545 U.S. 409 (2005), 04-169, Graham County Soil & Water Conservation District v. United States ex rel. Wilson

Docket Nº:No. 04-169
Citation:545 U.S. 409, 125 S.Ct. 2444, 162 L.Ed.2d 390, 73 U.S.L.W. 4544
Party Name:Graham County Soil & Water Conservation District Et Al. v. United States Ex Rel. Karen T. Wilson
Case Date:June 20, 2005
Court:United States Supreme Court
 
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Page 409

545 U.S. 409 (2005)

125 S.Ct. 2444, 162 L.Ed.2d 390, 73 U.S.L.W. 4544

Graham County Soil & Water Conservation District Et Al.

v.

United States Ex Rel. Karen T. Wilson

No. 04-169

United States Supreme Court

June 20, 2005

Argued April 20, 2005

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

Syllabus

The False Claims Act (FCA) prohibits a person from making false or fraudulent claims for payment to the United States. 31 U.S.C. §3729(a). That prohibition may be enforced in suits filed by the Attorney General, §3730(a), and in qui tam actions brought by private individuals in the Government's name, §3730(b)(1). A 1986 amendment to the FCA created a private cause of action for an individual retaliated against by his employer for assisting an FCA investigation or proceeding, §3730(h), and revised the FCA’s statute of limitations, §3731(b). Section 3731(b) provides that "[a] civil action under section 3730 may not be brought . . . more than 6 years after the date on which the violation of section 3729 is committed." In 2001, respondent Wilson brought an FCA qui tam action against petitioners, along with an FCA retaliation claim. Petitioner Graham County Soil and Water Conservation District employed Wilson as a secretary. Wilson alleged that petitioner county officials retaliated against her for alerting federal officials to the purported fraud and for cooperating with the ensuing investigation, ultimately forcing her 1997 resignation from the District. Petitioners successfully moved to dismiss the retaliation claim as untimely, on the ground that North Carolina's 3-year statute of limitations governed Wilson's FCA action and barred it. Reversing, the Fourth Circuit found it unnecessary to borrow a state limitations period because one was supplied by §3731(b)(1).

Held:

Section 3731(b)(1)'s limitations period does not govern §3730(h) retaliation actions. Instead, the most closely analogous state statute of limitations applies. Pp. 414-422.

(a) To determine the applicable statute of limitations for a cause of action created by federal statute, this Court asks first whether the statute expressly supplies a limitations period. If not, the most closely analogous state limitations period applies. Pp. 414-415.

(b) Section 3730(h) is a subsection of §3730, but §3731(b)(1) is nonetheless ambiguous about whether a §3730(h) retaliation action is "a civil action under section 3730" as that phrase is used in §3731(b)(1). Another reasonable reading is that §3731(b)(1)'s limitations period applies only to §§3730(a) and (b) actions. Section 3731(b)(1) starts the limitations

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period running on "the date on which the violation of section 3729 is committed," that is, on the date the false claim was actually submitted. That language casts doubt on whether §3731(b)(1) specifies a limitations period for retaliation actions. For even a well-pleaded retaliation complaint need not allege that the defendant submitted a false claim, leaving the limitations period without a starting point if §3731(b)(1) is applicable. By contrast, the section naturally applies to well-pleaded §§3370(a) and (b) actions. Those actions require a plaintiff to plead that the defendant submitted a false claim and therefore necessarily specify when §3731(b)(1)'s time limit begins. At a minimum this anomaly shows that §3731(b)(1) is ambiguous about whether "action under section 3730" means all actions arising under that section. Pp. 415-417.

(c) Two considerations show that the better way to resolve this ambiguity is to read the 6-year period to govern only §§3370(a) and (b) actions. First, the very next subsection, §3730(c), uses the similarly unqualified phrase "action brought under section 3730" to refer only to §§3730(a) and (b) actions. Second, reading §3731(b)(1) to apply only to those actions is in keeping with the default rule that Congress generally drafts statutes of limitations to begin when the plaintiff has a complete and present cause of action. Where, as here, there are two plausible constructions, this Court should adopt the construction that starts the time limit running when the cause of action (here retaliation) accrues. This approach resolves §3731(b)(1)'s ambiguity in petitioners' favor. Reading §3731(b)(1) to exclude retaliation actions will generally start the limitations period running when the cause of action accrues, for the likely analogous state statutes virtually all start when the retaliatory action occurs. However, under the reading favored by Wilson and the Government, the limitations period would begin at best on the date an actual or suspected FCA violation occurred, which would precede the retaliatory conduct. Pp. 417-422.

(d) The Court of Appeals should determine in the first instance the appropriate state statute of limitations to borrow. P. 422.

367 F.3d 245, reversed and remanded.

THOMAS, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and O'CONNOR, SCALIA, and KENNEDY, JJ., joined, and in which Souter, J., joined as to all but n. 2. STEVENS, J., filed an opinion concurring in the judgment, post, p. 422. BREYER, J., filed a dissenting opinion, in which GINSBURG, J., joined, post, p. 423.

Christopher G. Browning, Jr., Solicitor General of North Carolina, argued the cause for petitioners. With him on the

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briefs were Roy Cooper, Attorney General, Grayson G. Kelley, Chief Deputy Attorney General, and Jill B. Hickey, Special Deputy Attorney General.

Mark T. Hurt argued the cause for respondent. With him on the brief was Brian S. McCoy.

Douglas Hallward-Driemeier argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Acting Solicitor General Clement, Assistant Attorney General Keisler, Deputy Solicitor General Kneedler, and Douglas N. Letter[*]

Justice Thomas delivered the opinion of the Court.[*]

This case presents the question whether the 6-year statute of limitations in the False Claims Act (FCA), see 31 U.S.C. §3731(b)(1), governs FCA civil actions for retaliation, see §3730(h). We hold that it does not and therefore conclude that the most closely analogous state limitations period applies.

I

The FCA prohibits any person from making false or fraudulent claims for payment to the United States. §3729(a). Persons who do so are liable for civil penalties of up to $10,000 per claim and treble damages. Ibid. The Act sets forth two principal enforcement mechanisms for policing this proscription. First, the Attorney General may sue to remedy

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violations of §3729. §3730(a). Second, private individuals may bring qui tam actions in the Government's name for §3729 violations. §3730(b)(1); see Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 769-772 (2000). The qui tam relator must give the Government notice of the action, and the Government is entitled to intervene in the suit. §3730(b)(2). The relator receives up to 30 percent of the proceeds of the action, in addition to attorney's fees and costs. §§3730(d)(1), (2).

The 1986 amendments to the FCA created a third enforcement mechanism: a private cause of action for an individual retaliated against by his employer for assisting an FCA investigation or proceeding. §3730(h). Section 3730(h) provides in relevant part that

"[a]ny employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole."

Remedies for retaliation include reinstatement, two times the amount of backpay plus interest, special damages, litigation costs, and attorney's fees. Ibid.

The 1986 amendments also revised the language of the 6-year statute of limitations applicable to FCA actions. The previous version of the statute provided that "[a] civil action under section 3730 of this title must be brought within 6 years from the date the violation is committed." §3731(b) (1982 ed.). The 1986 amendments revised this provision to read:

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"(b) A civil action under section 3730 may not be brought—

"(1) more than 6 years after the date on which the violation of section 3729 is committed, or

"(2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed . . . ." §3731 (2000 ed.).

In January 2001, respondent Karen T. Wilson brought an FCA qui tam and retaliation action against petitioners. Petitioners Graham County Soil and Water Conservation District and Cherokee County Soil and Water Conservation District are special-purpose local government entities; the other petitioners are various local and federal officials. Graham County District employed Wilson as a secretary. Wilson alleged that petitioners made numerous false claims for payment to the United States in connection with a federal disaster relief program, the Emergency Watershed Protection Program, App. 17-20, and in connection with agricultural programs administered by North Carolina but funded by the Federal Government, id., at 17-24.

Wilson contended, in addition, that Graham County District officials retaliated against her for aiding federal officials in their investigation of these false claims. Id., at 25-30. Wilson alerted federal officials to petitioners 'suspected fraudulent activities in December 1995 and cooperated...

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