In a unanimous decision, the Supreme Court applied its retroactivity decision in Landgraf v. USI Film Products to bar the retroactive application of a 1986 amendment to the qui tam provisions of the False Claims Act. The qui tam provisions authorize private individuals to bring actions in the name of the United States government against federal contractors who knowingly submit fraudulent claims to the government. Prior to 1986, the False Claims Act required courts to dismiss qui tam actions based on evidence or information that the government already had when the action was brought. Congress amended the Act in 1986 to permit, with certain exceptions, suits based on information in the government's possession.
Schumer's suit against Hughes Aircraft was based on some 1982 accounting practices that the government had already investigated and cleared; the suit was thus barred under the version of the False Claims Act in effect at the time of the alleged misconduct. The district court, however, denied Hughes Aircraft's motion to dismiss, and the Ninth Circuit affirmed, holding that the 1986 amendment applied. The Supreme Court reversed.
Under , courts presume that a law will not apply to conduct which occurred prior to its effective date unless Congress clearly indicates otherwise. Schumer argued that Landgraf applied only to laws having certain retroactive effects that the 1986 amendment lacked -- such as impairing vested rights under existing laws, imposing new duties, or attaching new disabilities in respect to transactions already past. The Court first noted that such effects are merely sufficient, not necessary, conditions for invoking the presumption against retroactivity. In any event, the Court held that the 1986 amendment had precisely the type of retroactive effect Schumer disclaimed, because it changed the substance of an existing law by eliminating a previously available defense. Since the Landgraf presumption against retroactivity applied, the Court held that the 1986 amendment was inapplicable to the conduct at issue and that the case should have been dismissed pursuant to the pre-1986 version of the Act.