"The Tale of Billy Joe Hunt" - And, False Claims Act Statute of Limitations is Longer Thank You Might Think
by Susan Lavington
Last month, the U.S. Supreme Court resolved a split between the federal circuit courts of appeal concerning the statute of limitations for False Claims Act (FCA) suits in which the government does not intervene. Unfortunately for contractors, the Court held that a ten-year (as opposed to six-year) limitations period can apply.
As a result, contractors face the expanded prospect of defending FCA matters that are already a decade old at the time of filing. “Good luck” locating your documents and refreshing witness recollections!!
The Court’s May 13, 2019 decision came in the matter of Cochise Consultancy Inc. v. U.S. ex rel. Hunt. The decision turned on the interpretation of the FCA’s statute of limitations provisions, which require that a relator file their civil lawsuit within six (6) years from when the violation occurred but also provide for an alternative three-year limitations period running from the time the government knew, or should have known of the violation. In no event can suit be filed more than ten (10) years after the alleged violation. Prior to Cochise, there was a split among the 4th, 9th, 10th and 11th circuits as to the interpretation of the 3-year “knew or should have known” standard and its applicability to matters in which the government does not intervene in the case.
The Cochise suit was initially filed in 2013 by relator, Billy Joe Hunt. Suffice to say that Billy Joe is not what one would describe as a stereotypical relator. He was purportedly aware of the alleged fraudulent scheme in Cochise since 2006 but never reported it until 2010. Notably, he first reported the Cochise fraud to the FBI while being interviewed by the Bureau regarding his involvement in a different, illicit federal contracting scheme. According to the lower court’s description, Billy Joe served ten months in federal detention due to that otherwise unrelated kickback scheme and did not file his FCA lawsuit until “after his release from prison”. As one does.
Given the timing, the question for the Supreme Court in Cochise was whether a relator can bring a claim in 2013 more than six years after an alleged violation in 2006 but still within three years of the government learning of that violation in 2010 despite the fact the government does not intervene in the suit. Unfortunately for the contractor community, the Court agreed with Billy Joe, holding that the three years “knew or should have known” statute of limitations provision applies regardless of whether or not the government intervenes, and his FCA suit was therefore timely.
So our Billy Joe has smoothly transitioned from federal inmate to protector of the public treasury via qui tam suit in which his relator status might pay him twenty-five to thirty percent (25-30%) of the several million dollars at issue in Cochise if he’s ultimately successful.
Who said, “There are no second acts in American lives”?? [Ed., F. Scott Fitzgerald.]. Oh stuff it, Editor!
And “Go get’em, Billy Joe!!”