The Supreme Court’s recent decision in Cochise Consultancy Inc. v. United States, ex rel. Hunt, has altered the landscape for False Claims Act (FCA) claims by expanding the period for private-party relators to bring FCA lawsuits. Under the Court’s unanimous decision in Cochise, relators can now file a complaint either six years after an FCA violation or three years after the facts of the false claim are known or reasonably should have been known by the government, up to a maximum of ten years after the date of the violation. As a result, relators now potentially have a decade to bring a claim under the FCA in some circumstances, and contractors will bear an additional burden in responding to these lawsuits.

The FCA’s statute of limitations provides that a “civil action under section 3730” may not be filed “more than 6 years after” the date of the violation or more than three years after the facts of a false claim are known or reasonably should been known by the official of the United States charged with responsibility to act in the circumstances, whichever occurs last, but in no event more than 10 years after the date of the violation. In interpreting the applicability of those two tolling provisions to a relator’s claim, courts of appeals had split on whether relators could rely on the alternative three-year tolling provision in addition to the six-year period. And, if the relator could rely on the alternative three-year provision, the courts of appeal had split on whether a relator should be considered an “official of the United States” whose knowledge triggers the running of the three-year limitations period.

In reviewing these two limitations periods in Cochise, the Court first held that the plain text of the phrase “civil action under section 3730” in the FCA does not distinguish between relator-initiated cases in which the government intervenes, relator-initiated cases in which the government has declined to intervene, or actions brought by the government itself. Thus the Court determined that each type of case is a “civil action under section 3730.” As a result, the Court concluded that both relators and the government may take advantage of the three-year provision.

The Court then analyzed the phrase “official of the United States,” and it ultimately decided that a relator is not an “official of the United States.” The Court reasoned that relators are not government officials in any regular sense nor are they tasked with “responsibility to act” in response to a false claim violation; thus their knowledge of the fraud does not matter for statute of limitations purposes under the Act. Consequently, the Court found that only an actual government official’s knowledge of a false claim starts the clock on the alternative three-year statute of limitations period.

Contractors should be aware that the Cochise opinion significantly expands the time period in which a relator can file a complaint after an FCA violation. Relators can now bring a claim up to 10 years after a false claim violation, so long as an appropriate government official was informed of the violation three years before the relator files their complaint. And this expanded filing period can have several implications for contractors. First, because relators now will have more time to pursue claims — even if the government does not later intervene in their case — they also now have more time to allow damages to accrue on activities they later claim were fraudulent, thus potentially increasing the amounts at issue in future FCA lawsuits. Second, this extended filing window also has the effect of increasing the burden on contractors to effectively respond to allegations, as contractors need to be prepared to produce evidence and records relating to activities that may have occurred more than a decade earlier. Finally, contractors faced with a relator’s lawsuit should focus their early discovery efforts on the government’s knowledge of the alleged violation because such knowledge is now dispositive as to both statute of limitation periods, as well as materiality defenses under Escobar.