DOJ_Stauffer_Brief

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					I
    WEST/CRS
I
                                           2009-1428,-1430,-1453

I
                      IN THE      UNITED          STATES          COURT              OF APPEALS

I                                   FOR     THE    FEDERAL                CIRCUIT                              -r,.eU_;
                                                                                                             O'_'a_'g_;._


                                      RAYMOND               E. STAUFFER,                                     i_..         ""_¢_     _,_
I                                                               P_intiff-AppeUant,


I                                                           Vo
                                                                                                                    "'4




I             BROOKS      BROTHERS,             INC.,      and     RETAIL            BRAND
                                                                    Defendants-Appellees,
                                                                                                  ALLIANCE,




I                                                           Vo




I                                              UNITED            STATES,
                                                                    Movant-Cross            Appellant.


I
    Appeals    from    the United     States    District         Court      For the Southern             District          of New

I                          York     i n 08-CV-10369,             Judge     Sidney      H. Stein



I                        BRIEF       FOR     MOVANT-CROSS                        APPELLANT


I
I                                                                   TONY
                                                                         Assistant
                                                                                  WEST
                                                                                       Attorney       General


I                                                                   DOUGLAS
                                                                         (202)   514-3602
                                                                                         N. LETTER



I                                                                    Appellate
                                                                     Civil Division,
                                                                                       Litigation
                                                                                              Room
                                                                                                       Counsel
                                                                                                            7318
                                                                     Department            of Justice
I                                                                    950 Pennsylvania               Ave.,     N.W.
                                                                     Washington,            D.C.      20530

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                                                      TABLE               OF CONTENTS

!                                                                                                                                                                     Page


 I   STATEMENT           OF RELATED                         CASES



 I   STATEMENT           OF JURISDICTION                                  .......................................................................                            1


     STATEMENT           OF THE               ISSUES               ......... ,..........................................                   _.......................          3
il
     STATEMENT           OF THE               CASE                                                                                                                           4

 I   STATEMENT           OF THE              FACTS               .............................................................................                               5


!          A°        The Governing                    Statutory             Scheme              In Section              292                                                  5

           B.
I                    Stauffer's
                     Brothers,
                                          Allegations
                                         And        The District
                                                                      Of Patent
                                                                                Court's
                                                                                            Mismarking
                                                                                                  Rulings
                                                                                                                         By Brooks
                                                                                                                    ...... . .................................               7


 I   SUMMARY          OF ARGUMENT                             .............................................................................                                13


     ARGUMENT           .........................................................................................................                                          17
 i
     I.    The    Applicable             Standard             Of Review                ...........................................................                         17
 I   II.   The Supreme              Court         Has Recognized                        ThatQui             Tam         Relators
           Have      Article       III Standing                Based          On Injury                To The United
 !         States'     Sovereignty                ..................................................                   ..............................
                                                                                                                       •                                         . .....   18


 !         A°        Qui
                     Long
                               Tam Provisions
                                 Tradition•           in the Law
                                                                 Like       Section
                                                                                of the United
                                                                                               292(b)          Have
                                                                                                               States
                                                                                                                             a Very
                                                                                                                             ................................              18

 !         B°        The District              Court         Misunderstood                      the Nature                of Qui        Tam
                     •Actions,         and Incorrectly                    Ruled          that      Relators            Must          Show

 I                   Injury
                     Economy
                                  to Themselves
                                          of•the        United
                                                                    or a Competitor,
                                                                         States
                                                                                                          or Injury             to the
                                                                                       ...........................................................                         27

 !
 I
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    III.   The District        Court         Plainly         Erred         In Rejecting                 The      Request

I          By the United
           Constitutionality
                                    States       To Intervene
                                        Of Section                292(b),
                                                                               In Order
                                                                                    And
                                                                                                   To Defend
                                                                                               To Explain                Why
                                                                                                                            The


           Plaintiff      Stauffer's         Complaint                Was          Sufficient           For Article               III
I          Standing        Purposes          ......... ........................................................................                    .......   35


I          A.          Intervention          as of Right               Under          FRCP          24(a) ......................................             35

           B.          Permissive       Intervention                                                •                                                        42
I
    CONCLUSION                                                                                                                                               43

I   OPINIONS           AND    ORDERS


I   CERTIFICATE              OF SERVICE



I   CERTIFICATE
          FEDERAL
                             OF COMPLIANCE
                              RULES
                                              WITH
                                     OF APPELLATE
                                                                                      RULE 32(a) OF THE
                                                                                       PROCEDURE


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                                                     TABLE                OF AUTHORITIES

I    Cases:


,I    Adams,         qui tam v. Woods,                   6 U.S,         (2 Cranch)                 336       (1805)          ..... ..............      . ................          21


I     Alabama           v. Texas,        347      U.S.        272 (1954)                  ...... ........................................................                          26


      Bly-Magee            v. Californic_             236       F.3d         1014         (9th Cir. 2001)                    ....................................                  29
I
      Bonito       Boats,       Inc.     v. Adkins,           489 U.S.              141 (1989)                 ....... .........................................                        6

I     Bowsher           v. Synar,       478      U.S.714              (1986)           ................................................                     ...............        25


I     Brose       v. Sears       Roebuck            & Co, 455 F.2d                          763 (5th          Cir.       1972)         ........ . .... ,...............            23


      Butler,      Fitzgerald            & Potter            v. Sequa             Corp,          250 F.3d             171
i

                (2d Cir. 2001)              ..............................................................................................                                         40


I     C.J. Hendrey              Co. v. Moor_                318       U.S.        133 (1943)                  .................................               . .............      19



I     Clontech    Labs., Inc. v. Invitrogen
             (Fed. Cir. 2005)
                                                           Corp, 406 F.3d 1347
                                .............................................................................................                                                           7


I     Ericsson          Inc.   v. InterDigital                Communs.                    Corp,        418       F.3d        1217
                (Fed.     Cir. 2005)            .........................................                 . ........ :...................................                       17-18

I     Federal        Election          Commission                 v. Akins,           524        U.S.       11 (1998)               ...............................                31


I     Hammond             qui tam         v. _Sloop         Carolina(1735)                         ........................................................                        20



I     Harrington
            May
                           v. Ciba
                         22, 2009)
                                           Vision Corp, No. 3:08-cv-251
                                           ...........................................
                                                                                               (W.D.N.C.
                                                                                       ...................................................                                         34


I     Harrison          v. Westinghouse                  Savannah                River          Co, 176 F:3d                  776
                (4th Cir.        1999)       ..........................................                 :............ , ......................................                     29

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!
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I   Lake      Investors
              1256
                              Dev.
                       (7th Cir.
                                       Group,
                                      1983)
                                                      Inc.      v. Egidi            Dev.        Grou B 715 F.2d
                                                   .......................................................................                              ...... :......       41


I   Lear,     Inc.    v. Adkins,       395 U.S.           653       (1969)                                                                                                    6


    London       v. EverettH.            Dunbar           Corp,          179 F. 506 (lst                    Cir.         1910)         ......... .......... ......           24


    Marbury          v. Madison,         5 U.S.        (1 Cranch)                137 (1803)               ..................................                   . .........   25
I
    Marino       v. Ortiz,      484 U.S.         301 (1988)...                  .............................................                    , .............         3, 42

I   Marsh       v. Chambers,           463 U.S.            783       (1983)          ...........................................................                             25


I   Marvin       v. Trout,      199 U.S.           212      (1905)           .............................................................                              ,... 19



I   MasterCard
              471 F.3d
                          Intern.     Ine.    v. Visa Intern.
                              377 (2d Cir. 2006)
                                                                               Service           Ass 'n, Ine,
                                                                    ........ . ...............................................................                               18


I   Merrill      v. Town       of Addisor_            763 F.2d             80 (2d Cir.               1985)             .....................................                 37



i   Mistretta         v. UnitedStatess             488      U,S.       361 (1988)                 ..................................................                         24


    Myers       v. United      States,       272     U.S.        52 (1926)              .........................................................                            25
I   Negron-Almeda              v. Santiagc_            528 F.3d              15 (lst            Cir. 2008)               ...................................                 18

I   Niehols      v. Newel_           18 F. Cas.          199 (C.C.D.                 Mass.           1853)         ......................................                    24


!   Nuesse       V. Camp,       385 F.2d           694 (D.C.              Cir.       1967)         .......... :'......................................                       41



I   O'Keefe          v. New    York
              (S. D. N. Y. 1965)
                                         City Bd. of Eleetion_
                                             ....................        ....................
                                                                         •
                                                                                       246       F. Supp.
                                                                                                     . .............
                                                                                                                        978
                                                                                                                           ..................................                39


    Pequignot          v. SoloCup            Co, 640 F. Supp.                       2c1 714         (E.D.        Va. 2009)                  ......................           34


    Phile     qui tam v. The Ship               Anna,          (1788)           ........ :........................               _.............................              20
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    Phillips      Petroleum          Co. v. Shuttg               472        U.S.        797 (1985)                    .......................................              40

I   Raite      Rubbish      Removal          Corp.          v. Onondaga                     Cty,       161 F.R.D.                  236
              (N.D.N.Y.          !995)     .......................................................................                               ...................       39
I
    Reich      v. ABC/York-Estes                 Corp,          64 F.3d            316        (7th Cir.            1995)            .............................          40

I   SECv.       Dresser,         628 F.2d         1368          (D.C.       Cir.        1980)          .... ............................................                   42


I   Sierra      Club,     lnc.    v. Leavit_         488        F.3d        904       (1 lth Cir. 2007)                       ..............................           _.. 18



I   Sippit     Cups,
              (E.D.N.Y.
                          lnc.    v. Michael's
                                 1960)
                                                           Creations,
                                           .............................
                                                                                     lnc,       180 F. Supp.                    58
                                                                                     .............................................................                        24


I   Stalley     v. MethodistHealthcar_                           517 F.3d              911       (6th Cir. 2007)                      ...........................          17


i   TheNassau,            71 U.S.        (4 Wall.)          634       (1866)           ...........................................................                         21

    The Pocket           Veto Cas_         279       U.S.        655 (1929)                  .......................................................                       23
I
    TheSally,          12 U.S.      (8 Cranch)             382       (1814)           .............................             . ..............................           21

I   Trbovich          v. UnitedMine             Workers             of Am,            404 U.S.             528 (1972)                   ........... . .........        41-42


I   U.S. ex rel. A+ Homecare,   lnc. v. Medshares        Management                     Group,
         lnc., 400 F.3d 428 (6th Cir. 2005) ...............................................................                                                                29

I   US West        Communications,                  lnc.        v. TCG Seattl_                     971 F. Supp.                     1365
              (W.D.      Wash.      1997)       .............     . ...................................................                       .....................        39
I   United      States     ex tel. Marcus                v. Hesg            317 U.S.             537 (1943)                   ............    _....................        19

I   United      States     v. Pitney       Bowes,            Inc,       25 F.3d             66 (2d Cir.                 1994)         ...........................         40


I   United      States     v. Riverc_        55 F.3d            703 (lst             Cir.      1995)         ...........................................                  29



I   Varljen      v. Cleveland            Gear       Co., Inc,              250       F.3d       426       (6th Cir. 2001)                     .....................       29




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          Vermont         Agency          of Natural               Resources                v. United                States        ex rel. Steven¢

I                   529   U.S.         765    (2000)            ............................             3, 9, 13, 14, 15, 17, 19, 20,22,
                                                                                                         26, 28, 29, 30, 31, 32, 33, 36, 38
                                                                                                                                                                                   24, 25



I         Winne       v. Snow,          19 F. 507             (D. N.Y.              1884)          ...........................................................                         24


I         Wisconsin           v. Pelican           Ins.      Co.,          127 U.S.            265 (1888)                ............................................                  24


        Constitution:
I
         United        States      Constitution:

I                 Art.    I, Sec.        8, cl. 11 ...........................................................                                   . ..........................          21
                    Article      III    ................................            ...........      i............      3,      4, 5,8,         9, 11, 12, 13, 14, 15,
I                                                                                                                        16, 17, 24, 28, 29, 30, 31, 33,
                                                                                                                        35, 36, 40

I                 Art.    IV, Sec.           3, cl. 2 ....................................                      .................................................                      26


        Statutes:
I
         The    Indian        Tribal         Economic                Development                     and Contract

i                 Encouragement                    Act,         Pub.       L. 106-179                 .........................................................                        23


         Act of July            5, 1790,         ch. 25, § 1, i Stat.                          129.. ..................            . ..............................             21,    33
    I    Act of July
         Act of July
                                20, 1790,
                                22, 1790,
                                                    oh. 29, §9 1, 4, 1 Stat.
                                                    ch. 33, § 3, 1 Stat.                         137-138
                                                                                                        131,133               ...................................
                                                                                                                     .............................            i.................
                                                                                                                                                                                   21, 31
                                                                                                                                                                                       21
         Act of Mar.            1, 1790,          ch. 2, § 3, 1 Stat.                     209 ..................................                     . .................           21, 33
    i




         Act of Mar.            3, 1791,          ch.       15, § 44,            1 Stat. 209 .............                    i..................................                  21, 33

    i
         Act of February                 20, 1792,              ch. 7, § 25,              1 Stat.         239 ...............................................                          22

    I    Act of May
         Act of March
                                8, !792,
                                   1, 1793,
                                                  ch. 36, § 5, 1 Stat.
                                                      ch.       19, § 12, 1 Stat.
                                                                                               277-278          .............       ....................................
                                                                                                     331 ...................................................
                                                                                                                                                                                       22
                                                                                                                                                                                       22
         Act of March              22, 1794,              ch.     11, § 4, 1 Stat.                   349 ...... .............................................                          22

    i    Act of May             19, 1796,            ch. 30, § 18, 1 Stat. 469,                               474 ...........           , ...............     _................        22
         Act of April            2, 1802,           oh. 13, § 18, 2 Stat.                          139,      145                                                                       22
    i    Act   of April          29,     1802,        ch. 36, 9§ 3-4,                    2 Stat.          171,172              ........ ................................               22


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    • Act of May      3, 1802,           ch. 48, § 4, 2 Stat.                       189,       191 ................................................                          22

I   Act
    Act
          of March
          of March
                          26, 1804,
                          2, 1807,
                                                ch. 38, § 10, 2 Stat. 283,286                                      .........................................
                                             ch. 22, § 3, 2 Stat. 426 .....................................................
                                                                                                                                                                             22
                                                                                                                                                                             22
    Act   of March        2, 1863           (12 Stat. 696)                  ............................             . .......................................               23
i
     17 U.S.C.     § 1326         ...................................               :...........................            i..........     : .....................        ,. 23

I    18 U.S.C.     § 962                                                                                                                                                     23


I    25 U.S.C.     § 81 ............................................................................                                      ,............    ,............     23



I   25 U.S.C.      §201                                                                                                                                                      23


     26 U.S.C      § 7341                                                                                                                                                    23
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     28 U.S.C.     § 1295(a)              ...............................................................................................                                      3

I    28.U.S.C.     § 1331         .....................................................................................................                                        1
     28 U.S.C.     § 1338(a)             ...............................................................................................                                       I
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     28 U.S.C.     § 1355(a)             ................................................................................................                                      1

I    28 U.S.C.     § 2403(a)              .................      .................................................                        2, 11, 12, 16, 17,36


I    31 U.S.C.
     31 U.S.C.
                   § 3729
                   § 3730(b)              .............................................................................................
                                                                                                                                                                             28
                                                                                                                                                                             22

I    35U.S.C.      §292         ................................................                      1,2,3,4,5,7,9,13,14,16,25,26
     35U.S.C.      § 292(a)            ............................................................                         .•...............................               4, 6

I    35U.S.C.      § 292(b)            ................................................                    4, 5, 6, 8, 11, 12, 15, 16, 20, 21,
                                                                                                           22, 23, 25, 28, 30, 31, 32, 33,

I                                                                                                          35,36,38


    46 U.S.C.      § 723                                                                                                                                                     22

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I   Rules:


    Federal     Rules      of Appellate                 Procedure:
I
              Rule   4(a)(1)(A,              (B)                                                                                                                               36

I             Rule   29(a)         ...........    :...........................................................................................                                  5


I
    Federal     Rules      Civil       Procedure:

I             Rule   5.1(c)                                                                                                                                                36, 37


I             Rule    12(b)(1)                                                                                                                                               7, 8
              Rule    12(b)(6)             ...............................................................................................                                      7

I             Rule   24 ......................             :..................................................................................                                 17
              Rule   24(a)         .................................................                   : ...............................              .............        18, 35
I             Rule   24(a)(2)    ......................................................                       12, 13, 17, 33, 39, 40, 41, 42
              Rule   24(b) ..................................................................................                 12, 35, 42, 43

I   Miscellaneous:


I    J.W.     Ehrlich,      Ehrlich's            Blackstone545                         (1959)        ....................................................                      98



I    H. Krent,
              Some
                     Executive
                         Lessons
                                           Control
                                        from         History,
                                                              Over         Criminal
                                                                         38 Am.
                                                                                                 Law
                                                                                               U. L. Rev.
                                                                                                           Enforcement."
                                                                                                                    275 (1989)                   .......................       22


I    Note,     The History            and Development                           of Qui           Tang 1972             Wash.
              U. L.Q.      81 .............................................................................................                                                20, 22

I    W. Blackstone,            Commentaries                       on the Laws                    of England              ......................................                18


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I                                          STATEMENT              OF RELATED              CASES


               No other         appeal     in, or from,    the present         civil action      has previously        been     before
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     this    or any other        appellate       court.    There      is another        case pending          before   this Court,
!    which     at the lower        court    stage involved        the same Article        III standing        issue that      is raised

 i   in this Case. Pequignot             v. Solo Cup, No. 09-1547.             It is not clear to us if the appeal             in that


.I   case also now raises           the Article      III issue.     Pursuant        tO Federal      Circuit     Rule   47.5(b),      we


 I   note    that    there    are other      cases involving        the same Article          III standing       issue as this one



I    pending        in scattered      district    courts   around          the United     States.     Presumably        the ruling


     by this Court           on this issue will directly          affect    those   various      cases in the distr.ict        courts.
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                             IN THE       UNITED         STATES           COURT           OF APPEALS

I                                          FOR     THE     FEDERAL              CIRCUIT



I                                           Nos.      2009-1428,-1430,-1453


I
I                                            RAYMOND               E. STAUFFER,
                                                                           Plaintiff-Appellant,

I                                                                  V.




!                  BROOKS       BROTHERS,              INC.,      and RETAIL           BRAND          ALLIANCE,
                                                                           Defendants-Appellees,

I                                                                  V°




I                                                     UNITED            STATES,
                                                                           Movant-Cross           Appellant.

I
I     Appeals         from   the United
                                 York
                                             States    District
                                          in 08-CV-10369,
                                                                        Court
                                                                        Judge
                                                                                 For the Southern
                                                                                 Sidney    H. Stein
                                                                                                           District      of New




i
                                BRIEF      FOR     MOVANT-CROSS                     APPELLANT

I
I                                       STATEMENT              OF JURISDICTION


             This      case involves    claims     of patent      mismarking         under    35 U.S.C.        § 292 ("Section
I
    292").       Plaintiff   Raymond       Stauffer     invoked         the jurisdiction     of the district          court     under

I   28 U.S.C.        §§ 1331,   1338(a),     and 1355(a).          When         defendantsBrooks           Brothers,          Inc. and


I   its parent      Retail   Brand     Alliance    (collectively         "Brooks     Brothers")        moved    to dismiss         the


I
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|    complaint,


     and      under
                           the company


                           28 U.S.C.
                                                      raised


                                                    § 2403(a)
                                                                 questions


                                                                    provided
                                                                                   about


                                                                                      notice
                                                                                                the constitutionality


                                                                                                   to the Attorney
                                                                                                                                   of Section


                                                                                                                              General       that
                                                                                                                                                   292(b),


                                                                                                                                                    it was

|    doing       so.
                       1



I                The       district      court        granted       the United           States      until    May 22, 2-009 to intervene                   to



I!   defend        the constitutionality                   of Section          292(b).          However,          on May 14, 2009,              the court


     dismissed            Stauffer's       complaint.               A1.     The court            entered      a final judgment            of dismissal
I
     on May           15, 2009.          A389.



I"   •           On May 29, 2009,


     seek reconsideration
                                                       the United


                                            of the district
                                                                            States


                                                                        court's
                                                                                       moved


                                                                                      dismissal
                                                                                                     to intervene


                                                                                                         order,
                                                                                                                           in the case in order


                                                                                                                   and tO appeal          if necessary.
                                                                                                                                                           to




I    The      district      court        denied         that     motion       on June           15, 2009.         A433.


!                Meanwhile,              on June          14, 2009,         Stauffer       had flied a notice             of appeal     to this Court



!    from       the district          court's        May 15 judgment.                 A432.        The United            States    also filed a notice


     of appeal          from      that    judgment              on June       15, 2009.          A442.        On July 10, 2009,            the United
!
     States       filed     a notice            of appeal          from      the     district      court's        June     15 order       denying         the

|    motion           to intervene.
                                                1




                                                 A763.




!    United
            1 Section
                   States
                               2403(a)
                               to which
                                                    provides:
                                                     the United
                                                                    "In any action,
                                                                        States
                                                                                                  suit
                                                                                     or any agency,
                                                                                                          or proceeding
                                                                                                              officer
                                                                                                                                   in a court
                                                                                                                           or employee
                                                                                                                                                    of the
                                                                                                                                                thereof      is
     not     a party,       wherein         the constitutionality                    of any Act of Congress                   affecting      the public
i    interest         is drawn        into question,              the court        shall certify such fact to theAttorney                       General.
     and      shall      permit        the United              States     to intervene           * * * for argument               on the question          of
i    constitutionality."



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                   This Court           has jurisdiction          over these         appeals    under       28 U.S.C.       § 1295(a).       2 The

I       Court      consolidated            the three      appeals.

I                                                   STATEMENT                OF THE            ISSUES


I                  in Vermont           Agency of Natural          Resources v. United States ex rel. Stevens, 529                    U.S. 765,



I   %
        771-78      (2000),        the Supreme            Court      held    that,     under     the False         Claims      Act, when        the


    United           States      assigns       to a private        person     its chose        in action      against       a defendantwho


        has filed      a false         claim    with     the U.S.       Government,             that    private      person      has standing
i
    under          Article      III of the Constitution              to pursue         the legal action       on behalf        of himself      and

I       the United           States.     The mechanism             bywhich           this assignment         takes place is called           a "qui

I       tam action"          (which      we describe          and discuss      below      in this brief),         and the private      plaintiff


i       in such      suits     is known         as a "relator."         In Vermont         Agency, the Supreme                Court    ruled       in


I   favor        of such Article               III standing       even when           the relator       individually          has suffered       no



I       personal      injury       by the defendant's              false claim.


                   These       consolidated            appeals     present     two questions:
i
                   1. Whether             the district     court      correctly       ruled    that,    despite     the Supreme          Court's

I       decision      in Vermont           Agency, when           Congress        by statute      assigns     to a relator       the authority

i   to pursue             a qui tam case under              Section      292(b)       for patent       mismarking,           the relator      lacks


i
           2 Denial          of a motion          to intervene        is appealable.           See Marino          v. Ortiz, 484      U.S.     301,
i       303     (1988).



I
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     constitutional             Article       III standing             unless          he can       show      concrete         injury      to himself,

l    defendants'           competitors,            or the economy                 of the United            States.

I                2.     Whether           the     district        court        correctly        denied        the    United           States     leave       to


I    intervene          in order       to argue            that      Congress            can    consistently          with     Article          III of the


I    Constitution            assign       to a relator               the     ability      to pursue        a qui tam           action          for patent


     mismarking.
I
                                                    STATEMENT                      OF THE             CASE
I
                 Pro se plaintiff          Stauffer          filed     this     qui tam action             in the United               States     District

I    Court       for the Southern               District      of New York under                     35 U.S.C.        § 292(b),        against     Brooks

I    Brothers.          Section292(a)             states     that      any person           who commits              patent     mismarking              with


i    the intent         to deceive        the public              "[s]hall      be fined        not    more      than       $500       for every such



I    offense."         Section       292(b)        is at the center             of this case, and             provides         that     "[a]ny     person


     may sue for the penalty,                    in which            event     one-half        shall    go to the person               suing      and    the
I
     other     to the use of the United                      States."

I
                 The     district     court       dismissed           Stauffer's          action,      finding       that     he lacked          standing

I    under       the    Constitution              to pursue           an action           for himself          and      for the United              States


I    concerning           alleged      patent        mismarking                because         Stauffer       had     not     alleged          any actual


I    injury    to himself,          to a competitor               of Brooks            Brothers,       or to the economy                of the United



I    States.          see 615       F..Supp.2d         248 (SDNY                 2009).


                                                                                  4
l
I
I
               In addition,           the district       court         denied       a motion         by the United            States     to intervene

l   in the case in order              to argue         that    Congress            has, consistently           with     constitutional             Article

I   III standing           requirements,           assigned            through       Section         292(b)       authority      to prosecute           qui


I   tam cases.        See 2009            WL      1675397          (SDNY            2009).


I              The     United         States      is appealing             both      the dismissal            of Stauffer's            complaint        on



I   standing        grounds         and     the district         court's        order      denying         leave to intervene.              Out      of an


    abundance          of caution,          the UnitedStates                is separately           moving        in this Court          to intervene
I
    in Stauffer's          appeal     in order         to address        the Article          III standing          issue.    (The Government

I   takes      no    position         on    the    merits        of Stauffer's             case,      and     whether         or not       he should

I   Ultimately        prevail       against       Brooks        Brothers.)          3


I                                                 STATEMENT                      OF THE             FACTS



I              A.    The      Governing            StatutOry            Scheme           In Section         292


               As noted            above,       this    case was           filed     pursuant          to 35 U.S.C.              § 292(a),         which
I
    provides        that    any person          who commits               specified         acts of deceptive           patent         marking,       such

I
    as by affixing          to a product          a mark        that     falsely        asserts     that    the item is patented,            with       the

I   intent      to deceive            the     public,"[s]hall            be fined           not     more      than      $500      for     every       such


I
I        3 If this
    Government's
                           Court
                              motion
                                       does     not     find
                                              to intervene,
                                                                 that      the district
                                                                        we request           that
                                                                                                  court     erred
                                                                                                      this Court
                                                                                                                       in failing
                                                                                                                         treat    this
                                                                                                                                         to grant
                                                                                                                                           brief
                                                                                                                                                        the
                                                                                                                                                     as an
    appropriately            filed amicus curiae brief                 supportmg             plamnffStauffer             s appeal        (Docket       No.
I   2009-!428)             pursuant         to FRAP           29(a).



i
I
I
    offense      " The current            appeals         revolve     around            the qu! tam provisions               of Section         292(b),
I
    which       state that     "[a]ny person             may sue for the penalty,                    in which       event      one-half         shall go

I   to the      person     suing      and the other               to the use of the United                     States."


I              The qui tam provisions                   of Section           292(b)      were first enacted           by Congress               in 1842


I   (as we explain            below,      qui tam statutes                  have a long            history      in England,                in Colonial



I   America,        and in the first several                 Congresses            after the ratification                 of the Constitution,


    thus      stretching       from       the founding               of our        republic          tO the modern              day).         Through
I
    Section      292(b),      Congress          has authorized               a qui tam suit to be brought                   by a private         relator
I
    whose       successful      efforts       will redound            to the benefit           of the_United              States,     both     because

I   the    Government              is entitled         to a portion             of any penalty               recovered         and         because      the


I   imposition           of statutory         penalties          punishes         and     deters     violations       of the patent             laws.
                                                             i




I              The rationale           behind          the statutory          prohibition            against      false marking              of patents



I   is that     a properly      marked           patented          article     provides        the public         with       "a ready         means        of


    discerning       the status         of intellectual            property        embodied           in an article         of manufacture                or
I
    design."       Bonito       Boats,        Inc.     v. Adkins,           489    U.S.       141,     162 (1989).             This        rationale       is

I   consistent       with     federal         patent      policy,     which         recognizes         an "important                public      interest

I   in permitting          full and free competition                    in the use of ideas which                     are in reality           a part of


I   the public       domain."           Lear,        Inc. v. Adkins,              395     U.SI 653,670             (1969).          False marking



I   harms       that public        interest      because          it "misleads          the public       into believing             that     a patentee


                                                                               6
I
I
I
    controls        the article        in question         (as well as like articles),             externalizes           the risk of error              in

I   the determination,                  placing       it on the public          rather      than     the manufacturer                    or seller       of

I   the article,          and      increases      the cost to the public               of ascertaining             whether          a patentee           in


I   fact controls           the intellectual           property          embodied        in an article."          Clontech          Labs.,        Inc. v.



I   Invitrogen            Corp.,      406      F.3d     1347,      1356-57     (Fed.      Cir.     2005)      (footnote           omitted).


               B.     Stauffer's         Allegations             Of Patent         Mismarking           By Brooks                Brothers,         And
I              The        District      Court's        Rulings


I        .     1. In his complaint,                   Stauffer      alleged    that    Brooks       Brothers         violated           Section        292



I   by falsely       marking          ties it manufactures                and •sells with the numbers                    of expired           patents.


    A34-35.          Stauffer        expressly        alleged     that    Brooks      Brothers       falsely      marked          its ties "for the
I
    purpose         of, and with            the intent      of, deceiving           the public."           A65.

l              Brooks           Brothers         moved          to dismiss      Stauffer's         complaint             pursuant          to     FRCP

I   12(b)(1)        and     12(b)(6).       When         it did so, Brooks          Brother        filed a Notice          of Constitutional


I   Question,          which         it served        on the Attorney               General,        stating       that     the     company             was



I   challenging            the constitutionality                of Section     292 in part on the ground                         that    this statute


    "does      not        confer      standing         to a qui          tam   relator      as he does            not      meet         the     case     or
I
    controversy            requirement            of the U.S.       Constitution           Art. III because              he is not an assignee
I
    of the government."                     A190.

I
I
I
!
II-
                  The     United        States        requesteduntil                   May 22, 2009,            to advise      the district        court

!
      whether         it intended        to intervene               to defend          the constitutionality             of the Section           292(b),

I     and      the court      granted          that     request.            A387.


I                2.     On May         15, 2009,              before        the deadline           for the United            States     to advise      the



I     district    court      of its intention,                 that     court       granted       Brooks       Brothers'      motion        to dismiss


      the action        pursuant        to FRCP               12(b)(1)       on the ground             that " Stauffer,       proceedmg "         as a qui


      tam plaintiff,         fails to allege            a cognizable             injury        in fact to the United           • States     or such     an
,I
      injury     to the public          that     has been             assigned        to him by the government."                      A2.   The court

 i    concluded          on this basis           that     Stauffer           "lacks     standing          to pursue      the penalties        imposed

i     by section          292."        A2.       As the             court       further        explained,        Stauffer      lacked       Article     III


i     standing        t O pursue       this     case because                the complaint            "fails to allege with            any specificity



I     an actual         injury       to any individual                  competitor,             to the market          for bow        ties, or to any


      aspect     of the United            States         economy."               A9.
i
                 The      district      court         first     recognized             that     Section       292(b)       "is indeed        a qui tam
I
      provision         - i.e., a statute         that        authorizes         someone           to pursue      an action       on behalf        of the

i     government           as well as himself                  and has been               repeatedly        referred     to and treated           as such

I     by both         the Supreme             Court           and     the Second              Circuit."       A6 (footnote            omitted).       The


,i    district    court     then      observed           that qui tam relators                  must      nevertheless       meet      the Article      III



 I
i
I
I
     "irreducible          constitutional               minimum"             for standing           because         tl_at requirement              stems

I
     from      the "case or controversy"                    provision           in Article        IlL      A7.

I                The     district     court     recognized           that     a qui tam realtor             "commonly            suffers     no injury


I    himself,"         but that the Supreme                 Court         made       clear in Vermont              Agency that         Congress        can


I    through          a statute,      consistently          with      Article        III, assign        its rights        to pursue        a chose      in



I    action       to a private        party who can "proceed                      in vindicatio          n of those          rights    provided        the


     assignor         - i.e., the government                 has itself suffered              an injury           in fact causally         connected
,I
     to the defendant               that     is likely to be redressed                  by the court."             A7.     As the district         court

I    explained,          "Section          292 thus assigns           to Stauffer          - or to 'any person'                - the authority          to

I    bring       suit to vindicate            cognizable          injuries      incurred          on the public            or the United          States


I    through          violation      of its provisions,"               A8.



I                The     district     court      then      noted      that     "[i]n most         qui tam actions,             the alleged        injury



I    in fact to the United                  States      as assignor         is obvious        and proprietary.               In a claim       brought


     pursuant          to the False           Claims       Act,      * * * for instance,                the injury         in fact     is simply       the
I
     'proprietary          injury     resulting         from the alleged               fraud.'"      A8.     The district         court     explained

I    that     the injury          to the      United        States        through         a violation            of Section       292      is "far less

"|   evident"          because       the      statute      does      not      prohibit        only       false     marking        on      unpatented


I    articles,      "but    instead        false marking           that      is fraudulent,        deceptive,            and intentional."            A8.



I    The      court     went      on to express            its "doubt[]         that     the Government's                   interest      in seeing     its


                                                                                 9
I
I
I
    laws enforced          could      alone        be assignable,         concrete          injury      in fact sufficient         to establish

I
    a qui tam plaintiff's           standing."           A9 (fn.5).

I              The district        court     had earlier        in its opinion          specifically           recognized       that Stauffer's


I   complaint       alleged     that Brooks           Brothers         had mismarked                 patents     on various        ties, that the


I   company's        label    "thus        constitutes       a false      mark,"       that     it "knowingly           misrepresented              to



I   the public"      that its products              were covered          by a valid          patent,      and that      the false marking


    by Brooks       Brothers        was done          "for the purpose              of, and with          the intent        of, deceiving        the
I
    public."      A4.      Nevertheless,            the court      held      that     Stauffer's         allegations        did not describe

I   a concrete       and     particularized            actual      injury;     rather,         the court         held    that    Stauffer       had

I   merely      identified      "conjectural             or hypothetical             harm"         insufficient         for constitutional


I   standing      purposes.         A9.



I              The heart       of the district           court's     reasoning          is that      "[i]n particular,          the complaint


    fails to allege with           anyspecificity           an actual        injury     to any individual               competitor,           to the
I
    market      for bow ties, or to any aspect                     of the United              States     economy.?'          A9.       The    court

I
    accordingly         concluded           that     Stauffer      cannot           under      the      Constitutiori           have     standing

I   because      he "failed     to allege that defendants'                   conduct          has caused          an actual      or imminent


I   injury     in fact to competition,                to the United            States       economy,            or the public          that   Gould



I   be assigned      to him as a qui tam plaintiff                   or be vindicated                through       this litigatior_."         A10.



I   The court       dismissed         Stauffer's         complaint        because           it "fails to allege         an injury        in fact to


                                                                          10
I
I
I
     the      public       or to the           United        States,       [and     he thus]         lacks      constitutional               standing          to

I    proceed          on its [the United                States']       behalf."        A12.

,I               3.      Shortly       after    the district           court      dismissed         Stauffer's           complaint,              the United


,I   States      moved          to intervene            in the case in order                   to seek reconsideration.                      A390.           The



I    Government                noted      in its motion             that    the district          court      had given            the United              •States



l    until      May        22,      2009        to     decide       whether             to     intervene           in    order       to     address           the


     constitutional              arguments              raised      by     Brooks            Brothers;       the        court      nevertheless              had
I
     dismissed           the case more               than     a week       before        that     date     on the ground                  that     Congress

I    could      not      constitutionally               assign     a chose        in action         as it had           done      in Section          292(b),


I    because          the United          States      had      not suffered            a constitutionally                cognizable         injury.


i                The Government                  argued          in its motion          that     the district       court        first had a statutory



I    obligation           to permit          intervention           by the United               States     in light        of 28 U.S.C.              § 2403,


     which       provides          a right     for the Attorney            General           to intervene          when         the constitutionality
i
     of an Act of Congress                     is drawn        into question,            as Brooks         Brothers             had done          here.      The

I    Government                recognized        that       the district       court     had in its May 14 ruling                    not struck           down


 I   Section
     •                292(b)     as unconstitutional                   on its face, but that               the court            had in reality            found


,I   that      section      inconsistent             with      Article      III of the          Constitution              to the      extent        that      the



 I   statute      assigned          a chose      in action         to a private          personin          the absence             of direct        injury     to


     himself,         to competitors,                to the market,            or to the economy                    of the United                 States.      In
i
                                                                                  11
I
I
I
     other      words,         the dist/ict         court      had     determined              that     Article     III     meant       that       Section

I
     292(b)      is invalid         to the extent           that     it authorizes            a qui tam relator             to sue for sovereign

I    rather     than       economic          injury     to the United               States.


I               In addition,          the Government                 argued      that       it alternatively         had a right         to intervene


I    under      FRCP          24(a)(2)      because         the United         States        has a sovereign              interest     in seeing       that



I    Section         292(b)     is read properly             in order     to discourage               patent      mismarking,            and because


     the United            States     had     a proprietary            •interest        in half of any recovery                      Stauffer       would
I
     obtain     under         Section       292(b).

I               Finally,       the Government                 also asserted           that     it should         be permitted            to intervene

I    under      FRCP          24(b) because           it had a claim that              shared         with     Stauffer's      action       a common


I    question         of law.       Here,     the United            States'    claim         was that        a plaintiff      relator       has Article



I    III standing          under         Section       292(b)        without        any need            to show       economic              injury;     this


     claim     presented         a question           of law in common                with      what Stauffer             had asserted          through
I
     his complaint             and Brooks           Brothers         had argued              in defense.

I.              4. The district             court     denied        the Government's                  motion        to intervene.            The      court

I    held     that    the Government                  had no statutory              right      to intervene          under       Section        2403(a)


I    because         the court       had "made          no findings            and reached              no conclusions               with    respect      to


I    the constitutionality               of section         292."     A438.         The court           also rejected         the Government's



I    motion         to intervene          as of right        under      FRCP         24(a)(2)         because       the court         had not ruled


                ;                                                              12
I
I
I
     on the constitutionality                 of Section            292, and the court              had not considered             or addressed

I    the ability        of the United          States       to enforce          the prohibition          in Section        292 against       patent

I    fraud.         A439.,


I                  Finally,      the court     denied         permissive           intervention         under       FRCP      24(b) beca.use           it



I    concluded           that,     although         the United            States     might      have    an "interest"          in resolution          of


     Stauffer's         claim       of standing,            that     interest        was    insufficient          to support        intervention
I
     because         the Government's                 interest        was not        "premised         on issues         and legal questions"

I
     actually        presented         to, or decided              by, the court.           A440.       In addition,         the district      court

I    believed         that    Brooks      Brothers          would         be "unduly         prejudiced"          by intervention           because
               /




I    the Government                 had      indicated         that       it wished        to seek reconsideration                 of the court's



-I   decision         that     Stauffer      had     not     asserted        an injury         cognizable         under     Article     III of the


     Constitution.               A441.
I
                                                    SUMMARY                  OF ARGUMENT

I
                   I. As explained           above,      the Supreme               Court     held in VermontAgency                 that a qui tam

I    relator       has Article       III standing           to file and pursue              an action      on behalf       of himself       and the


I    UnitedStates                because,      through             the    qui tam          mechanism         in     the    False    Claims      Act,


I    Congress          has made           a valid     partial         assignment           of the Government's                 chose    in action



I    against        the defendant.            This         ruling        was based         in significant         part    on the long        history



I    and practice             in the United          States        of using        the qui tam mechanism                  as a way of utilizing


                                                                                13
I
I
I
        private      parties      to achieve        public        goals;     this      lengthy        and      well-accepted              practice       gave

I         f




        meaning        to the "case or controversy"                      provision            in Article        Iii.

1                   The ruling        in Vermont Agency is dispositive                        here,    and requires              the conclusion          that


I       plaintiff      Stauffer        has     Article      Ill     standing           to bring         this      case.          The      district     court


I-      nevertheless           held   that     Vermont      Agency does               not apply        because           the court        believed       that



I       the key to that decision               is that    in a False Claims              Act case the United                     States     has assigned


        a "proprietary"           interest     to the relator           (presumably            because         the defendant              in such a case
 I
        has wrongly        sought       money       from the Treasury),                  while the injury                here under         Section      292

 I      is instead       of a sovereign           nature          - i.e., the United              States       has not           suffered       economic

 I      injury      from patent        mismarking.           The district             court     therefore        concluded             that the United


I       States      has not      suffered      a constitutionally                cognizable           injury     that      will support          standing



 I      or can be assigned             to a qui tam relator,               and the relator              cannot           sue unless         he can show



    I   concrete       personal       injury     from      the defendant's              conduct,          or an injury            to the defendant's


        competitors,           or injury       to the United            States      economy.
i
                    As we show in our argument                      below,       the district         court's          attempt      to avoid         Vermont

.I      Agency was incorrect,                and based        on several          serious        flaws.

    I               First, the district        court's     understanding                of the False Claims                 Act was incomplete.


    i   The federal       courts       of appeals        have made         clear that the United                       States    or a qui tam relator


    i                                                               \



                                                                                 14
i
I
I
    can recover            penalties       under      that    statute        for the filing       of a false claim           even    when        the

I   United        States     has suffered          no economic          injury      at all. Accordingly,            the False Claims            Act


I   provides        a cause       of action        based     on the injury          to the sovereign           interests       of the United


I   States       - a knowing             violation         of the     prohibition           on filing      false     claims      with       federal



I   officials.          Moreover,         this point         was fully        established        in the case law by the time                     the


    Supreme          Court       ruled     in Vermont         Agency that          a qui tam relator         has Article        III standing.
I
    Indeed,        the Supreme           Court's      opinion        in Vermont        Agency expressly            discusses      the fact that
I
    the chose           in action        of the United             States     has a proprietary            and     a separate        sovereign

I   aspect.        The     district      court's     theory     here        that   the Constitution            permits        assignment          by


I   Congress         of proprietary           interests       of the United           States,     but not        sovereign       ones       cannot


I   be squared           with    the Supreme             Court's       ruling      •in Vermont       Agency.



I                Second, the Vermont               Agency decision           was heavily        premised       on the long history              and



I   long      acceptance         of qui tam provisions                  since      the founding         of our       republic       (and       even


    before       then      in English       practice).        That      point      is very telling      here because           several       of the
I
    first qui tam statutes             enacted       by early Congresses             involved      situations        like Section           292(b),

I   where        a relator      could     sue to vindicate            sovereign       rather     than      proprietary         interests.       For

I   example,        one such early statute                 authorized           a qui tam relator       to sue to recover               a penalty


I   for failing         to provide        required         census     forms.


I
                                                                             15
I
I
I
               Third,       even if some           form of proprietary                 interest        of the United           States     had     to be

I
    present      in order         for there        to be a valid          assignment            for Article            III standing       purposes,

I   there      is such      an interest       here.         Section      292      specifically         provides         for a penalty        for each


I   instance      of deceitful            patent     mismarking,            and half of that              penalty        is due to the United


I   States.      Thus,       the United            States     in fact has a proprietary                   interest       in Stauffer's         suit.



I              The district         court     accordingly             had no valid basis               for its restrictive         reading        of the


    constitutional           "case or controversy"                requirement,               or for its demand              that    some       form of
I
    concrete      financial         injury    to the relator,           to competitors,            or to the economy                of the United

I   States     be present.


               11. The district            court     also erred         in denying          the United         States       the opportunity             to


I   intervene       in order        to protect        its interests        in the proper          implementation                  of Secti0n       292.



I   The district         court    found       the statutory           intervention          right in Section             2403 (a) inapplicable


    because       the court         did      not    actually      strike        down        the patent        mismarking              provision         in
I
    Section        292.          But the           court      plainly       did      utilize      what       it      viewed        as mandatory

I   constitutional           principles        to find that           Congress         could      not make           the type of assignment

I   covered       by the         actual      wording         of Section           292(b).         Relying         on     its mistaken          view     of


I   constitutional           Article       III principles,         the district         court     wrote      into       Section       292(b)      a new



I   provision        that     relators       can     sue under           that     statute       only     if they have          been      personally



I   injured,      or Competitors              have been         injured,        or if the economy                 of the United          States        had


                                                                            16
I
I
I
     been      injured.         None         of these       limitations         appears        in the text of the statute,               and     they
I
     were      imposed         solely     because         the district        court    believed      that    they were constitutionally

I    compelled.


I                Section        2403(a)         is deprived         of much         of its force      if it can be so easily evaded                by


i    the courts.            The obvious           purpose          of this statutory           provision      is so that     the courts          have



I    the benefit            of briefing         and     argument        by the United            States     before    they strike        down       or


     rewrite         Acts    of Congress              for constitutional            reasons.       Had       the district     court      followed
i.
     that     route,        it possibly      would         have     avoided      its misunderstandings                about         why Vermont

I    Agency actually             does control            here.

I               Alternatively,              the grounds            for intervention            by right     or permission           in FRCP        24


I    were      also     present         here,     and      the district        court    should        have     granted      intervention           on


I    either     of those        bases       as well.


                                                                     ARGUMENT
i,
                I.     The     Applicable             Standards        Of Review
I
                When           a district       court      dismisses       a qui tam relator's               case for lack          of Article     III

I    standing,         the appellate            standard          of review     is de novo. See Stalley v. Methodist                  Healthcare,

I    517      F.3d     911,916           (6th Cir.        2007).


!               With         regard     to denial        of intervention            under      FRCP        24, this Court       has explained



i    that     the standard            of review         is that    of the Circuit         where     the trial court         sits.    See Ericsson


                                                                               17
i
I
I
     Inc. v. InterDigital             Communs.          Corp., 418 F.3d                1217,      1220-21        (Fed.        Cir.      2005).      There      is

I
     a split of authority              on the proper            standard          of review           for intervention               as of right      under

!    FRCP        24(a),       and      many      Circuits       review      such            rulings     de novo.            See Sierra Club,           Inc. v.


I    Leavitt,         488    F.3d      904,      910    (ilth      Cir.     2007).             In the Second                 circuit,         the court       of


,I   appeals          reviews         denials      of    motions           to         intervene         as of        right      or      for      permissive



I    intervention            under      an abuse        of discretion            standard.             See MasterCard                Intern.     Inc. v. Visa


     Intern. Service Ass%                Inc., 471      F.3d 377,          391         (2d Cir. 2006).               However,            even     under       an
I
     abuse       of discretion            standard,         an "error           of law is always               tantamount                to an abuse          of
i
     discretion."            Negron.Almeda             v. Santiago,       528         F.3d      15, 22 (lst          Cir.     2008).

I               11.           The      Supreme          Court       Has     Recognized                  That     Qui          Tam       Relators       Have

I                            Article      III Standing          Based      On InjuryTo                  The United              States'        Sovereignty


                 A.           Qui      Tam      Provisions         Like     Section            292(b)       Have       a Very         Long       Tradition
I                             in the Law of the United                     States



I                The        essence      of the qui tam mechanism                             is that    a private           party       may bring          suit


     because          of a wrong         done     to the sovereign,                   and     is entitled      to a share            of the recovery           if
I
     the action          is successful.         4 Several       centuries         ago        Blackstone         explained             that:

I
I
        4The          term     "qui tam" is an abbreviation                       of the Latin              phrase      "qui tam pro domino                 rege
I    quam pro,_e ipso," which                   means       "who     pursues            this action         on our Lord              the King's       behalf
     as well          as his own."              See Vermont         Agency,            529      U.S.     at 768         (citing         W.     Blackstone,
I    Commentaries             on the Laws of England                "160         ).

                                                                                 18
I
    I
    I
                                  these     forfeitures         created       by statute          are given        at large,      to any

    I                             common         informer;         or, in other            words,       to any such person               or
                                  persons       as will sue for the same;                     and hence          such actions           are

    I                             called
                                  in general.
                                             popular       actions,          because       they are given to the people




    I                                 Sometimes            one part           is given      to the king,           to the poor,         or
                                  to some       public       use, and          the other           part    to the informer              or

    I                             prosecutor.
                                  person      can pursue
                                                          But     if anyone
                                                                   it * * *
                                                                                       hath       begun         action,      no    other



    !   J.W.       Ehrlich,        Ehrlich's Blackstone             545       (1959).


    I                Central        to any analysis             of qui tam provisions                is the Supreme               Court's      observation



    I   that       "[s]tatutes        providing           for actions          by a common                  informer,          who      himself         has no



    !   interest       whatever            in the      controversy            other        than     that    given         by statute,         have     been       in


        existence           for    hundreds            of years         in    England,            and      in     this    country          ever      since     the
    I
        foundation            of our Government."                       United States ex rel. Marcus                     v. Hess, 317 U.S. 537,541

    I   n.4 (1943);           accord        Marvin        v. Trout,       199 U.S.          212,     225 (1905).

    I                In Vermont            Agency, the Supreme                 Court        explored        the development                   of the qui tam


    !   mechanism              in England,          beginning           around         the end of the 13m century                    as a common              law


    i
        device,       and      soon        becoming         a standard           enforcement               mechanism              in various          statutory


        schemes.          529 U.S.           at 774-761          Earlier,      in C.J. Hendrey Co. v. Moore, 318 U.S.                                133,     137-
i
        38 (1943),            the Supreme            Court        had     discussed           the development                in England              of the use
    !
        of qui tam procedures                   for seizures        and forfeitures                to the Crown             of ships or articles             used



                                                                                      19
I
I
      in violation          of the law, whereby             a qui tam relator           brought        a civil action          and received             a

I
     share     of the forfeiture           proceeds.        In that opinion,            the Court        cited and discussed                several

I    qui tam cases of this type decided                     by colonial        •and pre-Constitution                  courts      in America.


I    Id. at 145-48           (citing     and discussing           Hammond         qui tam v. Sloop Carolina,                   a i735       case in


I    New York,             six other     New York qui tam cases between                      1752 and            1772,     and Phi le qui tam



I    v. The Ship Anna,                a 1788    Pennsylvania          case).


                Thus,        by the time          the Constitution             was adopted,           statutes        authorizing           qui tam
i




     suits were well known                 in England        for several        hundred       years and also had been                      utilized
i



     by the colonial            legislatures.          See Note,       The History and Development                       of Qui Tam,            1972

I
     •Wash.     U. L.Q.          81, 83.        This     fact was recognized              by the Supreme                 Court      in Vermont

I    Agency: "Qui            tam actions        appear      to have been          as prevalent           in America            as in England,


I    at least in the period               immediately         before      and     after the framing               of the Constitution."


I    529      U.S.     at 776.          As the      Court        noted,     "immediately              after     the      framing,         the   First



I    Congress          enacted         a considerable            number        of informer        statutes.            Like      their     English


     counterparts,            some       of them       provided      both      a bounty       and an express                cause        of action;
,I
     others     provided             a bounty     only."     Id. at 776-77        (footnotes          omitted).

I
                Qui tam actions             were a routine          feature      of early federal             legislation.in        the United

I    States.         The     First     Congress        enacted      several      such     statutes,       and      at least       five of them


I
                                                                          2O
I
I
I
     hewed       closely     to the model             described      by Blackstone,          and were like Section                 292(b);    i.e.,

!    they provided           for a division         of any recovery          between       the informer          and the Government,

I    authorized           the informer         to file his own suit,             and placed        no restrictions          on the class of


I    persons       who could          serve as relators.           5 See Vermont           Agency, 529 U.S.           at 777 n.6 (listing



I    and describing            such      statutes).



I                Indeed,     the Constitution               itself provided           the basis    for early Congresses               to create


     federal      court     jurisdiction        in a way closely            related      to the type of qui tam action                brought
I
    • here     by Stauffer.           Pursuant          to Congress'             power     to •"grant      Letters        of Marque          and

I    Reprisal,      and make          Rules     concerning           Captures         on Land      and Water"          (Art. I, Sec. 8, cl.

I     11), these     Congresses            authorized        the President            to commission         private       ships     (known      as


i    "privateers"         ) tO capture       enemy       vessels and vessels             engaged    in illegal    trade     with enemies.



I    Under       the prize statutes,           the captor         could     bring the captured          vessel into       the jurisdiction


     of the United           States      and    file an action            against     the ship     in federal      court.         If the vessel
I
     was condemned,              the captor           was entitled         to the ship      or its value.        See, e.g., The Sally, 12

I
     U.S. (8 Cranch)            382, 384 (1814)              (Story,      J.); see also The Nassau,             71 U.S.     (4 Wall.)        634,

I
I       5 See Act of Mar.             1, 1790,        ch. 2, § 3, 1 Stat. 209 (census);                 Act of July 5, 1790,            ch. 25,
     § 1, 1 Stat. 129 (extending                 census      provisions          to Rhode      Island);     Act of July 20, 1790,              ch.
I    29, §§ 1, 4, 1 Stat.             131,     133 (regulation             of seamen);       Act of July 22, 1790,                ch. 33, §3,
      1 Stat.     137-138       (trade       with      Indians);       Act of Mar.         3, 1791,       ch.    15, § 44,         1 Stat.    209

I    (duties     on liquor).

                                                                            21
I
I
I
     640-642       (1866).         As with         the idea behind            Section         292(b),      the premise              of these     prize

I    statutes     was      that    important           sovereign           purposes        could      be furthered            by assigning          to

I    private     persons        the task       of attacking         enemy         shipping,       and making             this system         succeed


I   •through       the offer of a bounty                collected          through       an action         in federal       court.



I      '        •Subsequent         Congresses          andPresidents               continued        to employ           the remedial         qui tam



I    mechanism           as a way of achieving               public        governmental             goals. 6 See H. Krent,                  Executive


     Control Over Criminal               LawEnforcement:              Some Lessons from History, 38 Am. U. L. Rev. 275,
I
     296-300      (1989)        (describing         early Congressional                 use ofqui      tam statutes,         and their effect).

I
     Significantly,        a law enacted            by the Second            Congress          broadly        provided       for the award          of

I    costs     in qui tam         cases.       See Act      of May 8, 1792,                   ch. 36, § 5, 1 Stat.             277-278.           The


I    Second      Congress         thus regarded            the qui tam mechanism                    as a sufficientlywell-established


I    feature     of federal        statutory        law to warrant           a general         provision         governing          costs    in such



I    suits.




I       6 See Act of February                  20, 1792,         ch. 7, § 25, 1 Stat. 239                (2d Cong.;         postOffice);          Act
     of March          1, 1793,      ch.    19, § 12, 1 Stat.              331     (2d Cong.;          trading      with     Indians);         Act of
I    March       22,    1794,      ch.     11, § 4, 1 Stat.           349     (3d Cong.i            foreign      slave     trade)     (applied      in
     Adams,      qui tam v. Woo&,                 6 U.S.    (2 Cranch)            336    (1805);       Act of May 19, 1796,                    ch. 30,
    • § 18, 1 Stat.       469, 474         (4th Cong.;           trading      with      Indians);       Act of April          2, 1802,         ch. 13,
i


     § 18, 2 Stat.       139,      145 (7th Cong:;               trading     with     Indians);       Act of April          29, 1802,          ch136,
     §§ 3-4, 2 Stat.         171, 172 (7th Cong.;                  copyright);          Act of May 3, 1802,                ch. 48, § 4, 2 stat.
I    189,      191 (7th Cong.;             mail     carriers);      Act of March              26, 1804,        ch. 38, § 10, 2 Stat. 283,
     286      (8th Cong.;         Louisiana         slave trade);          Act of March            2, 1807,       ch. 22, § 3, 2 stat. 426

I    (9th Cong.;         slave trade).

                                                                             22
I
I
I
                Qui tam suits were thus                   a firmly     entrenche           d asPect      of American               law by the time
I
    Section          292(b)       was enacted        in 1842,         and     the False Claims               Act was enacted                in 1863.

I   See Act of March                 2, 1863      (12 Stat. 696)            (currently        codified       at 31 U.S.C.             § 3730(b)).


I               There      are currently          several     qui tam provisions                 in the United            States     Code        besides


I   Section          292(b)       and      the False      Claims       Act.         In     Vermont       Agency, the Supreme                      Court



I   identified         several      that      had been       enacted        prior    to 1900,        but were still in existence.                    See


    529       U.S.     at 768        n.1      (discussing       25 U.S.C.                § 201    (penalties         for violation               of laws
I
    protecting          commercial            interests      of Native        Americans);            18 U.S.C.         § 962 (forfeitures                 of

I   vessels      privately         armed      against     friendly      nations);          46 U.S.C.         § 723 (forfeiture              of vessels

I   taking       undersea          treasure      from       the Florida        coast))]


                Congress           has also enacted          qui tam statutes             of more     recent        vintage        that    remain     on


I   the books.           See 26 U.S.C.             § 7341       (forfeiture          of sums        paid     for property            sold to avoid



I   tax); 17 U.S.C.               § 1326       (penalty      for false copyright              marking).


                Moreover,           Section       292(b)       and     its antecedents               have     not     simply•        constituted            a
I
    historical         artifact     - this      statute     has been         used        by qui tam relators              in various        reported

I
I       7 Vermont
    share      of recovery
                              Agency also identified
                                     for contracting           with
                                                                      25 U.S.C.
                                                                        Native
                                                                                          § 81 (providing
                                                                                         Americans
                                                                                                                     a cause
                                                                                                            in an unlawful
                                                                                                                                     of action
                                                                                                                                          manner)
                                                                                                                                                     and
                                                                                                                                                           as


I   being
    statute
               on the books
                  were        repealed
                                        at the time of that
                                              when        Section
                                                                      decision;
                                                                       81 was
                                                                                         however,
                                                                                          amended
                                                                                                       the qui tam provisions
                                                                                                           with     the     March          14,
                                                                                                                                                  of that
                                                                                                                                                   2000,
    enactment           of The Indian           Tribal      Economic          Development             and Contract             Encouragement
I   Act,      Pub.     L. 106-179.

                                                                              23
I
I
I
    decisions          through          its 167 years of existence.                The earliest         reported       qui tam case under

I
    the statute         that we have been                able to locate          is Nichols    v. Newell,        18 F. Cas.     199 (C.C.D.

I   Mass.       1853),      and      other       reported          decisions      demonstrate          its continued          use.      See, e.g.,


I   Winne       v. Snow, 19 F. 507                  (D. N.Y.       !884);      London v, Everett H. Dunbar                 Corp. 179 F. 506


I   (lSt cir.      1910);        sippit     Cups, Inc. v. Michael's              Creations,     Inc., 180 F. Supp.             58 (E.D.N.Y.



I   1960)_ and           Brose v. Sears Roebuck&                     Co., 455 F.2d       763     (5 m Cir.       1972).



I               This     lengthy          history      and     continuing         practice      of Congress           legislating,       and     the


    courts      enforcing,           qui tam         provisions         is important          because         the Supreme            Court       has
I
    instructed           that     the      way      constitutional          provisions         have        actually    been     applied         and

I
    understood            over     a lengthy          period       give those      constitutional            provisions       meaning.           See

I   Mistretta       v. United           States, 488         U.S.     361,401       (1988)      ("traditional          ways of conducting


I   government             * * * give meaning                  to the constitution");               The Pocket Veto Case, 279                  U.S.


I   655,     689       (1929)       ("long       settled       and     established       practice          is a consideration           of great



I   weight"        in constitutiOnal                adjudication).


                Furthermore,               the Supreme             Court       has explained        that     legislation      "passed        by the
I
    First Congress              assembled           under      the Constitution,             many     of whose        members        had taken

I
    part     in framing          that     instrument,          * * * is contemporaneous                    and weighty        evidence         of its

I   true meaning.                Wisconsinv.           Pelican Ins. Co., 127 U.S. 265,297                      (1888).     The Court           "has


I
                                                                            24
I
I
I
    repeatedly         laid down         the principle           that a contemporaneous                       legislative      exposition           of the

I   Constitution             when       the founders            of our Government                    and framers         of our Constitution

I   were actively            participating        in public         affairs      acquiesced            in for a long term            of years,       fixes


I   the construction                 to be given         its provisions."              Myers v. United            States,      272 U.S.       52,      175


I   (1926)      (giving       great     weight       in constitutional               interpretation           to the practices         of the early



I   Congresses:);             accord         Marsh     v. Chambers,            463        U.S.     783,    790 (1983);          Bowsher v. Synar,


    478 U.S.          714,     723-24        (1986). 8
I
                Consequently,                in finding          that     qui tam          mechanisms            are   fully     consistent          with

I
    Article      III standing           requirements,             it is not at all surprising                 that     in Vermont         Agency the

I   Supreme           Court         looked     to the long              tradition         of qui tam actions            in England            and      the


i   American          Colonies,"          which        the Court           examined              in some detail.        529 U.S.          at 774-78.


I   The       Court          then      found         "this      history        well       nigh      conclusive         with      respect        to     the



i   [constitutional             standing]        question"              (529    U.S.        at 777),       and    concluded          that     "[w]hen


    combined           with         the theoretical          justification            for relator         standing       discussed          earlier,        it
I
I
I             8There
    Constitution.
                             are     obviously
                               For example,
                                                       limits      to the
                                                       the First Congress
                                                                                    use     of history
                                                                                           also passed
                                                                                                              alone
                                                                                                              the statute
                                                                                                                         in     interpreting
                                                                                                                                 struck      down
                                                                                                                                                       the
                                                                                                                                                        by

I   the Supreme
    instance,
                             Court
                   as demonstrated
                                        in Marbury
                                                 above,
                                                             v. Madison,
                                                                the historical
                                                                                 5 U.S.          (1 Cranch)
                                                                                          evidence
                                                                                                                  137 (1803).
                                                                                                          from long English
                                                                                                                                       But,
                                                                                                                                      practice,
                                                                                                                                                 in this
                                                                                                                                                       the
    American          colonial         experience,           and the early sessions                  of Congress         utilizing     the qui tam
I   mechanism            is overwhelming.

                                                                               25
I
I
I
    leaves no room              for doubt          that a qui tam relator           Under    the [False Claims          Act] has Article

I
    III standing."            529       U.S.      at 778.

I                Thus,      as already         discussed,       the Supreme          Court   held     in Vermont       Agency that         a qui

1   tamrelator           who brings            an action       for himself       and for the United          States     under     the False


t   Claims        Act has Article              III standing      because     Congress        has, through       legislation,       partially



I   assigned        to the relator              the authority        to pursue        the chose       in action       belonging       to the


    United        States.     9 The        Court      so held even          though      the relator       has suffered         no concrete
I
    and individualized                  injury;     the injury      sufficient       for constitutional        standing         purposes       is

I
    that     caused         to the       United       States     by the      submission       of    false   claims      to government

I   officials.      This      holding          in Vermont      Agency should          have been       dispositive      of the issue        here


I   and     established          that     plaintiff     S.tauffer     has standing.


I
I
I
I
I          9 This        legislative      partial     assignment           is made      pursuant      to Congress'         power      in the

I   Property
    dispose
                    Clause
                    of the
                                 of the Constitution
                                interest          of the United
                                                                    (Art. IV, Sec. 3, cl. 2), under
                                                                        States       in a chose
                                                                                                               which'Congress
                                                                                                      in action.        "The      power
                                                                                                                                            can
                                                                                                                                               of
    Congress         to dispose          of any kind          of property        belonging    to the United           States    is vested      in
I   Congress         without           limitation."         Alabama        v. Texas, 347      U.S. 272,       273     (1954).

                                                                            26
I
    I
    I
                    B.            The District          Court       Misunderstood                   the Nature            of Qui        TamActions,                and

I                                 Incorrectly
                                  Competitor,
                                                        Ruled
                                                         or Injury
                                                                    that     Relators
                                                                             to the Economyof
                                                                                                Must     Show         Injury
                                                                                                                   the United
                                                                                                                                     to Themselves
                                                                                                                                         States.
                                                                                                                                                                   or a



    I               As described             earlier,     the district          court      here concluded                 that the Supreme                 Court's


    i   decision         in Vermont Agency does not gover n the standing                                          issue under          Section       292(b)         for


        two reasons.
I




    I               First,    "[i]n most          qui tam actionsl              the alleged          in3ury in fact to the United                         States     as


        assignor         is obvious         and     proprietary.             In a claim          brought           pursuant          to the False Claims
    I
        Act, * * * for instance,                  the injury        in fact is simply             the 'proprietary                  injury   resulting           from

    I   the alleged          fraud.'"        A8.        By contrast,            the district         court        believed      that     the injury             to the

    I   United           States      through            violation          of    Section          292        is    "far      less     evident"            and      not


    I   "proprietary."              A8.      And,       the district         court        expressed          "doubt[}        that      the Government's



    I   interest      in seeing            its laws enforced               could        alone    be assignable,               concrete           injury     in fact


        sufficient         to establish           a qui tam plaintiffs               standing."              A9 (fn.5).
    I
                    Second,         the district          court      reasoned           that    "[i]n    particular,           the complaint                fails to
    I
        allege with          any specificity            an actual          injury    to any individual                 competitor,             to the market

    I   for bow ties, or to any aspect                          of the United              States       economy."              A9.       The      court      found


    I   that   Stauffer           cannot      under       the Constitution                 have standing              because          he "failed         to allege


    I   that       defendants'             conduct         has      caused           an     actual       or       imminent              injury      in     fact      to



    I
                                                                                     27
    i
I
I
      competition,           to the United        States     economy,              or the public          that could        be assigned        to him

I     as a qui tam plaintiff              or be vindicated            through         this litigation."             A10.

I                 In other       words,       the district          court      conceded           that,     like    the    False     Claims       Act,


.in   "Section          292 * * * assigns        to Stauffer          - or to 'any person'                - the authority            to bring      suit


I     to vindicate          cognizable        injuries      incurred          on the public             or the United           States       through



I     violation         of its provisions."        A8.     Nevertheless,              in order      to avoid        the holding          of Vermont


      Agency, the district            court     dismissed           Stauffer's        complaint           because         it "fails to allege       an
I
      injury      in fact to the public           or tO the United                  States,      [and     he thus]        lacks constitutional

I
      standing          to proceed        on [the United            States']       behalf."       A12.

I                 There     are several       serious    flaws in the district                court's      attempt        to skirt the Vermont


I     Agency controlling             precedent.


i                 First, the district       court wrongly            believed        that the chose          in action       partially       assigned



i     under       the     False Claims         Act is necessarily                "proprietary"            for the United            States     rather


      than     sovereign         in nature.       This     belief     is Wrong.          An individual             commits         a violation         of
i
      the False         Claims      Act    (31 U.S.C.         § 3729)            by submitting             a false claim           to the United

I     States      even     when      the Government                 suffers        no financial           or proprietary           injury      of any

i     kindfrom            that false claim.         Numerous                precedents         establish       that   a qui tam relator            can


I     bring a valid action            to obtain      statutory         penalties         under      the False Claims            Act even when


i
                                                                              28
i
    I
    I
         the Government               has suffered             no financial          loss.       See, e.g., U.S. ex rel. A+                   Homecare,

    I
         Inc.     v. Medshares             Management                Group,          Inc.,       400     F.3d        428,     446     (6th     Cir.         2005)

    I    ("[R]ecovery            under      the     FCA        is not        dependent            upon      the        government's             sustaining


    I    monetary          damages,"         quoting      Varljen       v. Cleveland             Gear Co., Inc., 250 F.3d 426                        (6th Cir.


    I    2001));        Bly-Magee          v. California,         236        F.3d     1014,       1017     (9th        Cir.    2001)        ("[A] qui tam



    I    plaintiff     need      not prove        that    the federal          government              will suffer monetary                 harm        to state


         a claim      Under       the FCA.");            Harrison       v. Westinghouse             Savannah            River Co. 176 F.3d                   776,
    I
         785 n.7 (4th Cir. 1999)                  ("[T]here        is no requirement                that the governmefit                    have suffered

I
         damages        as a result        of the fraud.'!);            United       States       v. Rivera, 55 F.3d                703,     709     (lst    Cir.

I        1995)       ("[T]he     statute      attaches         liability,     not        to the underlying              fraudulent           activity       Or to


I        the government's                wrongful        payment,            but to the claim            for payment").


I                    The    imposition            of penalties              in the       False    Claims            Act serves        to vindicate            the


         Government's             sovereign         interest      in enforcing            compliance        with its laws.             More        generally,
|
         under       a variety     of criminal           and civil provisions,                the Federal            Government              often      sues to
    I
         obtain      fines or other          monetary          penalties        for violations           of its laws, and it need                  not prove

    I    tangible      injury     to the Government                  fisc or to the public               in order        to establish         its standing

    I    to sue.                                                                                                ,


    I,                Thus,       contrary        to the        district      court's        understanding,                 the     False     Claims          Act


    I    authorizes        qui tam actions             even when             the only         injury     suffered           by the United            States     is


                                                                                    29
    I
!
I
     an injury      in its sovereign               capacity,      and this legal principle                   was fully established                 before

I    the Supreme            Court       held in Vermont             Agency that a Clui tam relator                     under      that statute           has

I    Article     Ill standing.          Section         292(b)     is therefore           no different          from the False Claims                    Act


I    insofar      as it authorizes               qui tam relators             to bring       suit when           the    underlying            statutory


i    scheme        is violated,           regardless            of whether            the     United          States        has    suffered             some



.I   proprietary           injury;     both        statutes      confer        standing       to sue based             on. the          injury       to the


     United       States      in its sovereign            capacity.
I
                 Second,      the     district      court       plainly       misread        Vermont          Agency by stating                  that     the

I    Supreme        Court       determined              there    that     the required             harm      in False Claims             Act cases "is

I    simply      'the proprietary              injury     resulting          from    the alleged          fraud,'"     and interpreting                  the


I    Vermont       Agency holding                as requiring         that     the United           States     must        have   "an injury             to it



I    or to the public           stemming             from       the fraudulent            or deceptive           false marking."             AS.         The



I    Supreme        Court        clearly         recognized        that       a qui tam relator              under     the False          Claims         Act


     asserts     an undifferentiated                 overall      injury      consisting           of both      sovereign         and proprietary
I
     injuries:      "It is beyond           doubt        that    the complaint              asserts       an injury        to the United             States

I    - both      the injury          to its sovereignty            arising      from      violation          of its laws (which             suffices       to

,i   support       a criminal          lawsuit       by the Government)                      and      the proprietary             injury      resulting


I    from      the alleged           fraud."        Vermont       Agency,           529     U.S.      at 771.        The     district      court        here


I    omitted       the key aspect          of that sentence               fro m the Supreme                Court's         opinion,        stating       that

                                                                               30
i
I
I
     the injury      in a False Claims             Act case also consists                 of "the injury           to [the United             States']

I
     sovereignty         arising     from    the violation               of its laws."       Ibid.

I               Vermont       Agency thus          does      not      provide       support         for the proposition               that     only      a


I    proprietary           or economic            injury      suffices        to establish          standing;       to the        contrary,        this


I    Supreme        Court      decision      provides             support      for the proposition               that either       an economic



I    injury     or a sovereign           injury     to the United               States    can validly          be partially        assigned        to a


     private     relator     to pursue       in litigation,              and thereby       provide       the requisite            concrete       stake
I
     in the controversy              to support        Article        III standing.

I               Third,     the district       court        expressed           "doubt[]      that     the Government's                 intere_st      in

I    Seeing its laws enforced               could      alone         be an assignable,              concrete      injury     in fact sufficient


.I   to establish          a qui tam plaintiffs               standing."            A9 n.5,           To support           this    position,        the


I    district    court     cited    Federal Election Commission                     v. Akins, 524 U.S.            11, 24 (1998).             But that



I    case is readily         distinguishable.


                J_kins did         not   involve      a qui tam statute.                  And        although       the      Akins     Court       did
I
     conclude       that     an "abstract"          harm          such      as "injury    to the interest           in seeing        that     the law

I
     is obeyed       * * * deprives          the      case of the concrete                 specificity"          necessary        for Article         III


     standing,       it did so to indicate                 that     individuals      could      not     assert     this    injury.      Ibid.      The


I
l
                                                                               31
!
!
!
    Akins      decision          made      no suggestion                that       the Government            cannot         assert     or assign          Its

!   sovereign       right    to see its laws obeyed.

|              Further,          the district        court       implied           that,     to support           Article    III standing,              the


|   underlying        injury        must       be economic               in nature           and      adversely       impact         an "individual


|   competitor,           * * * the market                for bow          ties,     or * * * any aspect                of the       United        States



|   economy."         A9.         But, under           the district        court's         reasoning,        not only does             a relator        lack


    standing       to sue for patent                mismarking,            but the United               States      itself must        perforce         also
|
    lack standing           because          it has,      in the        district       court's       view,   suffered        no      injury.       If the

I   district     court's         theory      were      correct,         there        would       accordingly          be a serious             question


I   whether       the United              States     itself    could       bring      an action         in court        to enforce        the patent


I   mismarking            law.



I              Fourth, as noted             above,      the Supreme                Court      was heavily         swayed       in Vermont         Agency



I   by the sterling              pedigree          of qui tam provisions                     in the      United        States'       constitutional


    framework.             That      history        is equally          Compelling             here     because        many       of the qui            tam
I
    provisions       cited       by the Supreme                 Court      in Vermont            Agency were like Section                  292(b)         in

I
    a critical    respect:         they involved              assignment           to a private         re!ator      of the ability        to pursue

I   a suit for a penalty            in order         to vindicate           the sovereign             interests      of the United             States     in


I   obedience        to federal            laws; these          statutes        in no way involved                  suits   to collect         damages


I   against      the proprietary             interests         of the United               States.

                                                                                32
I
I
I
               Thedistrict          court's       analysis       of constitutional            Article      IlI mandates              and Section

I    292(b)     thus     ignores        the fact that Section           292(b)       is like several             of the qui tam provisions

I   passed      by the First Congress,                and relied        on by the Supreme                    Court      in Vermont         Agency,


I   529    U.S.     at 776      n.6,     as historical       validation         of qui tam actions.                 For example,           the Act


I   of March        1, 1790,        in Section        3 (1 Stat.       102), provided               a cause       of action      and a bounty



1   of half the fine for certain                failures     to file census        returns.          In Section         1 of the Act of July


    5, 1790       (1 Stat.     129), Congress              extended        this provision.            And,        Sections      1 and 4 of the
I
    Act Of July 20, 1790,                provided         for suits     to be brought           by persons            to collect      half of the

I   fines for certain          practices        involving         seamen.        1 Stat.      131,      133.       Further,      Section       44 of

I   the Act of March                3, 1791       (1 Stat.    209),     authorized          private        individuals          to sue for and


I   receive     half of the goods             forfeited      for unlicensed          trading         with Native             American      tribes.



I   None       of these      statutes      involved        a traditional        proprietary          injury       to the United          States      or


    to the person          bringing        the suit.
I
               Fifth,     Section        292(b)       involves        assignment           of a chose              in action         to obtain          a
i



    monetary        penalty        for patent       mismarking,            half of which            will be paid         to the relator           and

i   the other       half to United             States.       This     monetary        recovery          itself     provides      a proprietary


i   interest      in the      claim,        under         such      circumstances,            the     premise         that     the    injury      and


i   interest      here    is solely      sovereign         is inaccurate.



I
                                                                           33
i
I
I
              The       district     court's     standing         ruling     here      is at odds        with      the ruling       in Pequignot

I
    v. Solo Cup Co., 640               F. Supp.      2d 714 (E.D.                Va. 2009),        where         the court        addressed         the

I   precise     issue      of whether          an injury    to sovereign            interest      in and of itself was sufficient                     to


I   confer     standing        on qui tam relators                under      Section         292(b),      and concluded             that     it was.


I   Observing         that    the Supreme           Court      had not distinguished                    between        financial         injury    and



I   sovereign        injury        in its discussion        of assignment              in Vermont         Agency, the            Pequignot        court


    "decline[d]         to adopt       this distinction."           Id. at 723 n. 15. Similarly,                   the court       in Harrington
I
    v. CiBA       Vision      Corp.,    another      Section        292(b)         case, specifically           rejected       the defendant's
I
    "proposed           dichotomy           between         the     United          States       Government's                 proprietary          and

I   sovereign       interests,"        and found       that       itwas     "insufficiently            defined      for this Court           to hold


I   that    Congress          may not assign         a qui tam cause of action                   to a private         individual          when      the


I   United      States       Government           has suffered            injury    to its sovereign             interest."       See transcript



I   of oral decision           in Harrington         v. Ciba Vision Corp., No.                   3:08-cv-251          (W.D.N.C.             May 22,



I   2009)     at 117.


              In short,        as we have explained,               the qui tam method                  for achieving          public      goals was
I
    well known           to the Framers            of the Constitution                 and the Members                 of the first sessions

I   of Congress,             and     was   obviously          viewed         by them           as fully     consistent            with     the     new

I   constitutional            scheme       they     were      creating.            It would        have      been        quite      odd      for the


I
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I
I
I
     individuals          who had just spent               immense        effort        molding          a new governmental                   structure

I    to have        enacted      immediately             thereafter      not     simply          one,     but       several    statutes       violating

I    that   very structure.           The earliest         federal     legislators        created         various       schemes         under       which


,I   qui tam relators           could      sue to vindicate           the Sovereign              interests        of the United           States,     and



 I   the    use      of    statutes        like    these      continues            to     this     day.           Thus,        the     approach             to



I    constitutional           adjudication          applied        by the Supreme                Cour t in Vermont              Agency by relying


     heavily      on      the system          of long      practice      in this         country,          which       gives      meaning           to the
I
     Article      III case or controversy                 requirement,           governs          this case as well.

I              IlL         The      District       Court       Plainly         Erred       In Rejecting                The      Request            By the
                           United         States    To Intervene           In Order          To Defend                The     Constitutionality
I                           Of Section         292(b),      And       To Explain          Why           Plaintiff      Stauffer's         Complaint
                           Was      Sufficient          For Article       111 Standing              Purposes.

I              The district           court    erred               "
                                                          in denying      the Government                     s request        to exercise       its right

I    to intervene          in this case, or to intervene                  permissively             under          FRCP        24(b).


I              A.          Intervention            as of Right         Under         FRCP          24(a)


I              1. FRCP           24(a)(1)      provides       that on timely            motion,          the court        must       permit        anyone



I    to intervene          who "is given an unconditional                       right      to intervene              by federal        statute."      The


     United       States      satisfied       this requirement            in this case.
I
               First, the •United             States'     motion       in the district           court       to intervene            was timely.          At

I
     the time the court            dismissed            the Complaint,          the United              States'      time to intervene              in the

I
                                                                           35
I
I
I
      action     had not           expired.      Pursuant          to FRCP        5.1 (c), "unless         the court         sets a later time,

I     the attorney           general        may intervene           within     60 days after the notice                   is filed or after      the

I   • court     certifies     the challenge,           whichever          is earlier."       Here,      the court        granted      the United


I     States     until       May       22,    2009,        to    advise      whether        it would        intervene          to defend         the



I     constitutionality              of the statute.            But the court         instead     dismissed            the case prior       to that


      date.
I ,
                 Likewise,          the periods        for the United          States      to seek reconsideration                 of the court's

I
      decision      and to appeal             the decision          had not expired             when      the United         States     moved      to

I     intervene.            See     Local     Civil     Rule       6.3    ("A notice         of motion           for    reconsideration           or


i     reargument            of a court        order     determining           a motion         shall be served            * * * in the case of


I     a court       order         resulting      in a judgment,              within      ten     (10)     days    after     the     entry   of the


      judgment.");           FRAP       4(a)(1)(A),        (B) (notice       of appeal         must     be filed with        the district      clerk
I
      within      30 days after             the judgment           or order       appealed        from      is entered;           60 days if the
I
    United         States     or an officer           or agency      of the United           States     is a party).       Thus,      the United

|     States'    motion           to intervene         was timely.


I                Second, the United               States        has an unconditional              right    to intervene            to defend     the


I     constitutionality              of a federal      statute.      Pursuant         to 28 U.S.C          § 2403(a),        "[i]n any action,



i     suit or proceeding               in a court        of the United            States       to which      the United            States   or any


      agency,      officer        or employee          thereof      is not    a party,     wherein        the constitutionality             of any
I
                                                                             36
I
I
I
     Act    of Congress            affecting        the public           interest     is drawn          into      question,        the court          shall

I
     certify      such      fact   to the         Attorney         General.         and       shall     permit        the     United         States      to

i

      intervene         * * * for      argument           on the         question         of constitutionality."                    This     statute      is


l     implemented              by FRCP            5.1   and      Local      Rule      24.1.     Here,          the     district      court     had       an



I    obligation         to permit         the United          States     to defend       the constitutionality                of Section        292(b)


     before       determining             that     Article      III of the          Constitution            prohibited             Congress          from
I
      assigning     to a qui tam relator                the authority         to pursue         a case on behalf              of himself       and the
I
     United       States       for patent         mismarking,            regardless       of whether           any injury          to the plaintiff,

I    or the competition,                  or to the federal             fisc or national          economy            had been         shown.


i               In Merrill v. Town of Addison,                    763 F.2d 80 (2d Cir.                  1985),       the plaintiffchallenged


I    the constitutionality                 of a New          York state       statute,      and       the district       court       dismissed          the



I    complaint           for failure       to state      a claim,        without      certifying          the constitutional               question.


     On appeal,          the Second          Circuit         notified      the Attorney           General         of the State        of New York
I
     that     the appeal        was pending             and granted           him     the opportunity                 to intervene           as a party

I
     defendant           and    respond,          which        he did.        Id. at 82.          While        the court           found      that      the

.|
     district     court's       failure     to certify        did not deprive             the court         of jurisdiction            and     did not


 I   necessitate         a remand,          it instructed         that     "[c]ertification            is * * * a duty            of the court         that


 i   should       not    be ignored,             even   if the claim         is obviously             frivolous       or may be disposed                 of



 I
                                                                              37
 I
I
I
     on     other      grounds        "      Ibid.        While       belated        certification          was "not            ideal,"     the      Second

I
     Circuit         found      it "is sufficient           to honor         the purpose               of Section          2403."       Id. at 83.

I               In this case, Brooks                  Brothers'        motion        to dismiss          and the district           court's        decision


!    dismissing             the complaint             on Article          III standing          grounds           both     Call into      question          the


I    constitutionality             of Section            292(b)       The court        dismissed           the relator's         Complaint            on the



I    ground          that    Stauffer        did not allege            a sufficient           injury      in fact to have            standing         under


     Article        IiI of the Constitution.                    By virtue       of the court's            ruling,        an attempt        by Congress
I
     to assign         the ability          to bring       an action        under       Section          292(b)          to a private       perso n who

I    does      not     meet     the standing              threshold        imposed           by the court            -     an economic            injury        -

i    would       not be constttunonal.
                                        •      ,          10




I               As we have           shown           above,        the district       court's          analysis      contradicts          the Supreme



I    Court's         holding      in Vermont             Agency. The district                court's     conclusion           here that the relator


     was required             to show something                    more     than      that     the Government's                  sovereign           interest
If
     was affected            by the false patent                marking         is contrary            to the holding            of Vermont           Agency
i
I           10 Although           the district            court      denied        the motion             to dismiss          on the ground                that
     Section           2403(a)was                  not     relevant         because           the       court       had       not      ruled         on      the

I    constitutionality
     filed by Brooks
                                   of Section
                                 Brothers
                                                         292(b),
                                                     in the district
                                                                     we note that the Notice
                                                                            court     described
                                                                                                                  of Constitutional
                                                                                                          the constitutional                issues
                                                                                                                                                  Question
                                                                                                                                                          it was


i    raising,        and listed
     of law flied• by Brooks
                                     first theArticle
                                                   Brothers'
                                                                   II! standing
                                                                    in support
                                                                                       issue.       A190.
                                                                                        of its motion
                                                                                                                   And,      in the memorandum
                                                                                                                     to dismiss,          the     company
     appears         to make      the argument                 that the district        court       accepted.            A136-39.         Thus,      Brooks
i    Brothers         itself apparently              thought        that this point           did indeed            implicate       Section        2403(a).

                                                                                38
|.
I
I
       and       interprets       Article      III standing           too      narrowly.            As such,        the       United       States     was

I      entitled         to the opportunity             to intervene              to present          its arguments             in defense           of the


I      statute's        constitutionality,         including           the Article            Ill standing         of the relator.           See,      e.g.,


I      O'Keefev.         New York CityBd.              of Elections,        246F.        SUP p. 978 (S. D. N. Y. 1965)                       (granting



I      United        States'     motion       to intervene          under        Section         2403(a)       where      the constitutionality



I      of Section          4(e) of th e Voting              Rights         Act     had     been       drawn       into    question);         US West


       Communications,              Inc. v. TCG        Seattle,      971       F. Supp.        1365        0gg.D. Wash.           1997)      (granting
I
       United        States'     motion       to intervene           under         FRCP        24(a)(1)        to defend       •constitutionality

I      of provision             of Telecommunications                      Act);      Raite    Rubbish         Removal        Corp. v. Onondaga

I      Cty.,161         F.R.D.      236      (N.D.N.Y.           1995)       (granting           state's    motion        to intervene          under


I      FRCP          24(a)(1)       where       plaintiff         challenged             state       statute      as     an     unconstitutional


I      infringement             of the Commerce                 Clause).



I                  2.    Alternatively,         the      United       States          should       be permitted            to intervene             under


       FRCP         24(a)(2),     which       provides      that     a party       is entitled        to intervene            as a matter      of right
i
       when        the applicant"             '
                                          claims      an "
                                                         mterest               "
                                                                         relatmg         to the property           or transaction           that is the

I      subject       of the action,          and is so situated             that      disposing        of the action           may as a practical

,|',   •matter       impair      or impede         the movant's              ability       to protect          its interest,      unless      existing


|      parties      adequately         represent         that     interest."          FRCP         24(a)(2).      The      Second         Circuit      has



I      identified        four criteria        that a movant           must       satisfy in order           to intervene         as of right        under

                                                                                 39
I
!
I
     FRCP        24(a)(2):          "the    applicant          must      (1) file a timely                motion;        (2) claim       an interest
!
     relating     to the property              or transaction          that     is the subject            oftheaction;           (3) be so situated

i    that     without       intervention            the disposition             of the action             may impair          that     interest;     and


I    (4) show       that      the interest          is not     already        adequately           represented           by existing          parties."



I    Butler, Fitzgerald           & Potter v. Sequa Corp., 250 F.3d                        171, 176 (2d Cir. 2001)                    (citing      United



I    States v. Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir.                                       1994).


                 The United           States     satisfies       each of the four requirements                           for intervention            as of
I
     right.      First, as set forth          above,     this application               is timely.         Second, the United              States     has

I
     an interest        in the action.           As explained            earlier,       the United           States      has two interests:           the

I    United       States      has a statutorily           mandated             interest       in defending            the constitutionality               of


 I   its Statutes;         and      the    United       States       has a strong           interest         in seeing       the     patent      statute


 I   enforced.          The      Government             has a sovereign               interest     in preventing            the distribution              of



,I   falsely     marked          unpatented           items,     and     it also has a proprietary                      interest      in half of the


     damages        gleaned          from     such     unlawful         activity.         The     district     court's      narrow        holding         in
/
     this case       restricts        individual         relators'       and         the United            States'     ability       to bring       these

,I   lawsuits.       Thus,       the district         court    should         have allowed           the United           States      to intervene.


 !   See Phillips        Petroleum          Co. v. Shutts,         472        U.S.     797,       805      (1985)       (litigants      always       have


i    standing       "to vindicate           [their]    own interests");               see generally Reich v. ABC/York-Estes                        Corp.,



 I   64 F.3d 316,             322    (7th Cir.        1.995) ("In ascertaining                   a potential          intervenor's        interest        in

                                                                               40
i
I
I
     a case,      our cases focus              on the       issues     to be resolved             by the litigation              and whether           the

I    potentiai         intervenor            has an interest           in those         issues.");      Nuesse      v. Camp,       385     F.2d      694,

I    700 (D.C.          Cir. 1967) (recognizing                 that     the "interest"           requirement
                                                                                                                            "\



                                                                                                                        under      FRCP      24(a)(2)


I    is "primarily          a practical         guide     to disposing            of lawsuits         by involving         as many       apparently



i    concerned           persons        as is compatible              with      efficiency        and due process").



I                Third, the United              States     is so situated             that, without        intervention,           the disposition


     of the action           may prejudice               its ability     to protect          its interests.           AS set forth       above,       the
,I
     United       States'      interest       in enforcing        the patent            statute      is adversely      affected      by the district

1    court's      decision         because       that court's         ruling      made       it more      difficult     for the United             States

i    and individual            relators        to bring such suits.              Without          the ability       to present       its arguments


!    regarding          the statute,         the ability      of relators         and the United              States     itself to pursue           relief



l    and    the United             States'     sovereign        and      proprietary          interests       were gravely          undermined.


                 Fourth,       the United           States'     interests         are not         "adequately          represent[ed]"            by the
I
     "existing         parties."       FRCP         24(a)(2).        Simply       put,     the interests         of the United            States      and
l    the arguments              in support          of those         interests        havenot         been     adequately          represented          in

!    this matter.           See Lake Investors Dev. Group, Inc. v. Egidi Dev. Group,                                    715 F.2d         1256,      1261


I    (7th      Cir.    1983)       (adequate        representation               requirement            of FRCP         24(a)(2)      is satisfied          if


i    "the applicant            shows         that   representation               of his interest          'may be' inadequate;               and the



I    burden           of making        that     showing         should         be treated         as minimal.")           (quoting        Trbovich          v.


                                                                                 41
i,
I
I
    United Mine Workers                   of Am., 404         U.S.     528,       538     n. 10 (1972));             SECv.        Dresser, 628 F.2d

I   1368,     1390       (D.C.     Cir.      1980)        (an applicant           "need        only Show that             the representation                of

I   his     interest       may       be     inadequate;              the     burden            of     proof       rests      on     those       resisting


!   intervention").


i              In      short,     intervention              for      purposes            of reconsideration                      and/or        appeal         is



I   authorized          and appropriate               in the Case of nonparties                       whose          interests      may be affected


    by a pending           case and whose                 right     to appeal          may otherwise              be in doubt.              See Marino,
i
    484 U.S.         at 302.      The application                 here satisfied         all requirements                 for intervention,             and,

!   as Marino        makes       clear,     intervention            was appropriate                 to ensure        the United           States'   ability

|   to pursue        its interests        on reconsideration                 and/or        appeal.           Accordingly,          the district       court


i   should      have granted              the United         States'       motion         to intervene            in this matter            pursuant        to



i   FRCP       24(a)(2).


              B.           Permissive           Intervention
I
               In the alternative,              the United             States         should        have      been      permitted          to intervene

I
    pursuan         t to FRCP         24(b),        which     provides:            "On     timely          motion,        the court         may permit

i   anyone         to intervene           who   * * * has a claim                or defense           that     shares     with      the main        action


I   a common            question          of law or fact."             Here,          the United           States'      claim,      briefly     stated,        is


i   that     the     plaintiff       relator        has     Article        III    standing           to sue       and      need       not      show       any



I   additional          economic           injury     to bring        his suit other            :than what            he has already            claimed.


                                                                                 42
/
I
I
     This   claim       presents     "common         question[s]        of law or fact" with          claims       made    by Brooks

i    Brothers         which      sought    and   obtained       a ruling     from      the district        court     on    this   issue.


I    Accordingly,         the United        States   should     have been      permitted        to intervene         under        Fed. R.


!    Civ. P. 24(b).



l                                                         CONCLUSION


                For    the    foregoing      reasons,     the   United      States     should       have     been      permitted           to
I
     intervene         in this     suit,   and   the judgment            of dismissal      by the        district      court      in the

I    underlying         case should        be reversed      and this suit should           be reinstated.

I                                                        Respectfully      submitted,


l                                                                           TONY       WEST
                                                                             Assistant      Attorney         General

I
                                                                            DOUGLAS             "N. LETTER

 I                                                                           (202)
                                                                            Appellate
                                                                                       514-3602
                                                                                            Litigation         Counsel

I                                                                           Civil Division,
                                                                            Department
                                                                                                    Room
                                                                                                 of Justice
                                                                                                                   7318     ,


                                                                            950      Pennsylvania          Ave.,    N.W.
1                                                                           Washington,           D.C.       20530



i    November           23, 2009

'1




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    OPINIONS   AND   ORDERS

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1                                                                                                                             COPY YOUR USDC SDNY
                                                                                                                                    FOR
                                                                                                                               It,FORMATIOtl DOCUMENT
                                                                                                                                 I
                                                                                                                                                                     ELECTRONICALLY                               FiLEE
                 UNITED  STATES   DISTRICT   COURT                                                                                                                   DOC #-
                 SOUTHERN    DISTRICT   OF NEW YORK                                                                                                                  D a'zrILED:
                 .................................................................                                                                       X



!
                                                                                                                                                                                               •T.?;_ I    " !        "   _.   [ X,,"




                 RAYMOND                                                             E. STAUFFER,


 I                                                                                                               Plaintiff,                                        08-cv-10369       (SHS)

                                                                                                                                                                   OPINION         & ORDER
I                                                                                       -against-


                  BROOKS                                          BROTHERS,    INC.                                and
                  RETAIL                                         BRAND   ALLIANCE,                                   INC.
i|
                                                                                                                 Defendants.

"-'1['
                    .................................................................                                                                        X




!                    SIDNEY                                        H. STEIN,                     U.S. District           Judge.


                                                  • Pro se plaintiff                                  Raymond          E. Stauffer          brings     this _       tam action     against     Brooks


                     Brothers,                                       Inc. and its parent                       company,            Retail   Brand      Alliance,      Inc. (collectively,          "Brooks


  !                  Brothers")                                            alleging             false     patent     marking         in violation       Of section      292 of the Patent             Act.       35


                     U.S.C.                               § 292.                        That     section      prohibits        a person       from marking           an "unpatented          article"        with


                      words                           "importing                               that the same         is patented,           for the purpose         of deceiving      the public."               Id__:


                      It further                                    provides                   that "any person"               may sue for damages,                 and if damages       are imposed


                      under                          the statute,                            "the person           suing"      is to receive         one-half      and the United      States         is to
:|
                       receive                              the other                       half.       Id._. Stauffer        contends       Brooks      Brothers      has falsely     marked             the bow


 I                     ties it manufactures                                                      and sells with the phrase                   "The      Original     Adjustolox       Tie Reg'd            &


                       Pat'd                        U.S Pat. Off. 279346                                      - 2083106            - 2123620"          when,      in fact, each of those          patents
 !_!         "


                        expired                                more                     than a half        a century        ago.      Stauffer       thus argues      Brooks     Brothers       should           be

 /|                     held liable                                           pursuant              to section      292 and that he is entitled                   to one half of any penalty


                        imposed.




 I
 [i[m• •

 .:_     %
ilI .....



                           Brooks    Brothers         now moves         to dismiss      the complaint           pursuant     to Fed. R. Civ. P.


              12(b)(1).      In particular,       Brooks       Brothers       contends      that Stauffer         lacks    standing      to pursue


              this action because he has not alleged any injury in fact, and that dismissal                                        pursuant      to

              Rule 12(b)(1) is therefore                 appropriate)         Stauffer counters          that section 292 creates a Qui

              tam cause of action because                  it allowS "any person"             to bring suit to recover             penalties,     and

              therefore,      Stauffer     has standing        as a relator      in the place         of the government            to pursue     the

          .
              action on behalf of an injuredpublic.


                           Because       the Court       fmds that Stauffer,          proceeding        as a _              plaintiff,     fails to

              allege      a cognizable        injury     in fact to the United           States    or such      an injury    to the public       that

I             has been       assigned      to him by the government,                  it concludes       that he lacks standing             to pursue


              the penalties         imposed      by section         292.    Accordingly,          defendants'       motion      to dismiss      the

              complaint        is granted.


                    I.         BACKGROUND


                           The following         facts     are taken       fi:om the complaint          unless     otherwise       noted    and are


              presumed        to be true.

                               A.           Parties


                           Since     1818, Brooks          Brothers        has been    a manufacturer            and retailer     of men's      and


              women's         clothing,       and, of particular           importance       to the present        litigation,    men's      bow ties.

              (_.   ¶¶ 5, 17-18.)           Brooks       Brothers       is wholly     owned        by defendant       Retail     Brand      Alliance.


                  ¶¶
              0_d_:. 6-7.)



/i   ..

              l Defendants also seek dismissal pursuant to Fed. R. Civ. P 12(b)(6) on the grounds that the complaint fails

I             to state a plaus_le claim to relief because it fails to allege an "intent to deceive" the public--a critical
              element of a section 292 claiav--with sufficient specificity to meet the heightened pleading requirements
              for claims of fiaud imposed by Fed. R. Civ. P. 9Co). Because the Court finds plaintiff lacks standing and
              that dismissal is thus appropriate pursuant to Rule 12(bJ(1), it does not reach the merits of defendants' Rule
              1209)(6) motion.
"m
    • •: •.
       •
_:!;_:i•i,

I                           Stauffer       is a practicing            patent     attorney       2 and, on several               occasions,        he purchased


              Brooks        Brothers        bow ties of the variety                 at the crux           of this action           at Brooks         Brothers
i.m       ¸



              stores.       I0_6:.¶¶ 4, 23; Ex. C to P1.'s                     Compl.)


                                 B.           Defendants'              Bow Ties          and the Adiustolox                  Patents


                            Brooks        Brothers       currently        manufactures               and sells more              than       120 different          bow


              ties.     _      ¶ 24.)       While       the various           bow ties differ           in design,         fabric,      and style,      all of them


              are "adjustable"--that                    is, wearers        can alter the length                  of the tie by using             a sliding         metal
?   i     •
 :-•...


              device        to ensure       that it fits comfortably                around          the wearer's          neck.         That sliding             metal

              device--"the               Adjustolox"---was               at one time covered                     by at least two patents:              patent


              2,083,106,         which        was issued         in 1937, covered                   an "Adjustable              Necktie"        and expired               in


              1954.         Patent       2,123,620,         whichwas            issued       in 1938, covered              a "Facing           Band    and Multiple

              Band        Strip" and expired                in 1955. 3 (Id. ¶7[ 19-20.)

,!                           Despite       the fact that both patents                    have       long since         expired,       according        to the


              complaint,          Brooks        Brothers'        bow ties continue                   to be embroidered                  with a label stating:


              "The        Original        Adjustolox         Tie Reg'd           & Pat'd        U.S Pat. Off. 279346                    - 2083106            -
 I
              2123620."              _     _[¶ 18, 24.)        Stauffer          alleges      defendants           knew       or should         have    known             that


              the patents            had expired         and that their bow ties                    therefore         were no longer             patented          articles.


                      _      114-15.)        Plaintiff       further      contends           that Brooks           Brothers        has manufactured                      tens of


               thousands         of these       falsely       marked           ties and continues                to design        and produce          new



 .•.2 •




               2 The Court takes judicial notice of the fact, conceded by plaintiff, that Stauffer is a practicing patent
               attorney admitted to the bar of this Court. (Pl.'s Mem. of Law in Opp. to,Mot, to Dismiss 23-24.); Fed. R.

 I             Evid. 201 (Judicial notice appropriate if facts are "not subject to reasonable dispute" and are "capable of
               accurate
               3 Theactual
                             and ready
                                 mark
                                            determination
                                           in dispute
                                                                by resort
                                                          lists not    two,
                                                                                to sources
                                                                               but three
                                                                                                whose
                                                                                             patents:
                                                                                                           accuracy
                                                                                                          2,083,106;
                                                                                                                         cannot
                                                                                                                          2,123,620;
                                                                                                                                     be reasonable      questioned").
                                                                                                                                             and 279,346.          However,
 ?.',"

               the complaint      makes       no mention        of and pleads        no facts       respecting      the third     patent,     so the Court        will    not
               consider   it further.
•m i


i!l                                                                                             3
I                            bow      ties, all of which            are similarly     improperly           embroidered          with the false mark.           _          ¶¶


                             46-47,      51.)
I
(:-.            •                                C.           The False        Marking     Statute


                                          Section        292 of the Patent          Act proves        that any person             who "marks       upon     [or]


                             affixes     to...         any article,      the word     'patent'       or any word         importing      that the same         is
       1                 •



                             patented,          for the purposes          of deceiving        the public        ...    shall be timed not more than $500


                             for every          such    offense."        35 U.S.C.       § 292(a).         Section     29203)      then provides     that "any



                    ¸.       person      may       sue for the penalty,           in which        event     one-half      shall go to the person            suing     and


                             the other to the use of the United                      States."       35 U.S.C.         § 292(b).


                                                  D.          The     Complaint


                                          The      complaint          states   that it is "a qui tam action              for false patent       marking       under        35


                             U.S.C.       § 292."         (Compl.        ¶ 1.) It alleges        that defendants'           bow ties are no longer


                              patented--and              are therefore         "unpatented"         for purposes         of the statute--but         have


                              nevertheless             been   marked       by defendants          with the label:         "The     Original     Adjustolox          Tie


                              Reg'd      & Pat'd         U.S Pat.       Off. 279346        - 2083106          - 2123620."           (Id. ¶¶ 112,    118-19.)         The


                              complaint          alleges that the label thus constitutes                      a false mark.         It goes on to allege that

                              defendants          "know,       or at least should have known" that the patents had expired, and

                              accordingly,             knowingly         misrepresented          to the public that each of its so-marked                     bow tie

                              products          was covered by a valid U.S. patent.                        (Id. ¶¶ 114-17.)          Finally,    Stauffer alleges

                              defendants          have falsely marked their bow ties "for the purpose                                 of, and with the intent of,
                     •
           ;' : _.5'_i


                              deceiving          the public"          and are therefore          subject     to penalties        set forth in section        292.     (Id.
           !l .)
                              ¶¶ 124-25.)

        I

                    •
           •I_I_•I••:•
ill"              :




                                                   By so doing,         Stauffer       coiatends         Brooks       Brothers          has "wrongfully            quelled


                                       competition        with respect         to such bow tie products."                       _       ¶ 129.)        In particular,        Stauffer


                                       alleges     Brooks      Brothers       has "wrongfully                  and illegally        advertis[ed]         patent     monopolies              that


                                       [defendants]          do not possess,"              thereby      causing       harm     to the economy              of the United             States"       •   ..)

'            :      .('-



                                       because       the embroidered               mark,     "has the potential            to, discourage             or deter"       potential
    il            I i

          i
    :_'i:?: •                          competitors        "fi:om     commercializing                  a competing         bow       tie."     _       ¶ 128,     130.)    The


                                       complaint        makes      those     allegations             largely    on "information               and belief"        and provides           no
    • ;?:{L: ''I.          :   .



                                       further     factual     allegations          in support         of that alleged         harm.         It also contends,           in similarly
    IU
                                       unsupported           fashion,      that,    as a result,        defendants         "have        likely     benefitted       in at least

    ilk                                maintaining           their considerable              market       sharewith        respect          to the herein-described               bow tie
                                                                                                                                                                                                       . ...:.


                                        products       in the high-end             haberdashery           marketplace."             _        ¶¶' 129-30.)         Accordingly,                                    .%


                                                                                                                                                                                                                 .-Z
                                                                                                                                                                                                             • .'.
                                        Stauffer      asks the Court          to impose          a $500        penalty       for each bow tie manufactured                        and


                                        marked       by defendants.            _      ¶ 131.)


     !I                                      II.         ANALYSIS                                                                                                                                            •    ..j




                                                         A.             The Motion            to Dismiss         Standard


                                                     On a motion           to dismiss         a complaint          for lack of subject-matter                   jurisdiction


                                        pursuant       to Fed. R. Civ. P. 12(b)(1),                     "the party       invoking           federal    jurisdiction       bears       the
      :i I - ," i .'""



                                        b.urden      of establishing          that jurisdiction            exists."       Sharkey           v. Quarantillo,         541 F.3d 75, 82-

                                         83 (2d Cir. 2008)           (quoting         Lujan      v. Defenders            of Wildlife,            50,4 U.S. 555,561             (1992)).


                                        While        the Court     must      accept         as true all material           facts     alleged       in the complaint,            in
       ",{       .'%,              •

                                        resolving       challenges         to subject-matter              jurisdiction         the Court          may look beyond               the


                                        pleadings       in order        to satisfy         itself that it has the authority                  to hear the action.             See Filetech



            •-)•
         i!i•
       ill•



       }i•_,_i• .,:_:...
                                    S.A.v.     Fr. Telecom            S.A.,      157 F.3d 922, 932 (2d Cir.               1998)      (citing     Antares    Aircraft,          L.P.
   ,..
:'_?                '



                                    v. Fed.    Republi       c of Nigeria,          948 F.2d 90, 96 (2d Cir.              1991)).
If
                                                     B.             Plaintiffs       Standing


                                                 Section       292 authorizes            "any person"       to bring     suit for false marking             and further


!1                                  provides       that any penalties              imposed      shall be split equally            between        "the person       suing"        and

                                    the United       States.        35 U.S.C.        § 292(b).      Despite        that provision,        defendants        contend           that

     ¸•
:i ll:ii                            Stauffer      lacks     standing        tO bring      this suit because         section     292 is not a _                    provision

                                                                                                                                                                                            , .   .   •

                                    but instead         authorizes         only competitors           actually      aggrieved       by false      marking        to bring       suit.


                                    A_ltematively,           defendants          argue    that even     if Stauffer      qualifies      as "any person"            for

.     ,.
 -.....
                ,                   purposes        of the statute,           he nonetheless        lacks the requisite            constitutional       standing         to bring


                                    •suit because          he fails to allege          an injury    in fact.

    .:.. _.:

                                                 As a preliminary              matter,     the Court     notes      that section       292 is indeed        a qui tam
!|i::::•
                                     provision--i.e.,           a statute        that authorizes       someone         to pursue      an action       on behalf      of the


I                         i:         government            as well     as himself4--and            has been        repeatedly       referred      to and treated         as such

    .. ,H           :     .

                                     by boththe          Supreme         Court      and the Second          Circuit.      See Vermont            Agency        of Natural            Res.


                                     v. United       States      ex tel. Stevens.,         529 U.S. 765,768             n. 1 (2000)       (listing     section     292(b)        as a

ill I                                             provision);          Boyd       v. Schildkraut       Giftware        Corp.,     936 F.2d 76, 79 (2d Cir. 1991)


                                     ("[Section         292]    is enforceable           by a fl__ tam remedy,            enabling       any person         to sue for the


                                     statutory      penalty         and retain      one-halfofthe          recovery.").         Accordingly,           while      defendants'
                    i I • '•
                                      are indisputably           correct       that the vast majority             of section    292 claims           are brought         by


                                     competitors           rather    than      consumers,       'there is nothing        in the text of the statute              that compels

 .::):i:.:::



      _. : '                          _pso in hac parte sequitur,           which means      'who pursues        this action on our Lord the King's         behalf    as well as


    if:l,:":"       ::i; .     ..     United States ex rel. Stevens,f_om 529at U.S. 756, til_e 1 (2000) (citing
                                     "hl-_OV_I21_' The l_ase dates              least the n.      of Blackstone.          3 W. Black.stone,
                                                                                                                             Ve_ont     A_ency    Commentaries Resoul-ces
                                                                                                                                                     of Nat ' 1       "160).          v.




    -_f:..          • •
                                                                                                                                                                                           •i.i.i




if ..¸                           such     a result.     Pequingnot         v. Solo Cup Co., No. 07-cv-897,                        2009      U.S. Dist.        LEXIS


                                 26020,      at *7-8 (E.D.        Va. Mar. 27, 2009)               (finding      the "plain       language         of the statute"


                             .precludes          limiting     "any      person"      to "competitors");            Pentlarge           v. Kirby,      19 F. 501,503

                                 (S.D.N.Y.         1884)     (Section      292(b)      grants     a cause      of action       to "whomsoever                it may please


                                 to sue").


                                             However,         all plaintiffs--including               _            plaintiffs         granted      a statutory         right of

                     i           action--must           satisfy     the "irreducible          constitutional        minimum"               of standing.        See Vermont


                                 -_              529 U.S. at 771 (quoting               _            504 U.S. at 560)•                That requirement,           which


                                  stems     from      the "case      or controversy"            requirement        of Article          III, see Sullivan         v. Syracuse


                                  Hous.     Auth.,      962 F.2d        1101,     1106 (2d Cir. 1992),             imposes        on any party            invoking        federal


                                 jurisdiction         a burden      to establish:       (1) that it has suffered              an injury         in fact, (2) that is


                                 •Causally       connected        to the defendant,           and (3) that is likely             to be redressed            by the court.
                                                                                                                                  i

                                  Luian,      504 U.S. at 560-1;           Port Wash.           Teachers'        Ass'n       v. Bd      of Ed., 478 F.3d 494, 498


                                  (Zd Cir. 2008).

                                              The first requirement--an                  injury      in fact--is      the "hard         floor    of Article       III


                                  jurisdiction         that cannot       be removed          by statute."          Summers:v.            Earth     Island     Inst.,    -- U.S. --,


                                  129 S.Ct.        1142,     1152      (2009).      Unlike       a traditional      plaintiffi        a_             plaintiffeommonly



i!!
:_il.-:..                    '    Suffers       no injury     himsel£       However,            as the Supreme           Court :instructs,          a _                provision
                                                                                                                                                                                            .       ._"

ii_:!i i".               "        operates       as a statutory         "assignment"          of the rights        of another--generally                    the United

      ii
i•i|i•• •                         States--and           accordingly,        a _              plaintiff      may proceed          in vindication             of those     rights       ..        .-

-c...---




                                  provided         the assignor--i.e.,            the government--has               itself    suffered        an injury       in fact causally
i|ii i'
f.Z.:"     '. 2:-"   "
                                 • Connected          to the defendant           that is likely     to be redressed           by the court.           Vermont           Agency,


                                   529 U.S.        at 774 ("[T]he         United      States'      injury     in fact suffices          to confer      standing         on [the
                                                                                                                                                                                             "       _..•i:       ._

   ii
    ¸
i!_:i__

!1
.    •     .,(
                                  relator]");      see also Conn.            v. Physicians            Health       Care    Servs.     of Conn.,        Inc., 287 F.3d            110,


                                  117 n.8 (2d Cir. 2005)                 (Vermont            Agency       grants      an assignee       plaintiff       standing       0nly


                              •insofar          as the "claim"          deemed        to be assigned           meets       constitutional          standing      requirements).


                              - Section          292 thus assigns           to Stauffer--or             to "any       person"--the          authority         to bring     suit to


                                  vindicate        cognizable          injuries      incurred      on the public           or the United           States     through      violation
    !l: I:•; ••

                                  of its provisions.

                                                In most     fl_    tam actions,             the alleged      injury       in fact to the United             States     as assignor

                                   is obvious       and proprietary.               In a claim       brought         pursuant        to the False       Claims        Act, 31


                                  U.S.C.        § 3729     et se_,       for instance,          the injury         in fact is simply        the "proprietary             injury


                                   resulting       from the alleged               fraud."      Vermont         Agency,         529 U.S. at 771.             In the context            of a



ii                                • section      292 claim,       however,           the injury       to the United          States     as assignor         is far less evident.


                                  •By its terms,          the statute       seeks to protect            the public        not simply        from      false marking           of                              :....




..         •         ..            unpatented         articles     but instead             from false marking             that is fraudulent,           deceptive,        and


                                   intentional.        See Clontech               Labs.,      Inc. v. Invitrogen           Corp.,     406 F.3d         1347,     1352 (Fed.           Cir.


                                   2005) (section           292 is not a strict liability offense but requires an intent to deceive public);

                                   Blank        v. Pollack,       916 F. Supp.              165, 173 (N.D.N.Y.              1996)      (no liability        for "erroneous
.    :..   •




                                   patent       marking       [that]     was the result           of mistake         or inadvertence")              (citations       omitted).



                          ¸        Accordingly,           the actionable             injury     in fact that the government                  is able to assign           would


                                    have      to be an injury          to it or to the public             stemming          from      fraudulent       or deceptive           false

                                                                                                                                                                                                 .             ...

                                    marking. 5



                                   S The Court is aware of the recent observation by one district court that an assignable interest--and thus,
                                    standing=can be found for purposes of a section 292 claim based solely on the United States government's
                                   '_sovereign interest" in seeing its laws followed and the aceorntaanying injury in fact "arising from violation
                                    of the law." Pequignot v. Solo Cup Co., No. 07-cv-897, 2009 U.S. Dist.LEXIS 26020, at *27-28 (E.D. Va.
                                  •Mar. 27,2009). Even assuming that a violation of the United States' "sovereign interest" in seeing the law
                                   _followed could be an assignable interest potentially vindicated by a .qui_tgmaction, in order for section 292
11                                 to be violated, a defendant must not only have falsely marked an unpatented article but must have done so




                 •            •
       i                , .                                                                                                                                                                       ..'._-.




                                          Stauffer's        complaint            purports      to allege        such     an injury       to the public       and to the


                              United      States     inasmuch            as defendants'          conduct          has "wrongfully            quelled     competition            with
ii
  ,-           .,       •
                              respect      to such bow tie products                   thereby          causing      harm      to the economy           of the United


                              States."       (Compl.        ¶ 129.)        It further        asserts     that by "wrongfully               and illegally         advertis[ing]


                              patent      monopolies            that they do not possess"                   defendants          have     "benefitted        in at least

                              maintaining           their   considerable            market       share..,           in the    high-end       haberdashery




                                                                                                                                                                                            m
                                                                                                                                                                                                           ..i
                              marketplace."             (Id. ¶ !30.)             Accordingly,           plaintiff       contends       he has standing           to proceed       as
                                                                                                                                                                                        •            -/

                              a fl_      tamassignee            of the public's         valid      section        292 claims.


_:;-..'..- . •                              Brooks      Brothers          responds          that the alleged           injury--which            is supported        by no


                               additional         factual      pleadings--is          insufficient:         to establish         an injury       in fact to the public           and


!ii                           therefore,        Stauffer        does not have           standing         to bring       suit on behalf          of the United        States.

                                                                                                                                                                                                • ('#
                               The Court          agrees.       An injury          in fact must         be "concrete           and particularized"              and "actual       or


                               _ent,              not conjectural            or hypothetical."              _              504 U.S. at 560 (internal               citations


                               Omitted).          Stauffer's       two conclusory              statements           set forth above          but buried         in a forty-page


                               complaint          are insufficient           to establish        anything           more     than the sort of"conjecturat                 or


                               hypothetical"           harm       that the Supreme              Court       instructs        is insufficient.       In particular,        the
           '        .



                               complaint          fails to allege          with any specificity                 an actual      injuryto      any individual


                               competitor,          to the market           for bow ties, or to any aspect                       of the United         States     economy.


_:;:5"f f                      That      some      competitor            might     somehow         be injured           at some      pomt,      or that some        component

ill:
                                                                                                                                                                                                            /




ii!!!_ .,i:... • . '            : for the purpose ofof deceptio n tO public.
                                hajuryia.the                                      plaintiff has Accordingly:, as noted above, absent therefore
                                               form deceiving the the public,35 aU.S.C. § 292. not alleged a v_olation of the law, and an alleged
!!l:" ii ....                 " there exists no corresponding    harm to the United States' "sovereign   interest." Thus, allegations  such as
!51!_-::           "           .plainfifEs that a defendant improperly marked an unpatented article as p_ented,       standing alone, neither
i::,.::._i',:: .                allege s a violation of section 292 nor pleads an injury in fact to the sovereign interest of the United States

il:il.ii./.                     la_'sl enforced
                              ._signabietoa          ui_plaintiff.
                                                    could alone be an assignable,
                                                                       Moreover,                 the Court doubts fact sufficient to establish a qni intam
                                                                                                concrete injury in that the Govemment's      interest    seeing                   its
.... " " .                      p!ainit_s  standing.  See FEC v. Akins, 524 U.S. 11, 24 (1998) (An "absti-act" harm such as "injury to the
 !i_ ""' ' "                   interest in seehag that the law is obeyed.., deprives the case of the concrete specificity" necessary,for
                                                                                                                                                                                                       5'

!1.".                :
                 :. .. "        standing) (c°llecting          cases)"                                                                                                                       ,   . f"..'


_; ... ....
                                                                                                                                                                                                  • :S
  1:                                                                                                                                                                                                                               ,"2"



          i
  _,-<.':-,                                                " •                                                                                                                                                                 +    ".._."




                                                               of the United           States     economy          might      suffer     some     harm      through       defendants'         conduct,         is


                                                           purely           speculative          and plainly       insufficient          to support       standing.        Cf. Summers,          -- U.S. at


                                                               ,,     129 S.Ct. at 1151-52               (finding      "some       day"     harms        "without     any description            of concrete
   .]..           •        .




                                                               plans,       Or indeed      any specification                of when      the some        day will be----do not support                    a


                                                               finding       of the 'actual         or imminent'             injury    that our cases         require"       (citations       omitted));

     .
  -_::7 :                                                                    504 U.S.      at 566 (''Standing               is not 'an ingenious             academic         exercise      in the
  •,.;....                     •                  ..


                      ;                                        conceivable'...                [but] requires..,              perceptible        harm."      (citations      omitted)).
  ,!       ,.....
   if!.'.,:                            :



  i!i';                        : !:                        '                 Moreover,:the           possibility        that "some          day" might         come--i.e,           that. hypothetical

          .:.-
  _:_!;......:                                         . .competitors,                might      be harmed         at some       point     in the future--is             substantially       diminished              by


  .... ...
                                                 -     "        information           contained       in declarations            and exhibits         submitted          by defendants,         and properly
       •
 .TW<.II:                                                           "•
 ;_l''::                                         < " considered                    on a Rule         12(b)(1)       motion,       Filetech       S.A.,     157 F.3d at 932, which                show         that

       ;-:
 ?:"Li"i:                                              • .the adjustolox                 mechanism,              with the mark         in question         affixed       to it, is not made          by
 i
 ,:.,...              j.. 2j               .i"                 defendants          but is instead          provided          to defendants        and to many             of Brooks        Brothers'
 -7_::-'"-                         '



 !                                                              competitors           by a third party,           "J.M.C.       Bow Company,                Inc."     (Decl.    of Joseph        Dixon         dated


                                                                Jan. 14, 2009            ¶ 4.)     In other words,            the relevant        mark      used by Brooks               Brothers,        far from


           '.
 !!.!!i.i.L!::                                                 quelling        competitors,          is Used by them as well, and defendants                              can point to bow-tie

 !ill: '
 •                                          '          .        products        made       and sold by competitors                    such as Saks Fifth Avenue,                    Bloomingdale's,              and


::_:';" ' "                                            "        Lord        & Taylor,      all of which           utilize     the adjustolox          mechanism           and are marked             with the
I"
                                                                    exact   same      language.          (Exs.    A-C to Decl. ofNeil               B. Friedman            dated Jan.        15, 2009.)                ,
.....                 • ....




                                                                --            Stauffer        disputes     none      of the above          in his opp0sition             papers,6     and in lightof            those


                                                                    representations        and the thinness             of plaintifFs         pleadings        with respect          to the injury-in-fact




                  ,: 'i""                                         6Instead, Stauffer points to bow ties sold by different competitors, including Ralph Lauren, Charvet, and
: ;,..-       -       ..                   .                    - Pad.Stuart, that do not contain the adjustulox mechanism or the mark in _tuestion here and concludes,
                                                               ' without:any basis in this record or additional factual allegations, that tho_e competitors incurred

!i:                                                             •"additional costs in designing around" the two adjustolox patents. (Decl.. of Raymond E. Stauffer dated                                                   ._..

                                                                                                                                                                                                                                    ]."
                                                                                                                                                                                                                                          :.




                                                                                                                                            10                                                                                     '3.-"




_-'/..... :,:,                                  ..
il                                                          requirement,              the Court          finds Stauffer           has failed         to allege       that defendants'                       conduct             has


                                                            caused         an actual         or imminent            injury      in fact to competition,                     to the United                  States      economy,

-.•:.!....                                   -..

.,,     ,.
                                                             orthe        public      that could          be assigned           to him as a _                     plaintiff              or be vindicated                   through
                                                                                                                                                                                                                                                                    ?.
                                                                                                                                                                                                                                                   ,   •                       ..,_
                                                            .this litigation.             Stauffer        therefore          lacks     standing      to proceed.            7



!i:ii.:i:                                                                          C.            Attorneys' Fees                                                                                                                                                .             :
                                                                                                                                                                                                                                                                            ,,: ,
!:i!i::.:i_".:                                                            Brooks          Brothers          also seeks          its attomeys'         fees incurred                in defending                the instant

i!l!                       I! " '                            action.         A court        may      award       "reasonable            attorneys'        fees"      in "exceptional                       cases"       to a                               .            .....3:


                                                                                                                                                                                                                                                                        ...,.



                                                             '-'prevailing          party."       35 U.S.C.            § 285.         Whether        a case is "exceptional"                          for purposes                of                   • ,!::!:--
                                                                                                                                                                                                                                                                          f.!
                                                              section        285 is a factual             determination,               and depends           on such factors                     as whether            the
                                                                                                                                                                                                                                                                          ".-:_


                                                            : litigation       was undertaken                 in bad faith and whether                    the opposing                   party        engaged          in              :                    .            S)           •


 _:.:.:-::                   ....            .




iii:li:? :.i.                                              inequitable               conduct.        Mahurkar              v. C.R. Bard,          Inc.,      79 F.3d 1572,                 1579        (Fed Cir.              1996).

                                                            • Thedecision               tO grant      fees is committed                  to the discretion            of the trial judge,                      and "not every


                                                            exceptional              case warrants             the award             of attorney      fees."       L.A. Gear,                   Inc. v. Thorn              MeAn
     :
:_._?. : ,,

                                                              Shoe        Co., 988 F.2d            1117,       t128          (2d Cir. 1993)        (citations         omitted).

 _     ....'.                           .                                                                                                                                                                                                                               ..,.

                                                                             After      evaluating          the "totality            of the circumstances"                   surrounding                   this litigation
                                                                                                                                                                                                                                                           .:       -          ....



                                                              .Yamanouehi               Pharm.       Co. Ltd. v. Danbury                   Pharmacal,            Inc., 231 F.3d                     1339,      1347         (Fed.          Cir.
                 FII
o.:          .         • •
                           FT
                                _
                                    I
                       "                           .   .
                                                               Mar. 16,2009¶¶      15-17.) Such f_ctual allegations are not contained in this complaint, are utterly
      '.
_;_._:" i"                                                   " eonelusory and, most important, urge a conclusion that is neither logically compelled nor remotely
i:_"-     : :                                                 : Supported by anything in the c0mplaint or any of plaintiff's exhibits or dtclarations.                                                                                                                         .....


_-J.!! 'i                                                       7 In'his opposition to the motion •to dismiss, Stauffer, for the first time, asserts that he personally suffered
_>:                    _                         -             injtu-'y   as a result     of defendants'         conduct       and therefore       has standing       to proceed                in three    ways:      first,    Brooks


!i!i!!                                   •         . .       • deceived
                                                               Br0thers'      into.thinking the mechanism remains currently topatented, and thtse the adjustolox
                                                                               alleged  false marking has caused competitors    "design around"                    costs been
                                                                                                                                                    design around having have been
      "."i. •
):_:i.:.                                                   . " passedon.to          consumers,       such     as plaintiff,      who    as a "sharp-dressed          man        ....    prefers       the bow        tie to the m0re
                                                              eommouly worn four inhand." (Pl.'s Mere. of Law in Opp. to Mot. to Dismiss at 20-21 (emphasis in
                                                               orighaal)). Second, because defendants' falge marks "create an injury to _yone who reads them," Stauffer                                                                                                    -:',

                                                                                                                                                                                                                                                                    "ii.
                                                               has
                                                              • bee_injured by hgtving foandhimself within eyesight of defendants' .bow ties _ at 23.) Third, as a
                                                                                                                                                                                                                                                                    "              ?:L
 ;2:." :-".
                                                               patent attorney, "plainliff found himself questinning his own professional: comt_etence , inasmuch as he was
                                                               sure that BrooksBrothers      .. could not have committed such a brazen section 292 violation." _ at 24.)
                                                                             None       of.the   above      is contained       in the complaint        and    accordingly              is not     a properly        alleged       injury      in
                                                               fact in thisaction.            Moreover, none would be sufficient to support this ctui tam action because, at the very
                                                              .most,      the above      might    establish      an injury      to plaintiff    and thus      plaintiff's        standing           to proceed        on his own
                                                               behalf,      not as an assignee           of injuries    to the public.


                                                                                                                        "t

                                                                                                                                                11
                                                                                                                                                                                        : . i'.'.




il               "':." .               2000),     the Court      finds    that an award       of fees would        be inappropriate.                While         defendants

    _::
:.7!::
                                       contend,     correctly,      that Stauffer's       complaint       should     be dismissed             for lack of standing,


                                       theydo      not assert     an2/basis      for finding        the suit was commenced                   or prosecuted           in bad


il i: '                                faith.     Nor do defendants           point    to any inequitable          conduct     or other           circumstances            that
:.",7•        .!_        .     •
:-.,     .:. • ...             ".
                                       would      warrant     a finding      that this was the type of"exceptional"                         case in which           fees are

   :.    :.,
 •"_,._ ".....           . -           appropriate.

I
•_ !¸7:•
                                                   Accordingly,          defendants'      request     for attorneys'         fees pursuant           to 35 U.S.C.            § 285

                                       is denied.
              '!'-..'.


                                       III.        CONCLUSION


                                                   Because       the Court      finds that the complaint            fails to allege           an injury       in fact to the


                                       public      or to the United         States,    Stauffer     lacks constitutional           standing         to proceed           on its


                                       behalf.      Accordingly,          Brooks'      Brothers'      motion    to dismiss         the complaint             is granted.



                                        Dated:      New York,        New      York
                                                    May     14, 2009

                                                                                                                       SO ORDERED:
                                                                                                                                                                     4      -:J//

                                                                                                                               /            .$:             /, .... :               .
                                                                                                                                      •",               '    -1            . :7




                                                                                                                       g ey                         o.s. J.
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                                                                                                           12                                                                             •   )::'7_
'I   Case 1:08-cv- 10369-SHS-DCF                     Document          47          Filed



 I    UNITED STATES             DISTRICT      COURT



 I    SOUTHERN          DISTRICT       OF NEW YORK                            x              .

      RAYMOND          E. STAUFFER,

 I                                          Plaintiff,                         :        08-cv-10369       (SHS)

                         -against-
 I    BROOKS BROTHERS, INC. and
                                                                               :       MEMORANDUM
                                                                                       & ORDER
                                                                                                                     OPINION


      RETAIL BRAND ALLIANCE, INC.

 I                                         Defendants_


 I
      SIDNEY H. STEIN, U.S. District Judge.

 I            In this flui tam action, pro se plaintiffRaymond                     E. Stauffer     alleges that Brooks

      Brothers, Inc. and its parent company,             Retail Brand Alliance, Inc. (collectively,                  "Brooks
 I    Brothers")     engaged     in false patent marking in violation of section 292 of the Patent Act.


 I    35 U.S.C. § 292.         In lieu of an answer, Brooks Brothers moved to dismiss the complaint,

      and on May 14, 2009, _is Court granted that motion to dismiss,                             finding that Stauffer

 I    lacked standing to pursue his claims.              Stauffer v..Brooks Brothers,              -- F. Supp 2d._--, No.

      08-cv-10369,      2009 WL 1357954 (S.D.N.Y. May 14, 2009).
 I            The United States now seeks to intervene,                 either as of right or with the Court's


 I    permission.      The government       contends the Court's Opinion dismissing                     Stauffer's

      complaint      "draws into question"      the constitutionality         of section 292 thereby          making

 I    intervention     necessary     to allow it to defend the statute and the government's                    interest in

      seeing the patent laws enforced.           If intervention       is allowed, the government             also seeks
 I    additional     time to file a motion for reconsideration              of the Court's        May 14, 2009 Opinion


 I    dismissing     this action.




 I
 !                                                            I    I
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I    Case 1:08-cv-10369-SHS-DCF                     Document    47       Filed 06/15/2009              Page 2 of 9




I             Brooks Brothers      opposes the motion and disputes the government's asserted


I    grounds for permissive       or rightful intervention.    In particular,   Brooks Brothers        contests

     the government's       characterization   of this Court's Opinion, arguing that the

I    constitutionality     of section 292 was never addressed        and therefore     that the government's



I    interest in seeing that statute upheld is not implicated

              Because the Court finds that the government
                                                                      by the Opinion.

                                                                     has no basis to intervene        as of right


I     and makes an insufficient       showing to warrant permissive       intervention,    the government's

     motion is denied.

I        I.       BACKGROUND
                                                                                                                     I ;



                                                                                                                     ii


I             This case centers on allegations       that Brooks Brothers       falsely indicated that bow

     ties it manufactures     and sells were covered by three different patents when, in fact, each


I    of those patents expired some time ago. In so doing, Stauffer alleged Brooks Brother

     violated section 292 of the Patent Act which makes it unlawful               to "affix[] to...      any

I     unpatented article, the word "patent' or any word or number importing                 that the same is


I     patented, for the purpose      of deceiving    the publiC' and authorizes "any person"           to sue for

      damages.    35 U.S.C. § 292(a)-Co)?

i             Brooks Brothers       moved to dismiss the complaint        pursuant to Rules 12(b)(1) and

      £o)(6), contending     Stauffer lacked standing to proceed, or that his complaint           failed to

I    •state a claim upon which relief could be granted.          Alternatively,      Brooks Brothers      asked


I
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I    Case 1:08-cv-10369-SHS-DCF                          Document         47        Filed 06/15/2009             Page 3 of 9




I     the Court to find the statute unconstitutional                  and thus unenforceable,         and it served timely


I     notice to the United States of the constitutional                  questions raised. 2

               On May 14, 2009, the Court granted Brooks Brothers'                           motion to dismiss the

I     complaint pursuant        to Fed. R. Civ. P, 12Co)(1), finding that Stauffer                   lacked standing to

      pursue his claims.       The Court's        Opinion began with an overview                  of the relevant law as
I     established      by the Supreme       Court and Second Circuit, and in particular,                  the following:

      first, section 292 is a _               provision,    see Ve .r_nont Agency of Natural Res. v. United
|,
      States ex tel. Stevens, 529 U.S. 765, 768 n.t (2000)), Boyd v. Schildltra_t                           Giftware

I              936 F.2d 76, 79 (2d Cir. 1991); second, _                            plaintiffs,   as with all plaintiffs,

      must meet Article III standing requirements,                    see Vermont Azency,           529 U.S. at 771; and,
I     third, a _           plaintiffmeets       those requirements             when it has been .assigned a cognizable


I     claim by an assignor--generally              by the government               who itself has standing to sue.

      see also Conn. v. Physicians           Health Care Servs. of Conn., Inc., 287 F.3d 110, 117 n.8 (2d

 i
      Cir. 2005) {_/ermont A_enc¥              grants an assignee plaintiff standing only insofar as the

      "claim" deemed to be assigned               meets constitutional           standing requirements).
 I              The Court then applied that law in the context of a section 292 claim, looking for


 I    a cognizable       injury-in-fac t to the government              (or the public) that had been validly

      assigned to Stauffer         for purposes     of establishing           his standing as a _           plaintiffto

 I    proceed on its behalf.         Finding no such injury in fact pied by this plaintiffin                    this ease, the



 I     Court found Stauffer lacked the "irreducible                    constitutional minimum"           of standing,



        That notice,   which -alas served   on January   21, 2009, required      the government    to inform the Court on or

 I     before March 3 I, 2009 as to whether or not it would seek to intervene in this action.  The government
       sought several extensions of tlrne, all of which were granted, and the l_st of which expired May 22, 2009.
       As discussed further below, because the Court was able to resolve the ease without considering    or
       addressing any of Brooks     Brothers'   constitutional challenges or arguments, it did not await answer from the

 I     government
       Co'tnt's
                   as to whether
              Opha_on.
                                    it intet_ded to brief those issues, all of which had been rendered moot by the




 I
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        Case 1:08-cv-10369-SHS-DCF                       Document       47         Filed 06/15/2009           Page 4 of 9




l        Vermon.t A_ency, 529 U.S. at 771, and therefore could not proceed in this action.


I        Stauffer, -- F. Supp 2d. at -, 2009 WL 1357954 at *5.                    Because the Court found that

         S_uffer's      complaint should therefore be dismissed,              it neither reached   nor addressed

I        Brooks Brothers'        constitutional     challenges    to section 292.

               • On May 29, 2009, the government                 moved to intervene pursuant          to Rule 24 and for
I        leave to seek reconsideration            of the Court's prior Opinion should intervention            be allowed.


I        The government         argues, first, that it has a statutory fight to intervene          because   Stauffer's

         suit is one in which "the constitutionality             of [an] Act of Congress       affecting   the public

I        interest is drawn into question."           28 U.S.C. § 2403(a); Fed. R. Civ, P. 24(a)(1).

                     Alternatively,   the government       contends it must be allowed to intervene            as of right
I        pursuant     to Rule 24(a)(2) because it el.aims an interest relating to the disposition                of this


    I    action, and resolution       of the action without its participation          would impair or impede its

         ability to protect that interest.         Fed. R. Cir. P. 24(a)(2).       Finally, the government       argues

    I    that even ifil_ is not entitled to intervene as of right, the Court should nonetheless                      grant



    I     perrmssrve mterventmn          because the government             has a _ el.aim or defte nse that shares wl h
               ....                                                                     "                  "         ""t




          the main action a common           question of law or fact." Fed. 1L Civ. P. 24("o)(1)(B).             3



    I     Provided intervention        is allowed, the government            also seeks leave to file a motion        for

          reconsideration      of this Court's      Opinion dismissing        the complaint.

    I                Brooks Brothers      filed its timely opposition to that motion, arguing that



    I     intervention

          assertions,
                            as of right was inappropriate         because, contrary to the government's

                          the Court did not address the constitutionality            of section 292 and the


    I     govetrrrnen't had uo real i_ters_t at stake -in the fitigation tha_.'was laol a_ready sufficiently


          3 While Rule 24(b)(2)(A)  provides for intervention   by a "govet-mnent officer or agency..,    ira party's

    I     claim or defense is based on...   a statute..,
          not moved to intervene on that basis.
                                                         administered   by the officer or agency," the government     has




    I
    I                                                              I    I
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1   Case 1:08-cv-10369-SHS-DCF                    Document              47     Filed 06/15/2009            Page 5 of 9




I    represented    by the parties. Brooks Brothers also opposes permissive                    intervention


I    arguing, for similar reasons, that it would be unnecessary and further contending that it

     would be unduly prejudicial         at this late stage.

I        II.        DIscussION



I              Unlike the False Claims Act, section 292 of the Patent Act does not require,a

     plaintiffto    give the government      notice of a proposed _t.uitam action or the opportunity to


I    take over the action and proceed in its own fight. Cf. Pequignot                    v, So!o Cup Co., No.

     07-ev-897, 2009 U.S. Dist. LEXIS 26020, at '_ (E.D. Va. Mar. 27, 2009) (finding                            section

I    292 to be a _           provision     despite "the United States' lack of ability to control a


I    relator's litigation   under § 292(b)").      Accordingly,          should the government

     intervene in a section 292 suit, it must seek leave to do so pursuant
                                                                                                     wish to

                                                                                              to Rule 24, and here,


I    the government      offers three different     grounds upon which such leave should be granted:

     as of statutory fight pursuant       to Rule 24(a)(1); otherwise            as of right pursuant   to Rule

I    9.A(a)(2); or with permission        pursuant to Rule 24(b).            The Court addresses     each in turn.


I              A.       Intervention     as of Statutory Right

               Pursuant to 28 U.S.C. § 2403(a), "in any action..,                  to which the United States is

I    not a party, wherein the constitutionality             of any Act of Congress affecting         the public

     interest is drawn into question,        the court..,        shall permit the United States to intervene..
I     • for argument    on the question of constitutionality."               The government     contends      this case


I     draws into question'the     consti'mtionality     of section 292 and accordingly,             that the Court

      must allow it to intervene.            Fed.
                                         Se___Ae R. Civ. P. 24(a)(1) (intervention              as of right must be

I     granted to any party "given an unconditional                right to intervene by a federal statute").



I
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I   Case 1:08-cv-10369-SHs-DCF                        Document        47       Filed 06/15/2009           Page 6 of 9




I            The government's          argument      fails, however, because neither Stauffer's           action nor


I    the Court's   Opinion drew the constitutionality            of any Act of Congress into question.

     The Court's Opinion in particular             made no findings and reached no conclusions              with

I    respect to the constitutionality.of           section 292. The government's         argument--that       the

     "effect of the Court's        ruling is to hold the statute unconstitutional        _"            (Gov't
I    Mem. of Law. In Supp. of a Mot. to Intervene dated May 29, 2009 at 2 (emphasis                            in


I    original)y--represents         only its own aggressive      interpretation     of an Opinion which did no

     more than evaluate the complaint              and construe tile relevant statute consistent       with

I    established   case law to find that this plaintiffon          these facts lacked standing to proceed.

              Moreover,        while, as noted, Brooks Brothers            raised several challenges   to the
I    constitutionality        of section 292 in its moving papers, the Court did not address those


I    arguments     at any time and did not decide them in its Opinion. 4

              Accordingly,        the government's       request to intervene      as of right pursuant    to Rule

I    24(a)0) is deni .


I                        2.         Intervention

              For similar reasons, the Government's
                                                     as of Right Pursuant to Rule 24(a)(2)

                                                                 motion to intervene as of right pursuant to


I    Rule 24(a)(2) is denied.          Interventionas     of right must be granted where a party asserts an

     interest in the action and is so situated that disposition               of the action would, as a practical

I     4 The government argues separately that intervention as of fight _hould he granted to remedy        tim error it
     contends the Court committed by ruling on Brooks Brothers'      motion before the government's         deadline to
      decide whether or not it would seek to intervene expired.       As a matter of law, the argument is unsound:

I     while certification   is a duty of the Court in eases raising constitutional
      intervene expires, the Court may reject the constitutional
                                                                                   questions, "[b]efore the time to
                                                                     challenge" so long as it does "not enter a final
     judgment holding the statute unconstitutional."        6 Moore's Fed. Prac. § 24.0212][b] (3d ed. 2008); see also
     Carroll v. Nakatalfi, 342 F.3d 934, 945 (9th Cir. 2003) ("The purpose of § 2403(a), ensuring that courts not

I     rule on the constitutionality    of an Act of Congress without first receiving input from the United States,
     would not be implicated where a court dismissed an action for lack of plaintiffs         own Article IIl
     standing ....   While the United States always maintains a right to intervene pursuant to § 2403(a), this
     interest dissolves if the action itself is dismissed due to a plaintiff's lack of standing.");

I                  366 F.2d. 254, 257 (2d Cir. 1966) (failure to certify harmless where Court's ruling does not
     trod statute unconstitutional).




I
I                                                            !    I
    Case 1:08-cv-10369-SHS-DCF                    Document         47     Filed 06/15/2009             Page 7 of 9



|    matter, impair or impede the movant's ability to protect its interest. Fed. IL Cir. P.


I    24(a)(1); see also Butler, Fitzgerald,       & Potter v. Sequa Co_p., 250 F.3d 17 !, 176 (2d Cir.

     2001) (identifying      the four criteria a movant must satisfy to intervene         as of right: "(1) file

I    a timely motion; (2) claim an interest relating to the property or transaction              that is the


I    subject of the action: (3) be so situated that without intervention            the disposition     of the

     action may impair that interest; and (4) show that the interest is not already adequately

I   represented    by other parties" (citations omitted)).          The Government      asserts two such

     interests here: first, an interest in defending      the constitutionality     of its statute; second, an

I    interest in protecting    its own ability to enforce the patent laws.


I             While both interests        might warrant intervention      as of right in an action that

     implicated   them, neither is actually at stake here. First, as noted, the Court's               Opinion did

I    not draw into question--or       pass on, in any respect--the        constitutionality   of section 292,

     and accordingly,     inl:ervention    by the government       to defend the constitutionality      of section
I    292 is unnecessary.       Second, the government's        asserted interest in defending         its own


I    ability to enforce its patent laws is equally unavailing           because that interest was never at

     issue in this action.     The government's      argument--that       the "effect of the Court's      decision

I    is to deny standing not only to this relator but also to the United States itself" (Gov't

     Mem. of Law in Supp. of a Mot. to Intervene dated May 29, 2009 at 9 (emphasis                        in
I    original))---is   unfounded.     As noted, the issue of the government's          ability to bring an


I    action pursuant to section 292 was at no time presented              by any party and therefore was

     not considered     or addressed by the Court.

I             Accordingly,      the Court finds no basis for granting        the Government's         motion to

     intervene as o fright.
I
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    Case 1:08-cv-10369-SHS-DCF                       Document              47    Filed 06/15/2009          Page 8 of 9




I                       3.        Permissive    Intervention:         Rule 24('0)


I            Rule 24(b) gives courts discretion to grant "permissive                    intervention" to any party

     that has a"claim        or defense that shares _vith the main action a common question                     of law or

I    fact." Fed. R. Civ. P. 24(b)(1)(B).            In exercising that discretion,        the Rule requires the



I    district court to evaluate "whether

     adjudication    of the original parties'
                                                 the intervention

                                                    rights."
                                                                            will unduly delay or prejudice

                                                                   Fed. R. Civ. P. 24(b)(3).
                                                                                                                the

                                                                                                  A district court has


I    "broad discretion to deny" a motion to intervene pursuant to Rule 24(b).                         New York

     News v. K_heel, 972 F.2d 482,487            (2d Cir. 1992); see also United States v. PitneyBowes,

I    Inc., 25 F.3d 66, 73 (2d Cir. 1994) ("Reversal                  of a district court's denial of permissive



I    intervention    is a very rare bird indeed, so seldom seen as to be considered

             The government         contends     it has a "claim" that Stauffer
                                                                                                      unique.")

                                                                                         has Article 111standing to


I    proceed in this suit, one that shares common issues of law and fact with the main action

     and thus warrants        permissive    intervention.      The argument         fails, however, because no such

I    claim exists.    Arguably, the guy ernment has an imerest in resolution                    of S_auffer' s claim


I    that he has standing to bring this action. But an interest in the outcome                      of litigation     is not

     itself a "'claim or defense"      especially     where, as here, the interest is premised            on issues

I    and legal questions not actually presented or decided by the Court.                       See United States v:

     City of New York, 198 F.3d 360, 367-68 (2d Cir. 1999) (affirming                          denial of permissive

I    intervention    where "the claimed interest s oftha proposed intervenors,                    although broadly


I    related to the subject matter of this action, are extraneous to the issues before the court")

              Moreover,       even if such an interest could amount to a "claim"                 for purposes       of Rule

I    24, Brooks Brothers argues it would be unduly prejudiced and the case needlessly

     delayed should intervention           be allowed.      The Court agrees.         Post-judgment     intervention      is
I
I
I                                                              I       I
    Case 1:08-cv-10369-SHS-DCF                     Document       47         Filed 06/15/2009             Page 9 of 9




I    "generally     disfavored   because it fosters delay and prejudice to existing parties." Farmland


I    Dairies v, Comm'r of N.Y. State Dep't of Agriculture                   & Markets,    847 F.2d 1038, 1044

     (2d Cir. 1988).     That is particularly     true here where the government           has already indicted

I    that, if allowed to intervene,      it would file a motion for reconsideration            raising

     constitutional    questions not previously       addressed by the Court and unnecessary                   to the
I    resolution     of the pending   action.    Briefing those questions would impose needless                    costs


I    on the parties, result in unnecessary         expenditure        of judicial resources,   and postpone           any

      appeal of this Court's     Opinion,      thereby fostering both delay and prejudice.               The

I     government's      motion to intervene pursuant          to Rule 24(b) is therefore       denied.

         III.       CONCLUSION
I               Because the Court finds no basis for either granting intervention                 as of right or by


I     permission,     the government's      motion is denied.




I     Dated: New York, New York
             June 15, 2009

                                                                           SO ORDERED:             '//
I
I
                                                                         JSidney_      St_i'n, I_.D      J.       '

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                                                CERTIFICATE            OF SERVICE

I            I hereby        certify    that    on November          23, 2009,      I filed    and   served   the foregoing

i   Brief for the Movants-Cross                  Appellants       by causing     an original     and twelve    copies   to be


I   mailed    to the Clerk           of the Court          by first class   mail,   and by causing        two copies    tobe



I   mailed    by overnight           Federal      Express     to the following:


             Neil    B. Friedman,          Esq.
i            Baker      and Rannels,            P.A.
             575     Route     28-      Suite     102

I            Raritan,     New Jersey            08869



I            Raymond
             9 Sentinel
                              E. Stauffer
                               Court,     Unit         F
             Chatham,          New Jersey         07928
I
I
I                                                                                   Douglas     Letter




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                          CERTIFICATE                 OF COMPLIANCE                   WITH         RULE        32(a)

I                   OF-THE          FEDERAL              RULES          OF APPELLATE               PROCEDURE



I               1. Pursuant        to Fed. R. App.             P. 32(a)(7),    I certify   that    the attached        Brief for the


     Movants-Cross           Appellants           complies      with the type-volume            limitation     of Fed. R. App.         P.
I
     32(a)(7)(B).         The      brief      contains         10,335     words,     as counted         by Word           Perfect     12,

I,   excluding       the parts of the brief           exempted          by Fed. R. App.     P. 32(a)(7)(B)(iii)         and Federal

,I   Circuit     Rule     32(b).


I               2. I also certify          that   this brief     complies     with    the typeface         requirements          of Fed.



 I   R. App.      P. 32(a)(5)       and      the type style requirements              of Fed. R. App.           P. 32(a)(6).         The


     brief     has been     •prepared        in a proportionally-spaced              typeface      using     Word      Perfect      12 in
 I
     14-point       Goudy     Old     Style.

 I
i
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I                                                        Counsel         for Cross    Appellants



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