Court Opinion

ID: 4106636
Source: CourtListenerOpinion
Date Created: 2016-12-13 01:01:08.63176+00
Date Added: 2024-06-11T07:46:07.467217
License: Public Domain

Case: 16-40332      Document: 00513792782         Page: 1    Date Filed: 12/12/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                    No. 16-40332                         December 12, 2016
                                  Summary Calendar
                                                                           Lyle W. Cayce
                                                                                Clerk
United States of America, ex rel., ROLAND WADE JACKSON,

              Plaintiff - Appellant

v.

UNIVERSITY OF NORTH TEXAS; TEXAS GUARANTEED STUDENT
LOAN CORPORATION; JP MORGAN CHASE BANK, N.A.; NELNET,
INCORPORATED; SLM CORPORATION,

              Defendants - Appellees

                   Appeal from the United States District Court
                        for the Eastern District of Texas
                             USDC No. 4:13-CV-734

Before STEWART, Chief Judge, and CLEMENT and SOUTHWICK, Circuit
Judges.
PER CURIAM:*
       Plaintiff-Appellant Roland Wade Jackson (“Jackson”) alleged that
University of North Texas (“UNT”); Texas Guaranteed Student Loan Co.
(“TGSL”); JP Morgan Chase Bank, N.A. (“Chase”); Nelnet, Inc. (“Nelnet”); and

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                No. 16-40332
SLM Co. (“SLM”) (collectively “Defendants-Appellees”) violated the False
Claims Act (“FCA”) and, alternatively, various Texas state laws in processing
his student loans and subsequently garnishing his wages after he defaulted on
his loan repayment plan. The U.S. District Court for the Eastern District of
Texas dismissed the claims for, inter alia, being time-barred. We AFFIRM.
             I.      BACKGROUND & PROCEDURAL HISTORY
      Jackson attended UNT from 1992–96 on an athletic scholarship. While
attending UNT, Jackson applied for several student loans. The loans at issue
in this case are those for which Jackson applied during the 1994–95 and 1995–
96 terms. Jackson claims that UNT failed to factor in his athletic scholarship
in calculating his cost of attendance (“COA”), causing the loan amount UNT
certified to Chase on Jackson’s behalf to be much higher than the amount for
which he should have qualified. Chase then approved the loan, and TGSL, as
the guarantee, certified the loan amount under an agreement with the U.S.
Department of Education (“DOE”).      Chase allegedly “falsely certified” the
erroneous award UNT submitted without conducting any independent
investigation into the document’s accuracy and sent the funding to UNT, which
was then supposed to obtain Jackson’s signature and disburse the award.
Jackson contends, however, that UNT realized its mistake in not including the
amount of his athletic scholarship and refused to relinquish the funds to
Jackson as it “did not want to violate NCAA Rules by physically disbursing
Chase’s unsubsidized loan.” This alleged mishandling happened with both
loans at issue in this case.
      Jackson graduated in May 1996, triggering his loan repayment
obligations. Nelnet, as the original loan servicer, began servicing the loans
until on or about June 1, 2000, whereupon SLM became the loan servicer.
After Jackson eventually defaulted on the loans, Chase and SLM, on July 26,
2005, “caused the default claim to be submitted” to TGSL, which accepted the
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claim “without verifying the loans were eligible under the guarantee and in
violation of the pertinent regulations.”        TGSL subsequently garnished
Jackson’s wages to repay the loan obligation to the DOE.           Through this
garnishment, Jackson has paid his loan obligations in full.
      Jackson, as a relator, filed the instant qui tam action under seal on
December 11, 2013. The United States declined to intervene, and the district
court thereafter ordered the complaint unsealed and served upon Defendants-
Appellees. In his complaint, Jackson alleges that UNT’s failure to include his
athletic scholarship, Chase and SLM’s submission of the guarantee, and
TGSL’s claim to the DOE violated the FCA. Specifically, (1) had UNT’s cost of
attendance calculation accounted for his athletic scholarship, Jackson would
not have been eligible for the loans, and (2) even if he were eligible for the
loans, UNT never disbursed them. Under either theory, Jackson contends,
Defendants-Appellees submitted a false claim for payment to the Government.
Alternatively, Jackson avers that Defendants-Appellees’ actions violate
Texas’s conspiracy and unjust enrichment laws. The district court found, inter
alia, that Jackson’s claims were time-barred and dismissed the case.
                              II.   DISCUSSION
      Jackson brings federal FCA and state law conspiracy and unjust
enrichment claims against Defendants-Appellees. Jackson further argues that
the district court abused its discretion when it denied his motion to amend his
complaint. We discuss each claim in turn.
                                      A.
      The FCA prohibits persons and entities from submitting false or
fraudulent claims to the federal government. 31 U.S.C. § 3729. Typically, the
government enforces the Act; however, under the FCA’s qui tam provision, an
individual may sue on the government’s behalf to recover false claims for
payment. Id. § 3730(b)(1); Little v. Shell Expl. & Prod. Co., 690 F.3d 282, 284–
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85 (5th Cir. 2012). In this case, Jackson alleges Defendants-Appellees violated
the FCA when, on July 26, 2005, claims for Jackson’s defaulted loans were
submitted. Because the district court dismissed the case as time-barred, we
review its judgment de novo. Clymore v. United States, 217 F.3d 370, 373 (5th
Cir. 2000).
      The statute of limitations begins to run on an FCA claim on the date
upon which the offender submits a false claim for payment, regardless of the
date of payment. Smith v. United States, 287 F.2d 299, 304 (5th Cir. 1961).
The FCA’s statute of limitations provision dictates an FCA lawsuit cannot be
brought
      (1) more than 6 years after the date on which the violation of [the
          FCA] is committed, or
      (2) more than 3 years after the date when facts material to the
          right of action are known or reasonably should have been
          known by the official of the United States charged with
          responsibility to act in the circumstances, but in no event more
          than 10 years after the date on which the violation is
          committed,
      whichever occurs last.
31 U.S.C. § 3731(b).
      Jackson contends that he is entitled to the ten-year statute of limitations
period because “[i]t was not until 2011 until [he] received documents from the
Appellees that demonstrated that a false claim had been submitted.” He
further argues that as a relator, he is entitled to take advantage of § 3731(b)(2)
as though he were an “official of the United States charged with responsibility
to act in the circumstances.” In this circuit, however, qui tam FCA actions are
governed by the limitations period found in § 3731(b)(1) when the government
declines to intervene, as it did here. See United States v. Tex. Tech Univ., 171
F.3d 279, 293 (5th Cir. 1999) (“Qui tam plaintiffs cannot qualify as surrogates
of ‘responsible federal officers’ who have the right to represent the sovereign
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                                      No. 16-40332
and sue the respective states.”); United States ex rel. Erskine v. Baker, 213 F.3d
638 (5th Cir. 2000) (per curiam) (“[Section] 3731(b)(2) is only available to
relators if they are in direct identity with the government.”); Foster, 587 F.
Supp. 2d 805, 816 (E.D. Tex. 2008) (“This Court has thoroughly considered the
text of the statute, the legislative history, and the case law cited above. Having
done so, the Court is of the opinion that actions brought by a qui tam relator
are governed by the limitations period in § 3731(b)(1).”).
       Therefore, the statute of limitations on Jackson’s claim bars any suit
filed after July 26, 2011, six years after the date Defendants-Appellees
allegedly submitted a false claim for payment. Because the United States
declined to intervene and Jackson did not bring his claim until December 11,
2013, two years after the statute of limitations found in § 3731(b)(1) had run,
his FCA claims are time-barred.
                                            B.
       Jackson alternatively asserts that Defendants-Appellees violated Texas
state law for conspiracy to convert Jackson’s property and unjust enrichment.
Having dismissed his FCA claims, the district court exercised its discretion to
retain supplemental jurisdiction over these state law claims. 1 See City of
Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 173 (1997). “[W]hen deciding
whether to exercise supplemental jurisdiction, ‘a federal court should consider
and weigh in each case, and at every stage of the litigation, the values of
judicial economy, convenience, fairness, and comity.’” Id. Here, the court
below “decided that those interests would be best served by exercising
jurisdiction over [Jackson’s] state law claims.” Id. (citations omitted). But see

       1 That is, the district court retained jurisdiction over Jackson’s state law claims
against each Defendant-Appellee except UNT. The district court dealt with each Defendant-
Appellees’ motion to dismiss separately. Unlike the other Defendants-Appellees, the district
court declined to exercise supplemental jurisdiction over Jackson’s state law claims against
UNT, dismissing them for lack of jurisdiction.
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                                         No. 16-40332
Parker & Parsley Petroleum Co. v. Dresser Indus., 972 F.2d 580, 585 (5th Cir.
2007) (“Our general rule is to dismiss state claims when the federal claims to
which they are pendent are dismissed.”). Having retained jurisdiction, the
district court found that each of Jackson’s state law claims were time-barred.
Again, we review the district court’s holding de novo. Clymore, 217 F.3d at 373.
       In Texas, the statutes of limitations for conspiracy, conversion, and
unjust enrichment are two years. HECI Expl. Co. v. Neel, 982 S.W.2d 881, 885
(Tex. 1998) (citation omitted) (stating unjust enrichment statute of limitations
is two years); In re Estate of Melchior, 365 S.W.3d 794, 798 (Tex. App.—San
Antonio 2012, pet. denied) (“The limitations period for conversion is two years,
and [it] begins to run at the time of the unlawful taking.”); Connell v. Connell,
889 S.W.2d 534, 540 (Tex. App.—San Antonio 1994, writ denied) (stating that
the statute of limitations on a civil conspiracy claim is two years). The latest
year in which Jackson alleges wrongdoing on the part of any Defendant-
Appellee is 2005, and, therefore, the relevant statutes of limitations ran in 2007.
Accordingly, Jackson’s state law claims, like his FCA claims, are time-barred. 2
       Having concluded that the applicable statutes of limitations prohibit
Jackson’s federal and state law claims, we find that the district court did not

       2  On appeal, Jackson asserts that Defendants-Appellees’ actions also constitute fraud
and that, therefore, he is entitled to a four-year statute of limitations. As Jackson alleges
Defendants-Appellees committed fraud for the first time on appeal, we need not consider it.
United States v. Cates, 952 F.2d 149, 152 (5th Cir. 1992) (“We will not consider for the first
time on appeal an argument not presented to the district court.” (citing Earvin v. Lynaugh,
860 F.2d 623, 627–28 (5th Cir. 1988))). Even if he were entitled to a four-year statute of
limitations, his claim would still be time-barred. Further, Jackson’s assertion that he is
entitled to the benefit of the “discovery rule,” is unavailing; as Jackson notes, even though he
never received the loans, his wages were garnished to repay them beginning on February 16,
2007. Thus, even assuming arguendo the discovery rule would toll the statute in his favor,
at a minimum, Jackson should have known he was being charged for loans he never received
in 2007, and the statute of limitations would have run years before he brought the instant
matter. See Barker v. Eckman, 213 S.W.3d 306, 311–12 (Tex. 2006) (noting that the discovery
rule tolls a statute of limitations “until the plaintiff knew or, by exercising reasonable diligence,
should have known of the facts giving rise to a cause of action”).
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                                  No. 16-40332
abuse its discretion in denying Jackson’s motion to amend and do not address
his remaining assertions of error. See DeLoach v. Woodley, 405 F.2d 496, 496–
97 (5th Cir. 1968) (per curiam) (“The liberal amendment rules . . . do not require
that courts indulge in futile gestures. Where a complaint, as amended, would
be subject to dismissal, leave to amend need not be granted.”).
                              III.   CONCLUSION
      For the reasons stated above, we AFFIRM the district court’s judgment.

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