On April 13, the U.S. Court of Appeals for the Third Circuit affirmed dismissal of a relator’s retaliation claims as time-barred, holding that the three-year statute of limitations applicable to such claims as a result of the Dodd-Frank Act does not apply retroactively. In U.S. ex. rel. Sefen v. Animas Corp., 2015 WL 1611698 (3d Cir. Apr. 13, 2015), the Third Circuit observed that before Dodd-Frank, the False Claims Act did not have an explicit statute of limitations applicable to retaliation claims. Accordingly, courts would apply the most closely analogous state limitations period. The relator’s claims against Animas and Johnson & Johnson were clearly time-barred under both of the two potentially applicable Pennsylvania limitations periods.
The relator nonetheless argued that the longer Dodd-Frank limitations period should apply retroactively to his claims, asserting that Dodd-Frank enacted a “procedural,” versus “substantive,” change in the law. In rejecting this contention, the Third Circuit applied the presumption against retroactivity, which can only be overcome if Congress has made a contrary intent clear. The court then held that because applying the Dodd-Frank limitations period retroactively would increase the defendants’ liability for past conduct by reviving an otherwise “moribund” cause of action, retroactive application was improper.
The Third Circuit’s decision is firmly rooted in Supreme Court precedent on the issue of retroactivity, and is noteworthy for any defendant faced with stale retaliation claims into which a relator attempts to breathe new life via Dodd-Frank.