Hughes Aircraft Co. v. United States Ex Rel. Schumer

Background

A former Hughes Aircraft contracts manager brought a private whistleblower lawsuit on behalf of the United States, alleging Hughes misallocated costs between two Air Force contracts and overcharged the Government. Government audits in 1986–1988 initially found misallocation and led to withholding $15.4 million from Hughes; the relator sued in 1989 seeking treble damages. The Government did not intervene. Lower courts split on whether a 1986 change to the False Claims Act applied to these pre-1986 events.

Reasoning

The central question was whether Congress’s 1986 amendment to the False Claims Act should be applied to alleged false claims and disclosures that happened before the amendment took effect. Relying on the presumption against retroactive laws, the Court concluded Congress had not clearly expressed an intent to apply the amendment retroactively. The Court explained that the 1986 change removed a defense the law previously provided when the Government already had the information, effectively creating a new cause of action and not merely changing which court would hear a case.

Real world impact

Because the amendment does not reach back to pre-1986 conduct, suits like this one must be dismissed under the earlier law when the Government already had the information. The Court therefore vacated the lower court judgment and instructed dismissal under the 1982 provision. The opinion does not resolve other questions the lower courts addressed, such as public-disclosure rules or whether harm to the public treasury is required.