Supreme Court Opinion Offers Guidance on False Claims Act Statute of Limitations

By Sarah Q. Wirskye - On

In Cochise Consultancy, Inc. v. United States ex rel. Hunt, No. 18-315 (2019), the Supreme Court held that the statute of limitations period in 31 U.S.C. § 3731(b)(2) begins to run when the government official responsible for acting, and not the relator, knew or should have known of the relevant facts.  This applies to False Claims Act (FCA) lawsuits in which the government does or does not intervene.

The Supreme Court’s decision resolves the application of the FCA’s statute of limitations provision, 31 U.S.C. § 3731(b), which reads as follows.

A civil action cannot be brought “(1) more than six years after the date on which the violation … is committed, or (2) more than three 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,” whichever occurs last. 

In Hunt, the relator alleged that government defense contractors submitted false claims for payment in 2006 and 2007. In 2010, he revealed the alleged fraud to government investigators. Almost three years later, he filed a qui tamaction against the defense contractors. The United States declined to intervene in Hunt’s qui tamaction.

The defense contractors moved to dismiss the lawsuit as barred by the statute of limitations. In dismissing the action, the District Court considered three potential interpretations: that §3731(b)(2) does not apply to a relator-initiated action in which the Government elects not to intervene; that §3731(b)(2) applies in non-intervened actions, and the limitations period begins when the relator knew or should have known the relevant facts; or that §3731(b)(2) applies in non-intervened actions, and the limitations period begins when the Government official responsible for acting knew or should have known the relevant facts. The district court rejected the third interpretation and found that Hunt’s complaint would be untimely under either of the first two. The Eleventh Circuit reversed and remanded, adopting the third interpretation.

The Supreme Court affirmed. It concluded that because both government-initiated suits under § 3730(a) and relator-initiated suits under § 3730(b) are “civil actions under section 3730” of the FCA, both of them are governed by the limitation period in § 3731(b). The Court reasoned that nothing in prior precedentsupports giving the phrase “civil action under section 3730” in §3731(b) two different meanings depending on whether the Government intervenes.The Supreme Court then held that the relator in a non-intervened suit is not “the official of the United States” whose knowledge triggers §3731(b)(2)’s 3-year limitations period.  Therefore, the three-year limitation period starts to run when “the official of the United States charged with responsibility to act in the circumstances” knew or should have known of the material facts. 

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