False Claims Act Statute of Limitations

Understanding the applicable federal False Claims Act statute of limitations for fraud cases under 31 USC 3729  and 18 USC 3731 can often get the case dismissed if not adhered to by the government. As for any case, facts drive the outcome of any limitations dispute. 

The regulation puts the burden on the federal government to act. Common examples related to whistleblower protection where the government is alleging that a contractor violated the False Claims Act Whistleblower laws include submitting invoices for payment or submitting a traditional claim against the government. When it comes to federal whistleblowers law, Courts look for evidence that supports any of the below legal requirements.

The United States Supreme Court in Cochise Consultancy, Inc. v. U.S. ex rel. Hunt, stated that the false claims act (“FCA”) lawsuits—those filed by qui tam relators in which the government does not intervene. The Court held that such suits must be brought within either six years of the FCA violation, under 31 USC 3731(b)(1), or “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 the responsibility to act in the circumstances,” but never “more than 10 years after” the violation, under 31 USC 3731(b)(2).

First, the Court held that “the clear text” dictates that the discovery rule is always available, thus rejecting what had been the majority view 31 USC 3731(b)(2) applies to “[a] civil action under section 3730,” and the Court found “no textual basis to base the [provision’s] meaning … on whether the Government has intervened.” Second, the Court found “no support for reading ‘the official of the United States’ [in § 3731(b)(2)] to encompass a private relator,” thus rejecting the more defendant-friendly view.

As the Court summarized the result, “if the Government discovers [a] fraud on the day it occurred, it will have six years to bring suit, but if a relator instead discovers the fraud on the day it occurred and the Government does not discover it, the relator could have as many as 10 years to bring suit.” Even if this seems anomalous, the Court found the statutory text to compel it. As a result, FCA timeliness arguments are increasingly likely to focus on when “material” facts “reasonably should have been known” to the government and who is the relevant government “official.” See information about criminal liability for false statements under 18 USC 1001.

Federal Civil and Criminal False Claims Act Statute of Limitations 31 U.S.C. 3729  and 31 USC 3731

False Claims Act statute of limitations or Qui Tam defense action is found in 18 USC 3731(b) of the United States Code.

“A civil action under section 3730 may not be brought—

(1) more than 6 years after the date on which the violation of section 3729 is committed, or

(2) more than 3 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, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.”

Keep in mind that under federal whistleblower law, government contracting agencies often seek to hold prime contractors liable for the acts of their subcontractors. This can be a tough pill to swallow. Nevertheless, case law supports this fact.

Under 31 USC 3731(b)(1), an FCA action must be brought within six years after the date the defendant committed the violation. This limitations period assumes that the qui tam whistleblower or the federal government has actual knowledge of the violation. A common problem for criminal defense attorneys is figuring out the proper date on which the false claims violation was committed.

Most federal courts may consider the federal fraud statute of limitations dates by looking at the actual dates that the claim is submitted to the date of submission of the claim is the trigger date for the six-year requirements. In other situations, the limitations date may be the date that the government pays the claim. Defense lawyers should see what their specific court decides.

The False Claims Act statute of limitations is three years from the date on which the retaliation occurred. Employees or other third parties must meet this deadline.  A person can file FCA retaliation claims directly in federal court without the headache of administrative exhaustion requirements. The federal fraud statute of limitations for whistleblower retaliation actions under the FCA is three years from the time of the retaliation. See 6 Things Contractors Should Be Aware of in Qui Tam Lawsuits & False Claims Act Lawsuits.

Whistleblower Protection for Companies

It only takes one innocent situation to bring your company under intense scrutiny for violation of federal whistleblower law. Always consult a Federal False Claims Act lawyer to make sure that rules have not changed and that you as a company, have ample whistleblower protection under the laws in your favor.

The U.S. Supreme Court addressed two important questions under the Federal False Claims Act 31 USC 3729. It decided that (1) the Wartime Suspension of Limitations Act (WSLA), 18 USC 3287, applies only to criminal cases, and (2) the FCA’s first-to-file bar, 31 USC 3730(b)(5), ceases to apply once the earlier-filed action that might have created the bar has been dismissed. See what is a Qui Tam Relator.

Other court decisions: In United States ex rel. Sansbury v. LB&B Associates, Inc., No. 07-251 (D.D.C. July 16, 2014) the court decided that a civil action under section 3730 may not be brought– (1) more than six years after the date on which the violation of section 3729 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 the responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last. 31 USC 3731(b).

The Act further states that “[f]or statute of limitations purposes, any . . . Government pleading shall relate back to the filing date of the complaint of the person who originally brought the action, to the extent that the claim of the Government arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint of that person.” 13 USC 3731(c).

Federal False Claims Act Statute of Limitations and qui tam action is found in Section 3731(b) of the FCA: “A civil action under section 3730 may not be brought:

(1) more than 6 years after the date on which the violation of 31 USC 3729 is committed, or
(2) more than 3 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 the responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.” See information about False Claims Acts defenses for contractors in litigation.

Sometimes federal agencies may try to suggest why the Federal False Claims Act Statute of Limitations should be tolled. However, the defendants would be in a better position than if the defense was not raised at all. Read more about federal false claims act penalties.

IMMEDIATELY REDUCE CHANCES OF JAIL TIME AND HUGE FINES. DOWNLOAD YOUR FREE COPY OF YOUR FALSE CLAIMS ACT DEFENSE CHECKLIST NOW.

If you are a government contractor looking for a False Claims Act & Whistleblower Lawyer or are seeking legal counsel to address matters pertaining to the federal statute of limitations for False Claims Act under 31 USC 3731, call the law firm of Watson & Associates, LLC  and speak to Theodore Watson at 1-866-601-5518 for cost-effective government contractor defense services.