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Supreme Court Recognizes Longer Statute of Limitations for Qui Tam Plaintiffs in False Claims Act Cases

On May 13, 2019, the United States Supreme Court decided Cochise Consultancy, Inc. v. United States ex rel. Hunt, unanimously affirming the Eleventh Circuit’s holding (887 F.3d 1081) that the 31 U.S.C. § 3731(b)(2) tolling provision applies to False Claims Act (FCA) qui tam actions regardless of whether the Government intervenes.  We wrote about the Eleventh Circuit’s holding here.  In confirming § 3731(b)(2)’s availability to qui tam plaintiffs (relators) in non-intervened actions, Cochise settles a circuit split and effectively lengthens the potential period of a company’s vulnerability to qui tam suits over alleged FCA violations.

Section 3731(b) applies two time limits to civil actions brought under the FCA.  Section 3731(b)(1) sets the statute of limitations for filing to “[no] more than 6 years after” the alleged violation.  But § 3731(b)(2) allows for tolling of the statute of limitations:  suit may be filed within three years after “the official of the United States charged with responsibility to act” either “kn[ew] or reasonably should have [] known” of the alleged fraud, but it must be brought “no . . . more than 10 years after” commission of the alleged fraud.

The Cochise relator alleged fraud by Cochise Consultancy, Inc. (Cochise) from at least January 2006 to early 2007 on contracts for security services in Iraq.  The relator was apparently aware of the fraud as early as 2006; he revealed the allegations to the Government on November 30, 2010, during investigation of an unrelated contracting fraud.  The relator filed his complaint just under three years later, in November 2013, and the Government declined to intervene.  Cochise successfully moved the district court for dismissal based on time-barring under § 3731(b)(1), but the Eleventh Circuit—noting a circuit split on the question—reversed on the grounds that even a non-intervened case is “[a] civil action under section 3730” and thus relators can invoke tolling under § 3731(b)(2).

First, the Supreme Court addressed whether § 3731(b)(2) is reserved for actions by the Government or whether it is also available to a relator in a non-intervened action.  If it is not available to a relator, as Cochise argued, then § 3731(b)(1) governs, and relators must file within six years from the date of the violations.  Finding this outcome reflected an unsatisfactory form of statutory construction, the Court interpreted the tolling provisions to be available to all plaintiffs.

The heart of the Court’s decision lies in its refusal to give the language “[a] civil action under section 3730” in § 3731(b) a different meaning under § 3731(b)(1), the straight six-year statute of limitation provision, and under § 3731(b)(2), which provides a tolling exception to § 3731(b)(1).  Writing for the Court, Justice Clarence Thomas invoked the canon of construction that counsels against giving the same language different meanings in different parts of a statute.  “There is no textual basis,” the Court held, for making the meaning of “[a] civil action under section 3730” hinge on whether or not the Government intervenes.

The Court distinguished Graham County Soil and Water Conservation District v. United States ex rel. Wilson, 545 U.S. 409 (2005), where the Court gave a different meaning to “a civil action under section 3730” in FCA retaliation suits brought under § 3730(h), because retaliation actions do not depend on an underlying FCA violation.  The Court thus rejected Cochise’s reliance on this precedent, finding it would be illogical to consider retaliation suits “civil action[s] under section 3730,” and therefore giving that language a different reading under § 3730(h) in Graham comported with the overall structure of the statute.

The Court’s resolution of the first question, however, raised a second one:  Is the relator “the official of the United States” referred to in § 3731(b)(2)?  If so, then a relator has three years from the date when the relator knew or reasonably should have known of the fraud, and the qui tam action in Cochise would be time-barred.  A “no” answer, in contrast, would give a relator three years from when the Government knew or should have known of the fraud, up to 10 years from the date of the alleged FCA violation.

As to this second question, the Court found that under the statute’s plain meaning, a relator cannot be “the official of the United States” referred to in § 3731(b)(2), being neither an “official of the United States” nor “charged with” undertaking any action with regard to alleged FCA fraud.

The end result of Cochise is the time frame in which relators can bring an FCA action is considerably expanded—§ 3731(b)(2)’s three-year clock starts ticking when the Government, not the relator, learns of the alleged fraud and can extend up to 10 years after the violation.

© 2023 Dinsmore & Shohl LLP. All rights reserved.National Law Review, Volume IX, Number 140

About this Author

Pablo J. Davis Attorney  Dinsmore Cincinnati Litigation False Claims Act Spanish Speaking
Of Counsel

Pablo’s practice focuses on False Claims Act (FCA) litigation and conducting investigations in response to government subpoenas and Civil Investigative Demands, as well as general commercial litigation. Pablo brings an international and multilingual background (including native fluency in Spanish) to his practice and is an experienced legal interpreter and translator.

Prior to joining Dinsmore, Pablo served as law clerk to Judge Bernice B. Donald of the United States Court of Appeals for the Sixth Circuit. He also worked as a law clerk with the general counsel of the Shelby County (...

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Julia d'Hemecourt Sherburney Litigation Attorney Cincinnati, OH Dinsmore Law Firm

Julia focuses her practice on commercial litigation and has experience in privacy and data security policy, as well as environmental matters.

Her practice includes experience before an array of federal agencies. She assists clients responding to civil investigative demands from the Department of Justice, Environmental Protection Agency, and Federal Trade Commission. She has also assisted clients in matters before state and federal appeals courts, as well as in the federal rulemaking process.

Prior to joining Dinsmore,...

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