Informer lacks standing to bring complaint under s. 962 of the Neutrality Act.

• Author: Medeiros, Mallory
• Position: Case note

FEDERAL CIVIL PROCEDURE--Informer Lacks Standing to Bring Complaint Under [section] 962 of the Neutrality Act--Bauer v. Marmara, 774 F.3d 1026 (D.C. Cir. 2014).

Under [section] 962 of the Neutrality Act of 1794 (codified at 18 U.S.C. [section] 962), an informer, who notifies the federal government of another person's efforts from within the United States to outfit a vessel for the sole purpose of attacking a friendly nation, is entitled to half the value of the vessel and its associated goods once they have been forfeited. (1) A private person may obtain standing under federal informer statutes through Article III of the United States Constitution or, if the statute is a qui tam statute, from the language of the statute itself. (2) In Bauer v. Marmara, (3) the United States Court of Appeals for the District of Columbia Circuit considered whether a [section] 962 informer can meet the three requirements for Article III standing or if he has standing under [section] 962 as a qui tam statute. (4) The Court ultimately dismissed the complaint for lack of standing because the federal government declined to pursue the action, and because the language of [section] 962 did not provide a private individual with standing. (5)

On June 13, 2011, Dr. Alan Bauer, an American citizen, wrote to the Attorney General regarding what he believed to be a violation of [section] 962 of the Neutrality Act. (6) He alleged that anti-Israeli organizations in the United States provided financial support to the Hamas organization, who in turn used the funds to outfit vessels in order to attack Israel. (7) Less than a month later, on July 11, 2011, Dr. Bauer filed a complaint in district court under [section] 962 based on these allegations. (8) According to Dr. Bauer, [section] 962 required the district court to order forfeiture of these vessels. (9) He also claimed that [section] 962 gave him, as an informer, the right to share half of the profits from the forfeited vessels with the federal government. (10)

The district court questioned whether Dr. Bauer had standing to bring suit under [section] 962. (11) Dr. Bauer was ordered to show cause for why the court should not dismiss his complaint due to a lack of standing and the court requested a statement of interest on standing from the Department of Justice. (12) The district court held that Dr. Bauer failed to state a claim because a private party cannot bring suit under [section] 962 and dismissed his complaint. (13) On appeal, the United States Court of Appeals for the District Court of Columbia affirmed the dismissal but on the grounds that Dr. Bauer lacked standing. (14)

The purpose of the requirement of Article III standing is to ensure that plaintiffs only bring real controversies before federal courts. (15) Federal courts have consistently held that a plaintiff must satisfy three requirements to have Article III standing: injury in fact, causation, and redressability. (16) The first requirement states that an injury is actual and concrete if it is not "hypothetical" or merely anticipated. (17) Further, causation cannot be established if a third party is the source of the conduct: in that situation, the connection between the injury and the conduct is insufficient because it is not "fairly traceable to the defendant's challenged conduct." (18) Finally, if a decision in favor of the plaintiff would not solve the alleged injury, that injury fails to meet the redressability requirement. (19)

When a private person's interest is insufficient to meet the requirements for Article III standing, he may still have standing through the statute under which he brought the action if it is a qui tam statute. (20) A qui tam statute is one that, unlike [section] 962, explicitly authorizes a private person to bring suit under it. (21) In a qui tam action, the private person shares in any recovered penalty. (22) United States ex rel. Marcus v. Hess, (23) an action that the federal government and a private citizen brought under the False Claims Act (FCA), is the only federal appellate case to imply that statutes including awards to informers also provide informers with standing. (24) While discussing the persistence of qui tam actions in Hess, the Supreme Court of the United States stated, "Statutes providing for a reward to informers which do not specifically either authorize or forbid the informer to institute the action are construed to authorize him to sue." (25) The Supreme Court held that the respondents defrauded the federal government under the FCA in regards to the Public Works Administration project for which they were electrical contractors. (26)

Similar to Hess, in Vermont Agency of Natural Resources v. United States ex rel. Stevens, (27) a private individual brought an action under the FCA in his own name; however, unlike in Hess, the action was only his name, it was against a state agency, and the federal government was not involved from the outset, but rather only became involved on appeal when it intervened on his behalf. (28) As a result of these differences, the Supreme Court considered whether the respondent even had standing under the FCA, and although it ultimately held he could not bring an action against a state agency under the FCA, it found that the federal government's injury accorded him standing because: (1) the FCA's language is similar to colonial qui tam statutes that expressly provided standing and (2) a relator--a real party in interest in whose name the government brings a suit--is similar to "the assignee of a claim [who] has standing to assert the injury in fact suffered by the assignor." (29) The Stevens Court described the statement from Hess as "dictum," or a stated view that is regarded as authoritative. (30) The Supreme Court identified the four qui tam statutes still in existence at the time of the decision--the FCA, 25 U.S.C. [section] 81, 25 U.S.C. [section] 201, and 35 U.S.C. [section] 292(b)--and cited [section] 962 as an example of an analogous yet different statute. (31) Generally, a private person has standing to bring a qui tam action under an informer statute; however, no court has explicitly held that [section] 962 is a qui tam statute--though in United States ex rel. Stinson, Lyons, Gerlin & Bustamante, (32) the United States District Court for the District of New Jersey included [section] 962 in a list of qui tam statutes. (33) Cases brought under [section] 962 are either a criminal prosecution of an individual or a civil suit in which the federal government seeks forfeiture of a vessel--neither of which is contingent upon the other. (34)

In Bauer v. Marmara, the United States Court of Appeals for the District of Columbia Circuit considered whether an informer has standing to pursue an action under [section] 962 of the Neutrality Act. (35) The Court explained that in considering whether Dr. Bauer stated a cause of action, the district court incorrectly presumed he had Article III standing. (36) In order to determine whether Dr. Bauer had Article III standing, the Court focused on the injury and redressability requirements. (37) The Court found that Dr. Bauer lacked a concrete injury because his interest as an informer was not ripe; under [section] 962, an informer's interest ripens if and only if the federal government pursues forfeiture of the identified vessels. (38) Similarly, the Court found that Dr. Bauer failed to meet the redressability requirement because a decision in his favor would not remedy his injury, insofar as it could not order the federal government to claim the vessels as United States property. (39)

The Court concluded that although "bounty statutes" often expressly provided informers with standing, Congress did not intend for informers to have standing under [section] 962 because the statute itself does not expressly provide for it. (40) Furthermore, the Court explained, the only language from a Supreme Court or federal appellate court decision supporting Dr. Bauer's argument is from a footnote in Hess, which the Supreme Court called an authoritative statement, and no appellate court has ever followed. (41) Finally, the Court considered whether [section] 962 is a qui tam statute and held that it is not because, unlike the FCA, [section] 962 does not assign any of the government's interest to Dr. Bauer sufficient to provide him with standing to bring a qui tam action. (42) The Court held that an informer lacks standing to bring an action under [section] 962 because the statute does not explicitly grant it, no controlling case has interpreted [section] 962 as providing it, and [section] 962 is not a qui tam statute. (43) Since Dr. Bauer had neither Article III standing nor standing through [section] 962 as a qui tam statute, the Court concluded that it must dismiss his complaint because his lack of standing meant that it did not have jurisdiction over his case. (44)

The Court was correct to focus on whether Dr. Bauer had standing, as opposed to whether he stated a claim because, as the Court noted, an examination of whether a plaintiff stated a claim presumes that he has standing to bring a claim. (45) In regards to whether Dr. Bauer met the requirements for standing, the Court appropriately followed the approach outlined in Lujan v. Defenders of Wildlife. (46) The Court correctly found that Dr. Bauer's injury was not ripe because [section] 962 clearly implies that an informer's interest is contingent upon the federal government's pursuit of forfeiture of the vessels and here, the government had already declined to seize the vessels. (47) The Court properly found that Dr. Bauer failed to meet the redressability requirement because, even if his injury were sufficient, it could not be remedied, for the court lacked the ability to force the federal government to bring a civil suit to seek forfeiture of the vessels. (48) Although a consideration of the causation requirement would not have affected the Court's holding...