Hooper v. Lockheed Martin

A transferee court must apply the state statute of limitations that a transferor court would have applied in cases arising under federal question jurisdiction. Further, a fraudulent estimate made for a bid on a contract can carry liability under the FCA.

Nyle J. Hooper brought suit against Lockheed Martin Corporation (“Lockheed”) under the qui tam provisions of the False Claims Act (“FCA”), alleging that Lockheed defrauded the United States Air Force under a cost reimbursement plus award fee contract. Hooper also brought suit under the FCA for retaliation in employment. The case was originally filed in the District Court for the District of Maryland; however it was transferred to the Central District of California at the request of Lockheed on the grounds of forum non conveniens. The California district court dismissed Hooper’s claim for retaliation because the statute of limitations had passed and granted summary judgment to Lockheed on all other issues. The Ninth Circuit held that the retaliation claim should not have been barred by California’s two-year statute of limitations, because Maryland’s statute of limitations is three years. If a case arising under federal question jurisdiction requires the use of the state statute of limitations, then the transferee court must apply the state statute of limitations that the transferor court would have applied. The Court also held that false estimates made during the bidding for a contract can be a source of liability under the FCA, and that there is a genuine issue as to whether Lockheed had “actual knowledge, deliberately ignored the truth, or acted in reckless disregard of the truth” when it submitted its bid. The Court further held that there was no fraudulent use of freeware software or defective testing procedures because the United State Air Force was aware of and approved the use of the software and the testing procedures. Lastly, the Court held that Hooper failed to meet the burden of proof for the admissibility evidence and so it was properly excluded. AFFIRMED in part and REVERSED and REMANDED in part.