Win for whistleblowers, loss for dicta.
The Ninth Circuit just brought “some discipline . . . to the sometimes loose” use of jurisdiction in the context of the False Claims Act. In Stein v. Kaiser Foundation Health Plan, Inc., the court concluded that a bar for whistleblowers—the “first to file bar”—is merely procedural, not jurisdictional. This decision involved overruling circuit precedent, but according to the passionate concurrence of Judge Forrest, these past decisions should never have been treated as precedent in the first place.
The Majority Opinion
The first-to-file rule generally prohibits multiple whistleblower lawsuits based on the same facts. In prior cases, the Ninth Circuit had ruled that this is a jurisdictional requirement—i.e., the existence of a prior suit on the same facts strips a court of jurisdiction. But in the majority opinion in Stein, an en banc Ninth Circuit ruled that the first to file bar is not a jurisdictional requirement. It did so by using a novel legal theory that some call “reading the statute.” The court recognized that the False Claims Act simply does not use the word “jurisdictional” in the context of the first to file bar, but it does in other contexts. Therefore, the False Claims Act does not “clearly state” that it is a jurisdictional requirement. Thanks for cracking that whip, Ninth Circuit!
This decision reflects a broader shift in how courts approach procedural rules. As Professor Erin Morrow Hawley identified, “the Rehnquist and Roberts Courts have carried out a quiet revolution in the nature and meaning of jurisdiction” by routinely “abandon[ing] [their] treatment of procedural requirements as presumptively jurisdictional.” The Ninth Circuit’s ruling is a prime example of this trend, aligning with the modern judicial approach to limit the scope of procedural rules deemed jurisdictional.
What does it mean? It means that the rule no longer automatically bars courts from hearing cases that violate it. When the rule is considered jurisdictional, courts must dismiss any subsequent cases without considering their merits. The court also does not have to wait for a party to raise the issue and can rule on jurisdictional issues at any time, even after a verdict. By rejecting its jurisdictional nature, the Ninth Circuit has provided courts with more flexibility to consider the merits of whistleblower cases that might otherwise have been dismissed on purely procedural grounds. This means that parties could potentially waive their challenges based on this rule, or that courts could create equitable exceptions to the rule.
The Concurrence
The holding of Stein may be about the FCA’s first-to-file rule, but the much longer opinion is found in Judge Forrest’s concurrence on dicta. Dicta (short for obiter dictum, because lawyers love Latin) is a portion of judicial opinion that touches on an issue that does not necessarily arise in the case. Identifying dicta is often hard, but let me give what I think is a pretty clear example. In an opinion where a court determines that a plaintiff lacks standing, dicta might be a footnote about a different hypothetical plaintiff that could have standing. In most jurisdictions, this—or any other dicta—is not binding on future courts (but it might still have some persuasive authority).
But the Ninth Circuit is a bit different. In United States v. Johnson, Judge Kozinski—writing for a four-judge portion of an en banc court—concluded that a court’s reasoned consideration of an issue germane to the case should be binding on future courts, whether or not it is strictly necessary to the holding. 256 F.3d 895, 914 (9th Cir. 2001) (Kozinski, J.). This rule was then adopted by a full 9th Circuit majority a few years later. Barapind v. Enomoto, 400 F.3d 744, 750-51 (9th Cir. 2005) (en banc) (per curiam). So, in the Ninth Circuit, some dicta is binding. Not “casual, off-hand remark[s],” but a well-reasoned analysis. Johnson, 256 F.3d at 916.
Judge Forrest’s concurrence bemoaned this split from the rest of the country. Though she recognized that Johnson may have eliminated difficulties in determining what does or doesn’t count as dicta, she posited that this uncertainty was simply replaced with uncertainty with what constitutes a “well-reasoned” analysis. And, according to Judge Forrest, this is far less objective than the dicta determination. Case-in-point: the first-to-file jurisdictional rule under the FCA appears to have been adopted with no reasoning at all, and yet future courts felt bound to apply the rule.
This may seem more like a theoretical debate more than a practical one, but Judge Forrest expressed deep concern that the elevation of dicta to law may violate the Constitution. Under Article III, judges may only decided cases and controversies, which means they may only address the controversies before them. This means that courts may not issue advisory opinions (i.e., opinions about issues that have not been presented as a live controversy to the court). Dicta, in some sense, is a form of an advisory opinion, so to treat it as binding law may violate the strictures of Article III.
Will A Future En Banc Court Agree With Judge Forrest?
Judge Forrest’s concurrence was joined only by Judge Bumatay. This is interesting because Judge Rawlinson sat on the en banc Stein court, and previously joined the Barapind concurrence criticizing the dicta-as-binding rule (which Judge Forrest cites). It’s unclear why Judge Rawlinson didn’t join the concurrence. Nearly 20 years have passed since Barapind, so it’s possible that she has had a change of heart. Or maybe Judge Rawlinson believed Judge Forrest’s concurrence was too harsh (the dicta-as-binding rule may be bad without being unconstitutional, for example).
With just one other judge on this en banc court siding with Judge Forrest, what are the odds that the Ninth Circuit ends up adopting Judge Forrest’s position and overruling Johnson/Barapind? Based on Judge Forrest’s citations, there appear to be just five active judges on the Ninth Circuit who have expressed dissatisfaction with the dicta-as-binding rule (Judges Forrest, Bumatay, van Dyke, Rawlinson, and Callahan). Because one of these judges is Judge Rawlinson, and she chose not to join Judge Forrest’s concurrence, I would count four instead. But even if we include Judge Rawlinson, five votes is not enough to get a majority of an 11-judge en banc court.
There are also four senior judges who have expressed dissatisfaction with the rule (Judges Tashima, Kleinfeld, Tallman, and Bea). Senior judges may potentially sit on the en banc court if they were members of the three-judge panel. See 9th Cir. Rule 35-3 Advis. Comm. Note 2. All of these judges are still regularly hearing cases, and multiple senior judges may sit on a panel together. So, it is statistically possible to get a majority of judges on an en banc panel who have been vocally opposed to the dicta-as-binding rule. Given the size of the Ninth Circuit, this is very unlikely, but possible nonetheless. And, of course, it’s possible that there are other judges who are against the dicta-as-binding rule but have not yet voiced that opposition. Indeed, some may not have even considered the issue, but may find Judge Forrest’s concurrence persuasive.
So, it’s hard to say whether the Ninth Circuit will backtrack the dicta-as-binding rule. With the evidence I have, I would say it’s more likely that the rule stays in place. But there does seem to be some very vocal judges who are opposed to the rule—maybe that will tilt the scales.