All qui tam plaintiffs should take note of this opinion, if only because has the effect of freezing the False Claims limitations bar in October 2002 (and thus also lengthens any potential damages period).
In dissent, Judge Agee notes (29 n.4) a circuit split on whether application of a limitations period that is lengthened after the relevant conduct is retroactive (and hence impermissible). To provide an example, on Date X, Defendant does something for which there is a 1 year limitations period. At some point after Date X, the legislature changes the period to 2 years. In year 2, plaintiff files suit. Can Defendant raise a viable limitations defense?
Judge Agree agrees with the CA6 that the answer is no. Giving effect to the new limitations period is not retroactive, because limitations regulates not the underlying conduct, but when the Plaintiff may file suit. In the words of the CA6 opinion cited by Judge Agee, "the 1991 Act applies to Forest's conduct, the filing of the complaint, which occurred after the enactment of the statute. Therefore, application of the 90-day statute is prospective in this case." Thus, in this view, the new limitations period applies because the key date for retroactivity is the filing of the complaint.
I disagree, and side with the CA9. The key date is not when Plaintiff finally files suit, but rather the date of passage/enactment of the limitations period. Under this analysis, whether the hypothetical defendant can raise a limitations defense depends on whether the legislature acted in year 1 (no), or in year 2 (yes).
If the legislature acted in year 1, all is fine. Plaintiff still had a viable claim, we presume he was on notice of the statute lengthening the limitations period. The longer period thus did not affect anybody's substantive rights: Plaintiff still had a cause of action, Defendant still had potential liability.
But if the legislature acted in year 2, then applying the new statute of limitations is retroactive. Plaintiff no longer had a viable cause of action, defendant had escaped liability. Applying the new limitations period would thus create a new substantive right in plaintiff, and a new liability in Defendant, when both had previously expired at the end of year 1.
Thus, the key point for retroactivity analysis is (1) the status of Plaintiff's claim on (2) the date the statute was passed/took effect.
Ultimately, this analysis calls to mind Justice Scalia's concurrence in Landgraf itself. Justice Scalia, joined by Justices Thomas and Kennedy, criticized the majority for focusing on the substance/procedural divide, rather than looking at what conduct the statute was meant to regulate. As any Civ Pro student knows, categorizing limitations periods as substantive or procedural so flummoxed the Supreme Court in Guarantee Trust that Justice Frankfurter crafted the outcome-determinative test to hold that--as with other parts of substantive law--state limitations periods should be applied in federal courts in diversity. This result alone demonstrates how limitations periods can affect substantive rights. By following the concurring opinion, one is left with the conclusion that the CA9 was correct in holding:
We do not find the substantive/procedural dichotomy helpful in deciding this case. Regardless of whether a statute is "substantive" or "procedural," it may not apply to cases pending at the time of enactment if the new statute would prejudice the rights of one of the parties. . . . [W]e hold that a newly enacted statute that lengthens the applicable statute of limitations may not be applied retroactively to revive a plaintiff's claim that was otherwise barred under the old statutory scheme because to do so would "alter the substantive rights" of a party and "increase a party's liability."
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