overall authority regardless of issues of trustO r ~ ~ ? t i c a lcientists and others have noted, the expansion ofcongressional staffs and th e proliferation of standing com mitteesare part of the same impulse to expand power. Nonetheless, Con -

ress still is constrained by certain limited resources: there are a$xed num ber of legislators and a limited amount of time for themto work. Fu rth er, th e legislative process, no matter how well staffed,is not particularly efficient in its use of those resources. The resultis an institutional imperative to find alternatives to the formallegislative process that does not consume so many resources. Oneoutcome was the short-lived legislative veto."Do enfo rceable statutory deadlines serve a similar purpose? Infact, they do so quite well. Rather than imposing on itself the self-discipline necessary to pass s ecific laws on a specific timetable,Rongress sets that task on ot ers. It thereby co-opts presidentialappointees to become de facto congressional staffers. Further,"Although Re ublicans controlled the Senate for six enrs of the Rea an

I-fresidenw. th e ouse has been continuously controlled by Aemoerats during! hek le va nt h e . Even in the 1981-87 six-year brio d. mnn 6f the ~roenv ironm entalReaublicans in the Senate did not see eve-to-eve with d e Reamin administration.~ & e 994, th e distrust has of course co'ntinueii, thou h the &es have switche droles. with a Democratic White House and a Repu&icon 8ongress: the formeris more "environmeritnlist" than th e latter.mAdditional evidence of this mistrust can be found in the increasing level ofdetail of the environm ental statutes, which indicates Congress's disincknation toleave the details up to the executive. Even to an enwonmental lawyer, forexamole. the level of detail in the 1990 amendments to the Clean Air Act ismindtnurnbing.W e egislative veto was a mechnnism that allowed one or both houses ofCo n ss, withou t nssage of (I stututo, to disa prove n mgulntion pron~ulgatedb Zex ecu t lve . &e Supreme Cou* found th i mechonkm unconshtut ion~lnI ~ S. C h a d h ~ , 82 U.S. 910 (1983).

?'he result is an expansion of the overall resources of the federa lov6rnmen t devoted to essentially legislative activities for the bene-it f Congress's au thority and at the expense of the o ther bran ches'a u f i ~ r i t yn sh ort, any constitutio nal evaluation of this system musteoncede that any infrin em ent of executive or judicial authority is7ntirely intentional, at east in a broad sense. That motive doesnot necessarily imply that such infringem ent reaches a level thatmust be deem ed unconstitutional. but there sho uld be no questionthat the infringement is neither inadvertent nor an unintentionalby-product of some other goal or objective.The Eflects of Enforceable Sta tutoy Deadlines

The most obvious effect of enforceable statutory deadlines isthat they establish priorities fbr EPA. In and of itself, of course,there isnothing inherently wrong w ith Congress establishingpriori-t ies for the ex e~ ut iv e .~On th e other hand, the system of statutory deadlines sets forthriorities in a remarkably specific fashion. It is the differencegetween Congress establishin a required outcome, and establish-,ing the precise method fo r ac ieving that outcome. In the contextof the Clean Air Act, for example, Congress does the former bysaying that air pollution from cars and trucks is a bigger roblemRhan air pollution from household appliances. It does t e latterwhen it sets forth a schedule that not only includes that prioritybut also establishes blueprints for the b e s of regulations thatmust be promu lgated, and their s ecific sm pe and timing. Putanoth er way, one of the tradition prerogatives of the executive9is to establish internal priorities and to determine how a particularoal or result is to be achieved. Such choices can be criticized ing e political forum an d in hearings on Con ress; it is less clear thatthey can be removed entirely. To do so un ermines the "executivef28Inde ed, those w ho adhe re to ~ us ti ce calia's view of legislative history wouldc l e ~ l yrefer that Con ss set forth its priorities in a statu te rather than simplyenunciating them in ~egf%tive histo . Broad ly speaking, Justice Scalia hasnrticu-

luted over the course of his ub ci Jc w ee r a strong v im that a Ie .sIative bodyspeaks only through the legid tion i t enacts. lhw, s ta tements made% Ie g i~ la to ~and com mittee reports should not be used in interpreting o st0tute .r

CITIZEN Sum AND QUI TAM ACTIONSpower** to the president by Article 11 of the ConstiN-non, and specificallyhis authority to "take Care that the LBW5 befaithfully executed."*. oneypical response is that Congress can always promulgate 're$ati0n;30


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legislation at the level of s cificity of environmentalaccordiningl t must have "lesser" p wer to Set a foro n closer examination, however, thisisunsatisfactory n ~0 respects. First, it is historically nottme h a t a lesser wer is included with a greater. Forthe Senate may g a p rove entirely a treaty the President putsbefore it; it may not, Rowever, attempt to renegotiate its terms.i hi^ response also ignores the realities of the modern federaland burgeoning administrative state. In practice.gress can no more write all of the environmentd regulations thanall of the tax regulations?'Another way of looking at statutory schedules is that they areimphcidydirectives to the executive dictatin how to executivepersonnel, ~ o td y do the statutory scheEPAwhat its personnel must work On, by exclusion

even worse.hat EPA may ~t work on. EPA's resources never have beensufficiently large even to meet the various statutoly deadlines The case law has placed on the executive aimposed on it, let alone to engage in any ~ ~ b s t a n t ~ ~egu1ato work burden to that the statutory dea&ne is impossible. q-heon of mportance to h e Administrator or the presXent- executive cannot do so simply by demonsbating that substantialmatters, that is, the deem essential to their ''tak[ingl Care thatthe Laws be f a i d Y xecuted:' would have to be reallocated from other tasks. ~t cannotdeadlines might be nt or OMB would like to haveThus, taken just on their own,viewed by the cou*s as an u n c o n s ~ E ~ ~ ~ 3nfringement on the gulations before they become find, h~authority of the executive if the issue were squarely presented' technical StudiesareThese deadlines, moreover, cannot be taken on their Own becausethat is not the context in which Congress has placed them. Theymust be considered w o additional factors:(1) he areXnvariably unrealistic, and (2) they are conjoined to e authorityof citizens to enforce them.Without this citizen-suit provision, of Course, unrealistic dead-lines would have little effect. Assuming that deadlines are constitu-tiona at all, when the executive missed such a deadline it

*US. CONST.rt. I, $ 3.xi^^ fact, onoeearion Conqess does just that by establishing fail-safethat into effe& if EPA & to p mmd ate a re ation on the issue. UsuPlly'e T?he &-sde so shingent &at it @ves PA a s u ~ t m t i d neentiE addmsthe issue. m a t f&..afe is-in contrast to ~lshltoI )'dea&es-subjst theleqlative process.qt is hoUad thnt a n p s s ' ~bih to be even as spodRc as itcumntly is a rrhtively modem d e v e l o r n e n t . ~ ~ t O r i C d y * Onpsshad

feWr l~ memberrboth for in&vtdunl m e m b n rind lorrl,,+{+Kar.ravel time to and from specific dishicts Or hes


many years into the futu re. A President who was not in office atthe time the under1 'ng legislation was assed has no constitutionalmechanism to chalrnge continuing ju6:cial amendm ents and newsets of deadlines im osed on his or her adm inistration.The problem is Rrther exacerbated when the lawsuit is notbrought by Con ress but is brought instead by private citizens

STATUTORY DEADLINES. CITIZEN S u m . AND EXECUTIVE p o w ,

~t is not the pu rpose of this chap ter to give definitive m swe rsto those questions. Instead, it has been written with the hope thatit will spur public debate on th e m atter, a debate that has not beenheld and is too important to continue avoiding,


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kither individual y, through citizens' groups, or throug h local gov-ernments. When EPA is in violation of twenty deadlines, it is upto entities like the NRDC, and not elected officials, to decidewhich of those 'delines will be enforced a ainst EPA and whichwill be i g n o r e r m e n this hap ns, the ialogue between thef %Congress and the President has een short-circuited. The resultis that amendments to the schedule are not even proposed to thejudiciary by members of the legislature. They are proposed bywhoever happens to H e the lawsuit first and in whatever order thelawsuits happen to hit t he various federal district courts. Becausejurisdiction is conferred by statute, the courts are not free (as theyare in other s heres) to abstain from resolving the ma tter becauseit is a politidqu estion : they are dragged in at the whim of anyonewho happens to disagree with EPA 's resource allocation decisions.To make matters even wo rse, these lawsuits are not lim ited to onecourt or even one circuit; EPA can be called to account anywherethere is a federal court.

IV. CONCLUSIONEnvironmental legislation invariably raises scientific, legal, andpolitical issues. How th ese issues are to be debated and resolvedis not simply an acade mic matter-it affects th e national econom yand the health of our citizens. Neither the legal nor the practicalproblems raised b enforceable statutory deadlines are easy toresolve, but they siuld not be swe t aside.This chapter has discussed how t1 typical statutory deadlinesare deliberately intended t o increase congressional authority at theexpense of the executive's, that they are deliberately unrealistic,and that they have succeeded in replacing executive decision-making with special-interest and judicial second-guessin .On theirown, statutory deadlines raise constitutional objections t i t are noteasily answered. Taken to gether with the citizen-suit enforcementrevisions and Congress's practice of establishing impossible dead-ine s, those uestions are even more profound. In addition to theconst itution j questions which fascinate lawyers are more p-matic questions: Is this really the best way to debate and esta lishenvironmentalpolicy?Does it really make sense to ask the judiciary

to aneaee in management and performance reviews of EPA?

7 9 CHAPTER 2

i~~ FNV[RONMENTAL CITIZEN- -


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, $ ROPER SCOPE OF RELIEFBENEDICT S.COHEN

DIRK D. HAIREI. INTRODUCTION

sue or civil penalti& based on past violations of the knvironmen-These seeming technicalities involve momentous constitutionaland policy battles, and they are being fought now in the contextof numerous environmental statutes and in all three branches ofthe federal government. Environmental groups and the Clintonadministration are determined to reverse existing law and poliand to expand dramatically the scope of citizen suits. If they p r e v zthe separation of powers mandated will besignificantly weakened, the nation'scoordinated environmental

lated community exposed to tens oincreased liability-all without any consistent offsetting benefit tothe environment.This chapter discusses these issues. Part II sets forth the major,overarching constitutional issues involved in citizen-suit cases: Arti-cle 111's standing requirements and Article 11's assignment of lawenforcement to the executive branch, Part I11 then examines anumber of specific issues-both constitutional and statutory-thathave arisen in citizen-suit litigation, including the establishment ofcitizen-plaintiff standing for environmental suits and the Su remea Pourt's resection of citizen suits for wholly past violations o envi-ronment statutes. Part IV discusses policy and legislative consid-

erations, focusing first on the Clinton administration and next on


congressional action. Part V offers some concluding thoughts onthe appropriate constraints for citizen suits,

Citize n suits for civil penalties or injunctive relief involve difficult

rpr STANDING A N D THE PROPER SCOPE OF RELIEF-The standing in uiry is three- prong ed, with each pron placing3imits on the ab i ity of federal courts to hear a plainti s suit. Acourt first must determine whether the constitutiond componentof standing has been satisfied. Th e basic constitutional corn onentof standing dictates that a '' aintiff must alle e [I]person$injury[2]fairly traceable to the 8'fendant's allege y unIawful conductI


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constitutional questions, whether such suits are prospective (thatis, based on ongoing violations) or retrospective (th at is, based onwholly past violations).Article 111

At the outset are issues of standing under Article I11 of theConstitution. Article 111 requires that a "case" or "controversy"must exist before federal courts can entertain a lawsuit.' Thisprerequisite involves two similar yet slightly different limitations:first, it strictly limits the types of cases federal courts can hear tothose that involve adverse parties who have a dispute of the kindhistorically viewed as bein prope rly resolved through litigation:and, second, it defines and gmits the p ower of th e judiciary versusthe other two branches of govemment, to ensure that the federalcourts do not meddle in areasproperly the province of the executiveor legislative branchesS2Historically, these jurisdictional limits on federal judicial powerwere designed to reinforce the Founders' notions of a strictlydefined separation of owers among the thre e branches of thefederal government an$ to underscore the limited role the courtswere meant to play in a democratic society? Of the several doctrinesthat have evolved under the rubric of Article 111's case-or-contro-versy requirement,' standing to invoke the power of the federalcourts to hear a suit is perhaps the most imp~rtant.~Standing GenerallyAt its most basic level, standing determ ines wheth er a particularplaintiff is entitled to secure a particular remedy in federal court.'US. CONST. rt. 111, $ 2. This Article 111 limitation is binding only on federalcourts. Standing to sue in state courts is determined by state constitutional andstatuto requirements. See New York State Club Ass n v. New York, 487 U.S.1 198$llus chapter focuses on citizen suits brought pursuant to federal envimn-menta l statutes; thus, it analyzes how federal courts inter pret fed eral constitutionaland statuto standin requirements.LFlastv. $hen, 39% U.S. 83, 95 (1968).Warth v, Seldin, 422 U.S. 490, 498 (1975).'Besides standing, these include the mootness, ripeness, and political ques.

tion doctrines.=SeeAllen v. Wright. 468 U.S. 37 , 750 (1984).

an d [3] likely to be redressed by the requested relief."Wnless theplaintiff can establish each of the se three elements, a federal courtmust dismiss the case for lack of standing. Following its constitu-tional analysis, a court then must cons iderpnrdmtial and tatutoylimitations on its exercise of'power.' These include "the generalprohibition on a litigant's raising another person's legal rights, therule barring ad'udication of generalized grievances more appro ri-dtely addresse by the elected branches, and the requirement t atKa plaintiffs com laint fall within the zone of interests protectedEy the law invo edW8 the latter asks whe ther the plaintiff hasasserted the specific type of injury that the statute was intendedto address).In the field of constitutional standin , he requirem ents of injury,causation, and redres s have receive extensive treatment in thecase law. Ge nerally , to show Article I11 standin g laintiffs mustallege an injury that is " distinct and pa lpable,' an not 'abstract'Sor 'conjectural' or 'h othetical.' Th e injury must be 'fairly' trace-able to the challenge? ction, and relief from the injury must b e'likely' to follow from a favorable de ci si ~n ." ~In appl 'ng these standing concepts, it is important to reme mberkhat this och ine is limiting in nature. Instructively, the Court haswritten that federal courts should consider:

Is the injury too abstract, or otherwise not appropriate, tobe considered judicially cognizable? Is the line of causation

'Warth v. Seld in, 422 U.S. a t 498.?Id. (citation omitted), Thus, the Supreme C oun hw recently granted certiorariOn a Ninth Circ uit determ ination that plaintiffs asserting no interest in the preser-Wi on of endan ered species lack standing to sue to enforce ~ro ced ura l equire-ments of the 8ndangered Species Act, even though they dege o variety ofeconomic injuries that undoubteclly meet th e constftutfonal est of concrete in u1"-fact. B ennett v. Ple nert, 6 3 F.3d 915 (8 th Cir. L985), ten grnnted, 116 d 811316 (1986) (No. 95-813). The Ninth C ircuit determined that these claims wereoutside the zone of interest protected by the statute. Although the Ninth Circuitc h m ~ t e r i r e dhe z one-of-inte rest analysis as a "prudential.. test, it sho uld moreP W P ~ ~ ~ Ye considered as a means of construing Congrsnsi intent in conferring"tutoy standin and the boun dvies of thezone of interest that Congress chose(0 ~ m t e c thou ld fe de ter mi ne d usin on ho do r m ethods of statutoxy constructonNucnonSee Clark V. See. Indus. &sen. 479&, 88.400 (1987) (zone-of-interestanalysisis "at bottom , . . [a] uestion [of] congressional intent").'Men v. Wright. 488 U.S. at 751.


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motivate him to reform his conduct, it is whoUy s eculative thatsuch endties would (a) become known to potential uture violatorsan d 6) nfluence their future conduct. As a co nstitutional matter,these standing arguments seem exceptionally tenuous, althoughthey have been accepted in a number of C O U ~ . ~

STANDINGAND THE PROPER SCOPE OF RELIEF

recurring a! the moment but the cause of that problem harnot been com pletely and clearly eradicated. Whe n a companyhas violated an effluent standard o r limitation, it remains, forurposes of [the statute], "in violation" of that standard orEmitation so long as it has not put in place rem edial measuresthat clearly eliminate the cause of the violation.=

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