U.S. Supreme Court to Resolve How to Apply Statute of Limitations for Whistleblower Suits

• Whistleblower News.

The United States Supreme Court announced that it would hear a case to resolve an issue that has vexed – and split – lower courts under the U.S. False Claims Act. The case is Cochise Consultancy v. United States ex rel. Hunt, U.S., No. 18-315.

Under the False Claims Act, a plaintiff may file a qui tam complaint: (1) more than 6 years after the date on which the violation of the Act 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.

The question that the Supreme Court will address is whether and to what extent relators and the government can take advantage of the 6-10 year tolling provision when determining if a case is barred by the statute of limitations.

Defendants’ petition notes that:

  • The Fourth, Fifth, or Tenth circuits do not allow a whistleblower to rely on the three-year period if the government hasn’t intervened against a defendant;
  • The Third or Ninth circuits allow whistleblowers to rely on the three-year period as long the complaint is filed within three of years of when the whistleblower knew or should have known about the alleged fraud; and
  • The Eleventh Circuit (a) conflicts with the Fourth, Fifth and Tenth circuits by allowing whistleblowers to take advantage of the three-year period even when the government declines to intervene in the case, while (b) conflicting with the Third and Ninth Circuits by holding that the three-year period doesn’t begin to run until the government knows about the alleged fraud (as opposed to when whistleblowers know about the fraud)

The case will likely set a national uniform rule on these issues.

Interestingly, the New York False Claims Act is unique among state false claims acts in avoiding these issues together. It applies a straight and ten year statute of limitations to all cases under that Act.