The Supreme Court recently granted certiorari in an Eleventh Circuit False Claims Act (FCA) case, Cochise Consultancy, Inc. v. U.S. ex rel. Hunt, No. 16-12836 (11th Cir. 2018). The Supreme Court will decide how the FCA’s statute of limitations applies in qui tam actions that are brought by a private relator, particularly in cases where the government has declined to intervene, resolving a long standing split among the circuit courts.
The FCA’s statute of limitations provision is contained at 31 U.S.C. § 3731(b) and provides that:
“(b) A civil action under section 3730 may not be brought—
(1) more than 6 years after the date on which the violation of section 3729 is committed, or
(2) more than 3 years after the date when facts material of 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.”
Although § 3731(b)(2) operates as a tolling provision to the six-year statute of limitations period in § 3731(b)(1), there has been a historical split among the circuits regarding whether this tolling provision applies when the government declines to intervene in a relator’s action. The key question the Supreme Court will decide is whether the relevant trigger for the limitations period is the government’s knowledge of the material facts or the relator’s knowledge of the material facts.
Eleventh Circuit Reverses United States District Court for the Northern District of Alabama
In Hunt, the district court below ruled that § 3731(b)(2)’s tolling provision was inapplicable in qui tam cases where the government declined to intervene. However, the Eleventh Circuit reversed the Northern District of Alabama, holding that the alternative 3-year limitations period can apply when the government declines to intervene in a relator’s qui tam action.
The Eleventh Circuit also held that the 3-year limitations period is triggered by the government’s knowledge of the alleged fraud, not the relator’s. It also held for purposes of applying the limitations period, the relator’s knowledge of the alleged fraud was irrelevant to the analysis.
Supreme Court Decision May Resolve Years of Circuit Split on this Issue
There are currently three approaches to handling the tolling provision:
- The provision only applies in FCA cases filed by the government or in which the government has intervened (followed by the Fourth, Fifth, and Tenth Circuits),
- The provision applies in cases where the government has not intervened, but the clock begins to run when the relator learned of the fraud (followed by the Third and Ninth Circuits), and
- The provision applies in cases where the government has declined to intervene, and the clock begins to run when the government learned of the fraud.
The Supreme Court’s decision in Hunt could resolve this split and create a uniform national standard that eliminates confusion and uncertainty for FCA defendants.