Blanck v. McKeen, 82-1730

• Decision Date: 23 May 1983
• Docket Number: No. 82-1730,82-1730
• Citation: 707 F.2d 817
• Parties: Albert A. BLANCK, Futuronics Corporation, Appellants, v. (Maj. Gen.) Chester M. McKEEN, (Jr.), (U.S.A. Ret'd), (Col.) Philip Cole, (U.S.A. Ret'd), Paul Cyr, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 817

707 F.2d 817

Albert A. BLANCK, Futuronics Corporation, Appellants, v. (Maj. Gen.) Chester M. McKEEN, (Jr.), (U.S.A. Ret'd), (Col.) Philip Cole, (U.S.A. Ret'd), Paul Cyr, Appellees.

No. 82-1730.

United States Court of Appeals Fourth Circuit.

Argued April 14, 1983.

Decided May 23, 1983.

Robert F. Condon, Washington, D.C. (Finley, Kumble, Wagner, Heine, Underberg & Casey, Thomas J. Walsh, Washington, D.C., on brief), for appellants.

Jenny A. Sternbach (J. Paul McGrath, Asst. Atty. Gen., Washington, D.C., Elsie L. Munsell, U.S. Atty., Alexandria, Va., Barbara L. Herwig, Civ. Div., Appellate Staff, Dept. of Justice, Washington, D.C., on brief), for appellees.

Before HALL and MURNAGHAN, Circuit Judges, and FOX, ^* District Judge.

PER CURIAM:

Futuronics Corporation and Albert A. Blanck, its president, appeal from the district court's order dismissing their complaint against Maj. Gen. Chester M. McKeen, Jr., Col. Philip Cole and Paul Cyr. The district court ruled, inter alia, that appellants' claims were barred by the applicable statute of limitations. We agree and affirm on that ground alone.

I.

Between 1968 and 1974, Futuronics was awarded eighteen contracts with various agencies of the Department of Defense (DOD) representing $37 million of business. By 1973, problems had arisen regarding Futuronics' inability to meet the production and delivery schedules under some of the contracts. ¹ Futuronics' continued failure to perform led to termination of the contracts, and on January 3, 1975, Futuronics filed a petition under Chapter XI of the Bankruptcy Act.

Futuronics appealed the termination of its contracts to the Armed Services Board of Contract Appeals. In its administrative complaint, dated October 18, 1976, Futuronics alleged that DOD officials caused its financial destruction by terminating the contracts. The complaint quotes language from an internal DOD memorandum which states in part that: "It was determined that it was in the Government's best interest to step back and let the contractor go bankrupt." After preliminary discovery and prehearing conferences, the Board consolidated Futuronics' appeals into one proceeding "for trial and resolution of all subsidiary issues as well as the ultimate issue of whether the Government caused [Futuronics'] bankruptcy."

On November 10, 1976, while Futuronics' claims were still pending before the Board, Futuronics instituted an action against the government for breach of one of its contracts in the United States Court of Claims. That complaint alleges that the government wrongfully withheld progress payments due under the contract, refused to negotiate adjustments to the contract, knew that termination of the contract "would seriously impact on [Futuronics'] ability to continue as a viable business concern," and that Futuronics' inability to satisfy the contract requirements was due to the poor technical data furnished by the government.

In this action filed on February 23, 1982, Futuronics claims that in March of 1981, the government released internal DOD correspondence and memoranda, which allegedly should have been given to Futuronics as early as 1975 under the Freedom of Information Act, pursuant to a request by a subcontractor of Futuronics. According to appellants, these documents establish that it was "the McKeen approach" or the "game plan" to retaliate against appellants for exposing gross misfeasance in the government's technical data package, to drive Futuronics out of business and destroy the business reputation of Blanck, and to impede all investigations into this matter by the means of a deliberately planned cover-up. These documents include the DOD internal memorandum from which Futuronics quoted in its 1976 complaint before the Armed Services Board of Contract Appeals.

Appellants instituted this action seeking $36 million in compensatory and punitive damages against McKeen, Cole, and Cyr, in their individual capacities, for allegedly violating their constitutional rights by conspiring to destroy the business of Futuronics and the business reputation of Blanck. The complaint alleges that appellees knew that the government's technical data package was inadequate and in order to cover up this matter, formulated a "game plan" to withhold progress payments, to disseminate false and misleading information, and to withhold documents, thereby causing Futuronics to file for bankruptcy. Appellees moved to dismiss the complaint, and the district court granted their motion in part because appellants' claims were barred by the applicable statute of limitations. ²

II.

On appeal, appellants contend that their cause of action did not accrue until March, 1981, and that, therefore, this action is timely. We disagree.

Appellants allege that their cause of action arises under the First and Fifth Amendments and that jurisdiction is based on 28 U.S.C. Sec. 1331(a). Since neither the amendments nor the federal statute contain a statute of limitations, the most closely analogous state statute of limitations applies. Johnson v. Railway Express Agency, 421 U.S. 454, 462, 95 S.Ct. 1716, 1721, 44 L.Ed.2d 295 (1975).

We find, and the parties do not dispute, that the statute of limitations applicable to this case is Va.Code Sec. 8.01-243 (1977 Rep.Vol.), which establishes a two-year limitations for personal injury actions and a five-year limitations for property damage actions. In addition, we find that the district court correctly determined that the time when a cause of action accrues is governed by federal, not state, law. Campbell v. Haverhill, 155 U.S. 610, 15 S.Ct. 217, 39 L.Ed. 280 (1895); Bridgford v. United States, 550 F.2d 978, 981 (4th Cir.1977); Portis v. United States, 483 F.2d 670, 672 n. 4 (4th Cir.1973). Furthe...