Cochise Consultancy, Inc. v. United States, ex rel. Hunt

Should Relators Rely on the Statute of Limitations in the False Claims Act When the Government Declines to Intervene?

On February 8, 2019, the National Whistleblower Center (NWC) filed an amicus curiae brief at the U.S. Supreme Court in support of a whistleblower. Only a few short months later, on May 13, 2019, the Justices unanimously ruled in support of the whistleblower.

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.

As a result, the case in question focuses on the False Claims Act statute of limitations. The Court heard oral arguments in the case, Cochise Consultancy, Inc. v. United States, ex rel. Hunt on March 19, 2019. The Court’s decision in this case resolved a three-way split between the circuit courts.

The question the court must answer is how whistleblowers under the False Claims Act (FCA), known as “relators,” must rely on the statute of limitations in the FCA when the government declines to intervene in the case. In that circumstance, the question the Court sought to address was whether the three-year statute of limitations begins at the date the whistleblower learns of the alleged false claim, or at the date the government learns of the alleged false claim?

In short, when does the statute of limitations clock start running in a False Claims Act (FCA) case when the government declines to intervene in a whistleblower case?

Whistleblower lawyer, Stephen M. Kohn, a founding partner at whistleblower law firm Kohn, Kohn & Colapinto, who is also the Chairman of the Board of the National Whistleblower Center, served as the Counsel of Record for on the amicus brief, and Litigation Fellow Sarah Khan was the lead staff responsible for the brief. Kohn noted that,

“It is little wonder why Petitioner and their supporting amici have foregone attempts to convince Congress to roll-back provisions of the FCA and are instead urging this Court to enter a policy debate that they have already lost in Congress and the court of public opinion.”

The NWC’s amicus presents four arguments as to why the Supreme Court must uphold the 11th Circuit’s decision in this case. First, the plain language of the statute in question strongly supports the whistleblowers’ position. Second, Congress intent to support strengthening the False Claims Act is clear in the Congressional record. Third, the NWC reviewed the same public documents and challenged data supplied by the business groups, including conclusions about the duration of cases. The amicus brief argues that the statistical analysis in the Chamber of Commerce’s brief, which supported the company, is flawed and does not support the idea that cases using the ten-year statute of limitations in non-intervened cases are meritless and cause hardship to defendants.

Leading whistleblower law firm Kohn, Kohn & Colapinto noted that,

The Chamber relied on a statistical analysis of 2,086 cases where the government did not intervene that were litigated between 2004 and 2013. The NWC reviewed the statistical data set-forth by the Chamber as support for its argument and found it to be flawed and representing “a gross exaggeration of the alleged problems.”

Fourth and finally, the first to file provision in the FCA is the primary method of ensuring FCA complaints are filed promptly in order to avoid dismissal of a claim, not the statute of limitations.

The NWC urged the Supreme Court to side with the whistleblower, arguing that the “merits of a claim often bear no relation to the duration of a case.” The amicus brief explains the story of Aaron Westrick, who shared vital information with the government about defective bullet-proof vests. In March 2018, a $66 million settlement was reached with a Japanese manufacturer charged with using false data to market the products, which put the lives of police officers at risk. Westrick’s qui tam case was filed in 2004, and a final settlement was not reached until last year — 14 years later. “However, the merits of the case and its contributions to public health and safety are unquestionable,” according to the brief.

The Supreme Court Justices understood the need to support whistleblowers. Kohn attended the oral arguments and reported that,

Demonstrating the Courts understanding as to why Congress would have wanted a longer statute of limitations when the relator moves a False Claims Act case forward, even without the government, Justice Sotomayor noted that, “in qui tam the recovery in bulk goes to the government.”

Justice Gorsuch added that to adopt the corporation’s position would be “quite a feat.” Justice Roberts stated that relators know that they must “move promptly” due to the first to file rule. Justice Gorsuch agreed stating “Congress wanted to ensure that relators act quickly.”

When counsel for the corporation tried to argue that the court should ignore the plain text of the statute, Justice Kavanaugh interjected, “Where is the ambiguity?”

The nine Justices of the Supreme Court ruled unanimously in favor of the whistleblower. In a decision written by Justice Clarence Thomas, they rejected the position of the company and its big business allies, including the Chamber of Commerce. As noted by the whistleblower law firm Kohn, Kohn & Colapinto,

The impact of the decision has significant implications, as whistleblowers and the government can pursue additional cases where fraudsters have attempted to use legal technicalities to avoid liability. While Billy Joe Hunt may have needed to wait six years, from 2013 to 2019, to see justice, future whistleblowers will feel safer stepping forward knowing that their rights are protected by the Supreme Court as a result of this case.

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