The United States Supreme Court just heard arguments on a recent case, Cochise Consultancy Inc. v. United States, ex rel. Hunt that will likely end up clarifying the False Claims Act’s two statutes of limitations. As anyone who follows the False Claims Act knows, working fast is your number one priority—you must be the “first to file” to attain any reward. If another person notifies the U.S. government of fraud before you do, you get nothing. But what about the other problem, if you act too slowly? How long does a whistleblower have to report fraud against the U.S. government? That is precisely the question before the U.S. Supreme Court right now. Because the decision in this case will likely change the False Claims Act playing field, I wrote the following blog post to provide an overview.
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Statute of Limitations Issues and the False Claims Act
All laws have a statute of limitations. A statute of limitations provides the amount of time a person has to sue under that statute. After the statute of limitation “runs” or expires, a person is barred from bringing suit. A statute of limitations also involves a concept called “equitable tolling” meaning that it is unfair to be able to sue another person after a certain period, as memories of the case fade, evidence gets stale, and it becomes increasingly difficult to weigh the evidence involved. In a nutshell, a statute of limitations is a deadline that a person must meet after they are harmed to bring suit regarding that harm.
The problem presented in the case before the Supreme Court is that the False Claims Act has two statutes of limitation and it is not clear which one applies in the case. In this case, Hunt claims that Cochise Consultancy defrauded the U.S. government through fraudulent munitions cleanup contracts in Iraq in 2006 and 2007. Hunt filed a False Claims Act suit in 2013, more than six years after the alleged fraud occurred.
The False Claims Act has two statutes of limitations. The original statute of limitations requires lawsuits to be filed within six years of the alleged fraud. The second statute of limitations, added later, allows for claims to be filed up to three years after the government has been notified of the complaint’s key facts, but not more than ten years after the alleged fraud. Whichever statute of limitations occurs last controls the case.
Here, Hunt brought his case in 2013, so he missed the first statute of limitations. However, he is claiming that the U.S. government became aware of his case and did not intervene, so he should be allowed to continue his suit under the second, longer statute of limitations. Of course, Cochise Consultancy’s attorney argued that this sort of delay would allow whistleblowers to “wait in the weeds” and violates the principle of ethical tolling.
I agree with many comments made by the Court’s Justices, all of which focused on the fact that speed is on the side of the whistleblower and it is never really in his or her interest to wait to file a claim, as that delay could result in losing their claim to another whistleblower. The Justices seemed persuaded by the fact that Mr. Hunt could have had the longer statute of limitations had the government taken an interest in his case, and that the longer statute of limitations serves the public interest of catching those who defraud the government. I look forward to hearing the result of this case later this year.
What Should You Do if You are Considering a Whistleblower Claim?
The reward for submitting a successful whistleblower claim can be massive, 15% to 30% of any amount recovered as a result of your report, reinstatement, back pay and front pay, and expenses, but don’t fool yourself—you will only reap this sort of award with the help of an experienced whistleblower attorney. Careful pleading is key to this process and will require the assistance of an experienced whistleblower counsel. Contact Barrett Law now at (800) 707-9577.
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