Memorandum of Decision and Order

JACOB MISHLER, Senior District Judge.

The United States of America, in its complaint, alleges that University Hospital at Stony Brook ("Stony Brook"), a "public hospital organized and existing under the laws of the State of New York" (¶ 6) . . . "improperly billed inpatient pharmaceuticals to Medicare under revenue code 250 representing `general classification'".

Stony Brook moves to dismiss the complaint pursuant to Fed.R.Civ.P. 12(6) ("failure to state a claim upon which relief can be granted").

The complaint alleges a claim under the False Claims Act ("FCA"), 31 U.S.C. § 3729, which states in pertinent part:

(a) Liability for certain acts. Any person who —

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;

(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;

(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;

is liable to the Government. . . .

Stony Brook's motion to dismiss the FCA claim is based on the fact that "Stony Brook is not a `person' subject to suit under the FCA." (Stony Brook Memo, p. 2). The term "person" does not include a State. (Stony Brook memo, p. 3.)

In United States v. State of VT Agency of Natural Resources, 162 F.3d 195, 201-02 (2d Cir. 1998), a qui tam action, the Court holds:

As against the United States, however, States have no sovereign immunity.

(Citations omitted.)

Nothing in the Eleventh Amendment or in any other provision of the Constitution prevents or has ever been seriously supposed to prevent a State's being sued by the United States."

(Citations omitted.).

The Supreme Court in sub nom Vermont Agency of Nat'l Resources v. United States, 529 U.S. 765, 120 S.Ct. 1858, 1871 (2000) in reversing the Court of Appeals holds:

"[T]he False Claims Act does not subject a State (or state agency) to liability in such actions.

I interpret Vermont Agency to "leave open the question . . . when the United States itself sues under the False Claims Act."

I am persuaded by the rational in Justice Stevens' dissent that "person" in § 3729(a) includes States. I refer to the following:

Cases decided before 1986 uniformly support the proposition that the broad language used in the False Claims Act means what it says. Although general statutory references to "persons" are not normally construed to apply to thr enacting sovereign, United States v. United Mine Workers, 330 U.S. 258, 275, 67 S.Ct. 677, 91 L.Ed. 884 (1947), when Congress uses that word in federal statutes enforceable by the Federal Government or by a federal agency, it applies to States and state agencies as well as to private individuals and corporations.

(Examples omitted.) ( 120 S.Ct. at 1872.)

• • •

The False Claims Act is also all-embracing in scope, national in its purpose, and as capable of being violated by state as by individual action. It was enacted during the Civil War, shortly after a congressional committee had decried the "fraud and peculation" by state officials in connection with the procurement of military supplies and Government contracts — specifically mentioning the purchases of supplies by the States of Illinois, Indiana, New York, and Ohio. See H.R. Rep. No. 2, 37th Cong., 2d Sess., pt. ii-a, pp. XXXVIII-XXXIX (1862). Although the FCA was not enacted until the following year, the Court of Appeals for the Second Circuit correctly observed that "it is difficult to suppose that when Congress considered the bills leading to the 1863 Act a year later it either meant to exclude the states from the `persons' who were to be liable for the presentation of false claims to the federal government or had forgotten the results of this extensive investigation." 162 F.3d 195, 206 (1998).

( 120 S.Ct. at 1873.)

The legislative history of the 1986 amendments discloses that both federal and state officials understood that States were "persons" within the meaning of the statute. Thus, in a section of the 1986 Senate Report describing the history of the Act, the committee unequivocally stated that the Act reaches all parties who may submit false claims and that "[t]he term `person' is used in its broad sense to include partnerships, associations, and corporations . . . as well as States and political subdivisions thereof." S.Rep. No. 99-345, p. 8, U.S. Code Cong. Admin.News 1986, p. 5273.

( 120 S.Ct. at 1874.)

Stony Brook's rejection of "person" including States, is stated in its reply memorandum as follows:

Thus, Vermont and Will stand for the broader proposition that a State is not a "person" under a federal statute that would impose a new liability upon States, absent affirmative evidence that Congress intended that result. See also New York v. United States, 505 U.S. 144, 170 (1992) (applying plain statement rule against United States and in favor of New York in construing Low-Level Radioactive Waste Policy Amendments Acts as a "series of incentives" rather than a "mandate to regulate"); Federal Trade Commission v. Bunte Brothers, Inc., 312 U.S. 349, 351 (1941) (holding that, in the absence of explicit authority from Congress, the FTC had exceeded the scope of its designated power when it sought to regulate wholly intrastate commerce with respect to certain unfair trade practices); California State Bd. of Optometry v. Federal Trade Commission, 910 F.2d 976,981 (D.C. Cir. 1990) (FTC regulations to not preempt state regulation of optometrists because, applying the clear statement rule, a State is not a "person" under the Federal Trade Commission Act when it acts in its sovereign capacity); State of Michigan v. United States, 40 F.3d 817, 824 (6th Cir. 1994) (finding that a state education trust fund, which performed an essential state function was not subject to federal income tax liability absent a plain statement of Congressional intent); United States of America v. City of Columbus, Ohio, Civ. Act. No. 2:99-CV-1097, 2000 U.S. Dist. LEXIS 11327 (S.D. Ohio August 3, 2000) (Report and Recommendation ) (King, J.J.) (concluding that, in interpreting 42 U.S.C. § 14141, the Violent Crime Control and Law Enforcement Act of 1994, in a suit commenced by the United States, "the Court will be guided by the time-honored tenet of statutory interpretation which requires that a Court `interpret the text of one statute in the light of text of surrounding statutes. . . .' as well as by the corollary that, `if Congress intends to alter the usual constitutional balance between States and the Federal Government, it must make its intention to do so unmistakably clear in the language of the statute.'") (citing Stevens, 529 U.S. at 786 and n. 17)

Stony Brook cites Hilton v. South Carolina Public Railways Com'n, 502 U.S. 196, 205-206 (1991), decided before Vermont, quoting the Court with reference to the imposition of "monetary liability on the States" the following:

The requirement also serves to make parallel two separate inquiries into state liability: Eleventh Amendment doctrine and canons of statutory interpretation.

The cases cited by Stony Brook do not involve the False Claims Act. They are irrelevant.

We do not reach the issue of whether the defendant is an arm of the state.

We find, for the purposes of defendant's motion, that in an action by the United States against a state, claiming a violation of the False Claims Act, the state is a "person."

CONCLUSION

SO ORDERED.