The US Supreme Court ruled Monday that suits brought under the False Claims Act by private individuals in which the US did not intervene were subject to a different statute of limitations than cases where the US brought or intervened in the suit.
In 2013 Billy Joe Hunt brought a complaint under the False Claims Act against two defense contractors including Cochise Consultancy, claiming that they defrauded the government for work done in Iraq between 2006 and 2007. The False Claims Act permits private individuals to sue on behalf of the government in cases of fraud committed against the US government. Federal prosecutors have the opportunity to intervene and take over cases brought under the False Claims Act, but are not obligated to do so. In addition, the statute of limitations for the False Claims act has two separate timings, requiring suits to be brought either six years from when the fraud occurred or three years from when the US government official is informed of the fraud. Hunt was interviewed by federal officials in late 2010, when he informed them of the alleged fraud committed by Cochise, though the government failed to bring suit. Since Hunt’s complaint was filed more than six years from the alleged fraud, Cochise moved to dismiss the claims. The District Court agreed with Cochise, but the US Court of Appeals for the Eleventh Circuit reversed the ruling, stating that the interview moved the statute of limitations from the six-year limit, where the suit would be barred, to the three-year limit beginning on the date of his interview with the federal agents, making the suit timely.
In a unanimous decision, the Supreme Court adopted the Eleventh Circuit’s reasoning. Justice Clarence Thomas, writing the opinion of the court, stated that Cochise’s move to dismiss based on the statute of limitations was ” at odds with fundamental rules of statutory interpretation.” Thomas stated that the False Claims Act was written to expressly shift cases from one period of limitation to another when the US government is informed of the impending action, and therefore Hunt’s interview “reset” the statute of limitations. The ruling resolves an ongoing circuit split among various Courts of Appeal in the country, many of which have adopted conflicting interpretations of the False Claims Act.
