Written by: David Honig
This week, the United States Supreme Court ruled that the government’s 10-year deadline to file FCA actions could be extended to whistleblowers. The Court’s decision in Cochise Consultancy, Inc. et al. v. United States ex rel. Hunt resolved a circuit split that had dogged the courts, whistleblowers and defendants for decades. Health care providers should work closely with their counsel to ensure their policies and practices account for the need to defend against fraud claims stretching back more than 10 years.
The FCA’s statute of limitations is triggered by one of two events. The first trigger is the submission of a claim. The FCA prohibits actions for claims more than six years after their submission. But the second trigger can extend the statute of limitations to 10 years from a submission of a claim if the action is brought within three years of the government learning of the alleged false claims.
Until last week, circuit courts disagreed on the application of these triggers. Some circuits held that whistleblowers proceeding without government intervention must bring claims within six years of submission—never 10 years—because the second trigger only applied when the government intervened in an action.The 11th Circuit injected, on the other hand, applied the 10-year statute of limitations to whistleblowers proceeding without government intervention.
In Cochise, a whistleblower filed an FCA action in Alabama seven years after the alleged fraud but less than three years after he reported the alleged fraud to the government. After the government declined intervention, the defendant moved to dismiss, arguing the six-year statute of limitations barred the whistleblower’s action on seven-year old claims. The district court dismissed the action, rejecting the whistleblower’s argument that because the action was filed within three years of the government learning of the alleged fraud, that the 10-year period applied. The whistleblower appealed to the 11th Circuit.
On appeal, the 11th Circuit reversed the district court and held that the whistleblower’s claims were subject to the 10-year statute of limitations. The court noted that the FCA does not tie the additional time to file to government intervention. While in most cases the plaintiff’s knowledge triggers a statute of limitations, in FCA cases, the government is the real party in interest and thus its knowledge is the measure—even for claims filed by whistleblowers. Defendants appealed to the Supreme Court, which granted review of the case.
The Supreme Court unanimously affirmed the 11th Circuit’s decision. The Court applied “fundamental rules of statutory interpretation” and rejected the defendant’s argument that the 10-year period only applied if the government brought an action or intervened. The Court held that the FCA’s statute of limitations states clearly that both the six-year and ten-year bars apply to “civil actions” brought under the FCA. To accept the defendants argument would require two different meanings of that phrase—one for whistleblowers and one for the government. Rejecting this position, the Court ruled that “civil action” means the same thing at all times, in all cases and to all parties. Even in upholding the 11th Circuit’s decision, the Court recognized this result would allow a whistleblower to delay filing up until 10 years after the claims by waiting to notify the government. But Justice Thomas, writing for the Court, noted that “a result that ‘may seem odd . . . is not absurd,’” can still be within the law. With no other “plausible interpretation of the text,” he wrote, “the ‘judicial inquiry is complete.’”
The Cochise case is the final word on the FCA’s statute of limitations, absent Congressional action. The FCA raises unique problems when it comes to the statute of limitations. While such statutes stop running when a case is filed, whistleblower cases are filed under seal. It may be years from the filing date before an FCA defendant even discovers they have been sued. The combination of the seal provision and the statute can mean an FCA defendant may be forced to answer to actions a decade or more before they first hear of a whistleblower’s lawsuit. With this decision, that time has grown even longer.
The prospect of answering allegations for claims more than a decade old presents unique challenges for health care providers. The evidence exonerating them may be destroyed, lost or inaccessible because of technological changes. In weighing proper policies for document retention and preservation, health care providers should analyze their practices, in light of this new decision, with counsel.