The Supreme Court on Monday expanded the time available under some circumstances to private parties, or relators, who bring whistleblower suits called “qui tam” actions under the False Claims Act, the Civil War-era statute meant to battle fraud in federal contracting.

In Cochise Consultancy Inc. v. United States, ex rel. Hunt, the justices unanimously affirmed the federal appeals court’s holding that a second statute of limitations added to the FCA by Congress in 1986 applies to a relator-initiated suit in which the United States declines to intervene.

Writing for a unanimous court, Justice Clarence Thomas rejected arguments on behalf of defense contractor Cochise Consultancy that qui tam claims brought against it and another contractor by relator Billy Joe Hunt were barred by the original statute of limitations included in the FCA, which requires lawsuits to be filed within six years of the alleged fraud.

Hunt alleges that Cochise Consultancy and another defense contractor defrauded the federal government in a contract to clean up munitions left behind by Iraqi forces. The contract covered a period from before January 2006 until early 2007.

Hunt contends that he revealed Cochise’s alleged fraud in an interview with federal agents about an unrelated alleged fraud in November 2010. He conceded that his 2013 lawsuit fell outside the six-year limitations period of Section 3731(b)(1) of the FCA.

But Hunt argued that his complaint was timely under Section 3731(b)(2) of the statute because it was filed within three years of the interview in which he informed federal agents about the alleged fraud (and within 10 years after the violation occurred).

Both statutes of limitations apply to a “civil action under section 3730,” and “whichever occurs last” controls the case.

If the federal government had intervened in Hunt’s suit, the alternative statute of limitations plainly would have applied. But the government did not intervene. The district court dismissed the suit as untimely, but the U.S. Court of Appeals for the 11th Circuit reversed, taking a position different from conflicting views in several other circuits.

As David Engstrom’s preview explained, the 11th Circuit held that relators can invoke Section 3731(b)(2) in suits in which the United States is not a party and that Section 3731(b)(2)’s three-year limitations period does not begin until the government learns of the alleged fraud, regardless of when the relator discovers it.

On Monday, Thomas backed that view over the approaches of several other federal appeals courts to have ruled on the issue.

Under Cochise’s reading, Thomas said, “a relator-initiated civil action would convert to ‘[a] civil action under section 3730’ for purposes of subsection (b)(2) if and when the government intervenes. That reading cannot be correct.”

“If the government intervenes, the civil action remains the same—it simply has one additional party,” Thomas continued. “There is no textual basis to base the meaning of ‘[a] civil action under section 3730’ on whether the government has intervened.”

Cochise had pinned many of its hopes for reversal on a 2005 decision, Graham County Soil & Water Conservation District v. United States ex rel. Wilson, in which the Supreme Court held that the six-year statute of limitations did not apply to actions brought under an FCA provision that governs retaliation.

Cochise argued that the court should adopt a similar construction of the phrase “civil action under section 3730” in Section 3731(b).

“We disagree,” Thomas said. “Nothing in Graham County supports giving the same phrase in §3731(b) two different meanings depending on whether the government intervenes.”

Thomas also rejected Cochise’s fallback argument that the relator in a suit in which the government did not intervene should be considered “the official of the United States charged with responsibility to act in the circumstances.”

“[T]he statute provides no support for reading “‘the official of the United States’ to encompass a private relator,” Thomas wrote.

The FCA helps the federal government recover some $ 3 billion in fraudulent contracting expenses annually, with the government taking the lead in about one-quarter to one-third of cases, while private relators initiate the rest (with the possibility of the government’s stepping in at any point).

The solicitor general’s office argued in support of Hunt, the relator in the case.

The outcome was not a surprise after oral argument, and the decision means that in some circumstances, relators will have more time to pursue claims, and the federal government (and the relators) may recover more money from fraud in contracting in the long run.

[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel on an amicus brief in support of the respondent in this case. The author of this post, however, is not affiliated with the firm.]

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