U.S. v. Core Laboratories, Inc.

• Decision Date: 06 May 1985
• Docket Number: No. 84-1844,84-1844
• Citation: 759 F.2d 480
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. CORE LABORATORIES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 480

759 F.2d 480

UNITED STATES of America, Plaintiff-Appellant, v. CORE LABORATORIES, INC., Defendant-Appellee.

No. 84-1844.

United States Court of Appeals Fifth Circuit.

May 6, 1985.

Robert V. Zener, Atty., Mark H. Gallant, Dept. of Justice, Civ. Div., Cecil Hunt, Pamela Breed, Thomas Barbour, Asst. Gen. Counsels, Dept. of Commerce, Washington, D.C., for plaintiff-appellant.

Thompson & Fink, Stephen F. Fink, James B. Harris, James E. Brasher, Dallas, Tex., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before GEE, POLITZ, and WILLIAMS, Circuit Judges.

GEE, Circuit Judge:

The issue for decision is when a particular statute of limitations begins to run, that of 28 U.S.C. Sec. 2462.

Facts

The Export Administration Act, 50 U.S.C.App. Sec. 2401 et seq. (1984) contains antiboycott provisions. The Commerce Department charged Core Laboratories, Inc. (Core) with violating these provisions on various dates, the last alleged violation occurring on August 1, 1978. Administrative proceedings on these charges began on November 19, 1979. On March 14, 1983, the Assistant Secretary for Trade Administration imposed a civil penalty on Core of $81,300 for its antiboycott violations. Core refused to pay the penalty. ¹ Seven months later, on January 26, 1984, the government began this action to enforce it. Core defended by asserting that the five-year limitation period of 28 U.S.C. Sec. 2462 had run and that the government's action was thus time-barred. The trial court apparently agreed; it granted Core's motion for judgment on the pleadings. Although the trial court offered no explanation for its action, both parties have assumed that judgment for Core was premised on Core's limitations defense. From this judgment, the government appeals.

Analysis

It is undisputed that 28 U.S.C. Sec. 2462 applies to the government's action. That section provides as follows:

Sec. 2462. Time for commencing proceedings

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.

The issue for decision is the meaning of "the date when the claim first accrued."

Core contends that this is the date on which the violation(s) occurred. The government contends that "the date when the claim first accrued" is the date of the final administrative order assessing the penalty. Despite numerous citations offered by the government on brief, only one case, United States Department of Labor v. Old Ben Coal Company, 676 F.2d 259 (7th Cir.1982), directly supports its position, and that support, given the court's conclusion that Sec. 2462 had no application, is less than overwhelming. Cases dealing with other limitations statutes are of extremely limited value; as stated by the Supreme Court in Crown Coat Front Co. v. United States, 386 U.S. 503, 87 S.Ct. 1177, 18 L.Ed.2d 256 (1967), a Tucker Act case heavily relied on by the Government,

The Court has pointed out before, however, the hazards inherent in attempting to define for all purposes when a "cause of action" first "accrues." Such words are to be "interpreted in the light of the general purposes of the statute and of its other provisions, and with due regard to those practical ends which are to be served by any limitation of the time within which an action must be brought." Reading Co. v. Koons, 271 U.S. 58 [46 S.Ct. 405, 70 L.Ed. 835 (1926) ].... Cases under the Suits in Admiralty Act do not necessarily rule Tucker Act claims.

386 U.S. at 517, 87 S.Ct. at 1185 (citations omitted). Similarly, cases under the Tucker Act do not necessarily rule Export Administration Act claims.

The Government's attempt to apply the reasoning of cases construing other statutes to the statute in question here would be justified were there no authority directly on point, but this is not the case. The current Sec. 2462 is derived from predecessor statutes dating from 1799; see Smith v. United States, 143 F.2d 228, 229 (9th Cir.), cert. denied, 323 U.S. 729, 65 S.Ct. 65, 89 L.Ed. 585 (1944); the statutes have produced a respectable body of decisional law. A review of these cases clearly demonstrates that the date of the underlying violation has been accepted without question as the date when the claim first accrued, and, therefore, as the date on which the statute began to run. See, e.g., United States v. Athlone Industries, Inc., 746 F.2d 977, 982 n. 1 (3d Cir.1984); Western Pacific Fisheries, Inc. v. S.S. President Grant, 730 F.2d 1280, 1287 (9th Cir.1984); United States v. Ancorp National Services, Inc., 516 F.2d 198, 200 n. 5 (2d Cir.1975); United States v. Witherspoon, 211 F.2d 858, 861 (6th Cir.1954); Smith, 143 F.2d at 229; Lancashire Shipping Co. v. Durning, 98 F.2d 751, 753 (2d Cir.), cert. denied, 305 U.S. 635, 59 S.Ct. 102, 83 L.Ed. 408 (1938); Durning v. McDonnell, 86 F.2d 91, 92-93, cert. denied, 300 U.S. 682, 57 S.Ct. 753, 81 L.Ed. 885 (1937); The Ng Ka Py Cases, 24 F.2d 772, 774 (9th Cir.1928); United States v. Advance Machine Co., 547 F.Supp. 1085, 1091 (D.Minn.1982); United States v. C & R Trucking Co., 537 F.Supp. 1080, 1083 (N.D.West Virginia 1982); United States v. Firestone Tire & Rubber Co., 518 F.Supp. 1021, 1037 (N.D.Ohio 1981); FTC v. Lukens Steel Co., 454 F.Supp. 1182, 1185 n. 2 (D.D.C.1978); United States v. Appling, 239 F.Supp. 185, 194-95 (S.C.Tex.1965); United States v. Fraser, 156 F.Supp. 144, 147 (D.Montana 1957); United States v. Wilson, 133 F.Supp. 882, 883 (N.D.Cal.1955); United States v. One Dark Bay Horse, 130 Fed. 240, 241 (D.Vermont 1904).

The Old Ben court did not cite any of these cases; its conclusion that a claim first accrues under Sec. 2462 at the end of administrative proceedings was supported solely by citation to Crown Coal, which, as we have noted above, does not deal with Sec. 2462. Because it is against the overwhelming weight of authority, we view Old Ben as an anomaly that provides no reason to depart from the common understanding of Sec. 2462.

That Congress shares this common understanding is evidenced by the legislative history of the antiboycott provisions. The Senate's "Declaration of Policy" regarding the new provisions was immediately preceded by the following statement:

FIVE-YEAR STATUTE OF LIMITATIONS

The bill does not prescribe any period following an offense within which the civil penalty must be imposed. It is intended that the general 5-year limitation imposed by section 2462 of title 28 shall govern. Under that section, the time is reckoned from the commission of the act giving rise to the liability, and not from the time of imposition of the penalty, and it is applicable to administrative as well as judicial proceedings.

S.Rep. No. 363, 89th Cong. 1st Sess. 7, reprinted in [1965] U.S.Code Cong. & Adm.News 1826, 1832 (emphasis added). The underlined language was repeated verbatim in the House report. H.Rep. No. 434, 89th Cong., 1st Sess. 5 (1965). It is thus abundantly clear that both the courts and Congress have construed the "first accrual" language of Sec. 2462 to mean the date of the violation.

Practical considerations support this construction. The progress of administrative proceedings is largely within the control of the Government. Northern Metal Co. v. United States, 350 F.2d 833, 839 (3d Cir.1965). The government is exempt from the consequences of its laches (quod nullum tempus occurrit regi). Guaranty Trust Co. v. United States, 304 U.S. 126, 132, 58 S.Ct. 785, 788, 82 L.Ed. 1224 (1938); United States v. Hughes House Nursing Home, Inc., 710 F.2d 891, 895 (1st Cir.1983) (private defendant cannot assert laches against government). A limitations period that began to run only after the government concluded its administrative proceedings would thus amount in practice to little or none. As one court has explained,

If the penalty does not accrue [under Sec. 2462] until the United States makes an administrative determination that it is due, the United States has within its power to prolong the period of limitations and the producer of rice "would remain indefinitely under the hazard of having penalties imposed upon him...." United States v. Lynn, supra, 132 F.Supp. at 607. The Court is of the view that such is not the case.

Appling, 239 F.Supp. at 194.

We take the same view. The interpretation of Sec. 2462 advanced by the government is in derogation of the right to be free of stale claims, which comes in time to prevail over the right to prosecute them. Burnett v. New York Central Railroad Co., 380 U.S. 424, 428, 85 S.Ct. 1050, 1054, 13 L.Ed.2d 941 (1965), quoting Order of Railroad Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342, 348-49, 64 S.Ct. 582, 586, 88 L.Ed. 788 (1944). There are exceptions to this rule, notably actions to collect fraudulently withheld taxes, but where the Congress has meant to make such exceptions, it has clearly expressed that intent. See Badaracco v. Commissioner, 464 U.S. 386, 104 S.Ct. 756, 78 L.Ed.2d 549 (1984). ² It would be especially inappropriate to view Sec. 2462 and the antiboycott provisions as such exceptions because Congress has stated that "[t]he monetary penalties authorized by this bill are not intended to deal with serious and flagrant violations." S.Rep. No. 363, supra, [1965] U.S.Code Cong. & Adm.News at 1831.

All of the factors discussed above--the case law, expressions of congressional intent, and general limitations principles--support Core's interpretation of Sec. 2462. A claim under that section accrues at the time of the underlying violation.

The government's fallback position is that if its claim first accrued at the time of the violation, the limitations period was...