Nov 202018

Supreme Court Agrees to Resolve Circuit Split on FCA Statute of Limitations in Non-Intervened Cases

Scott D. Stein
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On November 16, the Supreme Court agreed to resolve a percolating circuit split on an issue of critical importance under the FCA: are relators in non-intervened cases entitled to invoke the FCA’s alternate 10 year statute of limitations?  The grant of certiorari in Cochise Consultancy, Inc. v. United States ex rel. Hunt, 887 F.3d 1081 (11th Cir. 2018) makes it the third Supreme Court case in recent years addressing the False Claims Act’s limitations periods. 

The FCA provides that a civil action “may not be brought more than 6 years after the date” of the alleged violation or “more than 3 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” of the alleged violation.  31 U.S.C. § 3731(b).  Courts have split over two critical issues arising out of this provision: (1) whether relators in non-intervened cases are entitled to invoke the longer 10 year provision, and (2) if so, whether the reference to the knowledge of an “official of the United States” refers to the knowledge of a responsible government official, or the knowledge of the relator.

Interestingly, both the relator (Hunt) and the defendants in Cochise supported the request for cert.  Hunt worked for petitioner The Parsons Corporation.  As part of the Coalition Munitions Clearance Project (the “CMC contract”), the United States engaged Parsons to dispose of munitions abandoned by retreating enemy forces in the Iraq and Afghanistan wars.  According to Hunt, Parsons awarded a subcontract under the CMC contract to ArmorGroup initially, but ultimately gave the subcontract to petitioner Cochise.  Hunt alleges that Parsons changed course because Cochise bribed an officer in the Army Corps of Engineers to compel Parsons to award the subcontract to Cochise.  Hunt alleged that the alleged bribery induced the government’s contractor to award the subcontract to Cochise, resulting in the submission of fraudulent claims to the government from February through September 2006.

Hunt filed suit in 2013, approximately seven years after the alleged fraud.  He acknowledged that the 6 year statute of limitations in § 3730(b)(1) barred his suit, but contended that the action could nevertheless proceed because it fell within the longer 10 year limitations period.  Hunt had filed his complaint in 2013, within three years of his informing the government of the alleged fraud, which had occurred less than ten years earlier.

The district court held that Hunt could not rely upon the 10 year limitations period.  The court concluded that that longer limitations period was unavailable because the United States had not intervened and, alternatively, because Hunt had learned of the alleged fraud more than three years earlier.  Reversing, the 11th Circuit held that Hunt could indeed rely upon the 10 year limitations period.  Hunt had alleged that the relevant government official had learned of the material facts less than three years before Hunt filed.  The 11th Circuit further held that “official of the United States” does not refer to relators, and that in its view, the statutory language requires the conclusion that it is the knowledge of the relevant federal government official—not of the relator—that matters.

The 11th Circuit expressly departed from rulings by several other circuit courts.  The Fourth, Fifth and Tenth Circuits have ruled that the 10 year period applies only where the government intervenes or files the complaint.  The Third and Ninth Circuits, on the other hand, have decided that relators may use the longer period even in the absence of government intervention.  Further, these circuits say, it is the relator’s knowledge of the alleged fraud that triggers the 10 year limitations period.

The petitioner’s opening brief is currently due on December 31, and a decision in the case is expected by the end of the Supreme Court’s term in June 2019.

Scott D. Stein

Chicago

sstein@sidley.com

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