Amicus Curiae Brief — Graham County Soil & Water Conservation Dist. v. United States Ex Rel. Wilson

)

FEB 1 6 2005

No. 04-169 OFFICE OF THE CLERK

IN THE

Supreme Court of the Anited States

GRAHAM COUNTY SOIL & WATER CONSERVATION DISTRICT;

CHEROKEE COUNTY SOIL & WATER CONSERVATION DISTRICT;

GERALD PHILLIPS; ALLEN DEHART; LLOYD MILLSAPS; BILL

TIPTON; C.B. NEWTON; EDDIE Woop; GRAHAM COUNTY,

Petitioners,

Vv.

UNITED STATES OF AMERICA EX REL KAREN T. WILSON

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

BRIEF OF THE NATIONAL DEFENSE INDUSTRIAL

ASSOCIATION, AEROSPACE INDUSTRIES

ASSOCIATION, AND PROFESSIONAL SERVICES

COUNCIL AS AMICI CURIAE IN SUPPORT OF

PETITIONERS

C. STANLEY DEES ~ MARK R. TROY

LAWRENCE S. EBNER Counsel of Record

MCKENNA LONG & MCKENNA LONG &

ALDRIDGE LLP ALDRIDGE LLP

1900 K Street, N.W. 444 South Flower Street

Washington, D.C. 20006 Los Angeles, CA 90071

(202) 496-7500 (213) 688-1000

Attorneys for Amici Curiae

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D. C. 20001

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES. .....sssssssssssssceesssssssssesseeeeseeee hi

INTEREST OF THE AMICI CURIAE.......0c0sss00seese0e0e0e000 |

I. THEFALSE CLAIMS ACT’S STATUTE

OF LIMITATIONS PLAINLY AP°?LIES

ONLY TO “FALSE CLAIMS” CAUSES

Il. ITWOULD BE UNFAIR AND

IMPRACTICAL TO APPLY THE FALSE

CLAIMS ACT’S STATUTE OF

LIMITATIONS TO RETALIATORY

Ill. ENGRAFTING THE FALSE CLAIMS

ACT’S STATUTE OF LIMITATIONS

ONTO RETALIATORY DISCHARGE

CLAIMS WOULD ENGENDER

CONFUSION RATHER THAN FOSTER

SIMPLICITY pocssennes 13

A. It Typically Is Easier For Both

Unduly Complicated. 15

(ii) (iii)

Page TABLE OF AUTHORITIES

CONCLUSION .cccccccsscscscccccssccssesesssescnsesnnnsssnssennnennnananl 21 Page(s)

CASES

Agency Holding Corp. v. Malley-Duff & Associates,

Inc., 483 U.S. 143 (1987)... eeeditontsinentenescanenccses 15

Bantsolas ex rel. United States v. Superior Air and

Ground Ambulance Transp, Inc., No. O1 C 6168,

2004 U.S. Dist. LEXIS 4540 (N.D. Ill. March 18,

TT TD 14

Burnett v. New York Cent. R.R. Co., 380 U.S. 424

Sir iaiiadeaddateeiedensntntienteisecnennnceseensescensscscesessssseseccscccseese 19

Childree v. VAP/GA AG Chem, Inc., 92 F.3d 1140

ES ST )

Clemes v. Del Norte County Unified School

District, 843 F. Supp. 583 (N.D. Cal. 1994) 0.0000... )

Hughes Aircraft Co. v. United States ex rel.

EY Ms HED CBIR ccccccscccsccescccccnsenescecsseccseee 2

Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d

176 (3rd Cir. 2001)..........ccccceeeees puinncenssumesnnscsnensed 9,11

In re Chapman, 166 U.S. 661 (1897) .......cccccccccccceeeeeeeeeeees 9

Neal v. Honeywell Inc., 33 F.3d 860 (7th Cir. 1994)......... 9

Owen v. Okure, 488 U.S. 235 (1989) ....ccccccccccceeseeeeeeeees 16

Reed v. United Transport Union, 488 U.S. 319

Ee 15

United States ex rel. Clausen v. Laboratory Corp. of

America, 290 F.3d 1301 (11th Cir. 2002) ...............04. 11

United States ex rel. Karvelas v. Melrose-Wakefield

Hosp., 360 F.3d 220 (1st Cir. 2004)... .ccccccceeeeeees 9,14

United States ex rel. Lujan v. Hughes Aircraft Co.,

162 F.3d 1027 (9th Cir, 1998) ........cccccceeseeeeees 7, 11, 16

United States ex rel. Madden v. General Dynamics

Corp., 4 F.3d 827 (Sth Cir. 1993) .........ccccccccsrceesseees 11

United States ex rel. Ortega v.

Columbia Healthcare, 240 F. Supp. 2d 8 (D.D.C.

IIIT ctnieieieeenseteermsnstennensenstenstennssennssensesssesessssaseesescseeesseese 11

(iv)

Page

United States ex rel. Pogue v. Diabetes Treatment

Ctrs. of America, Inc., 238 F. Supp. 2d 258

GEE. Bee cccensstantterstienuiiniiaiiaitamcinn 14

United States ex rel. Stevens v. Vermont Agency of

Natural Resources, 529 U.S. 765 (2000) ........cccccceeeeees 2

United States ex rel. Truong v. Northrop Corp.,

No. CV 88-967 MRP, 1991 WL 496831 (C.D.

a 13

United States ex rel. Williams v. Martin-Baker

Aircraft Co., Ltd., 389 F.3d 1251 (D.C. Cir.

eT 14

United States ex rel. Yannacopolous v. General

Dynamics, 315 F. Supp.2d 939 (N.D. Ill. 2004) ......... 11

United States ex rel. Yesudian v. Howard Univ., 153

F350 T90 GAL, Cis. FGGED ccesscsssesccsssnsscessssessnsssencscessssass 9

United States v. American Trucking Assns., Inc.,

DOD UB. FS COG cecsssnsesssscssssscsensesssnnsnsemessmncssesssemed 9

United States v. Kubrick, 444 U.S. 111 (1979) ............... 20

United States v. St. Joseph's Reg’] Health Ctr., 240

F. Supp. 2d 882 (W.D. Ark. 2002)..........ccccccsceeeeeeeeees 11

Wilson v. Garcia, 471 U.S. 261 (1985) ......cccceeeceeeeenees 19

(v)

Page

STATUTES

31 United States Code §§ 3729 ef S0q ........cccccecceseeeeeeseees l

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©} Fe ep ressecnasensensastesnnssstscasanteneneseemmememmensentaibmasd 5,7,8

© DIED crenmeasmsemnennnmenninimnantial 6

0) FN cxsnansscsssssennmnscsnenmnsreemmnennesieemnsnninmnenmenniinl 6

© SOS EED crsrerneemmannmmmenmnnneinl 10

0) FD ercascscssensssnsasemsessenmmmensntenegemnemmnmmingeatntts 19

© DR cnsscenssnssesnmemennessmmemmesamamneesmemenanatsin passim

© OD crncnnsnssmennnnnemagennnnemmminanneel 4,5, 6,7

D FREE cxenseeememnnmnnemennnaniiteliel 6

©) SUD OEED cessssssusumssmapenepeeapeneagageecnemmmnnnenensceeel 6

California Civil Procedure Code § 340(3)...........ccccceeeee 16

OTHER AUTHORITIES

False Claims Amendment Act of 1986, Pub.L. 99-

Sey CEPR. SUED corsceanssnsnsrersemsenpumeneeninmmmmeianes 7

Management Reporting and Disclosure Act of 1959

ne 16

Tex. Health & Safety Code Ann. § 161.132,

BG 8. Ocensnssnssasssessnssesesssnnssesscessamsnemmsmpensesmannsnemnmnenanid 16

RULES

Federal Rules of Civil Procedure 9(b) ...............cccccceeeeeees 14

SD Ce GD BED crnrsnesersteeememesmenane l

INTEREST OF THE AMICI CURIAE!

Amici Curiae National Defense Industrial

Association, Aerospace Industries Association, and

Professional Services Council have a substantial interest in

the subject of this appeal — the statute of limitations

governing retaliatory discharge claims filed by government

contractor employees (or other individuals) who bring qui

tam actions under the federal False Claims Act (“FCA”), 31

U.S.C § 3729 et seq. The government contractor members of

these associations are the types of companies likely to be

subjected to claims alleging such “whistleblower” retaliation.

The associations are submitting this amicus curiae brief in

order to shed additional light on the reasons why the lower

court’s attempt to engraft the six-year limitations period for

“false claims” causes of action onto retaliatory discharge

claims is wholly unfair and impractical, as well as plainly

inconsistent with the language, structure, and purpose of the

FCA.

The National Defense Industrial Association

(NDIA) is a non-partisan, non-profit organization with a

membership encompassing over |,100 companies and close

to 40,000 individuals. NDIA’s members, which include

some of the nation's largest defense contractors as well as

many small businesses, provide a wide variety of goods and

services to the Federal Government. The association has a

specific interest in policies and practices concerning the

government's acquisition of goods and services, including

| The parties’ letters of consent to the filing of this brief have

been lodged with the Clerk. Pursuant to Supreme Court Rule

37.6, amici curiae state that no counsel for a party has written this

brief in whole or in part and that no person or entity, other than

the amici curiae, theiz members, or their counsel, has made a

monetary contribution to the preparation or submission of this

brief.

=e

2

research and development, procurement, and logistics

support.

The Aerospace Industries Association (AIA)

represents the nation's leading manufacturers and suppliers of

civil, military, and business aircraft, helicopters, unmanned

aerial vehicles, space systems, aircraft engines, missiles,

materiel, and related components, equipment, services, and

information technology.

The Professional Services Council (PSC) is the

leading national trade association that represents companies

of all sizes providing professional and technical services to

the virtually every agency of the federal government,

including information technology, engineering, logistics,

operations and maintenance, consulting, international

development, scientific, environmental and social sciences.

As the government contracting industry’s leading

voices on federal procurement matters, these associations

sponsor numerous seminars emphasizing compliance with

federal procurement laws and regulations, including the

FCA, to enhance their member companies’ ability to comply

with their responsibilities as government contractors. NDIA

and AIA have submitted amicus briefs to the Supreme Court

in matters involving government contracting, including two

FCA cases heard by the Court in recent years.

Amici believe that the opinion below, which provides

plaintiffs with an excessively long period of time in which to

2 AIA and NDIA’s predecessor submitted briefs in Hughes

Aircraft Co. v. United States ex rel. Schumer, 519 U.S. 926 (1996)

(successful challenge to the retroactive application of the 1986

FCA amendments), and AIA submitted a brief in United States ex

rel. Stevens v. Vermont Agency of Natural Resources, 529 U.S.

765 (2000) (unsuccessful constitutional challenge to qui tam

relator’s standing).

3

file retaliation claims, does not enhance FCA enforcement.

Nor does the ruling provide clarity to litigants or other

interested parties as to when the period of limitations

commences.

Rather, the lower court’s ruling permits some

employees to delay seeking redress of their alleged retaliation

claims until the matter has grown stale and the collective

memory of other personnel involved in the matter has faded.

Further, holding that the limitations period commences when

the alleged false claim is submitted instead of when the

alleged retaliation occurred would produce impractical and

counter-productive results, including in some _ instances

barring the retaliation claim before the alleged retaliation has

occurred, and in other instances rendering it impossible for

either party to identify when the period commenced.

SUMMARY OF ARGUMENT

The Fourth Circuit determined that an employee who

claims that she has been retaliated against by her employer

for reporting violations of the FCA has six years from the

employer’s submission of the false claim to file her

retaliatory discharge action under § 3730(h). Amici agree

with petitioners that the FCA’s six-year statute of limitations

applies only to the cause of action alleging that a false claim

was submitted by a contractor, and not to the employee's

cause of action for retaliatory discharge. —

Because, in amici’s view, the FCA does not provide a

limitations period for retaliatory discharge claims, such

actions are governed by the most closely analogous state law

limitations period, typically for wrongful discharge in

violation of public policy. Contrary to the lower court’s

finding that there is inherent uncertainty in identifying the

appropriate siate statute of limitations (Pet. App. 25a-26a),

the table included in this amicus brief (infra at 17-18) shows

the appropriate statute of limitations for each of the 45 states

that recognize a cause of action for wrongful discharge in

violation of public policy. The table reflects that most states, —

4

including states such as California and Virginia where there

is a heavy concentration of government contractors, provide

a limitations period of two years or less, thereby lending

credence to the dissent’s succinct observation that “six-years

is a long time.” Pet. App. 29a.

Amici maintain that the Fourth Circuit’s majority

decision runs afoul of the language, structure and purpose of

the FCA. The associations also take issue with the lower

court majority s unsupported generalizations about the nature

of FCA litigation, including the court’s conclusion that

commencing the period of limitations from the date of the

false claim is justified because it supposedly is easier to

pinpoint than the date of the alleged retaliatory conduct. To

the contrary, gui tam complaints frequently are vague as to

when the alleged false claim was submitted, making it

difficult, if not impossible, to determine when the limitations

period for a retaliation claim would commence. On the other

hand, the date of the alleged act of retaliation is more easily

identifiable because the employee certainly would know

when he or she was terminated or suffered other alleged

harm, and the employer could refer to personnel records

which would reflect when any disciplinary ac.ion occurred.

There is no statutory or policy justification for

commencing the limitations period for retaliation claims

from any date other than the date of the retaliatory act. As

described in the specific examples below (infra at 10-12), the

Fourth Circuit’s construction would produce impractical and

unmanageable results and needless further lit}gation.

ARGUMENT

I. THE FALSE CLAIMS ACT’S STATUTE OF

LIMITATIONS PLAINLY APPLIES ONLY TO

“FALSE CLAIMS” CAUSES OF ACTION

Contrary to the Fourth Circuit’s decision, the “plain

language” of the FCA’s statute of limitations, § 3731(b),

does not afford a six-year limitaiions period in which to

5

bring a retaliation action under § 3730(h). Rather, § 3731(b),

when read in full and in context, applies exclusively to “false

claims” causes of action.

The court of appeals attempted to justify its finding

by relying solely upon § 3731(b)’s introductory reference to

an action “under section 3730,” and concluded that those

words — by themselves — mean that the statute of limitations

covers an action under any part of § 3730, including subpart

(h), the retaliatory conduct provision.3 Pet. App. 5a (“an

action under section 3730 which necessarily includes an

action for retaliation under section 3730(h)”). Once the court

concluded that the introductory reference was inclusive of all

actions under § 3730, including subpart (h), it then attempted

to force-fit the additional verbiage of the provision — which

cleariy has nothing to do with the employer’s retaliatory

conduct — into a statute of limitations governing the filing of

retaliatory conduct claims. |

3 The FCA’s statute of limitations (§ 3731(b)) states in full:

“A civil action under section 3730 may not be brought --

(1) more than 6 years after the date on which the violation of

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

- date on which the violation is committed, whichever occurs

ast.”

The retaliatory conduct cause of action, § 3730(h), provides:

“Any employee who is discharged, demoted, suspended,

threatened, harassed, or in any other manner discriminated against

in the terms and conditions of employment by his or her employer

because of lawful acts done by the employee on behalf of the

employee or others in furtherance of an action under this section,

including investigation for, initiation of, testimony for, or

assistance in an action filed or to be filed under this section, shall

be entitled to all relief necessary to make the employee whole.”

6

The FCA’s statute of limitations, read as a whole,

does not give any indication that it applies to retaliatory

discharge claims under § 3730(h). Rather, the provision falls

under the heading “False claims procedure,” a title which

itself suggests that the provision is limited to the “false

claims” causes of action arising under § 3729, which are

brought either by the government under § 3730(a) or a

private person (a so-called gui tam relator) under § 3730(b).

After § 3731(b)’s introductory reference to “[a] civil

action under section 3730,” every other reference point in the

statute of limitations is to accrual of the cause of action for

submitting a false claim. Section 3731(b)(1) refers

specifically to the date of the violation of § 3729, and

§ 3731(b)(2) refers to the date when the government first

learned of the violation of § 3729.4 See supra, n.3.

The Fourth Circuit failed to heed a primary rule of

Statutory construction which it cited, namely that 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.”” Pet. App. 4a (citing Robinson v. Shell Oil Co., 519

4 Section 3731(b)(2) tolls the running of the statute for up to

three years when the “facts material to the right of action” were

known “by the official of the United States charged with

responsibility to act in the circumstances ... .” No government

official is responsible for or involved in bringing an action to

enforce an employee’s claim under § 3730(h). Clearly the “right

of action” that is referenced is the false claims cause of action.

Accordiiigly, the tolling provision, which can extend the statute of

limitations to ten years, pertains only to a cause of action under

§ 3729 for submission of a false claim for payment to the

government. The Fourth Circuit does not suggest that this tolling

provision has any applicability to a retaliation claim. If the Court

reads the provision’s subsections consistently, just as the “right of

action” mentioned in § 3731(b)(2) has no bearing on a retaliation

claim, neither does the “violation” mentioned in § 3731(b)(1).

:

U.S. 337 (1997)). In contrast, the Ninth Circuit, in United

States ex rel. Lujan v. Hughes Aircraft Co., 162 F.3d 1027,

1034 (9th Cir. 1998), and Judge Wilkinson in his dissent in

the instant case (Pet. App. at 30a-32a), correctly applied this

rule of statutory construction and found that the provision

plainly applies only to the underlying false claim cause of

action, not to retaliatory conduct claims. No reference to

legislative history or extraneous analysis is necessary.

Beyond erroneously interpreting the plain meaning of

the statute, the Fourth Circuit also misconstrued the FCA’s

legislative history. When Congress added § 3730(h) in 1986,

it amended the FCA’s statute of limitations to refer

specifically to false claims allegations under § 3729. False

Claims Amendment Act of 1986, Pub.L. 99-562, 100 Stat.

3153. Lujan correctly reasoned that Congress intended this

change to narrow the FCA’s statute of limitations to

violations of § 3729.

If Congress had wanted to retain a six-year

statute for all actions under section 3730,

including retaliation claims, it would have left

the pre- 1986 language of section 3731(b)

intact when it enacted the 1986 amendments

to the FCA. Instead, Congress, while adding

a provision for retaliation claims under

3730(h), narrowed the application of the six-

year statute of limitations to violations of

section 3729. Section 3729 specifically and

strictly addresses false claims, not retaliation

claims.

162 F.3d at 1034-35. Lujan further observed that Congress’

stated rationale for the lengthy period of limitations — to

ensure the government’s rights are not lost through the

violator’s deception — “is inapposite to a private claim for

retaliation.” observing, “[t]here is nothing covert or

deceptive about retaliation — the victim feels its sting

immediately.” Lujan, 162 F.3d at 1035 (citing S.Rep. No. 99-

8

345, 99th Cong., 2d Sess. 15 (1986), reprinted in 1986

U.S.C.C.A.N. 5266, 5280).

The Fourth Circuit’s reference to legislative history is

unavailing, and the Ninth Circuit’s view that Congress

actually narrowed the statute of limitations to exclude al] but

false claims causes of action is the more sound conclusion.

Il. IT WOULD BE UNFAIR AND IMPRACTICAL

TO APPLY THE FALSE CLAIMS ACT’S

STATUTE OF LIMITATIONS TO

RETALIATORY DISCHARGE CLAIMS

The Fourth Circuit’s erroneous application of the

FCA’s statute of limitations to retaliation claims creates a

situation unlike any other wrongful discharge statute of

limitations. As noted in the dissent, the court “introduces an

unprecedented oddity into state and federal law by

disconnecting the statute of limitations for anti-retaliation

claims from the actual retaliatory acts themselves.” Pet.

App. 28a-29a. The majority's reasoning and _ its

generalizations about the nature of FCA litigation are

unrealistic and would lead to absurd outcomes, some of

which are illustrated herein.

Instead of linking the limitations period for the

retaliation claim to the alleged act of retaliation, the decision

is premised on an erroneous finding that the act of retaliation

is somehow linked to the act of submitting the false claim.

“{Section] 3730(h) subsumes a violation of section 3729,

even if it does not do so explicitly... . Because an action

under section 3730 will not lie absent an alleged violation of

section 3729, it is clear that Congress has elected to identify

a single, readily identifiable point at which to begin the

limitations periods for all actions under section 3730.” Pet.

App. |4a.

This notion that a retaliation claim will not lie absent

an underlying allegation that the employer submitted a false

claim, is unfounded. Courts have held that § 3730(h) is

9

broadly worded to protect employees who _ investigate

possible false claims, even if their investigation comes up

empty or they decide not to bring a false claims cause of

action. Thus, liability under § 3730(h) can exist even where

there has been no alleged violation of § 3729 (/.e., no false

claim allegation by the employee). See, e.g., United States ex

rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 236

(Ist Cir. 2004) (“retaliation claim does not require the

plaintiff to have filed an FCA lawsuit or to have developed a

winning clair at the tinie of the alleged retaliation”);

Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 188

(3rd Cir. 2001) (“employees need not actually file a False

Claims Act suit to assert a cause of action under

section 3730”); Childree v. VAP/GA AG Chem., Inc., 92 F.3d

1140, 1143 (11th Cir. 1996) (plaintiff “never considered”

bringing false claims cause of action but was nevertheless

permitted to maintain her retaliation claim); Neal v.

Honeywell Inc., 33 F.3d 860, 861 (7th Cir. 1994) (plaintiff

claimed retaliation by employer after she supplied

information about false claims to in-house counsel, but she

did not file § 3729 claim against her employer); Clemes vy.

Del Norte County Unified School District, 843 F. Supp. 583,

585 (N.D. Cal. 1994) (plaintiff filed discrimination claims

under several statutes including § 3730(h), but did not file a

false claims action). Indeed, one court has held that a

plaintiff may maintain a § 3730(h) retaliation claim even if a

§ 3729 complaint has been rejected as meritless by a jury.

See United States ex rel. Yesudian v. Howard Univ., 153

F.3d 731 (D.C. Cir. 1998).

As in the foregoing cases, if there is no underlying

allegation that a false claim was submitted, then under the

Fourth Circuit’s construction, the period of limitations for

the retaliation claim would never commence. That is an

absurd result. It is well-settled thai this Court will not

construe a statute in a manner that leads to absurd or futile

results. See United States v. American Trucking Assns., Inc.,

310 U.S. 534, 543 (1940); In re Chapman, 166 U.S. 661, 667

(1897) (“nothing is better settled than that statutes should

receive a sensible construction, such as will effectuate the

10

legislative intention, and, if possible, so as to avoid an unjust

or an absurd conclusion”).

Even when a retaliation claim is accompanied by an

underlying false claims allegation, because the former, by its

very nature, would occur subsequent to the latter, the two

acts do not, and cannot, occur simultaneously. Indeed, they

typically are far removed in time from each other. This is

demonstrated in the following common scenarios, which

show the impracticality of setting the accrual date for the

retaliation claim as the same date that the false claim is

submitted.

Example 1. In 2000, during the early stages of

performing a long-term government contract, the employer

submits a false claim. The employee does not discover the

false claim until 2005 when the contract performance is

completed and the employee examines all of the cost

submissions. Immediately upon discovery in 2005, the

employee reports the matter to the employer and to the

government. If the employer postpones retaliation against

the employee until 2007, under the Fourth Circuit's illogical

construction, the employee’s retaliation claim would be time

barred.

Example 2. In the same scenario as Example 1, the

employee files a gui tam action in 2005 upon discovering the

false claims, but the matter remains under seal for two years,

during which time the employer is unaware of the suit. In

2007, when the seal is liftea and the employer learns of the

whistleblowing, the employer immediately retaliates against

the employee. Regardless of whether the employee files a

separate action under § 3730(h) or amends his gui tam

complaint to add the new retaliation claim, the claim would

be time barred.

This example is not far-fetched given the procedural

aspects of initiating a gui tam action. Under § 3730(b)(2),

qui tam complaints are filed under ‘seal for at least 60 days

while the government investigaes the matter and decides

11

whether or not to intervene. The primary intent of this

provision is to permit the government to investigate the

matter without tipping off the defendant. Lujan, 67 F.3d at

243. It is not unusual for gui tam complaints to remain under

seal for years while the government conducts its

investigation.> | Thus, the time period between the

submission of the false claim and the notification to the

employer about the employee’s whistleblowing (which is one

of the predicates for a retaliation claim)® can be lengthy.

Under the Fourth Circuit's illogical construction, the

retaliation claim would be time barred ia such situations.

Example 3. Employee A works in the accounts

receivable department and witnesses the submission of the

false claim on the day it was submitted in 2000. He

complains about the conduct and suffers retaliation on that

day. Employee B works in the internal audit department

discovers the same false claim during her contract close-out

audit in 2005. Employee B complains immediately to the

employer who immediately retaliates against her. Though

both employees suffered retaliation immediately after they

5 See e.g., United States ex rel. Clausen v. Laboratory Corp. of

America, 290 F.3d 1301, 1303-04 (Lith Cir. 2002) (complaint

under seal for almost four years); United States ex rel. Madden v.

General Dynamics Corp., 4 F.3d 827, 829 (9th Cir. 1993)

(complaint under seal for over two years); United States ex rel.

Yannacopolous vy. General Dynamics, 315 F. Supp.2d 939, 944

n.7 (N.D. Ill. 2004) (complaint under seal for seven years); United

States ex rel. Ortega v. Columbia Healthcare, 240

F. Supp. 2d 8, 11 (D.D.C. 2003) (complaint remained under seal

for three years); United States v. St. Joseph's Reg'l Health Ctr.,

240 F. Supp. 2d 882, 883-84 (W.D. Ark. 2002) (complaint

remained under seal as to some defendants for over five years).

© See Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 186

(3rd Cir. 2001) (retaliation under § 3730(h) requires proof that

employer had knowledge of plaintiff's whistleblowing at the time

of the retaliatory conduct).

12

complained about the same false claim, employee A has six

years to file his retaliation claim and employee B has one

year.

Example 4. Employee A witnesses the submission

of a false claim in 2000. In the same week, employee A

complains to the employer, suffers retaliation and files a gui

tam action and a retaliation claim. The complaint is unsealed

in 2004 after a lengthy government invest’ sation. Three

years later in 2007, the case proceeds to urial. Employee B is

called as a witness and testifies against the employer. Later

that day, the employer fires employee B. Employee B's

claim under § 3730(h) already would be time barred under

the Fourth Circuit's illogical construction.

These scenarios illustrate that if the accrual date of a

retaliation claim is held to be the date the false claim is

submitted rather than the date the retaliation occurs, then

individual employees would have widely varying periods of

limitation governing their retaliation claim depending on

how close in time the retaliation was to the submission of the

false claim.

This impractical result was observed in one of the

earliest decisions involving the FCA’s retaliatory discharge

provision.

[I}f the accrual date is not a function of the

date of retaliation, individual employees will

have widely varying periods of limitations. It

is both unreasonable and unfair for identically

situated plaintiffs to be held to widely varying

periods of limitation because the accrual date

for the limitations period is unrelated to their

claim. .... [The purpose behind § 3730(h)]

is best satisfied by allowing an equal period

for all employees to bring a private action and

to have that period to begin to run from the

time of the retaliation.

13

United States ex rel. Truong v. Northrop Corp., No. CV 88-

967 MRP, 1991 WL 496831, at *2 (C.D. Cal. Nov. 26,

1991). Application of state statutes of limitations would

allow an equal period for all employees affected by the same

alleged act of retaliation who bring suit in the state where the

conduct occurred, which is normally where such actions are

filed.

The above scenarios demonstrate the fundamental

flaw in the Fourth Circuit’s assumption that there is a close

temporal relationship between the submission of the false

claim and the retaliatory discharge act. -

Ill. ENGRAFTING THE FALSE CLAIMS ACT’S

STATUTE OF LIMITATIONS ONTO RETAL-

IATORY DISCHARGE CLAIMS WOULD

ENGENDER CONFUSION RATHER THAN

FOSTER SIMPLICITY

The Fourth Circuit errs in concluding that its

construction fosters “simplicity of administration” on the

theory that (a) it is easier to pinpoint the date on which the

false claim occurred than the date on which the retaliation

occurred, and (b) it is preferable to utilize a single federal

statute of limitations rather than subject retaliation claims to

“vagaries of a patch-work of state limitations periods, some

as short as six months.” Pet. App. 13a-25a. The dissent

correctly notes that there is no indication in the legislative

history of Congress’ desire to simplify the statute of

limitations by having the false claim cause of action and

retaliation claims accrue from the same starting point. Pet.

App. 37a-4la.

A. It Ty y Is Easier For Both Employee

And yer To Ascertain The Date Of

The A Retaliatory Act Than The

Date Of Alleged False Claim

The court asserts “it is easier to determine the date of

a false claim than to pin down the time of retaliatory acts; the

14

claim is a document, but arguments about retaliation depend

on oral exchanges and are subject to failure of memory as

well as the risk of prevarication.” Pet. App. 14a (citing Neal

v. Honeywell, Inc., 33 F.3d at 865).

This notion is far removed from the reality faced by

FCA defendants in the many cases in which the date of the

alleged false claim is anything but clear. Qui tam complaints

typically are subjected to challenge under Rule 9(b) of the

Federal Rules of Civil Procedure for lack of particularity as

to when the false claim was submitted. While some

complaints are dismissed on this basis, others survive

without clearly setting forth the date of the false claim,

making it difficult to ascertain the commencement of the

limitations period. See, e.g., United States ex rel. Williams vy.

Martin-Baker Aircraft Co., Ltd., 389 F 3d 1°51 (D.C. Cir.

2004) (upholding dismissal of relator’s FCA claim for its

failure to specify dates within an open-ended period spanning

several years while, at the same time, reinstating the

associated retaliation claim); Bantsolas ex rel. United States

v. Superior Air and Ground Ambulance Transp, Inc., No. O1

C 6168, 2004 U.S. Dist. LEXIS 4540, at *6, 10 (N.D. Ill.

March 18, 2004) (relator directed to amend complaint where

false claims allegations encompassed 21 month period but

failed to identify dates of false claims within the period);

United States ex rel. Pogue v. Diabetes Treatment Ctrs. of

America, Inc., 238 F. Supp. 2d 258, 268 (D.D.C. 2002)

(relator adequately pled scheme spanning twelve years

despite failure to identify specific dates of alleged false

claims); Karvelas, 360 F.3d at 223, 232-35 (dismissal of

FCA allegations upheld where relator failed to specify dates

of false claims allegedly committed from 1994 to 1997). In

these and other similar factual situations, it is difficult to

assert a statute of limitations defense without undertaking

prolonged discovery efforts. In that regard, the judicial

economy that normally results from applying statutes of

limitations is severely diminished.

Under the Fourth Circuit’s construction, it is

conceivable that a plaintiff could argue that an act of

15

retaliation which occurred seven years earlier is not time

barred because the wrongdoing that allegedly resulted in the

submission of false claims continues up to the present time.

Thus, the mere allegation of continuing conduct would

breathe life into a stale retaliation claim that the employer

never expected to see.

In contrast to the uncertainty which typically

surrounds the time that the alleged false claim was

submitted, the date of an alleged retaliatory act by the

employer is more easily ascertainable. Whereas the

employee may be unaware of the when the false claim was

submitted to the government, he certainly would know the

precise date on which some supposed act of retaliation

directed against him occurred. Similarly, while the timing of

some retaliatory acts, such as threats or harassment, might be

difficult for the employer to ascertain, there almost certainly

would be a record of acts such as termination of

employment, demotion, suspension or other official

disciplinary action. These dates could be discovered by

examining the employee’s personnel file; thus, both an

employee and employer would be in a position to know when

the period of limitations commenced.

B. Applying State Statutes Of Limitation To

Federal Causes Of Action Is Neither

Unusual Nor Unduly Complicated

It is not unusual for federal-statutes to omit an all-

encompassing statute of limitations. See Agency Holding

Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 147

(1987) (“Given our longstanding practice of borrowing state

law, and the congressional awareness of this practice, we can

generally assume that Congress intends by its silence that we

borrow state law.”’). In such instances, the rule of statutory

construction calls for applying the most closely analogous

statute of limitations under state law. See Reed v. United

Transport Union, 488 U.S. 319, 322 (1989) (applying North

Carolina’s three year statute of limitations for personal injury

claims to a claim involving violation of the right to free

16

speech under the Labor — Management Reporting and

Disclosure Act of 1959 (29 U.S.C. § 41 1(a)(2)), a law which

contained no express statute of limitations for such claims).

This Court has acknowledged that sometimes the

practice of relying on state statutes of limitations can result in

confusion aiid inconsistency where it is difficult to determine

the most analogous state law from a variety of similarly

worded statutes containing different limitations periods. See

Owen vy. Okure, 488 U.S. 235, 240 (1989). That is not the

case here. While the decision below imagines difficulties in

determining the appropriate state law limitations period,

most states have a statute of limitations for personal injury

~ claims which normally would apply to the tort of wrongful

discharge in violation of public policy. For example, Lujan

held that this tort was most analogous to the § 3730(h) claim,

and therefore, it applied California’s one-year statute of

limitations (in effect at the time) for wrongful termination in

violation of public policy (Cal.Civ.Proc.Code § 340(3) (West

Supp. 1998)). Lujan, 162 F.3d at 1035.

Each of the following state statutes of limitations

have been held to be applicable to claim for wrongful

discharge in violation of public policy, likely the “most

closely analogous” state statute to apply in a § 3730(h) action

breught in the federal court in that state. 7

7 As the decision below notes, some states have limitations

periods for particular actions, such as the Texas law imposing a

180-day period in which a health care worker has to file an action

alleging retaliation for reporting illegal or unethical conduct in the

operation of a health care facility. Pet. App. 24a-25a (citing Tex.

Health & Safety Code Ann. § 161.132, 161.134). Where the

§ 3730(h) allegations appear to be analogous with a particular

State statute, the court would have to decide between that statute

and the general provision governing the filing of wrongful

discharge actions. In most instances, as in Lujan and in the case

(Footnote cont'd on next page)

17

Limitations

State Period State Statute

AL ___2 years Ala. Code § 6-2-38

AZ __1 year Ariz. Rev. Stat. Ann. § 12-541

AR__5 years Ark. Code Ann. § 16-56-115

CA __2 years Cal. Civ. Proc. Code § 335.1

CO __2 years Colo. Rev. Stat. Ann. § 13-80-102

CT _3 years Conn, Gen. Stat. Ann. § 52-577

DE _2 years Del. Code Ann. tit. 10, § 8119

DC _3 years D.C. Code Ann, § 12-301

HI 2 years Haw. Rev. Stat. Ann. §§ 657-1, 657-

4, 662-"

ID _— 4 years Idaho Code §§ 5-217, 5-219, 5-224

IL 2 years 735 Ill. Comp. Stat. Ann. 5/13-202

IN 2 years Ind. Code Ann. § 34-11-2-4

IA 2 years lowa Code Ann. § 614.1

KY _5 years Ky. Rev. Stat. Ann. § 413.120

LA ___1 year La. Civ. Code Ann. art. 3492

MD 3 years Md. Code Ann., Cts. & Jud. Proc.

§ 5-101

MA 3 years Mass. Gen. Laws Ann. ch. 260, § 2A

MN _ 2 years Minn. Stat. Ann. § 541.07

MS __3 years Miss. Code Ann. § 15-1-49

MO _5 years Mo. Ann. Stat. § 516.120

MT | year Mont. Code Ann. §§ 39-2-901 et seq.

NE 4 years Neb. Rev. Stat. Ann. § 25-212

NV__3 years Nev. Rev. Stat. Ann. § 11.190

NH _3 years N.H. Rev. Stat. Ann. § 508:4

NJ _ 6 years N.J. Stat. Ann. § 2A:14-1

NM _ 4 years N.M. Stat. Ann. § 37-1-4

NY 1 year N.Y. C.P.L.R. 215

(Footnote cont'd from previous page.)

below, the general wrongful discharge statute of limitations would

apply.

18

State — State Statute

NC _3 years N.C. Gen, Stat. § 1-52

ND __ 6 years N.D. Cent. Code § 28-01-16

OH = 4 years Ohio Rev. Code Ann. § 2305.09

OK 2 years Okla. Stat. Ann. tit. 12, § 95

OR __2 years Or. Rev. Stat. § 12.110

PA _2 years Pa. Stat. Ann. tit. 42 § 5524

RI N/A R.I. Gen. Laws § 9-1-14

SC _3 years S.C. Code Ann. § 15-3-530

SD _3 years S.D. Codified Laws § 15-2-14

TN __1 year Tenn. Code Ann. § 28-3-104

TX 2 years Tex. Civ. Prac. & Rem. Code Ann.

§ 16.003

UT _1 year Utah Code Ann. § 78-12-29

VT __3 years Vt. Stat. Ann. tit. 12, §§ 511,512

VA _ 2 years Va. Code Ann. § 8.01-243

WA 3 years Wash. Rev. Code Ann. § 4.16.080

WV 2 years W. Va. Code § 55-2-12

Wi 2 years Wis. Stat. Ann. § 893.57

WY 4 years Wyo. Stat. Ann. § 1-3-105

Another reason offered by the Fourth Circuit for

avoiding state statutes of limitations is that generally the state

statutes provide shorter limitations periods. That observation

is correct. Nearly half the states listed above provide a

limitations period of two years or less, and nearly three

quarters provide a period of three years or less. (These states

include California, Texas, Virginia, Pennsvivania, New

York, Colorado, and Marylaid, states with heavy

concentrations of government contractor employees.) These

shorter periods, however, do not support the court’s efforts to

manufacture a relationship between the cause of action for

retaliation and the unrelated FCA’s longer limitations period.

The court employs circular reasoning in its assertion

that applying state law would “undermine the very protection

that Congress intended to confer by enacting § 3730(h).”

Pet. App. 25a. As noted in the dissent, there simply is no

19

statutory language or legislative history suggesting that

Congress intended to simplify the administration of such

claims by having a federal limitations period. Pet. App. 37a-

39a. The dissent further notes that application of the FCA’s

six-year period is not justified simply because it provides a

longer duration than most state statutes provide. /d. “It is

altogether plausible that Congress chose to respect . . . the

diverse views of states on the length of limitations periods

for wrongful discharge ....” /d.

Congress clearly intended to encourage

whistleblowers to bring gui tam actions (as reflected in the

FCA’s bounty provision (§ 3730(d)), and to protect plaintiffs

against retaliation by providing in § 3730(h) the remedy of

double back pay, special damages and attorneys’ fees. While

Congress perceived the need for a uniform federal remedy

against whistleblower retaliation, there is no such need for

uniformity with regard to the merely procedural aspect of

how soon a complaint must be filed.

Moreover, there is substantial justification for

applying shorter limitations periods to retaliation claims.

The policy behind any statute of limitations is to protect

defendants from stale claims. Wilson v. Garcia, 471 U.S.

261, 271 (1985) (“Just determinations of fact cannot be made

when, because of the passage of time, the memories of

witnesses have faded or evidence is lost”); Burnett v. New

York Cent. R.R. Co., 380 U.S. 424, 428 (1965) (Court noted

in action against employer that statutes of limitations are

designed to assure fairness to defendants by preventing

surprises where evidence has been lost, memories have

faded, and witnesses have disappeared).

Even in matters where the alleged retaliatory act

occurred near the time of the alleged false claim, government

contractors would be prejudiced if they were subject to

employment-related claims brought six years later.

Companies that employ tens of thousands of people can find

it difficult to maintain a collective memory of the relevant

events associated with one particular employee, particularly

20

if the retaliatory conduct was in the nature of harassment by a

co-worker or some other unofficial, unauthorized conduct.

Given the nature of government contracting, different

projects come and go and er:ployees frequently find

themselves working within different groups of co-workers or

moving to another division or company altogether. Section

3730(h) claims can be based upon alleged discrimination in

employee compensation which itself is often based on

subjective criteria that may be difficult for the employee's

supervisors to recollect years later.

Under the Fourth Circuit's ruling, an employee can

gain a significant tactical advantage over the employer by

delaying filing her retaliation claim. The employee might

have a greater recollection of the events because they

affected her personally. In addition, the prolonged delay in

filing could enhance the damages available to the employee

under the double back pay provision.

Companies are entitled to know how long they

remain subject to suit by a disgruntled employee. As the

Supreme Court stated, “statutes of limitations . . . represent a

pervasive legislative judgment that it is unjust to fail to put

the adversary oni. +e 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 (1979) (quoting

Railroad Telegraphers v. Railway Express Agency, 321 U.S.

342, 349 (1944)). State laws governing employment-related

litigation form a_ basis for company record-keeping

procedures and other compliance procedures. Government

contractors should not have to endure the uncertainties that

would arise from applying the FCA's statute of limitations to

an employment claim. Nor should they be held accountable

for up to six years for an action that could have been brought

by the impacted employee almost immediately after that

alleged wrongful conduct occurred.

21

CONCLUSION

For the foregoing reasons, amici NDIA, AIA, and

PSC urge the Court to reverse the Fourth Circuit on the

question presented and hold that the FCA does not specify a

limitations period for retaliation claims.

Respectfully submitted,

C. Stanley Dees Mark R. Troy*

Lawrence S. Ebner McKENNA LONG &

McKENNA LONG & ALDRIDGE LLP

ALDRIDGE LLP 444 South Flower Street ~

1900 K Street, N.W. Los Angeles, CA 90071

Washington, D.C. 20006 = (213) 688-1000

(202) 496-7500 Attorneys for Amici Curiae

*Counsel of Record

February 2005