GRAHAM COUNTY WATER DISTRICT v. UNITED STATES
The False Claims Act (FCA) allows the government or an individual on the government's behalf to sue any person for "making false or fraudulent claims for payment to the United States." A 1986 amendment to the FCA allows individuas to sue their employer if the employer retaliates against them in any way for assisting in an investigation of such false claims. In 2001, Karen Wilson, a secretary for Graham County Water District, sued her employer for various false claims it allegedly made concerning a federal disaster relief program. She also brought a retaliation suit against her employer, alleging that after she had provided information on the false claims to federal officials in December 1995, she had been repeatedly harassed by Graham County District officials until she resigned in March 1997. The District Court dismissed Wilson's suit as untimely. The court accepted Graham County District's argument that the six-year statute of limitations in the 1986 amendment to the FCA was not intended to apply to retaliation suits. Therefore, the court held, the most closely analogous state limitation applies instead. The north Carolina limit for retaliation suits was three years, so Wilson's suit was brought too late. On appeal, the Court of Appeals for the Fourth Circuit reversed the District Court and applied the six-year limitation to all retaliation suits under the FCA.
Does the six-year statute of limitations in the False Claims Act apply to suits brought by individuals who were retaliated against by their employers for assisting an investigation of false or fraudulent claims?
Legal provision: Federal False Claims
No. In a 7-2 decision, the Court ruled that the six-year statute of limitations did not apply to suits for retaliation. The majority opinion by Justice Clarence Thomas found the statute of limitations "ambiguous." The ambiguity arose from the fact that the six-year limitation in the FCA starts from the time the false claim was made. Yet in a retaliation suit, no actual false claim needs to be alleged. The plaintiff only has to allege that her employer retaliated against her in connection with a federal investigation. The Court found that the ambiguity could be resolved by interpreting the statute of limitations to apply only to suits for false claims, not to retaliation suits. The Court left to the lower courts the question of which state statute of limitations should apply in place of the six-year limitation. Justice Stephen Breyer, joined by Justice Ruth Bader Ginsburg, dissented. The dissent characterized the statute of limitations as "unusual" but "reasonably clear," and argued that it should be read to apply to retaliation actions.
Argument of Christopher G. Browning, Jr.
Chief Justice Rehnquist: We'll hear argument next in Graham County Soil & Water Conservation District v. the United States.
Mr. Browning: Mr. Chief Justice, and may it please the Court:
The issue in this case is whether Congress expressly provided for a limitations period for a retaliatory discharge action under the Federal False Claims Act.
The 6-year limitation period set out in section 3731(b) of the act is tied to a violation of section 3729, that is, the submission of a fraudulent claim to the Government.
The triggering event to start the statute of limitations running under section 3731(b) is a violation of section 3729.
Because a violation of section 3729 is not an element of the cause of action for retaliatory discharge, Congress did not intend to provide a limitations period in section 3731(b) for a retaliatory discharge action.
The Government in its amicus brief argues that Congress must have intended a uniform limitation period so that all three actions created by the False Claims Act could be brought in the same proceeding.
The... the Government's argument undermines the very purpose of the Federal False Claims Act and the retaliatory discharge provision.
The retaliatory discharge provision, section 3730(h) of the False Claims Act, not only protects people who blow the whistle, the initial whistleblower, but it expressly protects people who testify at trial.
And we have seen time and again in many of these cases the Government will keep a case under seal for 5, 6, 7 years.
We've seen repeatedly situations, because of the complexity of the underlying violation of the false claim, that it might take a decade from when the complaint is filed to when the case actually is put before a jury.
Justice Ginsburg: Mr. Browning, this argument that you're making, where you seem to be having great solicitude for the... for the whistleblowers, for the people who might be retaliated against... the respondent and the Solicitor General answer your argument by saying in all the years that 3730(h) retaliation claims have been available, there has been no instance of qui tam plaintiff barred because the retaliation occurred outside the 6 but are there any actual cases where the retaliation in fact fell outside the 6-year, dated from the submission of the false claim?
Mr. Browning: Justice Ginsburg, I cannot cite to a specific situation where that has occurred, and the Government, you're right, makes very much of the argument that this is simply hypothetical.
But it is a very real and concrete problem when you have cases that go to trial, that it takes so long to go to trial, and those people who are testifying at trial have no protection because it' s more than 6 years from the violation of section 3729.
I... I would--
Justice Ginsburg: Maybe they don't get retaliated against if they testify at trial.
Mr. Browning: --Well--
Justice Ginsburg: And if the question is whether there is a problem out there in the real world on... for people whose interest is certainly not identical to yours.
Mr. Browning: --Your Honor, I recognize that, but you have to look at the statute as a whole to construe it in its proper context.
And there are many situations where there... a number of years pass from... from when the complaint is filed to when the testimony takes place at trial.
And... and as the amicus brief of the National Work Right Institute points out, an organization that's designed to protect the human rights of employees, an organization that's a spin-off of the American Civil Liberties Union, that organization clearly views the interpretation advocated by the respondents and adopted by the Fourth Circuit as detrimental by employees.
Justice Breyer: All right.
All that's true, but the question that I think Justice Ginsburg asked was you have on your side the whole National Defense Industrial Association.
You have the Equal Employment Advisory Council that represents dozens and dozens, I take it, of businesses.
We have your own client.
We have you in the firm.
I imagine you all racked your brains to say has there ever been such an example, and I take the answer is no, never.
Not all of you could even find one instance where this happened.
Now, am I right?
Because that's what I think unless you provide the example.
Mr. Browning: I cannot cite a specific example.
Justice Breyer, I would direct your attention to the case in the Eleventh Circuit, Childray v. UAPGA, in which 4-and-a-half years had passed between when the initial allegation of--
Justice Breyer: Okay.
So... so what would be so unreasonable about a Member of Congress concluding the following?
We want these things to end after 6 years, you know?
And there's never been an example of this horrible that you think of, and so we are going to end them all after 6 years from the time the thing took place, the cheat took place.
And that's it.
And if there's some other problem of the kind you're worried about that comes up, we will worry about that later through amendment, tolling, et cetera.
Why is that an... we don't want 30 day statutes of limitations or 90-day statute of limitations.
We want 6 years.
That helps most people.
And if there's an odd case that doesn't, we'll worry about it.
What's the answer to that?
Mr. Browning: --Well, Your Honor, if Congress had said that, they certainly could have made that decision, but it would run completely contrary to almost 200 years of precedent from this Court that as a general rule, the limitations period does not begin to run before your cause of action even comes into existence.
Justice Breyer: Yes, that's true, it would be.
And the reason we're doing it is because there's a period of time when somebody lies to the Government and we don't want actions that are related to that.
We'll have to go into that proof to take place more than 6 years later.
Now, that would be the reason, and I agree it would be contrary.
But the difficulty for me is the language seems to point to that reason.
Mr. Browning: Well I--
Justice Breyer: And I can't find that reason idiotic.
Mr. Browning: --Well, Your Honor, I... I don't think the language points to that because the language of the limitations period, 3731(b), which is set out in the appendix to the cert petition at page 135a... the language of the statute is a civil action under section 3730 may not be brought more than 6 years after the date of the violation of section 3729.
There are two material aspects of... of the statutory language: the violation of section 3729, which is not an element of the cause of action--
Justice Stevens: Well, I... I don't mean to interrupt, but it is true that this is a civil action that's brought under 3730(h), is it not?
Mr. Browning: --The... the action is brought under 3730(h), and Justice Stevens--
Justice Stevens: So it is literally within the plain language of the statute.
Mr. Browning: --Well, it is and it isn't.
It is clearly in 3730(h), but when you look at the False Claims Act, Congress has used the phrase, an action under 3730, to mean different things in various portions throughout the False Claims Act.
Congress has used that phrase on six different occasions, and I would particularly direct the Court's attention to 3731(c).
In... in that provision, Congress has provided that in an action brought under section 3730, the United States must prove the elements of the cause of action by a preponderance of the evidence.
The respondent and the Government say you must have this little reading of section... the phrase, an action under 3730, and it means all three causes of action in 3731(b), but that... but when you turn to 3731(c), that virtually identical phrase appears and you have to read that statutory provision in context, and read in context--
Justice Ginsburg: It seems... it seems if you read a provision like this, it says what the United States would be required to prove.
Implicit in... in that is in any action brought by the United States under 3730.
I think... think (c) is clearly talking about cases in which the United States is bringing the action.
Mr. Browning: --Exactly, Justice Ginsburg.
You have to read it in context, and I think when you read 3731(b) in context and that limitations period is tied to a violation of section 3729, it is clear that Congress did not intend the phrase, an action under 3730, to... to include a retaliatory discharge action in which a violation of section--
Justice Ginsburg: Well, I don't think that's at all as clear as that (c) is directed to cases brought by the United States for the reason that Justice Breyer just explained.
Congress might want to have one 6-year limitation and say, well, maybe there would be this hypothetical case that you're worried about, but for the most part, 6 years will take care of everybody.
Mr. Browning: --And, Justice Ginsburg, my point is just as section 3731(c) is not intended to cover all of the causes of action under the False Claims Act, 3731(b) is not intended to cover all of the actions under the False Claims Act as well, that it's only intended to cover the causes of action in which a violation of section 3729 is an element of the cause of action.
The... the Government makes the argument that you need a uniform limitations period so these actions can be tried together, but the Government ignores the fact that a qui tam action or an action brought by the Government is a completely different cause of action than an action for retaliatory discharge action.
They involve different substantive claims.
Justice Stevens: That's true, but is it also not true that some of the people who get retaliated against may be the same people who bring the qui tam action?
Mr. Browning: In some cases, that is... is the case, Justice--
Justice Stevens: So if they don't get the... recover as being the victim of retaliation, they may still get a very handsome reward for what happened to them.
Mr. Browning: --That is the case, but... but I also want to point out that in many cases, the person who brings the qui tam action is a completely different plaintiff than the person who brings the retaliatory discharge action.
The example of someone who is retaliated against for testifying at trial... in that situation, it's clearly going to be a different plaintiff than the plaintiff who brought the original qui tam action.
It can also be a different defendant.
Section 3730(h) is intended to preclude an industry from blacklisting an employee.
So if an employee brings a qui tam action while at one employer and subsequently leaves and go to... goes to work for a second employer, when the second employer recognizes or... or learns that this employee had previously been involved in an investigation under the False Claims Act, that second employer is precluded from retaliating against the... the employee.
Justice Souter: In the real world, do we have such cases?
Mr. Browning: --Yes, Your Honor.
I cannot cite to a specific case, but I'm aware that that is very much a issue that practitioners face day in and day out.
Justice Souter: Another real-world question.
Do we... do we have any... do you have any experience that you can rely on either to show that in fact these subsection (h) claims are brought customarily with the main qui tam action or, conversely, that they are brought separately?
Do we know what's going on?
Mr. Browning: Yes, Your Honor.
It is a real mix, that on many cases you will see a retaliatory discharge action brought independently, and in other cases you'll see the qui tam action and the retaliation action brought simultaneously.
Justice Ginsburg: In connection with what's included and what isn't included, the... in that same 3731 provision in (d), (d) is limited to (a) and (b) and so excludes (h).
And if Congress had meant that with respect to the 6-year period, they could have said the same thing, that it relates to (a) and (b) and not (h).
Mr. Browning: Your Honor, I would recognize that there is different language that Congress could have... have chosen to state this in a different way, but... and you're right, that in section 3731(d), Congress did specifically reference section 3730(a) and 3730(b), but Congress did not use that precision in drafting throughout the Federal False Claims Act.
Just... there are a number of ambiguities that exist throughout the Federal False Claims Act.
Congress even referred to the General Accounting Office as the Government Accounting Office.
Justice Scalia: They could have done the same in 3731(c) also.
Instead of just saying any action brought under section 3730, they could have said any action brought under... which one?
(a) of... of... which is the one that allows the Government suit?
Mr. Browning: 3730(a), Justice Scalia.
Justice Scalia: (a).
They could have said (a), and they didn't.
They said all of 3730.
Mr. Browning: Yes.
So... so all you can really take from the statute is that the phrase--
Justice Scalia: Sloppy--
Mr. Browning: --Yes.
Justice Scalia: --is what you can take.
Mr. Browning: Yes, Your Honor.
That you have to look at the context.
You have to look at the meaning, and when you're dealing with a statute that is drafted in a way that's sloppy, you have to look at what Congress really intended, and when Congress--
Justice Stevens: May I ask... may I ask you a question about the alternative?
If we don't follow this statute, you... you refer to State law for the correct cause... statute of limitations I guess.
Mr. Browning: --Yes, Your Honor.
Justice Stevens: And I imagine because there are different forms of retaliation... sometimes it's a discharge, sometimes it might be slander by defaming the person for his next employer, it might be a tort, they beat him up or something, there could be a lot of different kinds of retaliation... each of which would give rise to a different statute of limitations under State law.
Does that seem reasonable?
Mr. Browning: Well, Your Honor, this Court has faced that situation with 1983 in a variety of contexts, and there are a number of--
Justice Stevens: We had to make up a rule to fill a gap.
Mr. Browning: --And... and in North Carolina it's easy.
It is basically a 3-year statute of limitations for everything.
And for a retaliatory discharge action, you look at the... in North Carolina, you look at the limitations period for--
Justice Stevens: But what about Wisconsin, Michigan, Illinois, and... and Florida?
Maybe they all have different statutes and they have different kinds of causes of action that may be relevant in the retaliation case.
Mr. Browning: --Your Honor, that is certainly an issue.
With respect to the parties in this case, that is a matter that is clear and simple because North Carolina you look to a retaliatory discharge action--
Justice Stevens: No, but in our construction of the statute, we have to think about its application throughout the United States, not just in North... North Carolina.
Mr. Browning: --Yes, and a rule that would apply the residual limitation period for personal injury would certainly be appropriate for a situation like this.
Justice Scalia: Is it... is it a necessary element of a successful action for retaliatory discharge that... that the action under the False Claims Act have succeeded?
Mr. Browning: No, Your Honor.
The courts have repeatedly held that for a retaliatory discharge action, it is not necessary to have a violation of section 3729.
Justice Scalia: What does the Government contend is to be done under (b)(1) when no violation of section 3729 is committed?
Mr. Browning: Well, the way I read the Government's brief is they want to modify the language of section 3731(b) by inserting the phrase alleged before the phrase, violation of section 3729.
Justice Breyer: But don't we have to do that anyway when... when in fact a person brings an ordinary claim?
I mean, Joe Smith brings a claim that XYZ company cheated the Government.
Now, that doesn't mean it was committed.
It just means he says it was committed.
After all, he might lose.
Mr. Browning: But... but, Justice Breyer, when the jury renders its verdict, if there is a violation of section 3729 that's proven to exist, but that... that proven violation is beyond the 6-year period, the defendant would be entitled to judgment based upon the affirmative--
Justice Breyer: You mean if in fact the plaintiff loses because the jury finds for the defendant in the qui tam action, then it should have been dismissed on statute of limitations grounds.
Mr. Browning: --No, Your Honor.
What I'm saying--
Justice Breyer: No, of course not because... because the word is committed there refers to the claim of a plaintiff.
Mr. Browning: --What I'm... what I'm saying is you have to look at the facts that are ultimately proven at trial, and if the fact of the violation is more than 6 years from the filing of the cause of action, clearly that's going to be barred by the limitations period.
The word alleged does not appear in the statute, and the Government tries to... they essentially confuse the issue by saying, well, you... you could never... a defendant could never prevail on a motion to dismiss because you have to look at the allegations for a motion to dismiss.
But that's the very nature--
Justice Stevens: Well, it seems to me that if... if there's no violation, then there's no triggering event to start the statute of limitations running.
Mr. Browning: --Yes, Your Honor.
That... that's the real problem, that even under the Government's reading, that there is not a triggering event.
So when you look at 3731(b) as a whole, when you try to discern congressional intent, Congress intended a... the triggering event to be a violation of section 3729 which doesn't apply to a retaliatory discharge action.
Your Honor, the... the statute here is worded in such a way that throughout the Federal False Claims Act, there are a variety of ambiguities, but when you look at the statute as a whole, when you look at the stated purpose that Congress had of protecting people who testify at trial, there is only one way to read the statute in a way that's harmonious, and that's to read it so that 3731(b) only applies to section 3730(a) and 3730(b)--
Justice Ginsburg: Mr. Browning, is it proper to consider in the calculus that if you use 6 years from the date the... that the false claim was made or was alleged to be made, then you don't have to get into the question which State's statute of limitations, the choice of law question, and then when you identify that State, which limitation period within that State?
I mean, those are two inquiries which can sometimes be rather complicated.
They are obviated entirely if we take the 6 years from the Federal statute.
Mr. Browning: --Justice Ginsburg, you're absolutely right, that if the respondents' and the Fourth Circuit's reading of the statute is correct, that Congress did intend this bizarre result to take place for all three causes of action, then you don't have to look to a State law cause of action to fill the gap.
But there are many circumstances where this Court has recognized that you do... when Congress has not expressly provided a limitations period, the most appropriate vehicle is to look to the most closely analogous State law cause of action.
As a matter of fact, one of the comparable situations here is ERISA.
Justice Scalia: We've done it for several hundred years, haven't we--
Mr. Browning: Yes.
Justice Scalia: --for all Federal causes of action?
We've... we've looked to State--
Justice Ginsburg: When there is no statute of limitations.
Mr. Browning: When... when--
Justice Ginsburg: The question is Federal statute.
Is there one?
And my question is deciding is there one... this is not something drawn from thin air.
There is a 6-year period right in the statute.
Mr. Browning: --There... there is a 6-year period and if that is applied by this Court to a retaliatory discharge action, there will still be difficulties because you will have situations where there is no violation of section 3729.
So when do you start the limitations period running?
The respondent would argue in their brief that you start it running from when they believed that the violation took place.
So your... the respondent is arguing you're looking to the mental impression of the litigant that would be the triggering device for the limitations period.
Your Honor, if there are no further questions, I'd reserve the remainder of my time for rebuttal.
Argument of Mark T. Hurt
Chief Justice Rehnquist: Very well, Mr. Browning.
Mr. Hurt, we'll hear... we'll hear from you.
Mr. Hurt: Mr. Chief Justice, and may it please the Court:
The text of this statute could not be more clear on this issue.
A retaliation claim is a civil action under section 3730, and a civil action under 3730 is subject to a 6-year limitations period.
Petitioners argue, in effect, that the Court should disregard the plain language here and claim that Congress really meant that only two of the three causes of action under section 3730, should be subject to the 6 year limitations period, those brought under sections (a) and (b), and that Congress told us this indirectly by changing the limitations trigger... this simply makes no sense for two reasons.
First, there is no reason why Congress would have limited the scope of the limitations period in such a cryptic manner.
In paragraph (d) as Justice--
Justice Scalia: Sloppiness.
How about that as a reason, sloppiness that appears throughout the rest of this... of this piece of legislation?
Mr. Hurt: --Well, I... I would propose that if Congress really wanted this trigger, wanted a uniform limitations period, they really couldn't have done this particular provision, (b)(1), in a more clear way.
Justice Scalia: Do you... do you know of... of any other situation in which a... a time limit is imposed that has nothing whatever to do with the... with the act that the individual is complaining about, nothing whatever to do with the act--
Justice Kennedy: And... and where the time limit begins to run even before the act occurs?
Justice Scalia: --Before the act occurs.
Mr. Hurt: The answer is no, but--
Justice Scalia: And the time limit could have expired before the act occurs.
So you get free retaliation after 6 years.
Is that right?
Mr. Hurt: --Sometimes equitable doctrines might apply, but the--
Justice Scalia: No, wait.
What kind of an equitable doctrine?
Mr. Hurt: --For instance, if the employer deliberately waited to retaliate until the 6 years has past, that could be an instance.
But the important thing is the retaliation provision in the False Claims Act is unique because it's designed to be a companion or an add-on action to the qui tam action.
That's... if you look at the reported cases, the vast majority of those cases show the two actions brought together.
Justice Scalia: I thought that one of the major things they were concerned about was retaliation against witnesses in the qui tam action, and that will always occur after.
I mean, the... the suit for retaliation will then always occur after the qui tam action.
Mr. Hurt: I believe the core concern is to incentivize the whistleblower.
But take that particular situation, the witness, and that concern.
There are other laws and other causes of actions that will protect the witness in that situation.
For instance, section 1985.
This Court in Hadel v. Harrison ruled that a witness who is retaliated against at a Federal trial does have a section 1985 action.
Here, Congress was focusing on the whistleblower, encouraging him to bring this qui tam action.
In fact, he's only protected for activities that are... the... the statute says, in furtherance of an action under this section.
That is pointing to the qui tam action.
And there's all kinds of problems that arise if these two actions are not brought together if the retaliation action must be brought first.
First, if you accept the petitioner's view, you're going to have situations where as little as 180 days... they have 180 days like in Florida to bring this retaliation action.
Once that's gone, the... the whistleblower has possibly 6 years to bring this qui tam action, but no incentive from the retaliation action, which was one of the--
Justice Ginsburg: Mr. Hurt, can you... can you go back a few steps?
Because there was a difference between an answer that you gave and one that Mr. Browning gave.
He said it's a mixed bag, the litigation of whether it's brought in one action and the whistleblower is making both claims or whether the retaliation claim is saved out and brought in a separate action.
You said the vast majority of the cases involve the whistleblower asserting both claims in a single action.
Which characterization is right?
Mixed bag or vast majority?
Mr. Hurt: --Well, the SG's office informed us that they did a search of the reported cases.
In the majority of those cases, the... the claims were brought together.
The SG, I think, can give you the details on that.
Justice Ginsburg: All right.
Justice Scalia: You're now saying majority, not vast majority.
Mr. Hurt: Okay.
I think it--
Justice Scalia: Well, wait for the SG.
Mr. Hurt: --But they point out... they realized, I think, petitioners, that this is a problem that... that this is a unique act, and they... and they point out... they make the claim that the Major Fraud Act somehow renders this not unique.
That's a criminal statute and it doesn't have a qui tam action.
Every retaliation claim is going to be based in part on an alleged violation of section 3729.
Justice Scalia: So you're reading alleged into... into (b)(1).
Sure, it will always be based on an alleged violation.
So it doesn't have to be a violation.
Mr. Hurt: Well, no.
I think that ignores how statute of limitations are actually construed by courts.
You can write a statute basically two ways.
You can put the violation as the trigger or you can put the act, alleged to be a violation.
Courts apply those identically.
And for instance, if you have a summary judgment motion by a qui tam... qui tam defendant, which we always agree that this statute (b)(1) applies, all the defendant has to do is point out the act alleged to be a false claim falls outside of the 6-year period, and he wins.
He doesn't have... no one has to show whether the actual claim itself was false or not.
So I think, you know, as Justice Breyer points out, this is the way you universally construe statute of limitations.
Having the same trigger for all three 3730 actions means the limitations period starts for all three at the same time.
This makes it easier for the whistleblower to bring both their qui tam and retaliation actions together.
If she's forced to bring the retaliation action first, then if she misses that, then she's got no incentive to then go on and bring the qui tam action from the... the incentive from this whistleblower action, which is the key purpose of it.
Also, if she has to bring the... the retaliation action first before the qui tam action, then what will happen, if she's not ready to bring the qui tam action... these can be very complicated allegations, complicated defense contract... then what will happen is she will most likely have to split her claim.
And that exposes the whistleblower to all kinds of... of pitfalls.
Justice Ginsburg: Mr. Hurt, what... what about the argument that unlike most retaliation situations, here if you take that 6-year period, which is much longer than the general run of retaliation statutes take it, then you could have a qui tam plaintiff who waits while the back pay is mounting, and so you can have an exorbitant application both with respect to the amount of back pay and the claim for reinstatement.
5 years down the road... I haven't worked with this company now... I'm going to insist they take me back, be reinstated.
That... that concern, that on your reading there is the potential for much larger damages and much more disruptive reinstatement than is usually the case.
Mr. Hurt: --I think that that type of situation is just so highly unlikely.
It doesn't really comport with the realities of what whistleblowers are thinking about.
For instance, in this case, Ms. Wilson didn't come forward until she saw no one else would come forward and remedy what she saw as theft from the U.S. Government.
Justice Souter: No, but isn't... isn't Justice Ginsburg's question raised by your very argument, that you don't want whistleblowers having to bring their whistleblower actions before they are ready to bring their main actions?
And if it's going to take... you've just said how difficult it may be to prepare one of these qui tam cases.
If in fact you're right and it may take a couple of years from the time the employer gets wind that something is going on and fires or does whatever, then in exactly that situation, the... the whistleblower damages are going to be mounting during that period of 1 or 2 or whatever years it may be before the qui tam action starts.
So on your hypothesis, it seems to me, you're going to get just the situation that Justice Ginsburg raised.
Mr. Hurt: I think that... I think there's a split in the lower courts about how the mitigation will apply.
Justice Souter: Well, let's... let's first see about your argument.
Isn't that what your argument implies?
Mr. Hurt: I think that... that that is a possible case, but I think that that's... the priorities for the Government and... and Congress in drafting this law was to get money back for the Government.
That's their number one concern here and to incentivize that whistleblower.
If it so happens that the whistleblower takes much... takes a long time to prepare his qui tam and brings his... his retaliation action at the same time and ends up getting some more damages, I... I think that ranks low on the list of Congress'priorities in drafting this retaliation provision.
It's the... getting the Government's money back, giving the whistleblower protection and an incentive to bring that qui tam claim is really Congress'core concern here.
And I think these other issues about damages mounting can be readily addressed with the mitigation defense and... and dealing with that that will take care of double damages so... so if the whistleblower is just sitting around waiting for that, then the mitigation defense would take care of that.
Also, I think the petitioner raised the idea that this is some kind of... the... the retaliator can bring some kind of nebulous fraud allegation if it doesn't... isn't really tied to a specific false claim.
I think that the courts are not interpreting it that way because this is a False Claims Act retaliation claim, not just a generalized fraud claim.
So in a typical case, there will be a claim that... that the whistleblower will... will be able to point to and say I think that this claim is false.
I have a good faith belief that it is false, and then it... and that's what the trigger would be based on.
I mean, in summary, if there's no further questions, I'd like to just summarize.
I think this Court should uphold the plain language of the statute.
While the limitations trigger is unusual, it is the one that Congress set forth in the statute.
It makes sense.
It reflects the unique considerations of encouraging... the goal of encouraging a whistleblower to bring his qui tam claim with his retaliation claim.
19 years of experience have shown that the plain language works in the typical cases that arise, and that none of the reasons given by the petitioners come close to providing a justification for this Court to discard the plain language of the statute.
None of the reasons... this statute does not rise to the level of absurdity that would justify this Court disregarding the plain language.
Argument of Douglas Hallward-Driemeier
Chief Justice Rehnquist: Thank you, Mr. Hurt.
Mr. Driemeier, we'll hear from you.
Mr. Hallward-Driemeier: Mr. Chief Justice, and may it please the Court:
Section 3731(b) provides the statute of limitations for, quote, a civil action under section 3730.
There is no question that Ms. Wilson's claim of retaliation is a claim under section 3730.
Petitioner asks the Court to construe section 3731(b) to include an implicit limitation to claims under subsections (a) or (b)--
Justice Scalia: What he's saying is it should be read to include only those causes of action under 3730 that the rest of (b) makes sense as applied to, just as in (c) the phrase, brought under section 3730, should be interpreted to... to include only those causes of action that the rest of that provision applies to, namely, those... those actions under 3730 that involve the United States.
I mean, that's... that's a perfectly reasonable--
Mr. Hallward-Driemeier: --Section 3731(c) does not require, in its application, the Court to construe a civil action under section 3730 to mean anything other than what its words import because it only relates to the United States' burden of proof.
The petitioner suggested that it implicitly was limited to an action under 3730(a).
Well, that's certainly not true because if... if an action is brought under 3730(b) and the United States intervenes, section 3731(c) establishes the standard of proof.
If Congress were to amend section 3730(h) to allow the United States to bring a claim on behalf of the employee who was retaliated against, section 3731(c) would, by its terms, establish the burden of proof that the United States would have to meet.
So there is no inconsistency there.
Justice Scalia: --You think... do you think Congress is more likely to amend 3731(b) to say clearly and non-sloppily what it means if we find for the Government here or if we find for the... I mean, for... for the side that the Government supports or if we find for the other side?
Mr. Hallward-Driemeier: Well, Your Honor, I think that 3731(b) is capable of application exactly as written, and in fact, as we say in our brief, that that is the statute of limitations which most serves the purposes of the statute unlike the alternative the petitioner--
Justice Scalia: What... what about this as a general... as a general principle of construction?
A court should not, unless there is no reasonable alternative, construe a statute of limitations provision in such fashion that the statute can expire before the cause of action arises?
Mr. Hallward-Driemeier: --Well--
Justice Scalia: Is that a reasonable proposition?
Mr. Hallward-Driemeier: --No, sir.
Justice Scalia: No?
Mr. Hallward-Driemeier: There are any--
Justice Scalia: It seems to me reasonable to me.
Mr. Hallward-Driemeier: --Many States have adopted statutes of repose, and they apply to a cause of action that under State law accrues for purposes of statute of limitations upon the discovery of the injury.
But a statute of repose can come in and instead tied to the act, say, for instance, in which the date that a product was first sold into the market.
And so the cause of action, for purposes of statute of limitations, will not arise in many instances until after the statute of limitations has run because of a statute of repose.
So that it's certainly not unheard of in the law.
Justice Ginsburg: And that was the point that the Seventh Circuit made clear in... in its--
Mr. Hallward-Driemeier: That's right, Justice Ginsburg.
Justice Ginsburg: --statute of repose.
Justice Breyer: What about an action of ejectment, an action of ejectment that arises only after the adverse possession statute of limitations have run?
Mr. Hallward-Driemeier: That's right.
Justice Breyer: I'm not sure it is right.
Mr. Hallward-Driemeier: --there other examples of... of cases in which the time in which a claim can be brought may have expired before the cause of action accrues.
Justice Scalia: But we don't run forward to create situations like that, do we?
Mr. Hallward-Driemeier: Well--
Justice Scalia: My... my point isn't that it couldn't exist.
I just said you should not interpret a statute of limitations if it is reasonably possible to avoid it in that fashion.
Mr. Hallward-Driemeier: --Well, in the Bay Area Laundry case and in the Reiter case, the Court has acknowledged that there is a general rule that statutes of limitations start to run when the cause of action accrues.
But in each of those case... cases, the Court was very clear that that was the rule that applied in the absence of contrary indication by Congress.
And here we have a very explicit contrary indication by Congress, that the statute of limitations for any civil action under section 3730 runs from the date on which the violation of section 3729 was committed.
In other words, Congress has opted here to establish a single uniform statute of limitations for all claims that might arise under the False Claims Act.
And as I said before, that serves the purposes of the False Claims Act better, far better certainly, than petitioner's alternative.
As we have pointed out, many State statutes of limitations, assuming that one can determine which one applies of the many that might be offered, are much shorter than the statute provided for bringing the qui tam action.
As a practical matter, then an employee might be forced to split their claims.
If they split their claims, any number of adverse consequences follow.
First, they could find themselves barred from bringing a subsequent qui tam action on behalf of the United States by the public disclosure bar of the False Claims Act.
The Eleventh Circuit has a rule that says that the two claims are one for purposes of res judicata.
So in the Eleventh Circuit, apparently they could be barred by res judicata from bringing a qui tam action.
The disclosures in the course of the wrongful termination of retaliation claim action would, of course, alert the defendant to the scope and extent of any Government investigation.
Justice Souter: Well, he's already alerted to the extent that he's taking retaliatory action as true.
He may not whole... know the... the whole extent of... of what the employee knows, but he's already been tipped off.
Mr. Hallward-Driemeier: Well, as a practical matter, oftentimes the employer fires the employee as soon as the employer has a sense that the employee is on to something.
He doesn't have a full knowledge of what the employee knows and certainly doesn't know that the employee might have told the Government and that the Government is investigating.
And that's the purpose of the under seal requirement of the False Claims Act, to allow the Government to conduct a full investigation of the claim, talk to other employees about what was going on.
Sometimes the employee really has identified fraud, but may only have identified a portion of the larger scheme of fraud that's going on.
And the Government gets to investigate that while the claim is under seal.
But in the course of discovery in any wrongful termination suit or retaliation suit, all of that information would become available to the employer.
And so the sealed provisions of the FCA would be defeated in large extent.
There's also the fact of just the litigation efficiencies of litigating the two claims together.
Justice Scalia: Can I ask you--
Mr. Hallward-Driemeier: --will be the same.
Justice Scalia: --Can I ask you another textual question?
You... you want us to say that (b)(1) must apply to all civil actions under section 3730.
Must (b)(2) apply to all civil actions under 3730 as well?
Mr. Hallward-Driemeier: The... the most close reading of the text would be that any civil action under 3730 can be brought within 3 years of when the official of the United States... now, we differ from the Ninth Circuit on this.
We believe that is only a Government official, in particular a Department of Justice official... knows of the facts relevant to bringing a cause of action that the United States could bring, i. e., the cause of action under 3730(a).
But we think that 3 years from that date in the action under 3730 could be brought, including the qui tam action or including a retaliation action.
But that reading is not essential to the position that we advocate here.
Justice Scalia: So that... that could exclude even a retaliation action by an individual who... who doesn't... who doesn't know when the... when the individual... the official of the United States found out about those facts.
That... that doesn't seem to me very reasonable.
Mr. Hallward-Driemeier: Well, of course--
Justice Scalia: That provision is very... very reasonable as applied to qui tam actions.
It doesn't seem to me to make any sense as applied to a retaliation action.
Mr. Hallward-Driemeier: --Well, Your Honor, it... it does make sense applying it to a retaliation action because it could be, for instance, the employee who was the individual who informed the Government official charged with responsibility to act of the facts that would warrant the United States in filing an action under 3730(a).
Justice Scalia: It might be, but maybe the United States found out before... before that individual came forward.
Maybe there was an official in the United States.
Mr. Hallward-Driemeier: That's... that's possible.
Justice Scalia: And so he's... you know, he's... he's out of... out of time before he even knows about it.
Mr. Hallward-Driemeier: Well, there may be events that--
Justice Scalia: Strange.
Mr. Hallward-Driemeier: --There may be instances where the employee would not know that they could take advantage of that provision.
But in the Bay Area Laundry case, the Court considered and rejected a virtually identical argument.
That case... the statute of limitations also was stated in the alternative, and the second one was 3 years after the information necessary to the claim had arrived.
And the party who was opposed to the position the Court ultimately adopted said that the Court's interpretation of the first of the two alternatives would render the second superfluous.
And the Court said, it may be superfluous to this category of claims, but it's not superfluous to other categories of claims, and so that does not prevent us from construing the first provision in the way that we are.
So likewise, even if the Court were to conclude that 3731(b)(2) is unavailable to a retaliation claim or unavailable to a qui tam claim, as some courts of appeals have held, it would not mean that 3731(b)(1) is unavailable, just as holding that 3731(b)(2) is unavailable to a qui tam relator would not mean that 3731(b)(1) is unavailable to a qui tam relator.
A couple of Justices, Justice Souter--
Justice Scalia: No, but it... but it would mean that just as 3731(b)(2) can be selectively applied to some categories and not to others, so also, by parity of reasoning, (b)(1) can selectively be applied to some categories of violation and not to others.
Mr. Hallward-Driemeier: --Well, again, we believe that the best, most faithful reading of the text is that (b)(2) is available to all causes of action under 3730.
The... Justice Souter asked a question about statistics and the frequency with which the claims are litigated together.
In a review of court of appeals decisions, there were 51 court of appeals decisions actually involving a 3730(h) claim.
Of those, in 32 the qui tam... a qui tam claim and a retaliation claim were paired.
They were litigated together.
In only 5 were both a qui tam action and retaliation claim brought, but brought in separate litigation.
So 32 to 5 is the relevant comparison there.
Justice Scalia: What about the rest?
Mr. Hallward-Driemeier: In... in--
Justice Scalia: That's--
Mr. Hallward-Driemeier: --14 claims an individual brought a retaliation claim but never brought a qui tam suit.
It may be that the Government had--
Justice Scalia: --Well, I would count that as being brought separate.
I think you should add that with the other 5.
Mr. Hallward-Driemeier: --Well, Your Honor, in... in fact, if we... if we look more closely at those 14 cases, 5 of them were dismissed because the plaintiff was not even involved in protected conduct under the statute.
So the closer you get to the core of what Congress had in mind, when it enacted the statute, of... of pulling out employees who have the information that only they have that the Government needs in order to recover fraud, the closer you get to that core, the more likely it is that the claims that are going to be litigated together.
And that's the way the Court ought to apply the statute.
It's the way Congress wrote the statute, to serve those purposes.
The... I... I think that the alternative of applying State statutes of limitations raises... North Carolina does not dispute that, for example, in Florida the... the analogous statute of limitations under Florida law... it's the Florida State False Claims Act which has a retaliation provision... would be 180 days.
180 days is far too short to put together the complicated qui tam complaint that is called for under the False Claims Act.
Chief Justice Rehnquist: Well, apparently Florida didn't think so.
Mr. Hallward-Driemeier: Excuse me, sir?
Chief Justice Rehnquist: Apparently Florida didn't think it was too short.
Mr. Hallward-Driemeier: Well, Florida may have made an alternative policy decision in terms of wanting the claims to be litigated together or apart.
The Congress has established a single uniform statute of limitations which allows the claims to be litigated together, and as I've said, that is in fact the practice that when someone is going to bring a qui tam action, they almost invariably... there... there are 5 exceptions... bring the cases together.
If there are no further questions, thank you very much.
Rebuttal of Christopher G. Browning, Jr.
Chief Justice Rehnquist: Thank you, Mr. Driemeier.
Mr. Browning, you have 8 minutes remaining.
Mr. Browning: Thank you.
The Government argues that there will be problems that will arise from splitting the qui tam action and the retaliatory discharge action.
And one of the examples that the Government use... uses is the public disclosure doctrine which is set out in section 3730(e)(4)(A) of the False Claims Act.
The public disclosure doctrine, however, is a red herring here because the public disclosure doctrine is designed to keep... to avoid parasitic lawsuits where information is in the... the public domain, somebody taking that information, and then filing a... a qui tam lawsuit.
The... the public disclosure doctrine, 3730(e)(4)(A), also provides that when someone is the original source of the information, even if the basis for the lawsuit has been made public through a congressional hearing or elsewhere, that person can still bring an action if they're an original source.
So it's a complete red herring here.
The other red herring that was put forth is a statement that there's a rule in the Eleventh Circuit relating to claims splitting.
And forgive me, I cannot recall the name of the case that the Government is referring to, but it is a decision by James C. Hill.
And that specific case involved a situation where the qui tam action was brought, a settlement was reached, and then well after the fact, the plaintiff said, oh, and I have this retaliation claim.
It makes perfect sense in that situation to... to apply principles of res judicata.
What the Government is ignoring is there are no reported decisions anywhere a retaliatory discharge action was brought and then res judicata was used to bar the qui tam action filed at a later date.
And there's a perfectly logical reason for that because they are different causes of action, and they involve different parties.
A retaliation claim is personal to the individual.
A qui tam action is an action brought on behalf of the Government.
One final point that I'd like to make is the respondent takes the position that the False Claims Act is unique.
Well, it's not unique.
It's not unique in that when you look at the Major Fraud Act, there is a retaliatory discharge provision that is virtually identical to the False Claims Act, and in the Major Frauds Act... with respect to the Major Fraud Act, Congress made a... a conscious decision not to include an express limitations period.
It's not... the False Claim Act is also not unique when you compare it to ERISA.
Justice Ginsburg: Just go back to what you said.
In... in the Major... whatever it is... is there any limitation at all, or just the limitation on the qui tam and as here, as you contend is so here?
Mr. Browning: --The Major Fraud Act is a criminal provision that provides a retaliatory discharge provision for anyone who assists the Government in bringing the criminal prosecution.
There... there... in the Major Fraud Act, there is a specific limitations period of 7 years in which the prosecution has to be brought by the United States.
Justice Ginsburg: Oh, that's... that's a criminal proceeding.
Mr. Browning: But... but there is... it... but the criminal statute provides for a civil remedy for a retaliatory discharge, and with respect to that retaliatory discharge provision in the Major Fraud Act, there is no limitations provision.
One other point that I want to make is that the False Claims Act is not... not unique when you compare it to ERISA.
ERISA is a statute that has essentially a retaliatory discharge provision as well in section 510 of ERISA, 29 U.S.C. 1140.
And courts... the Federal courts have consistently held that there is no express limitations period for section 510, so we have to look to the limitations period under the most closely analogous State law cause of action.
On the other hand, ERISA has numerous provisions, numerous other aspects of the statute, that do have a limitations period.
The limitations period for an action for breach of fiduciary duty is a 6-year period with a 3-year tolling provision.
So ERISA is a prime example of a statute where Congress has made a decision that when you have a retaliatory discharge provision, not to apply the statute of limitations period, that you look to State law, even though that Federal statute in other aspects has other limitations provisions.
If there are no further questions, we would rely upon our briefs.
Chief Justice Rehnquist: Thank you, Mr. Browning.
The case is submitted.
Argument of Chief Justice
Mr. Justice: The opinion of the Court in Graham County versus United States will be announced by Justice Thomas.
Argument of Justice Thomas
Mr. Thomas: This case comes to us on a writ of certiorari to the United States Court of Appeals for the Fourth Circuit.
The False Claims Act prohibits submitting false claims for payment to the US Government.
It also prohibits employers from retaliating against employees who assist the government in investigating or prosecuting false claims actions and gives employees a private cause of action as a remedy.
The question we decide is whether the six year statute of limitations in the False Claims Act applies to such retaliation actions or whether instead the most closely analogous state statute of limitations applies?
This case began when respondent Karen T. Wilson brought a False Claims Act retaliation action against petitioner, Graham County Soil and Water Conservation District, a political subdivision of the state of North Carolina.
She alleged that County officials retaliated against her for aiding in a federal investigation whether County officials and others had made false claims to the United States.
The District Court concluded that Wilson's action was time barred because it was outside the 3-year statute of limitations specified by North Carolina law.
The Court of Appeals reversed the District Court's ruling.
It held that the False Claims Act's longer 6-year statute of limitations governed Wilson's retaliations action rather than the shorter state statute of limitations.
In an opinion filed with the Clerk today, we reverse the judgment of the Court of Appeals and remand for further proceedings.
If no federal statute of limitations expressly governs a federal cause of action, we generally borrow the most closely analogous state statute of limitations.
We think that no federal statute of limitations expressly governs False Claims Act retaliation actions and therefore hold that the most closely analogous state statute of limitations supplies the time limit.
The only possible federal statute of limitations applicable to retaliation claims is set forth in Section 3731(b)(1) of the False Claims Act.
It provides that the time limit for filing a cause of action begins to run on the date the defendant submits the false claim for payment.
For reasons we explain in detail in the opinion, we find that this statute's text is ambiguous about whether it governs the retaliations actions.
We resolve this ambiguity primarily using a rule of statutory construction, the presumption that statues of limitation begin to run when the cause of action arises.
If section 3731(b)(1) governs retaliations actions, then the limitations period will begin to run before the cause of action arises contrary to our presumption.
By contrast, if we borrow the most closely analogous state limitations period, the time limit will begin when the cause of action accrues in keeping with our presumption.
We therefore conclude that the most closely analogous state limitations period governs False Claims Act retaliations claims.
Justice Souter joins all of the opinion except for footnote two; Justice Stevens has filed an opinion concurring in the judgment; Justice Breyer has filed a dissenting opinion in which Justice Ginsburg joins.