SCOTUS Extends FCA Statute of Limitations to 10 Years for Non-Intervened Cases

The U.S. Supreme Court has unanimously held that the False Claims Act’s (FCA) alternative 10-year statute of limitations period in 31 U.S.C. § 3731(b)(2) applies to non-intervened actions.  In addition, the Court rejected defendants’ argument that the relator was himself “the official of the United States” referenced in 31 U.S.C. § 3731(b)(2).

The FCA provides for two limitations periods applicable to a civil action under section 3730.  The first limitations period runs six years from when the statutory violation occurred.  The second limitations period requires an FCA action to be brought within three years after “the official of the United States charged with responsibility to act in the circumstances” knew or should have known the relevant facts, but not more than 10 years after the statutory violation occurred.

The relator sued the defendants, his former employer and its subcontractor, for allegedly defrauding the government by submitting false payment claims for providing security services in Iraq in 2006 and 2007.  The relator claimed he revealed the defendant’s fraud to federal officials in 2010, and less than three years later, he filed his qui tam action.  The relator claimed that he filed timely based on the limitations period of three years after the government knew, and within 10 years of the violation.  After the United States declined to intervene in the case, the district court dismissed the case for being time-barred under the six-year statute of limitations from the date of the violation. The Eleventh Circuit reversed, holding that the three-year government-knowledge limitation period applies even when the government does not intervene in a case.

The Court affirmed the Eleventh Circuit’s holding, concluding that because both government-initiated suits and relator-initiated suits are “civil actions under section 3730” of the FCA, both of them are governed by the limitation period in §3731(b).  Finally, the Court rejected the defendant’s argument that, in a non-intervened case, the relator is in fact “the official of the United States charged with responsibility to act in the circumstances,” meaning that once the relator knew of the fraud, the three-year limitations period in §3731(b)(2) would begin.  The Court noted that a relator is neither an appointed officer nor an employee of the United States, and is not required to investigate or prosecute an FCA action.