The False Claims Act (FCA) was enacted in 1863 to stop the massive fraud perpetrated by large contractors during the Civil War. The FCA has gone through many iterations since its enactment. Relevant here, the FCA allows a private plaintiff, known as a relator, to bring a qui tam action in the name of the United States against a violator. 31 U.S.C. § 3730(b). If the United States decides to intervene, the government acquires ‘‘primary responsibility for prosecuting the action,’’ although the relator remains a party. Id. § 3730(c)(1). In contrast, if the United States declines to intervene, the relator may proceed with the action alone on behalf of the government, but the United States is not a party to the action. Id. § 3730(c)(3).
A qui tam action 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 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, whichever occurs last. Id. § 3731(b)(2) (i.e. statute of limitations provisions).
Over the years, a circuit split has developed on the applicability of the statute of limitations provisions in the FCA. The Third and Ninth Circuits have held that a relator may rely on the statute of limitations provisions in the FCA even if the government does not intervene but the limitations period is triggered by the relator’s knowledge of the fraud, not the government’s knowledge. See U.S. ex rel. Malloy v. Telephonics Corp., 68 F. App’x 270 (3d Cir. 2003); U.S. ex rel. Hyatt v. Northop Corp., 91 F3d 1211 (9th Cir. 1996).
The Fourth, Fifth, and Tenth Circuits have held that a relator may rely on the statute of limitations provisions in the FCA only in cases filed by the United States or where the government has intervened in the case. See U.S. ex Rel. Sanders v. North American Bus Industries, Inc., 546 F.3d 288 (4th Cir. 2008); U.S. ex rel. Sikkenga v. Regence BlueCross BlueShield of Utah, 472 F.3d 702 (10th Cir. 2006); U.S. et rel. Erkskine v. Baker, 213 F.3d 638 (5th Cir. 2000).
The Eleventh Circuit agrees with the Third and Ninth Circuits that the FCA’s limitations period applies even if the government declines to intervene. However, the eleventh circuit recently held the statute of limitations is triggered by a government official’s knowledge of the fraud, rather than the relator’s knowledge. Cochise Consultancy Inc. v. U.S. ex rel. Hunt, 887 F.3d 1081 (11th Cir. 2018). This is a split from the Third and Ninth Circuits.
On Nov. 16, 2018, the U.S. Supreme Court granted certiorari in Cochise Consultancy Inc. v. U.S. ex rel. Hunt. In deciding this case, the Supreme Court will resolve a current three-way circuit split on whether a relator in a FCA qui tam action may rely on the statute of limitations provisions in the FCA in a suit in which the United States has declined to intervene and, if so, whether the relator constitutes an “official of the United States” for purposes of FCA Section 3731(b)(2).
With the circuits clearly split, the Supreme Court’s decision will clarify the applicability of the FCA’s limitations provisions for all FCA relators. This decision should also prevent forum shopping as relators, currently, may have their cases dismissed in some circuits and allowed to proceed in other circuits. The Supreme Court will hear oral argument on March 19, 2019.