Case No. 18-315 | 11th Cir.
Preview by Sean Lowry, Online Editor*
In Cochise, the Court will seek to clarify a three-way circuit split over interpretation of the False Claims Act’s (“FCA”) statute of limitations. The FCA enables individuals to bring suits on behalf of the government (i.e., qui tam) for claims such as fraud to the government. 31 U.S.C. § 3730(b) (2012). A successful plaintiff (or in FCA parlance, a “relator”) receives a share of any financial recoveries to the government. The U.S. government may investigate the claim and assume primary responsibility to litigate or it can choose not to intervene formally as a party in the case.
The controversy in Cochise concerns whether respondent/relator Hunt brought his FCA case too late under the FCA’s statute of limitations. Hunt alleges that his former employer, Parsons, and Cochise defrauded the United States for work they performed as defense contractors in Iraq, resulting in approximately $3.9 million of higher costs to the U.S. government. The defense contract was performed from February through September of 2006. Hunt first told the FBI about the alleged scheme on November 30, 2010 during an interview related to a separate fraudulent scheme. On November 27, 2013, Hunt formally filed an FCA complaint against his former employer and Cochise. The U.S. government declined to intervene.
The FCA’s statute of limitations provision says that a suit cannot be brought: “(1) more than six years after the date on which the FCA violation is committed, or (2) more than three 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 . . .”—whichever is later. 31 U.S.C. § 3731(b) (2012). The district court held that (b)(2) did not apply because the U.S. government declined to intervene and thus Hunt’s case was time-barred under (b)(1). The Eleventh Circuit reversed and remanded, holding that (b)(2) still applies even if the U.S. government chooses not to intervene. Hunt’s case could proceed because he (barely) filed it within three years of providing the facts to an “official of the United States charged with responsibility to act in the circumstances” (the FBI).
Parsons and Cochise petitioned for certiorari with the Court, asking whether the statute of limitations in (b)(2) applies even if the U.S. government does not intervene, and, if so, whether the relator constitutes an “official of the United States” under (b)(2). The Fourth and Tenth Circuits do not apply (b)(2) to cases where the U.S. government declines to intervene. See United States ex rel. Sanders v. North American Bus Industries, Inc., 546 F.3d 288, 295–96 (4th Cir. 2008); United States ex rel. Sikkenga v. Regence BlueCross BlueShield of Utah, 472 F.3d 702, 725 (10th Cir. 2006). This was the interpretation applied by the district court to dismiss Cochise. The Third and Ninth Circuits interpret a relator as an “official of the United States” under (b)(2). See United States ex rel. Malloy v. Telephonics Corp., 68 F.App’x 270, 272–73 (3d Cir. 2003); United States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211, 1214–18 (9th Cir. 1996). Hunt’s case would also be barred under this interpretation because he learned about the facts in 2006 but did not file suit until 2013. The Eleventh Circuit’s decision in Cochise created a third possible option for the interpretation of the statute of limitations that does not consider when the relator learned of the material facts.
*Sean Lowry is a 2LE (Class of 2021) and Analyst in Public Finance at the Congressional Research Service (CRS). The views expressed are those of the author and are not necessarily those of the Library of Congress or CRS.