Government Contracts Supreme Court: False Claims Act Suit Was Timely
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Monday, June 10, 2019

Supreme Court: False Claims Act Suit Was Timely

By Government Contracts Editorial Staff

Affirming the Court of Appeals for the Eleventh Circuit, the Supreme Court, in a unanimous opinion, held a False Claims Act presentment claim was timely because the limitations period under 31 USC 3731(b)(2) applies to qui tam suits in which the government does not intervene, and the period is triggered by the government’s, not the relator’s, knowledge. The relator alleged the contractors submitted false claims for payment under a subcontract to provide security services in Iraq “from some time prior to January 2006 until early 2007.” The relator claimed to have revealed the allegedly fraudulent scheme in an interview with government agents slightly less than three years before filing suit in November 2013. The government declined to intervene in the action, and one contractor moved to dismiss the complaint as barred by the FCA’s statute of limitations, which provides that “[a] civil action under section 3730” must be brought within the later of “6 years after the date on which the violation … is committed” (§3731(b)(1)) or within “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 on which the violation is committed” (§3731(b)(2)).

Suits by Private Relators. The Eleventh Circuit reversed the district court’s dismissal and held the complaint was timely under §3731(b)(2) (62 CCF ¶81,366). Addressing a conflict between courts of appeals, the Supreme Court agreed with the Eleventh Circuit’s reasoning. First, there were no textual grounds to base the meaning of “[a] civil action under section 3730” on whether the government has intervened, and the period in §3731(b)(2) applies to relator-initiated, nonintervened suits. Second, the statute provided no support for reading “the official of the United States charged with responsibility to act in the circumstances” to encompass a private relator, with the result that §3731(b)(2)’s 3-year limitations period would start when the relator knew or should have known about the fraud. Private relators are not “official[s] of the United States” in the ordinary sense of the phrase, and they are not “charged with responsibility to act” in the sense contemplated by §3731(b), because they are not required to investigate or prosecute an FCA action. (Cochise Consultancy, Inc., et al. v. U.S. ex rel. Hunt, SCt, 63 CCF ¶81,657)

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