Top Menu

Fifth Circuit Affirms Dismissal Of “LNG Consultant’s” Due Process Claims Against The U.S. Arising From The Bonny Island, Nigeria FCPA Action

Judicial Decision

It’s not too difficult to reverse engineer the basic facts of a Fifth Circuit opinion issued earlier this week.

In 2008, the DOJ criminally charged Albert Jackson Stanley (the former CEO of KBR Inc.) with conspiracy to violate the FCPA and commit mail and wire fraud in connection with lucrative liquefied natural gas projects at Bonny Island, Nigeria. Various consultants were generically mentioned in the criminal information and a subsequent criminal indictment would reveal that those consultants were Jeffery Tesler and Wojciech Chodan.

The Stanley charging document also mentioned “LNG Consultant” – a citizen of the U.S. and a citizen of Lebanon – who was also involved in the bribery scheme. This individual, referred to as “John Doe” in the Fifth Circuit opinion, filed suit in 2015 against the United States in the Southern District of Texas, asserting that the Government violated his Fifth Amendment due process rights by accusing him of a crime during the course of a criminal proceeding in which he was not named as a defendant. Doe sought a declaratory judgment that his Fifth Amendment rights had been violated, expungement of court records, and other forms of nonmonetary relief.

As stated in the Fifth Circuit’s opinion:

“Doe maintains that the Government’s description of the Consultant identified him “in all respects except by name” because “there are few contractors and customers that comprise” the particular industry in which he worked, and “no other person in the industry possesses these same personal and biographical characteristics.” Doe alleges that his clients were able to identify him from this description, causing some clients to cease engaging Doe and his companies for consulting and ultimately costing him “many millions of dollars in consulting fees.” He also asserts that he “was unable to obtain further consulting work[,] … which was a direct result of the prosecutor’s public statements during the [Roe] plea hearing and elsewhere that the [Government’s] investigation of the [ ] Consultant and others was ‘ongoing.’”

The trial court granted the Government’s motion to dismiss, holding that the action was barred by limitations and the Fifth Circuit affirmed.

In reviewing the applicable limitations period, the Fifth Circuit noted:

“The district court observed that our court has “not addressed which statute of limitations period applies to a due process claim seeking expungement of an accusation,” and therefore “adopt[ed] the general statute of limitation provision of 28 USC 2401(a) which provides that ‘every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.’” Neither party has argued that this statute is inapplicable, and we will therefore assume, without deciding, that it governs all of Doe’s claims. The district court concluded that 2401(a) barred relief for the statements made in the Information, the plea agreement, and the plea hearing, each of which occurred in 2008. We will affirm that decision only if “it is evident from the plaintiff’s pleadings that the action is barred and the pleadings fail to raise some basis for tolling or the like.”

The Fifth Circuit’s opinion next states:

“Doe argues that he did not have a complete and present cause of action until he “was affirmatively denied a forum for vindication,” that is, until either the Government notified him that he would not be indicted for his alleged involvement in the kickback scheme or the Government would be barred by limitations from prosecuting Doe for his alleged criminal activity. However, we have held that a Fifth Amendment claim seeking expungement of district court records was cognizable even though prosecution of the party seeking expungement might yet occur. In In re Smith, we ordered expungement despite noting that “[o]ur opinion will in no way interfere with any legitimate investigation” of the party who obtained expungement, and in United Statesv. Briggs, we granted relief despite acknowledging the possibility of a later indictment. Vindication of “[t]he fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time and in a meaningful manner.’ ” We note that, although the foregoing statement was made in a different context, the present case exemplifies the need for a claim such as Doe’s to be brought at a meaningful time. The 2008 records that Doe seeks to expunge have been public for many years, and the harm to Doe commenced in 2008.

In cases like the present one, the accrual of a right to relief is not deferred until it is clear that no indictment will or can ever issue. The fact that the Government might have rendered the “extraordinary remedy of expungement” unwarranted had it indicted Doe before he brought his claim does not affect the accrual of such a claim. The statute of limitations is not deferred until the power to indict is legally beyond the Government’s reach or the Government affirmatively states that it will not indict. Doe’s claim that the Fifth Amendment was violated when “government charges [were] made with no opportunity to defend” accrued when the Government purportedly accused him of criminal activity without indicting him.”

Regarding statements made about “Doe” at Jackson’s 2012 sentencing, the Fifth Circuit states:

“The references to a “consultant” during the sentencing hearing contained minimal identifying information. To the extent that Doe contends it was only in conjunction with the 2008 statements that the 2012 reference to a “consultant” made him identifiable, he seeks to expand the limitations period to include the 2008 statements. That is impermissible. We therefore consider only the 2012 references, standing alone, and conclude that references as nondescript as those to which Doe objects do not violate due process. Doe has not alleged a plausible due process violation.”

FCPA Institute - Zoom (May 16-18, 2023)

Elevate your FCPA knowledge and practical skills. Nine hours of integrated and cohesive instruction led by Professor Koehler (an FCPA expert with teaching experience). Learn more, spend less. Professional credential available.

Learn More and Register

Powered by WordPress. Designed by WooThemes