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SCOTUS Clarifies Statute of Limitations for Qui Tam Actions

Following a circuit split over the statute of limitations on whistleblower actions, the Supreme Court (SCOTUS) issued a unanimous decision on May 13, 2019. This decision held that, regardless of government intervention, a longer statute of limitations may apply to qui tam lawsuits under the False Claims Act (FCA).

Two types of limitation periods govern whistleblower actions under Section 3731(b)(2):

  1. The action must be brought within six years after the violation; or,
  2. The action must be brought within three years after “the official of the United States charged with responsibility to act in the circumstances” knew or reasonably should have known the material facts, but not more than ten years after the violation is committed, whichever occurs last.

The federal government declined to intervene in the case of Cochise Consultancy Inc. v. United States, ex rel. Hunt, creating a question of the interpretation of the FCA’s Section 3731(b)(2).

The defendants moved to dismiss the whistleblower action on the grounds that the six-year limitation period had passed. The relator argued that, although the action was brought against the defendants after the six-year period, the complaint was still within the three-year limitation period of the government learning of the fraud, as well as within ten years of the alleged violation.

The district court dismissed the action as untimely. However, the Eleventh Circuit Court of Appeals reversed the decision, holding that the limitations described in Section 3731(b)(2) began when the government, not the relator, had knowledge of the alleged fraud in non-intervened actions.

SCOTUS affirmed this interpretation, finding that the plain text of the statute applied to qui tam actions regardless of government intervention.

Additionally, the defense argued that the three-year limitation period began when the relator knew or should have known about the alleged fraud. In the opinion of SCOTUS, a private relator is not an “official of the United States” and therefore the relator’s knowledge has no effect on the three-year limitation period.

Justice Thomas, on behalf of the unanimous court, writes in his opinion, “[W]e see nothing unusual about extending the limitations period when the Government official did not know and should not reasonably have known the relevant facts, given that the Government is the party harmed by the false claim and will receive the bulk of any recovery.”

This decision confirms that, in whistleblower cases where the federal government has declined to intervene, action can be brought by relators for up to four more years beyond the initial six-year limitation period.

For more information on qui tam lawsuits, please contact The Health Law Partners at (248) 996-8510.

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