The U.S. Supreme Court ruled last week that whistleblowers have as much time to bring False Claim Act suits as the government would if acting on its own or alongside a whistleblower.
In a unanimous May 13 decision, the court held that a private plaintiff can use the government’s three-year filing period under the FCA to sue a contractor, even when the government declines to take over their case. The plaintiff-friendly ruling in Cochise Consultancy v. U.S. ex rel Hunt resolves a circuit split that included the 10th Circuit Court of Appeals, and it expands the legal exposure companies potentially have from contractor fraud claims.
Private litigants under the FCA, who are referred to as relators, can blow the whistle on federal contrac- tors by making a qui tam fraud claim against them with the U.S. Department of Justice. In fiscal year 2018, the Department of Justice recovered $2.1 billion in settlements and judgments from these qui tam cases. The DOJ investigates the sealed allegations and may choose to take over the case. More often, the government declines to intervene, leaving the relator to litigate the case on their own. It’s in the latter situation that the Supreme Court clarified how long the relator has to file their own FCA action.