The difference is time specificity. Past perfect is used when the event took place at an unspecified time before a specified time in the past, e.g. "I thought you had seen him there before you ran away." (when "you ran away" is the specified time in the past) Past simple is used at a specified time in the past, e.g. "I thought you saw him there yesterday." ("yesterday" is the specified time in the past) You would probably need more context to figure out which you need to use!