December 16, 2018

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Supreme Court To Address False Claims Act Statute of Limitations

The False Claims Act’s statute of limitations is, easily, the most confusing portion of the False Claims Act. On November 16, the Supreme Court granted certiorari in case that has the potential to bring some clarity to the FCA’s statute of limitations.

The FCA has two statute of limitations. Normally, a case must be brought within 6 years of “the date on which the violation of [the False Claims Act] is committed.” 31 U.S.C. § 3731(b)(1). The Act’s second statute of limitations provision allows for FCA cases to be brought “more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed.” 31 U.S.C. § 3731(b)(2).

In United States ex rel. Hunt v. Cochise Consultancy, Inc., 887 F.3d 1081, 1083 (11th Cir. 2018), the relator filed his case in 2013. He alleged that the defendants violated the FCA beginning prior to January 2006 and through “early 2007.” In 2010, the relator told FBI agents about his allegations. The government declined to intervene and the district court dismissed the case holding that the 31 U.S.C. § 3731(b)(2) does not apply in cases in which the government has declined to intervene. The Eleventh Circuit reversed and held that because the three year period in § 3731(b)(2) “begins to run when the relevant federal government official learns of the facts giving rise to the claim, when the relator learned of the fraud is immaterial for statute of limitations purposes.”

The Eleventh Circuit acknowledged its decision created a three way circuit split. Two circuits – the Third and Ninth Circuits – also permit a relator to use § 3731(b)(2) but they hold that the limitations period begins to run when the relator, not the Government, knows or should know of the facts underlying the alleged fraud. Three other circuits – the Fourth, Fifth, and Tenth Circuits – have ruled that if the government does not intervene, the relator cannot use § 3731(b)(2).

The Supreme Court’s decision to grant certiorari in Cochise Consultancy Inc. v. United States, ex rel. Hunt should result in a decision resolving the split amongst the circuits while bringing some clarity to a confusing statute of limitations, which would be a welcome development.

Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

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About this Author

David T. Fischer, Sheppard Mullin, Government Contracts lawyer, Investigations attorney
Special Counsel

David T. Fischer is a special counsel in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Mr. Fischer's practice focuses on representing individuals and companies in civil and regulatory government enforcement actions, including false claims act and antitrust matters. Mr. Fischer has represented both plaintiffs and defendants in these matters, including qui tam whistleblowers in False Claims Act matters, and has conducted internal investigations for national and...

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