Hughes Aircraft Company v. United States ex rel. Schumer

PETITIONER: Hughes Aircraft Company
RESPONDENT: United States ex rel. Schumer
LOCATION: Western District Court of New York

DOCKET NO.: 95-1340
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 520 US 939 (1997)
ARGUED: Feb 25, 1997
DECIDED: Jun 16, 1997

ADVOCATES:
Kenneth W. Starr - Argued the cause for the petitioner
Laurence E. Gold - Argued the cause for the respondent
Laurence Stephen Gold - for respondent
Seth P. Waxman - Argued the cause for the United States, as amicus curiae, by special leave of court, supporting the respondent

Facts of the case

In 1989, William J. Schumer filed an action against Hughes Aircraft Co. under the False Claims Act (FCA), specifically under the qui tam provision which allows suits by private parties on behalf of the United States against anyone submitting a false claim to the government. Schumer alleged that Hughes had submitted false claims related to two Air Force radar projects between 1982 and 1984. Hughes moved to dismiss the case claiming that the 1986 amendment to the FCA that Schumer had filed under was not retroactive and that the alleged conduct precluded the suit because the government already had the information on which the suit was based. The motion was dismissed; however, the District Court ruled in favor of Hughes based on the merits of the case. Ultimately, the Court of Appeals rejected Hughes, finding that the FCA should be applied retroactively to suits pre-1986. The appellate court also found that, because no public disclosure of information possessed by the Government had been made, the action was not barred under the 1986 version of the Act.

Question

Does the False Claims Act, as amended in 1986, apply retroactively to qui tam suits regarding allegedly false claims submitted to the government submitted prior to is enactment?

Media for Hughes Aircraft Company v. United States ex rel. Schumer

Audio Transcription for Oral Argument - February 25, 1997 in Hughes Aircraft Company v. United States ex rel. Schumer

Audio Transcription for Opinion Announcement - June 16, 1997 in Hughes Aircraft Company v. United States ex rel. Schumer

The opinion of the Court in No. 95-1340, Hughes Aircraft Company against the United States versus ex rel. Schumer will be announced by Justice Thomas.

This case comes to us on a writ of certiorari to the U.S. Court of Appeals for the Ninth Circuit.

It arises under the qui tam provision of the False Claims Act which permits private parties to bring an action on behalf of the United States against any person who has submitted a false claim to the Government.

Respondents brought this qui tam action in 1989 alleging that petitioner's internal cost accounting practices resulted in significant overcharges submitted to the Government between 1982 and 1984.

Before the lower courts could reach the merits of respondent's claims, they had to address two jurisdictional issues.

First, whether to apply retroactively in 1986 amendment which expanded qui tam actions to include actions such as this one in situations where the Government already had the information involved.

And secondly, if so, whether the Government's disclosure of its audits to petitioner's employers -- employees barred the actions under the 1986 amendment's public disclosure bar.

The Ninth Circuit held that the 1986 amendment applied to this action relying on its reading of our decisions -- our decision three terms ago in Landgraf versus USI Film Products and further held that this action was not barred by that amendment's public disclosure bar.

In an opinion filed with the Clerk to date, we reverse.

In Landgraf, we reiterated the longstanding presumption that legislation which has a retroactive effect does not apply to pre-enactment conduct unless Congress evidences a clear intent to the contrary.

Nothing in the 1986 amendment even suggests a much less clearly evidence as such an intent.

In the 1986 amendment clearly has a legal effect on pre-enactment conduct.

It eliminates an absolute defense to a qui tam suit prior disclosure to the Government that was available to qui tam defendants prior to 1986.

Under our Landgraf presumption, therefore, the amendment does not apply to pre-enactment conduct and this case should have been dismissed.

That -- the 1986 amendment is phrased in jurisdictional terms does not alter our conclusion.

Unlike statues that merely define which court has jurisdiction over a matter, this statute here defines whether jurisdiction will lie in any Court thus speaking not just to the power of the courts, but to the rights and obligations of the parties as well.

Such statute is as much subject to our presumption against retroactivity as any other.

Because we reverse on the first of the two jurisdictional issues, we do not reach the second issue.

The opinion of the Court is unanimous.

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