The False Claims Act serves as a powerful tool in the hands of conscientious citizens and the federal government in holding entities accountable for defrauding governmental programs. But navigating the complexities of this act, especially regarding the statute of limitations, can be daunting for individuals. 

Understanding the False Claims Act and its statute of limitations is vital for potential whistleblowers seeking to expose fraudulent activities.

This guide aims to provide an in-depth look at the False Claims Act, including key considerations to know about the statute of limitations. To begin, we’ll decode some essential terms.

Understanding Key Terms

What is a Statute of Limitations?

A statute of limitations is a law that sets the maximum period during which a legal action can be brought after an event. If a lawsuit is not filed within this timeframe, the ability to bring a lawsuit may be lost. 

What is the False Claims Act?

The False Claims Act (FCA), sometimes called the “Lincoln Law,” is a federal law that allows individuals and the government to bring civil actions against entities that have defrauded government programs. The FCA encourages individuals to come forward and report misconduct involving public funds. 

A key provision of the False Claims Act is the qui tam provision, which allows individuals (often referred to as “whistleblowers” or “qui tam relators“) to file lawsuits on behalf of the government. 

Other key provisions of the FCA provide protections against whistleblower retaliation as well as for whistleblower rewards in the event of a successful action.

Types of False Claims Act Cases

Qui Tam Action

A qui tam action is a lawsuit brought by an individual on behalf of the government. Under the False Claims Act, a qui tam whistleblower may share in the recovery of funds if the case is successful. 

Whistleblower awards can range from 15 – 30% of the funds recovered in a successful qui tam lawsuit, depending on several factors, including whether or not the government intervenes in the case. These monetary awards incentivize private individuals, often employees or former employees of the offending organization, to report fraud against the government. 

Qui tam whistleblowers play a crucial role in uncovering and prosecuting fraudulent activity, especially in areas such as healthcare, defense contracting, and customs and tariffs fraud.

Whistleblower Retaliation Action

Whistleblower retaliation actions arise when an employer retaliates against an employee for exposing wrongdoing or fraud. The False Claims Act provides whistleblower protections to deter this. 

Under section 31 U.S.C. § 3730(h) of the False Claims Act, an employee who is discharged, demoted, threatened, or discriminated against in the terms and conditions of their employment because of lawful acts in furtherance of a False Claims Act action may be entitled to relief. 

This relief may include reinstatement, double back pay plus interest, and compensation for any damages sustained as a result of the retaliation.

False Claims Act Statute of Limitations

So, what is the statute of limitations for False Claims Act cases? The answer depends in part on the type of FCA action at issue.

Statute of Limitations for Qui Tam Actions

Under 31 U.S.C. § 3731(b), a civil action must be filed either:

  • within six years of the violation, or 
  • within three years of the date when the relevant government official knew or should have known about the violation, but no longer than ten years after the violation itself.

To the extent those timelines differ, the applicable FCA statute of limitations is whichever period is longer.

Facts Material to Qui Tam Action

Determining the beginning of the limitations period assumes proper identification of the violation’s actual occurrence or the point in time when the government knew or should have known about the violation.

United States Ex Rel and Qui Tam Whistleblower

In cases styled “United States ex rel,” the whistleblower, acting as the qui tam relator, steps into the shoes of the government. The clock for the statute of limitations can begin from the relator’s knowledge of the alleged fraud, rather than from when the government’s knowledge begins.

Additionally, in a 2019 decision, the Supreme Court held that the False Claims Act statute of limitations periods noted above apply to qui tam actions whether or not the government intervenes in the case.

Statute of Limitations for FCA Whistleblower Retaliation Action

A different statute of limitations applies to whistleblower retaliation actions under the False Claims Act. 

The applicable statute of limitations for FCA whistleblower retaliation actions is three years. 

Understanding the Limitations Period

  • When does the Limitations Period begin?

The limitations period begins from the point of the defendant’s alleged violation. However, the “discovery rule” or “tolling provision” can extend this period.

  • Whichever Occurs: The Discovery Rule or Tolling Provision

The “discovery rule” permits the lawsuit to be filed within a certain period from the discovery of the fraud rather than from when the fraud occurred. “Tolling” refers to legal exceptions that can extend the statute of limitations period.

  • Incentives to File Promptly Remain

Keep in mind that there is still good reason to initiate a False Claims Act lawsuit promptly, even if a potential whistleblower is safely within the statute of limitations period.

A crucial element of a successful qui tam action is that the whistleblower be the original source of information. Thus, if someone reported the same information first, it could undermine a whistleblower’s ability to pursue a lawsuit.

Additionally, the public disclosure bar prohibits whistleblowers from filing qui tam lawsuits if the fraudulent activities have been publicly disclosed, unless the whistleblower is an “original source” of the information.

The Bottom Line

Understanding the False Claims Act and its statute of limitations is crucial for potential whistleblowers. Awareness of these laws can empower individuals to expose fraud while protecting their rights. As these cases can be complex, seeking the counsel of a knowledgeable attorney can greatly aid in successfully navigating the legal landscape.

AtJeff Newman Law, we specialize in representing whistleblowers in the False Claims Act cases, and we have a long track record of recovering multi-million dollar settlements on behalf of our whistleblower clients. 

Get in touch today for a free confidential assessment of whether you might have a potential whistleblower lawsuit that could result in an FCA whistleblower award: