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UNITED STATES EX REL. THISTLETHWAITE v. DOWTY WOOD

June 1, 1998

UNITED STATES OF AMERICA ex rel. JEFFREY THISTLETHWAITE and JEFFREY THISTLETHWAITE, Plaintiffs, against DOWTY WOODVILLE POLYMER, LIMITED, RICHARD WALKER and MICHAEL THOMPSON, Defendants.


The opinion of the court was delivered by: STANTON

OPINION AND ORDER

 Defendants move for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) with respect to all claims based on retroactive application of certain parts of the 1986 amendments to the False Claims Act ("FCA") 31 U.S.C. §§ 3729 et seq.. Specifically, the defendants claim that the new statute of limitations, enhanced civil penalties, and treble damages provisions do not apply to defendants' conduct before October 27, 1986, and that even if the new statute of limitations does apply, the tolling provision does not benefit the Relator.

 BACKGROUND

 In 1974, defendant Dowty Woodville Polymer, Ltd. ("Dowty") co-developed polymer wing slot seals for use in variable geometry aircraft. Since 1984, Dowty has produced thousands of seals for the United States Air Force. The Relator, Jeffrey Thistlethwaite, a former employee of Dowty, commenced this action on May 12, 1994. The United States intervened and filed an Amended Complaint on April 28, 1995. The Amended Complaint alleges violations of the FCA claiming that Dowty improperly inflated its costs in submitting bills to the United States, used false records and statements to get those bills paid, and conspired to defraud the United States. The government seeks civil penalties and treble damages for all claims dating back to May 12, 1984.

 Before the FCA was amended in 1986, the statute of limitations was six years, civil penalties were limited to $ 2,000 per false claim and the government was entitled to double damages. The 1986 amendments, effective October 27, 1986, retained the six-year base period but added that an action could be brought three years after the government learned of the violation (but in no event over ten years after the violation), raised the civil penalties to not less than $ 5,000 and not more than $ 10,000 for each claim, and increased the government's punitive recovery from double to treble damages.

 The defendants move for judgment on the pleadings precluding the amendments from being applied to bills submitted or paid before October 27, 1986.

 DISCUSSION

 A. The Statute of Limitations

 Before the 1986 amendments, the FCA had a six-year statute of limitations from the date the violation was committed. 31 U.S.C. § 3731(b) (1982 ed.). The amendments changed the law to provide that late discovery by the government might extend the maximum period to ten years:

 
A civil action under section 3730 may not be brought--
 
(1) more than 6 years after the date on which the violation of section 3729 is committed, or
 
(2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed,
 
whichever occurs ...

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