A case must be filed within either six years of the FCA violation or three years from when the government knew or should have known of the violation.
In Cochise Consultancy, Inc. v. U.S. ex rel. Hunt, the
Supreme Court yesterday clarified the statute of limitations for
most False Claims Act ("FCA") lawsuits—those filed
by qui tam relators in which the government does not
intervene. The Court held that such suits must be brought within
either six years of the FCA violation, under 31 U.S.C. §
3731(b)(1), or "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 never
"more than 10 years after" the violation, under §
3731(b)(2).
Because § 3731(b)(2) mentions the government's knowledge,
circuit courts had long disagreed over its application when the
government declines to intervene—not only on whether
relators could use the discovery rule, but also on whose
knowledge matters (just the government's, or the relator's
also?). In a unanimous opinion by Justice Thomas, the Court found
both issues straightforward.
First, the Court held that "the clear text" dictates that
the discovery rule is always available, thus rejecting what had
been the majority view. Section 3731(b)(2) applies to "[a]
civil action under section 3730," and the Court found "no
textual basis to base the [provision's] meaning ... on whether
the Government has intervened." Second, the Court found
"no support for reading 'the official of the United
States' [in § 3731(b)(2)] to encompass a private
relator," thus rejecting the more defendant-friendly
view.
As the Court summarized the result, "if the Government
discovers [a] fraud on the day it occurred, it would have six years
to bring suit, but if a relator instead discovers the fraud on the
day it occurred and the Government does not discover it, the
relator could have as many as 10 years to bring suit." Even if
this seems anomalous, the Court found the statutory text to compel
it. As a result, FCA timeliness arguments are increasingly likely
to focus on when "material" facts "reasonably should
have been known" to the government and who is the relevant
government "official."
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