U.S. ex rel. Wilson v. Graham County Soil

• Decision Date: 29 April 2004
• Docket Number: No. 03-1122.,03-1122.
• Parties: UNITED STATES of America ex rel. Karen T. WILSON, Plaintiff-Appellant, v. GRAHAM COUNTY SOIL & WATER CONSERVATION DISTRICT; Cherokee County Soil & Water Conservation District; Richard Greene; William Timpson; Keith Orr; Raymond Williams; Dale Wiggins; Gerald Phillips; Allen Dehart; Lloyd Millsaps; Jerry Williams; Billy Brown; Lynn Cody; Bill Tipton; C.B. Newton; Eddie Wood; Graham County, Defendants-Appellees, and Graham County Board of County Commissioners; Cherokee County Board Of County Commissioners; Cherie Greene; Ricky Stiles; Betty Jean Orr; Joyce Lane; Jimmy Orr; Eugene Morrow; Charles Lane; Charles Laney; George Postell; Lloyd Kissleburg; Ted Orr; Bernice Orr; John Doe; John Doe Corporations, And Defendant; Government Entities 1-99, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

367 F.3d 245

UNITED STATES of America ex rel. Karen T. WILSON, Plaintiff-Appellant, v. GRAHAM COUNTY SOIL & WATER CONSERVATION DISTRICT; Cherokee County Soil & Water Conservation District; Richard Greene; William Timpson; Keith Orr; Raymond Williams; Dale Wiggins; Gerald Phillips; Allen Dehart; Lloyd Millsaps; Jerry Williams; Billy Brown; Lynn Cody; Bill Tipton; C.B. Newton; Eddie Wood; Graham County, Defendants-Appellees, and Graham County Board of County Commissioners; Cherokee County Board Of County Commissioners; Cherie Greene; Ricky Stiles; Betty Jean Orr; Joyce Lane; Jimmy Orr; Eugene Morrow; Charles Lane; Charles Laney; George Postell; Lloyd Kissleburg; Ted Orr; Bernice Orr; John Doe; John Doe Corporations, And Defendant; Government Entities 1-99, Defendants.

No. 03-1122.

United States Court of Appeals, Fourth Circuit.

Argued: October 28, 2003.

Decided: April 29, 2004.

ARGUED: Mark Tucker Hurt, Abingdon, Virginia, for Appellant. Ben Oshel Bridgers, Bridgers & Ridenour, Sylva, North Carolina, for Appellees. ON BRIEF: Brian S. McCoy, Rock Hill, South Carolina, for Appellant. Scott D. MacLatchie, Womble, Carlyle, Sandridge & Rice, Charlotte, North Carolina; Jill Hickey, North Carolina Department Of Justice, Raleigh, North Carolina, for Appellees.

Before WILKINSON, MICHAEL, and DUNCAN, Circuit Judges.

Vacated and remanded by published opinion. Judge Duncan wrote the opinion, in which Judge Michael joined. Judge Wilkinson wrote a dissenting opinion.

OPINION

DUNCAN, Circuit Judge:

Karen Wilson brought a qui tam action under the Federal False Claims Act, 31 U.S.C. §§ 3729-3733 (2000) ("the FCA" or "the Act"), alleging that her coworkers had submitted false claims to the federal government in violation of the FCA and that she was constructively discharged in retaliation for reporting these activities. Deciding that the six-year limitations period of the FCA did not apply to the retaliation claim, the district court applied North Carolina's three-year limitations period for wrongful discharge actions and dismissed Wilson's claim as untimely. Because we conclude that the six-year limitations period of the FCA does apply to retaliation claims under the Act, we reverse the district court's dismissal and remand for further proceedings.

I.

Wilson is a former part-time secretary at the Graham County Soil & Water Conservation District ("the Conservation District"). On January 25, 2001, Wilson filed a qui tam action pursuant to § 3730(b) of the FCA, alleging that several of her former coworkers at the Conservation District had intentionally submitted false claims for reimbursement from three programs created or funded by the federal government. Wilson's complaint further alleged that after she reported her concerns in a letter to federal authorities, her supervisors and coworkers initiated a pattern of harassment that precipitated her resignation on March 7, 1997.

The Appellees moved to dismiss Wilson's claims under Federal Rule of Civil Procedure 12(b)(6). The Appellees argued that the FCA's statute of limitations did not apply to retaliation, and thus the timeliness of Wilson's claim should be controlled by North Carolina's three-year statute of limitations for wrongful discharge. The district court concluded that applying the FCA's limitations provision to retaliation claims could lead to absurd results, and that the timeliness of Wilson's claim should be controlled by North Carolina law. Agreeing with the Appellees that the closest analogous limitations period was the three-year period applicable to claims of wrongful discharge, see N.C. Gen.Stat. § 1-52(5) (1999), the district court concluded that the retaliation claim in Wilson's complaint of January 25, 2001, based on her constructive discharge of March 7, 1997, was untimely.

Wilson filed a motion for reconsideration of the statute of limitations issue. The district court denied Wilson's request for reconsideration, but certified its order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) (2000). We granted Wilson's timely petition for authorization to pursue this appeal.

II.

We review de novo the district court's order granting the Appellees' Rule 12(b)(6) motion to dismiss, Franks v. Ross, 313 F.3d 184, 192 (4th Cir.2002), as well as its statutory construction of the FCA, see United States v. Jefferson-Pilot Life Ins. Co., 49 F.3d 1020, 1021 (4th Cir.1995). It is axiomatic that when interpreting a statute, the starting point is the language employed by Congress, Am. Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 71 L.Ed.2d 748 (1982), and where "the statute's language is plain, `the sole function of the courts is to enforce it according to its terms,'" United States v. Ron Pair Enter., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) (quoting Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917)). In determining whether the language is plain, courts must look to "`the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.'" Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). If the language of the statute is ambiguous, in that it lends itself to more than one reasonable interpretation, our obligation is "to find that interpretation which can most fairly be said to be imbedded in the statute, in the sense of being most harmonious with its scheme and with the general purposes that Congress manifested." Comm'r v. Engle, 464 U.S. 206, 217, 104 S.Ct. 597, 78 L.Ed.2d 420 (1984) (internal quotation omitted). A departure from the literal text of a statute is also appropriate if "a literal application would frustrate the statute's purpose or lead to an absurd result." Nat'l Coalition for Students with Disabilities Educ. & Legal Def. Fund v. Allen, 152 F.3d 283, 288 (4th Cir.1998) (quoting Robinson, 519 U.S. at 340, 117 S.Ct. 843).

Three sections of the FCA determine whether the timeliness of Wilson's retaliation claim is governed by the Act itself or state law. The FCA's limitations period, § 3731(b), provides that

[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....

§ 3731(b)(1).¹ Section 3730 creates three causes of action arising under the FCA: an action for compensation filed by the Attorney General, see § 3730(a); a qui tam action filed by an individual, see § 3730(b); and an action for retaliatory conduct predicated on identified protected activity, see § 3730(h). Section § 3729 creates and defines the parameters of liability for presenting a false claim to the Government. Hence, the effect of the language as written is to provide that an action under § 3730, which necessarily includes an action for retaliation under § 3730(h), may be brought no more than six years after the date on which the underlying violation was committed.

Both the retaliation provision of § 3730(h) and the limitations provision of § 3731(b)(1) are relatively recent additions to the FCA. Prior to 1986, the FCA did not specifically include a cause of action for retaliation. Section § 3731(b) stated simply that "`a civil action under Section 3730 of this title must be brought within six years from the date the violation is committed.'" United States ex rel. Lujan v. Hughes Aircraft Co., 162 F.3d 1027, 1034 (9th Cir.1998) (discussing the 1986 amendments). Congress's stated intent in amending the FCA was "not only to provide the Government's law enforcers with more effective tools, but to encourage any individual knowing of Government fraud to bring that information forward." S.Rep No. 99-345, at 1-2 (1986) (hereinafter "S. Rep."), reprinted in 1986 U.S.C.C.A.N. 5266, 5267. Toward that end, Congress also added § 3730(h),² which provides a remedy for any employee who "is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against" as a result of lawful acts by the employee in furtherance of an action under the FCA.

The proper interpretation of these provisions has divided both our sister circuits and courts within this circuit.³ In United States ex rel. Lujan v. Hughes Aircraft Co., the Ninth Circuit held that § 3731(b)(1) did not apply to retaliation claims under the FCA. 162 F.3d at 1034-36. The Lujan court reasoned that the 1986 amendments, "while adding a provision for retaliation claims under § 3730(h), narrowed the application of the six-year statute of limitations to violations of § 3729," such that the amendments "created the retaliation claim but provided no specific statute of limitations for such claims." Id. In view of this perceived absence of a congressionally prescribed statute of limitations, the Ninth Circuit concluded that "the most closely analogous statute of limitations under state law" must fill the void. Id. at 1035 (citing Reed v. United Transp. Union, 488 U.S. 319, 323, 109 S.Ct. 621, 102 L.Ed.2d 665 (1989)).

In contrast, in an earlier decision which the court in Lujan failed to distinguish or cite, the Seventh Circuit found no difficulty in applying § 3731(b)(1) to retaliation claims under § 3730(h). See Neal v. Honeywell, Inc., 33 F.3d 860, 865-66 (7th Cir.1994).⁴ The employer in Neal made the same argument accepted by the district court (and propounded by the dissent). Expressing a concern for the rights of employees generally (although, similar to the dissent here, not the employee who filed the complaint at issue), the employer contended that § 3731(b)(1) could not apply to retaliation claims, as a literal application of its terms would lead to absurd results. The Neal court disagreed, concluding that the revised language of § 3731(b)(1) reflected Congress's decision to prioritize "simplicity of administration," and that the employer had mischaracterized the consequences of a literal reading of the statute.⁵ Id. at 865. Against this backdrop, we...