Fifth Circuit reverses dismissal of FCA retaliation claim on limitations grounds

by Ben Vernia | January 6th, 2012

On January 5, in Riddle v. Dyncorp. Int’l, the Fifth Circuit Court of Appeals reversed a Northern District of Texas’ judge’s dismissal of a wrongful retaliation suit brought under the False Claims Act. The lower court judge had concluded in August 2010 that the Texas Whistleblower Act was the closest analogue to the FCA’s whistleblower retaliation provision, 31 USC 3730(h). Because the Texas law provided a 90-day statute of limitations, the suit, filed six months after the plaintiff’s termination, was untimely. A year ago, the district court refused to reconsider the decision when the plaintiff argued that the Dodd-Frank Wall Street Reform and Consumer Protection Act’s three-year limitation amendment to the FCA controlled.

The Fifth Circuit first found that the district court had erred in choosing to borrow the limitations period of the Texas Whistleblower Act. This law, the Court reasoned, applied only to public employees, and effectively extended the limitations period for most such plaintiffs who work in municipalities that provide for an administrative grievance process before suit may be filed. The Court instead applied Texas’s two-year statute of limitations for personal injury cases, and the plaintiff’s case was timely under this provision.

The Court did not quite reach the plaintiff’s alternative argument that the Dodd-Frank three-year period applied to his suit, because under the circuit’s precedent, newly-enacted statutes of limitations are not applied if doing so would revive claims that had expired before the statute’s effective date. Because the plaintiff’s claim would have expired under the Texas Whistleblower Act’s 90-day period prior to the effective date of Dodd-Frank, the dispositive issue on appeal was the selection and application of Texas law.

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