The Supreme Court is scheduled to hear arguments on Tuesday in Cochise Consultancy, Inc. v. United States, a case that will determine the statute of limitations window for False Claims Act (FCA) cases when the government declines to intervene.

At issue: How should the statute of limitations apply in a qui tam suit in which the United States declines to intervene? Does the three-year limitations period begin to run from the date of the whistleblower’s knowledge of the alleged false claim? Or does it begin on the date of the government official’s knowledge of the alleged false claim?

The case revolves around whistleblower Billy Joe Hunt. In 2013, he filed a qui tam case alleging fraud by his former employer, a war contractor performing munitions clean-up work in Iraq in 2006. The government declined to intervene in Hunt’s case and it was dismissed by a district court. The Eleventh Circuit then allowed the case to go forward ruling that the FCA’s three-year limitations period was triggered by the government’s knowledge of the alleged fraud—not the whistleblower’s knowledge.

Those arguing in support of the Eleventh Circuit ruling include the federal government and a 20-state coalition. An amicus brief filed on the coalition’s behalf by the Indiana attorney general argues that the states have a “strong fiscal interest in ensuring the False Claims Act (FCA) provides adequate time to investigate, prepare, and file FCA claims.”

States share in the recovery when the federal government uses the FCA to root out fraud in the Medicaid program, the joint federal and state health insurance plan for low-income patients, according to the brief.

“States, therefore, have a significant stake in FCA cases, which often involve considerable sums” he writes.

NWC executive director Stephen M. Kohn also filed a brief in the cases, noting that “merits of a claim often bear no relation to the duration of a case.”

A brief in support of the limits was filed by industry groups led by the U.S.  Chamber of Commerce. They argue that lack of a “robust statutes of limitations” would “encourage stale claims up to a decade old which the government has decided are not worthwhile to pursue and which frequently turn out to be meritless.”

The NWC reviewed the same public documents and challenged data supplied by the group. Kohn also argued that the first-to-file provisions work to keep cases from dragging on.

An amicus brief filed by Department of Justice notes that “for a variety of reasons, the United States intervenes in only about one-quarter of qui tam actions, which in turn significantly outnumber the actions brought by the government.”

If the court disagrees with the Eleventh Circuit ruling, it would “allow many wrongdoers to escape liability by concealing their frauds for six years and then asserting the statute of limitations to bar a qui tam suit, even when the suit is filed within three years after the government learns of the fraud.”

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