U.S. ex rel. Miller v. Bill Harbert Intern. Const.

• Decision Date: 14 June 2007
• Docket Number: Civil Action No. 95-1231 (RCL).
• Parties: UNITED STATES of America, ex rel. Richard F. MILLER, Plaintiffs, v. BILL HARBERT INTERNATIONAL CONSTRUCTION, Inc., et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 1

505 F.Supp.2d 1

UNITED STATES of America, ex rel. Richard F. MILLER, Plaintiffs, v. BILL HARBERT INTERNATIONAL CONSTRUCTION, Inc., et al., Defendants.

Civil Action No. 95-1231 (RCL).

United States District Court, District of Columbia.

June 14, 2007.

COPYRIGHT MATERIAL OMITTED

Robert B. Bell, Gregory B. Reece, Howard M. Shapiro, Jennifer M. O'Connor, Jonathan Goldman Cedarbaum, Kevin Michael Henry, Matthew B. Baumgartner, Michael J. Gottlieb, Monya Monique Bunch, Wilmer Cutler Pickering Hale & Dorr LLP, Carolyn Gail Mark, Michael F. Hertz, U.S. Department of Justice, Keith V. Morgan, U.S. Attorney's Office, Washington, DC, for Plaintiffs.

Charles Anthony Zdebski, June Ann Sauntry, Troutman Sanders LLP, Barry Coburn, Trout Cacheris, PLLC, Charles Samuel Leeper, Jeffrey J. Lopez, Michael Reilly Miner, Elizabeth Ewert, Michael J. McManus, Drinker, Biddle & Reath, LLP, Phillip Craig Zane, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, David Schertler, Schertler & Onorato, L.L.P., Andrew Lawrence Hurst, Stephen Printiss Murphy, Reed Smith LLP, Washington, DC, Brian P. Watt, Bryan B. Lavine, James J. Mills, Timothy J. Kozik, Troutman Sanders LLP, Charles C. Murphy, Jr., Vaughan & Murphy, Atlanta, GA, for Defendants.

MEMORANDUM OPINION

LAMBERTH, District Judge.

I. INTRODUCTION

This Memorandum Opinion confirms and explains the Orders issued by this Court during the April 27, 2007, hearing concerning defendants Bill L. Harbert ("Harbert") and E. Roy Anderson's ("Anderson") motions for judgments as a matter of law on statute of limitations grounds, except as to one false claim against Anderson relating to contract 29.

Relator filed his original complaint under seal on June 30, 1995, alleging an overarching conspiracy to rig bids on USAID contracts for construction programs in Egypt in violation of the False Claims Act ("FCA"), 31 U.S.C. § 3729, et seq. (2007). The extent of this complaint was limited to claims on contract 20A. Neither defendant Harbert nor defendant Anderson was named in this iteration of the complaint. Over five years later, on December 28, 2000, the relator filed his Second Amended Complaint against the defendants, including for the first time, defendants Anderson and Harbert. As with the relator's first complaint, the relator's Second Amended Complaint only specified claims arising out of contract 20A. Shortly thereafter, on March 13, 2001, the government filed its Complaint in Intervention against all of the defendants listed in the relator's Second Amended Complaint, including Anderson, but not including defendant Harbert. Unlike the relator's Second Amended Complaint, the government's Complaint in Intervention included claims arising out of all three contracts at issue in this case: contracts 20A, 29, and 07. The relator did not include claims arising out of either contract 29 or 07 until March 9, 2006, when the relator filed his Third Amended Complaint.

Prior to the commencement of trial, defendants Harbert and Anderson moved to dismiss as time-barred plaintiffs' causes of action against them, pursuant to § 3731 of the FCA. Under this section:

[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, whichever occurs last.¹

In response to the defendants' motions, this Court issued a series of pretrial Opinions addressing the propriety of the claims against both defendants under each statute of limitations provision.

Specifically, this Court found that, if the six-year limitations period under the FCA were to apply, the relator's claims against defendants Anderson and Harbert as to all three contracts at issue would be barred completely due to the fact that the relator's claims against both Anderson and Harbert were brought more than six years after the FCA violations occurred on contract 20A. For the same reason, all but one of the government's claims against defendant Anderson² would be time-barred under the six-year limitations period.³

Relying on its decision in United States ex rel. Pogue v. Diabetes Treatment Centers of America, 474 F.Supp.2d 75 (D.D.C. Feb.7, 2007) (Lamberth, J.), however, this Court noted that the three-year alternate statute of limitations under § 3731(b)(2) applied to the government and relator alike. See id. at 89. Accordingly, the Court indicated that the relator and government's claims against Harbert and Anderson could be deemed timely if the evidence showed that the plaintiffs' respective claims were filed within three years of the point in time the government knew or should have known of facts material to the cause of action against Harbert and Anderson. If the evidence demonstrated that the government knew or reasonably should have known facts material to the right of action against Harbert and Anderson more than three years prior to December 28, 2000 when the relator's complaint was filed,⁴ however, then the plaintiffs could not take advantage of the three-year provision under § 3731(b)(2), and their claims would be measured under the six-year provision under § 3731(b)(1).

On April 27, 2007, this Court conducted a hearing out of the presence of the jury to determine when, as a matter of law, the government knew or reasonably should have known facts material to the cause of action brought by plaintiffs.⁵ At the hearing, this Court GRANTED defendants, Harbert and Anderson's motions for judgment as a matter of law on statute of limitations grounds, and ORDERED that all claims against defendant Bill Harbert be DISMISSED, and that all claims except the final claim on contract 29 against Roy Anderson be DISMISSED on the grounds that the government reasonably should have known facts material to the cause of action prior to December 28, 1997, and that no rational jury could find otherwise. The Court's analysis in support of its decision follows.

II. ANALYSIS

A. STANDARD OF REVIEW

"If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may ... grant a motion for judgment as a matter of law against the party on that claim or defense...." Fed.R.Civ.P. 50(a)(1)(B). A party is entitled to a judgment as a matter of law in its favor only if "no reasonable jury could reach a verdict" in the opposing party's favor. Holbrook v. Reno, 196 F.3d 255, 259 (D.C.Cir.1999). In resolving a motion for a judgment as a matter of law, a court must "view the evidence in the light most favorable" to the non-moving party, and must "resolve all conflicts in [the non-moving party's] favor." Id. at 259-60. A court should not direct a judgment as a matter of law in favor of a party if reasonable minds might differ as to the import of the evidence presented before the court. Borgo v. Goldin, 204 F.3d 251, 254 (D.C.Cir.2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

B. ANALYSIS

1. Purpose and Rules of Interpretation of Statutes of Limitations

Throughout this Court's determination of whether the government should have known of facts material to the right of action, it is important to keep in mind both the purpose behind, and the methodology in interpreting, statutes of limitations. As the Supreme Court has held, statutes of limitations "represent a pervasive legislative judgment that it is unjust to fail to put the adversary on notice to defend within a specified period of time and that `the right to be free of stale claims in time comes to prevail over the right to prosecute them.'" United States v. Kubrick, 444 U.S. 111, 117, 100 S.Ct. 352, 62 L.Ed.2d 259 (1979) (quoting R.R. Tels. v. Ry. Express Agency, 321 U.S. 342, 349, 64 S.Ct. 582, 88 L.Ed. 788 (1944)). Statutes of limitations are designed to "afford[] plaintiffs what the legislature deems a reasonable time to present their claims [while simultaneously] protecting defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise." Kubrick, 444 U.S. at 117, 100 S.Ct. 352 (citing, inter alias United States v. Marion, 404 U.S. 307, 322, n. 14, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971)). Accordingly, courts "are not free to construe [a statute of limitations] so as to defeat its obvious purpose, which is to encourage the prompt presentation of claims." Kubrick, 444 U.S. at 117, 100 S.Ct. 352 (emphasis added).

2. Section 3731(b)(2) Analysis

The relevant issue before this Court is whether, applying the three-year statute of limitations under § 3731(b)(2) of the FCA, the plaintiffs' claims against defendants Harbert and Anderson were timely. The timeliness of a plaintiffs complaint under § 3731(b)(2) of the FCA depends upon a determination of when the fraud at issue was known or reasonably should have been known. See United States v. Intrados/Intl. Mgmt. Group, 265 F.Supp.2d 1, 12 (D.D.C.2002) (Urbina, J.). Though this Court has previously found that a relator may take advantage of the three-year period under § 3731(b)(2), the statute of limitations under that section begins to run from the point in time the government knew or reasonably should have known of facts material to the right of action. Cf. Pogue, 474 F.Supp.2d at 85 ("[31 U.S.C. § 3731](b)(2)'s three-year statute of limitations applies across the board, measured by the government's knowledge.") (emphasis added). Therefore, this Court must determine whether no reasonable jury could...