Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-04632/USCOURTS-cand-3_04-cv-04632-35/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 18:1961 Racketeering (RICO) Act

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United ForSta the Ntes orther Di n Distr striict oct Cf Califor ouniart

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Contrary to defendants’ argument, the Court finds that the submission of the false claim is a 1

critical element of a CFCA claim, which must exist, and be known to the plaintiff, before a CFCA claim

accrues. Debros v. The Los Angeles Raiders, 92 Cal. App. 4th 940 (2001), does not hold otherwise.

United ForSta the Ntes orther Di n Distr striict oct Cf Califor ouniart

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO BAY AREA RAPID

TRANSIT DISTRICT,

Plaintiff,

 v.

 WILLIAM D. SPENCER, et al.,

Defendants.

 /

No. C 04-04632 SI

MEMORANDUM RE: STATUTE OF

LIMITATIONS

The Court has analyzed the impact of the three-year statute of limitations on the claims in this

case, in drafting the jury instructions and creating a comprehensible verdict form. For counsel’s

guidance, the Court’s analysis is as follows.

The statue of limitations begins running when the claim accrues. A legal claim accrues when

the plaintiff has constructive or actual knowledge of the critical facts underlying the legal claim. In this

CFCA claim, there are two critical facts of which BART must have had actual or constructive

knowledge for the statute of limitations to begin running: (1) BART must have had actual or

constructive knowledge of defendants’ fraudulent scheme to set up the alleged sham joint venture; and

(2) BART must have had actual or constructive knowledge of the submission of a progress payment

application that reflected work done by the joint venture.1

As to the second category of knowledge, as a matter of law, BART had actual or constructive

knowledge as soon as it received the progress payment applications. Therefore, as a matter of law,

Case 3:04-cv-04632-SI Document 324 Filed 02/13/07 Page 1 of 2
United ForSta the Ntes orther Di n Distr striict oct Cf Califor ouniart

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BART’s suit is timely with respect to all of the progress payment applications received by BART after

October 31, 2001. Similarly, if BART had actual or constructive knowledge of defendants’ fraudulent

scheme on or before October 31, 2001, then, as a matter of law, BART’s claims with respect to all of

the progress payment applications received on or prior to October 31, 2001, are untimely. By way of

example: Suppose BART learned of the scheme on January 1, 2001. Suppose the prime contractors

submitted progress payment applications on (A) January 30, 2000, (B) June 30, 2000, (C) January 30,

2001, and (D) June 30, 2001. As of January 1, 2001, BART would have known of the scheme, and

known of the January 30, 2000, and June 30, 2000 progress payment applications. BART’s claim with

respect to progress payment applications (C) and (D) would therefore have accrued on January 1, 2001,

and its complaint filed on November 1, 2004 would therefore be untimely. As of January 30, 2001,

BART would have known of the scheme, and known of progress payment application (C); the claim

with respect to (C) would have accrued, and BART’s complaint would be untimely. Similarly, as of

June 30, 2001, BART would have known of the scheme, and known of progress payment application

(D); the claim with respect to (D) would have accrued, and BART’s complaint would be untimely.

The instructions are based on this analysis; see page 25. It will be necessary to attach a list of

the allegedly false claims – the progress payment applications – with the dates they were filed, in order

that the jury an properly “count” any false claims it may find to be actionable.

IT IS SO ORDERED.

Dated: February 13, 2007

_______________________________

SUSAN ILLSTON

United States District Judge

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