Supreme Court Rules on the FCA’s “Government Knowledge” Statute of Limitations

The False Claims Act’s statute of limitations provision requires suits to be brought within either six years from when the fraud occurred, or three years from when the pertinent government official is informed of the fraud. Until today, circuits were split on whether the latter three year “government knowledge” limitations period applied only to cases brought by the government, or if it applied to all suits brought under the False Claims Act, even where the government did not intervene. In a unanimous opinion penned by Justice Clarence Thomas, however, the Supreme Court held today that the government knowledge limitations period applies—and can extend the limitations period—regardless of whether the government intervenes.

The case—Cochise Consultancy, Inc., et al., Petitioners v. United States, ex rel. Billy Joe Hunt—arose out of Billy Joe Hunt’s allegations that two defense contractors defrauded the government for work done in Iraq between 2006 and 2007. Hunt informed government officials of the alleged fraud in a 2010 interview, and then filed a qui tam suit in 2013 after the government declined to pursue the suit.  Since the complaint was filed more than six years from the alleged fraud, Cochise moved to dismiss.  The District Court agreed and dismissed the case. The Eleventh Circuit reversed the ruling, holding that the interview shifted the statute of limitations from the six year limit, to the three year limit beginning on the date of the interview, and Hunt’s lawsuit was therefore timely.

The Supreme Court adopted the Eleventh Circuit’s reasoning, explaining that the False Claims Act was written to reset the period of limitation when the government is informed of the alleged fraud. “If the government intervenes, the civil action remains the same—it simply has one additional party,” and “[t]here is no textual basis to base the meaning of [Act’s limitations clause] on whether the government has intervened.”

May 13, 2019