Opinion ID: 437447
Heading Depth: 3
Heading Rank: 1

Heading: Fraudulent Concealment: Case Law

Text: 131 Initially, all defendants agree that federal law provides the applicable tolling doctrine. This assumption is consistent with the law in this Circuit 100 and, since we reach the same result under local law as well, 101 we take it to be true for purposes of this discussion. 132 The keystone of federal fraudulent concealment doctrine is Bailey v. Glover, 88 U.S. (21 Wall.) 342, 22 L.Ed. 636 (1874), in which the Court wrote that where a party injured by another's fraudulent conduct 133 remains in ignorance ... without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered, though there be no special circumstances or efforts on the part of the party committing the fraud to conceal it from the knowledge of the other party. 134 Id. 88 U.S. (21 Wall.) at 348. The Court also held that, absent laches or negligence on plaintiff's part, the limitations period does not begin to run until plaintiff discovers his cause of action when the fraud has been concealed or is of such character as to conceal itself. Id. 88 U.S. (21 Wall) at 349-50 (emphasis added). Shortly thereafter, in Wood v. Carpenter, 101 U.S. 135, 25 L.Ed. 807 (1879), the Court gave some indication of the meaning of the phrase of such character as to conceal itself, when it wrote, Concealment by mere silence is not enough. There must be some trick or contrivance intended to exclude suspicion and prevent inquiry. Id. 101 U.S. at 143. Read together, Wood and Bailey establish first, that equitable tolling generally has two elements, (successful) concealment by defendant and diligence by plaintiff, and second, that a defendant who contrives to commit a wrong in such a manner as to conceal the very existence of a cause of action, and who misleads plaintiff in the course of committing the wrong, may be found to have concealed the wrong. This second principle distinguishes between acts that are self-concealing (such as frauds) and acts where, absent a subsequent act of concealment, only the perpetrator, but not the fact that a cause of action might exist, would be unknown (such as a burglary). In the former case, concealment is established by the nature of the act; in the latter case, additional acts of concealment are required to trigger the tolling doctrine. 102 135 Although the foregoing principles generally have been accepted by the courts, the case law reflects a variety of formulations to apply the concealment doctrine. 103 In each instance, however, before a defendant's exposure to liability is given a potentially infinite duration, there [is] some minimum of culpability--if not affirmative concealment, then at least the construction of a scheme which is by its nature unknowable. 104 136 Applying these principles to the facts of this case, we are able to put to one side actions involving wrongs that are by their nature knowable and taper our analysis to focus on the self-concealing wrongs that warrant different treatment. Bearing in mind Wood 's requirement of some trick or contrivance intended to exclude suspicion, 101 U.S. at 143, we conclude that defendants must engage in some misleading, deceptive or otherwise contrived action or scheme, in the course of committing the wrong, that is designed to mask the existence of a cause of action. 105 The deception may be as simple as a single lie or as complex as that which we confront here, so long as the defendants conceal not only their involvement, but the very conduct itself. Richards v. Mileski, 662 F.2d 65, 70 (D.C.Cir.1981). 137 This Circuit has recently refined its approach to cases involving self-concealing wrongs and placed on the defendant the burden of proving that the plaintiff did not exercise due diligence. Thus, in Richards v. Mileski, the court held [w]hen tolling is proper because the defendants have concealed the very cause of action, ... they have the burden of coming forward with any facts showing that the plaintiff could have discovered ... the cause of action if he had exercised due diligence. 662 F.2d at 71. 106 The jury in this case was so instructed. In finding for plaintiffs on the statute of limitations issue, the jury found that defendants had not proved by a preponderance of the evidence that plaintiffs failed to exercise reasonable diligence in pursuing their claims. Defendants do not seriously challenge that finding. 138 Before turning to apply these principles to defendants' principal assertions about the sufficiency of the evidence on fraudulent concealment, we pause to note an obvious, albeit often overlooked, proposition. The doctrine of fraudulent concealment does not come into play, whatever the lengths to which a defendant has gone to conceal the wrongs, if a plaintiff is on notice of a potential claim. A key aspect of a plaintiff's case alleging fraudulent concealment is therefore proof that the plaintiff was not previously on notice of the claim he now brings. By notice, we refer to an awareness of sufficient facts to identify a particular cause of action, be it a tort, a constitutional violation or a claim of fraud. We do not mean the kind of notice--based on hints, suspicions, hunches or rumors--that requires a plaintiff to make inquiries in the exercise of due diligence, but not to file suit. 107 139 While the precise standard for notice that amounts to constructive discovery and triggers the statute of limitations is not precisely delineated, for our purposes the contours are sufficiently clear. For one, the plaintiff must know facts giving notice of the particular cause of action at issue, not of just any cause of action. Richards provides an example. Plaintiff Richards was a career employee with the United States Information Agency until 1955, when he resigned under the duress of false charges of homosexual activity. At the time, he knew the charges were false. Years later he brought suit against six former federal officials alleging a variety of tort injuries. The suit was dismissed as untimely. On appeal this court reversed and held that the complaint stated sufficient allegations of fraudulent concealment to toll the statute of limitations. It found persuasive Richards' argument that, while he was aware of the falsity of the charges in 1955, only in 1978 had he become aware that his superiors had knowingly filed false reports. On this issue, the court held that claims Richards might have brought in 1955 (such as wrongful discharge) and those he filed in 1978 were different--that it was no mere 'detail' in 1955 that the false charges against Richards had been fabricated as part of a deliberate conspiracy against him, or that his own superiors rather than an unknown informant were the source of his misery 108 --and that mere knowledge of falsity did not constitute such notice as to bar tolling the statute. 140 Second, plaintiff's knowledge of the grounds for a suit must generally extend to an awareness of the persons responsible for plaintiff's injury. We by no means imply that a plaintiff may postpone suit until he knows every defendant by name and title. However, simply because a person knows he has been injured by one person cannot reasonably mean he should be held to know of every other participant. 109 This Circuit's decision in Fitzgerald v. Seamans, 553 F.2d 220 (D.C.Cir.1977), illustrates the point. Plaintiff Fitzgerald sued officials of the Air Force and the Executive Branch charging a conspiracy to deprive him of his civilian position with the Air Force and of his constitutional rights in retaliation for testimony he gave before Congress. We held there that Fitzgerald's prior administrative appeals disclosed that he had reason to know he was being eased out of his job in retaliation for his testimony in time to file his suit against the Air Force officials within the given period of repose. However, we also held that he had no reason to know of the involvement of a White House official until significantly later. Because the White House official was a person of influence in a different center of power, id. at 229, the court declined to hold that Fitzgerald was on notice of his participation. We therefore must probe a plaintiff's knowledge to determine whether he was on notice of all possible defendants, and not just a subgroup, as well as the particular cause of action.