Federal Election Com'n v. Williams

• Citation: 104 F.3d 237
• Decision Date: 26 December 1996
• Docket Number: No. 95-55320,95-55320
• Parties: , 96 Cal. Daily Op. Serv. 9422, 96 Daily Journal D.A.R. 15,496 FEDERAL ELECTION COMMISSION, Plaintiff-Appellee, v. Larry R. WILLIAMS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 237

104 F.3d 237

65 USLW 2444, 96 Cal. Daily Op. Serv. 9422,

96 Daily Journal D.A.R. 15,496

FEDERAL ELECTION COMMISSION, Plaintiff-Appellee, v. Larry R. WILLIAMS, Defendant-Appellant.

No. 95-55320.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 5, 1996.

Decided Dec. 26, 1996.

David Kolker and Vivien Clair, Federal Election Commission, Washington, D.C., for plaintiff-appellee.

W. James Knowles, Heber City, Utah, and Stuart M. Gerson, Epstein, Becker and Green, Washington, D.C., for defendant-appellant.

Appeal from the United States District Court for the Central District of California, Edward Rafeedie, District Judge, Presiding. D.C. No. CV-93-06321 ER.

Before: FLETCHER, BEEZER and KLEINFELD, Circuit Judges.

BEEZER, Circuit Judge:

Larry R. Williams appeals the district court's denial of his motion to dismiss and grant of a motion for summary judgment in favor of the Federal Election Commission (FEC). Williams argues, inter alia, that the FEC action is time-barred under 28 U.S.C. § 2462, and that he is not liable for civil penalties under the Federal Election Campaign Act (FECA), 2 U.S.C. §§ 431-455.

The district court had jurisdiction under 28 U.S.C. § 1331. Williams timely filed a notice of appeal. We have jurisdiction under 28 U.S.C. §§ 1291. We hold that 28 U.S.C. § 2462 applies, and we reverse.

I

Jack Kemp sought the 1988 Republican Presidential nomination. At the end of 1987, his campaign committee engaged in a fundraising promotion involving tickets to the Superbowl. The Philadelphia Eagles made a number of tickets available to Kemp's campaign for $100 each. Donors who contributed $1000 to the Kemp campaign were given the right to purchase one of these $100 tickets.

Williams purchased 40 of these tickets from the Philadelphia Eagles for $4000. He then gave those tickets to people whom he persuaded to contribute $1000 to Kemp's campaign, including a number of Williams' friends and employees. In 22 cases, Williams "advanced" $1000 to the contributor as the resale price of the ticket. Williams later resold these tickets and recovered the sums advanced. The fate of the other 18 tickets is not relevant to this case. These events occurred between the autumn of 1987 and the end of January, 1988.

On September 12, 1988, Richard Hooton, a former Williams employee, filed an administrative complaint with FEC. FEC notified Williams, provided a copy of the complaint and offered him an opportunity to respond. On September 13, 1989, FEC found reason to believe that Williams violated 2 U.S.C. §§ 441f and 441a(a)(1)(A).

After an investigation and finding probable cause to believe that Williams had violated FECA, FEC conducted a statutorily mandated attempt at conciliation from May 24, 1993 to July 20, 1993. Conciliation failed.

FEC filed suit on October 19, 1993, seeking the imposition of civil penalties as well as declaratory and injunctive relief. The district court denied Williams' motion to dismiss on limitations grounds and partially granted FEC's motion for summary judgment on January 31, 1995. The district court fixed a $10,000 civil penalty and enjoined Williams from similar violations of FECA for 10 years. After a stipulated dismissal of the remaining count, the court entered final judgment on March 7, 1995. Williams filed a timely notice of appeal.

II

We review de novo a grant of summary judgment. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1261, 134 L.Ed.2d 209 (1996).

A

FECA does not contain an explicit statute of limitations for the bringing of actions for civil penalties. Williams argues that the default statute of limitations, 28 U.S.C. § 2462, applies. It provides:

Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon.

Williams argues that this provision applies on its face to FEC suits to impose civil penalties.

FEC argues that § 2462 is not applicable to suits to impose penalties; that by its terms it applies only to suits to enforce penalties that have previously been imposed. We disagree.

We have previously held that "enforcement" includes "assessment." United States v. Walsh, 8 F.3d 659, 662-63 (9th Cir.1993), cert. denied, 511 U.S. 1081, 114 S.Ct. 1830, 128 L.Ed.2d 459 (1994). In Walsh, the government brought an action for civil penalties and injunctive relief under 42 U.S.C. § 7413, the Clean Air Act. The Clean Air Act gives the government the option of issuing administrative penalty orders or bringing a civil action. The government did the latter in Walsh. The relevant statutory provision states:

The Administrator [shall or may, depending on the violator] commence a civil action for a permanent or temporary injunction, or to assess and recover a civil penalty ...

42 U.S.C. § 7413(b) (emphasis added). We held in Walsh Walsh contends that the action of the United States is an action for money damages brought by the United States and founded on a tort, so that the three-year tort statute of limitations applies, 28 U.S.C. § 2415(b). Walsh is in error. The government's action does not sound in tort but is for the enforcement of a civil penalty. The appropriate statute is the five-year statute of limitations. 28 U.S.C. § 2462.

Walsh, 8 F.3d at 662 (emphasis added). It is the law of this circuit that, for the purposes of § 2462, "enforcement" comprises "assessment." See also 3M Co. (Minnesota Mining and Mfg.) v. Browner, 17 F.3d 1453 (D.C.Cir.1994) (discussing the drafting history of § 2462 and concluding that "enforcement" comprises "imposition").

Two recent cases from the District of the District of Columbia also hold that actions for civil penalties under FECA are subject to § 2462's limitations period. FEC v. National Republican Senatorial Committee, 877 F.Supp. 15 (D.D.C.1995); FEC v. National Right to Work Committee, Inc., 916 F.Supp. 10 (D.D.C.1996). These cases specifically hold that § 2462 applies to FEC actions for the assessment of civil penalties, and that the limitations period begins to run at the time the alleged offense is committed.

We hold that § 2462 applies to FEC actions for the assessment or imposition of civil penalties under FECA.

B

FEC argues that § 2462 does not apply to actions for injunctive relief. This assertion runs directly contrary to the Supreme Court's holding in Cope v. Anderson, 331 U.S. 461, 464, 67 S.Ct. 1340, 1341, 91 L.Ed. 1602 (1947). Cope holds that "equity will withhold its relief in such a case where the applicable statute of limitations would bar the concurrent legal remedy." In other words, because the claim for injunctive relief is connected to the claim for legal relief, the statute of limitations applies to both.

C

FEC next argues that the running of the statute of limitations was tolled during the time that Williams allegedly fraudulently concealed his illegal payments. FEC cites In re United Insurance Management, Inc., 14 F.3d 1380, 1384 (9th Cir.1994). FEC also argues that the related "discovery rule" applies, citing No. Calif. Retail Clerks Unions v. Jumbo Markets, Inc., 906 F.2d 1371, 1372 (9th Cir.1990). Neither of these cases involves § 2462's limitations period.

In 3M Co., 17 F.3d at 1460-1463, the D.C. Circuit specifically rejected the application of the discovery rule to the running of limitations periods under § 2462. 3M Co. states:

[W]e hold that an action, suit or proceeding to assess or impose a civil penalty must be commenced within five years of the date of the violation giving rise to the penalty. We reject the discovery of violation rule [respondent] advocates as unworkable; outside the language of the statute; inconsistent with judicial interpretations of § 2462; unsupported by the discovery of injury rule adopted in non-enforcement, remedial cases; and incompatible with the functions served by a statute of limitations in penalty cases.

17 F.3d at 1462-1463. We agree.

3M Co. is silent on the application of the doctrine of equitable tolling for fraudulent concealment. The doctrine of equitable tolling provides that "where a plaintiff has been injured by fraud and remains in ignorance of it without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered...." Holmberg v. Armbrecht, 327 U.S. 392, 397, 66 S.Ct. 582, 585, 90 L.Ed. 743 (1946) (internal quotations omitted). "This equitable doctrine is read into every federal statute of limitation." Id. We have found only two cases that have addressed the application of equitable tolling to § 2462's limitations period. United States v. Core Laboratories, Inc., 759 F.2d 480, 484 (5th Cir.1985); United States v. Firestone Tire & Rubber Co., 518 F.Supp. 1021, 1036 (N.D.Ohio 1981). Both cases applied equitable tolling to § 2462's limitations period. We are compelled by Holmberg to agree; section 2462 is subject to equitable tolling.

To establish that equitable tolling applies, a plaintiff must prove the following elements: fraudulent conduct by the defendant resulting in concealment of the operative facts, failure of the plaintiff to discover the operative facts that are the basis of its cause of action within the limitations period, and due diligence by the plaintiff until discovery of those facts. See, e.g., King & King Enterprises v. Champlin Petroleum Co., 657 F.2d 1147, 1154 (10th Cir.1981), cert. denied, 454 U.S. 1164, 102 S.Ct. 1038, 71 L.Ed.2d 320 (1982); Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389, 394 (6th Cir.1975).

These elements are not met in this case. FECA's campaign finance reporting requirements are, as a matter of law, sufficient...