Court Opinion

ID: 9489912
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:27:34.572685+00
Date Added: 2024-06-11T17:53:47.581263
License: Public Domain

FLETCHER, Circuit Judge,
dissenting:
The majority correctly determines that the equitable tolling doctrine applies to 28 U.S.C. § 2462. However, I cannot agree with the majority’s conclusion that the doctrine does not apply to toll the running of the statute in this case.
To support its conclusion that the statute of limitations began to run as soon as the violation occurred, the majority relies on 3M Co. v. Browner, 17 F.3d 1453 (D.C.Cir.1994), a decision that is neither the law of our circuit nor directly on point, nor does it deal with the statute involved in this case. In SM Co., the D.C. Circuit held that a plaintiffs failure to discover a violation of the law in question should not toll the statute of limitations. 17 F.3d at 1463. But in holding that the discovery rule should not apply to § 2462, the SM Co. court had no occasion to consider the “venerable principle” of equitable tolling. Lampf, Pleva, Lipkind, Prupis *242& Petigrow v. Gilbertson, 501 U.S. 350, 360-62, 111 S.Ct. 2773, 2781, 115 L.Ed.2d 321 (1991). 3M Co. simply does not address the situation we face here, in which the very nature of the offense at issue — making a political contribution in the name of another person in order to exceed the $1,000 limit on contributions — involves using deceptive methods to conceal violations of the campaign-finance laws. It seems only logical that the discovery rule apply when the defendant’s deception in the course of committing a violation prevents discovery of that violation.
Equitable tolling prevents a defendant from fraudulently depriving a plaintiff of the opportunity to bring a cause of action due to the running of the statute of limitations. “[W]here a plaintiff has been injured by fraud and ‘remains in ignorance of it 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.’” Holmberg v. Armbrecht, 327 U.S. 392, 397, 66 S.Ct. 582, 585, 90 L.Ed. 743 (1946) (quoting Bailey v. Glover, 88 U.S. (21 Wall.) 342, 348, 22 L.Ed. 636 (1874)). Equitable tolling is proper in this case: “without any fault or want of diligence or care”, the FEC did not discover Williams’s fraud until the complaint against him was made to the FEC in September 1988. The running of the statute should be tolled at least until that time.
Equitable tolling requires both that the defendant engage in fraudulent conduct resulting in concealment of the operative facts giving rise to the violation and that the plaintiff fail to discover the violation within the limitations period despite due diligence. See King & King Enterprises v. Champlin Petroleum Co., 657 F.2d 1147, 1154 (10th Cir.1981), cert. denied, 454 U.S. 1164, 102 S.Ct. 1038, 71 L.Ed.2d 320 (1982); see also In re United Ins. Management, Inc., 14 F.3d 1380, 1385 (9th Cir.1994) (discussing plaintiffs duty to diligently investigate potential cause of action). The majority states that the FEC “should have discovered the operative facts giving rise to this suit” merely because the names of the 22 persons in whose names Williams made contributions were listed in the campaign reports. Yet nothing before us indicates that the FEC had any reason to suspect Williams’s involvement in those contributions until it received Richard Hooton’s complaint. The majority in effect imposes a duty on the FEC to investigate every report, even though nothing on its face indicates illegal activity, or else risk being barred by the statute of limitations when a violation comes to light. Here, the very information contained in the report was used to lull the FEC into believing that no single contributor gave more than the $1,000 limit. I conclude that the earliest date on which the statute of limitations could have commenced running in this case was September 12,1988, the date of Hooton’s complaint.
Moreover, upon receiving Hooton’s complaint, the FEC promptly notified Williams and began investigating whether Williams had in fact violated FECA. The FEC did not find reason to believe that Williams had violated FECA until September 13, 1989, and did not find probable cause to support its suspicions until some time later. There is no indication that the FEC was less than diligent in investigating Williams’ alleged violations.
This court faced a similar situation in UA Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465 (9th Cir.1994), cert. denied, — U.S. -, 116 S.Ct. 297, 133 L.Ed.2d 203 (1995). There, the National Labor Relations Board failed to file suit against the defendant within California’s four-year statute of limitations for breach of contract. The NLRB argued that the statute was equitably tolled because even though it had reason to suspect the defendant of illegal conduct as early as 1980 and repeatedly sought information from him, it did not have sufficient evidence to support a complaint until the limitations period had run. See id. at 1474-75. The court agreed: “Where a plaintiff suspects the truth but investigates unsuccessfully, fraudulent concealment will toll the statute.” Id. at 1475.
The majority’s refusal to apply equitable tolling here raises distressing policy concerns. If the statute of limitations is not equitably tolled in penalty proceedings in*243volving the kind of violation that was committed in this case, the result will be a perverse reward for violators of the campaign-finance laws: those who are most clever in deceiving the FEC and concealing their illegal contributions will be the least likely to be prosecuted successfully, since their violations will take the longest time to come to light.
Finally, I disagree "with the majority’s refusal to apply the principles of Sierra Club v. Chevron, U.S.A., Inc., 834 F.2d 1517 (9th Cir.1987), in determining the timeliness of the FEC’s action. The FEC received Hoo-ton’s administrative complaint on September 12, 1988, and filed suit on October 19, 1993. Running the five-year statute of limitations from the filing of Hooton’s complaint with the FEC puts the FEC’s filing of the suit 37 days after the running of the statute. Application of Sierra Club, however, would toll the statute during those periods in which the agency must follow mandatory notice and conciliation procedures. FECA provides a range of 65-125 days for such procedures. The FEC was involved in conciliation efforts with Williams from May 24, 1993, to July 20, 1993. Thus, Sierra Club strongly suggests that the complaint was timely even without applying equitable tolling.
Furthermore, the rationale of Sierra Club highlights the inappropriateness of reliance on 3M Co. Because the FEC must follow statutorily mandated administrative procedures before it may bring a civil action, running the statute of limitations from the date of the violation would gravely limit the FEC’s ability to fulfill its statutory mandate. Applying the 3M Co. “date of the violation” rule to this ease contravenes both the language and the legislative history of FECA. The Act’s enforcement provisions are tied to the receipt of an administrative complaint. They require that the FEC, after receiving an administrative complaint, notify the alleged violator and provide him or her with opportunity to respond. 2 U.S.C. § 437g(a)(l). Only after determining that it has reason to believe that the person named in the complaint has violated the Act may the FEC undertake a full investigation of the alleged violation. Id. § 437g(a)(2). If it finds probable cause to believe that the person in conciliation efforts. Id. § 437g(a)(4)(A). The FEC may initiate a civil action against the alleged violator only after conciliation efforts have failed. Id. § 437g(a)(5)(D).
Congress adopted the notice and conciliation requirements of § 437g in order to encourage informal resolution of apparent FECA violations. Congress intended the FEC to bring civil actions only “where its informal methods of obtaining compliance fail to correct violations.” Joint Explanatory Statement, Conf.Rep. No. 1237, 93d Cong., 2d Sess. (1974), reprinted in 1974 U.S.C.C.A.N. 5618, 5662. The statute of limitations should be tolled while the FEC fulfills its statutory obligation to resolve informally an alleged FECA violation.
I would affirm the District Court’s grant of summary judgment to the FEC. I therefore dissent.