Appropriate time limit to bring a qui tam case? U.S. Supreme Court to weigh in
Coauthored by Jessica C. Colombo.
UPDATE: In a unanimous decision released on May 13, 2019, the U.S. Supreme Court affirmed the Eleventh Circuit, holding that § 3731(b)(2)’s 10-year statute of limitations applies to a qui tam action in which the government has declined to intervene. The extended limitations period will now uniformly apply to FCA qui tam cases regardless of whether the government intervenes, providing relators with additional time in which to bring claims under the FCA, and the possibility of additional financial recovery on behalf of the government. Read the order.
The U.S. Supreme Court is expected this term to resolve conflicting opinions in False Claims Act (FCA) whistleblower litigation regarding whether an extended statute of limitations should apply to cases in which the government declines to intervene.
If you aren’t familiar, the FCA, which begins at 31 U.S.C. § 2739, imposes liability on anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment” to the United States government. The law allows Attorneys General or private whistleblowers—or “relators”—to bring a “qui tam” action in the name of the United States.
When a private party brings a qui tam action under the FCA, any financial recovery belongs to the government, with a statutory share available to the relator. The FCA also allows the government to intervene in a qui tam action, in which case the government will conduct the investigation and litigate the case.
A point of controversy in FCA litigation has arisen with respect to the appropriate statute of limitations to apply when the government does not intervene. This is because the FCA sets forth not one, but two possible limitations periods during which a case may be brought. Section 3731(b) states that a civil action under § 3730 may not be brought:
- more than six years after the date on which the violation of section 3729 is committed, or
- 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.
Conflicting opinions a challenge for whistleblowers
Since Congress added the current limitations periods to the FCA in 1986, courts have disagreed on whether a whistleblower who brings a case is entitled to the benefit of (b)(2)’s extended limitations period when the government declines to intervene in the case:
The Ninth and Eleventh Circuits have both held that the limitations period in § 3731(b)(2) may apply in declined qui tam cases.
- (Those cases are: United States ex rel. v. Northrop Corp., 91 F.3d 1211 (9th Cir. 1996); United States ex rel. Hunt v. Cochise Consultancy, Inc., 887 F.3d 1081 (11th Cir.), cert. granted, 139 S. C.t. 56 (2018))
The Fourth, Fifth, and Tenth Circuits have reached the opposite conclusion.
- (Those cases are: United States ex rel. Sanders v. N. Am. Bus Indus., Inc., 546 F.3d 288 (4th Cir. 2008); United States ex rel. Jackson v. Univ. of N. Tex., 673 Fed. Appx. 384 (5th Cir. 2016), cert. denied, 138 S. Ct. 59 (2017); United States ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702 (10th Cir. 2006))
The Supreme Court is set to resolve the issue in United States ex rel. Hunt v. Cochise Consultancy, Inc. In Hunt, the relator, Billy Joe Hunt, filed a qui tam action alleging that his employer and another entity submitted false or fraudulent claims for payment to the United States for work they performed as defense contractors in Iraq. Because Hunt failed to file the action within the six-year limitations period, the issue was whether the extended limitations period of up to 10 years applied. The district court concluded that the extended statute of limitations is inapplicable when the United States declines to intervene.
The Eleventh Circuit reversed, concluding that the law’s reference to a “civil action under section 3730” referred to all civil actions brought under § 3730, including those in which the government declines to intervene. The court further noted that “nothing in § 3731(b)(2) says that its limitations period is unavailable to relators when the government declines to intervene.” Thus, the court concluded that in the absence of such language, “the text supports allowing relators in non-intervened cases to rely on § 3731(b)(2)’s limitations period.”
It remains to be seen how the Supreme Court will resolve this disagreement, and the importance of resolving this issue cannot be overstated. As it currently stands, there is uncertainty for relators who bring FCA suits about which statute of limitations will apply, all of which hinges on the government’s ability to intervene at any stage of the proceedings. If the Supreme Court follows the text of the statute and affirms the Eleventh Circuit’s decision in Hunt, it will bring consistency to this area of the law, benefiting qui tam relators, who, despite facing enormous personal risk in most situations, continue to bring these very important cases that benefit the public at large.
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