Amicus Curiae Brief — Cochise Consultancy, Inc., et al., Petitioners v. United States, ex rel. Billy Joe Hunt

No. 18-315

IN THE

Supreme Court of the United States

___________

COCHISE CONSULTANCY, INC., AND

THE PARSONS CORPORATION,

Petitioners,

v.

UNITED STATES OF AMERICA EX REL. BILLY JOE HUNT,

Respondent.

___________

On Writ of Certiorari to

the United States Court of Appeals

for the Eleventh Circuit

___________

BRIEF OF WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

___________

January 9, 2019

CORBIN K. BARTHOLD

Counsel of Record

CORY L. ANDREWS

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave., NW

Washington, DC 20036

(202) 588-0302

cbarthold@wlf.org

QUESTION PRESENTED

Whether a relator in a False Claims Act qui tam

action may rely on the statute of limitations in 31

U.S.C. § 3731(b)(2) in a suit in which the United

States has declined to intervene and, if so, whether

the relator constitutes an “official of the United

States” for purposes of § 3731(b)(2).

ii

TABLE OF CONTENTS

TABLE OF AUTHORITIES .................................. iii

INTEREST OF AMICUS CURIAE ........................ 1

STATEMENT OF THE CASE ................................ 2

SUMMARY OF ARGUMENT................................. 5

ARGUMENT ........................................................... 8

I.

THE SECOND OF THE FCA’S TWO

LIMITATION PERIODS SERVES A DISTINCT

END FOR A DISTINCT PARTY .......................... 8

II.

THE FCA’S STATUTE OF LIMITATIONS

MUST BE READ IN HARMONY WITH THE

FCA’S SEAL PROVISION................................ 11

A.

The FCA’s Seal Provision Creates

Due-Process Concerns ...................... 12

B.

The

FCA’s

Statute

Of

Limitations Should Not Be Read

To Exacerbate The Due-Process

Concerns Created By The FCA’s

Seal Provision ................................... 14

CONCLUSION ....................................................... 18

iii

TABLE OF AUTHORITIES

Page(s)

Cases:

Am. Civil Liberties Union v. Holder,

673 F.3d 245 (4th Cir. 2011) .............................. 13

Boumediene v. Bush,

553 U.S. 723 (2008) ............................................ 18

CTS Corp. v. Waldburger,

573 U.S. 1 (2014) ............................................ 4, 16

Graham Cnty. Soil & Water Conserv.

Dist. v. United States ex rel. Wilson,

559 U.S. 280 (2010) .............................................. 1

In re Pharm. Indus. Average Wholesale

Price Litig.,

498 F. Supp. 2d 389 (D. Mass. 2007) ..... 13, 16, 17

Univ. Health Servs., Inc. v. United

States ex rel. Escobar,

136 S. Ct. 1989 (2016) .......................................... 1

United States v. The Baylor Univ. Med. Ctr.,

469 F.3d 263 (2d Cir. 2006) ......................... 12, 13

United States ex rel. Costa v. Baker &

Taylor, Inc.,

955 F. Supp. 1188 (N.D. Cal. 1997) ............. 15, 16

United States v. Griswold,

24 F. 361 (D. Or. 1885) ....................................... 11

United States ex rel. Lee v. Horizon West, Inc.,

2006 WL 305966 (N.D. Cal. Feb. 8, 2006) ......... 13

iv

Page(s)

United States ex rel. Sanders v. N. Am.

Bus Indus., Inc.,

546 F.3d 288 (4th Cir. 2008) ...................... 5, 6, 17

United States ex rel. Sarmont v. Target Corp.,

2003 WL 22389119 (N.D. Ill. Oct. 20, 2003) ..... 13

United States ex rel. Sikkenga v. Regence

Bluecross Blueshield of Utah,

472 F.3d 702 (10th Cir. 2006) ............................ 10

United States ex rel. Tracy v. Emigration

Improvement Dist.,

2018 WL 3111687 (D. Utah June 22, 2018) ........ 4

Statutes:

False Claims Act, 31 U.S.C. §§ 3729-3731

31 U.S.C. § 3730 ................................................ 3, 5

31 U.S.C. § 3730(a)............................................ 3, 9

31 U.S.C. § 3730(b)................................................ 5

31 U.S.C. § 3730(b)(1) ........................................... 3

31 U.S.C. § 3730(b)(2) ........................................... 3

31 U.S.C. § 3730(b)(3) ......................................... 13

31 U.S.C. § 3731(b)...................................... 4, 8, 17

31 U.S.C. § 3731(b)(1) ....................................... 4, 8

31 U.S.C. § 3731(b)(2) ..................................passim

31 U.S.C. § 3731(c) .............................................. 14

31 U.S.C. § 3733 .............................................. 9, 14

31 U.S.C. § 3733(a)(1) ......................................... 16

v

Page(s)

Miscellaneous:

Department of Justice, Fraud Section,

https://perma.cc/3BXV-GVXD

(Oct. 20, 2014) ...................................................... 9

Department of Justice, Two U.S. Contractor

Employees Sentenced for Kickback

Conspiracy and Tax Crimes Related to

Iraq Reconstruction Efforts, https://perma.cc/

KS8Y-YNJZ (Oct. 10, 2012) ................................. 3

Joel D. Hesch, It Takes Time: The Need to

Extend the Seal Period for Qui Tam

Complaints Filed Under the False Claims

Act, 38 Seattle U. L. Rev. 901

(Spring 2015) .................................................. 9, 10

Laura Hough, Finding Equilibrium:

Exploring Due Process Violations in the

Whistleblower Provisions of the Fraud

Enforcement and Recovery Act of 2009,

19 Wm. & Mary Bill Rts. J. 1061

(May 2011) .......................................................... 14

Michael Lockman, In Defense of a Strict

Pleading Standard for False Claims Act

Whistleblowers, 82 U. Chi. L. Rev. 1559

(Summer 2015) ................................................... 10

S.Rep. No. 99-345 (1986)....................................... 13

1

INTEREST OF AMICUS CURIAE*

Washington Legal Foundation is a nonprofit,

public-interest law firm and policy center with

supporters in all 50 states. WLF promotes free

enterprise, individual rights, limited government,

and the rule of law. It has appeared as amicus curiae

before this Court in important False Claims Act

cases. See, e.g., Univ. Health Servs., Inc. v. United

States ex rel. Escobar, 136 S. Ct. 1989 (2016);

Graham Cnty. Soil & Water Conserv. Dist. v. United

States ex rel. Wilson, 559 U.S. 280 (2010).

Government fraud investigations are usually

long—sometimes very long. Recognizing this,

Congress, in 1986, amended the False Claims Act’s

statute of limitations to ensure that the government

has ample time to conduct an investigation and

decide whether to act. The old statute of

limitations—still in place—supplies a flat six-year

period within which to sue. The 1986 amendment

adds that, within a ten-year outer boundary, the

government may sue within three years of when it

learns or should learn of a fraud against it.

Although she may sue as a relator under the

False Claims Act, a private party does not—or, at

least, should not—need an unusually lengthy

limitation period. She hardly need investigate her

claims, the details of which she typically knows

firsthand; nor need she run them through a

*

No party’s counsel authored any part of this brief. No

person or entity, other than WLF and its counsel, helped pay

for the brief’s preparation or submission. All parties have

consented to the brief’s being filed.

2

government bureaucracy. She can cut to the quick

and sue. It is clear therefore that Congress did not

have her in mind when it added a ten-year repose

provision.

When a relator sues under the False Claims Act,

her complaint remains under seal while the

government considers whether to intervene in the

lawsuit. Although it is supposed to spend no more

than a few months deciding whether to intervene,

the government often takes several years. (To

repeat: government investigations are usually long.)

If a relator may wait up to ten years to sue, and the

government may then spend several years

investigating, before a complaint is served on the

defendant, serious due-process concerns arise. It

should not be lightly assumed that Congress

intended to let a dozen or more years pass before a

fraud defendant is first instructed in the accusations

against it.

WLF urges the Court to restrict relators to the

False Claims Act’s original, and abundant, six-year

limitation period.

STATEMENT OF THE CASE

After invading Iraq in 2003, the United States

hired The Parsons Corporation to collect munitions

Iraqi forces had abandoned as they retreated or

surrendered. Pet. App. 3a. Parsons, in turn, needed

to hire someone to secure the cleanup sites. Cochise

Consultancy, Inc., allegedly bribed individuals at

Parsons and in the Army Corps of Engineers to

ensure that it won the security sub-contract. Id. at

3

3a-5a. Cochise supplied the pertinent security

service from February to September 2006. Id. at 5a.

Billy Joe Hunt worked on Parsons’s cleanup

project. Id. at 3a. On November 30, 2010, Hunt told

the FBI about Cochise’s alleged bribes. Id. at 5a. He

then went to prison for his part in a separate

kickback and tax-fraud scheme. Id.; Department of

Justice, Two U.S. Contractor Employees Sentenced

for Kickback Conspiracy and Tax Crimes Related to

Iraq Reconstruction Efforts, https://perma.cc/KS8YYNJZ (Oct. 10, 2012). After leaving prison, he sued

Parsons and Cochise under the False Claims Act.

The False Claims Act sets forth, at 31 U.S.C.

§ 3730, two distinct rights of action. First, the

United States may sue on its own behalf. Id. at

§ 3730(a). Second, a private party may bring a qui

tam action—that is, an action in which, proceeding

as a “relator,” the party acts in the government’s

name. Id. at § 3730(b)(1). A relator files her action

under seal, so that the government can investigate

her claims and decide whether to intervene in (and,

in effect, take over) the lawsuit. Id. at § 3730(b)(2).

In Hunt’s case the government declined to intervene.

Hunt filed his complaint on November 27, 2013,

more than six years after the alleged fraud occurred,

and more than three years after Hunt discovered it.

This timing matters, because the False Claims Act’s

statute of limitations, 31 U.S.C. § 3731(b), provides:

4

A civil action under section 3730 may not be

brought—

(1) more than 6 years after the date on which

the violation of section 3729 [i.e., the fraud]

is committed, or

(2) more than 3 years after the date when

facts material to the right of action are

known or reasonably should have been

known by the official of the United States

charged with responsibility to act in the

circumstances, but in no event more than 10

years after the date on which the violation is

committed,

whichever occurs last.

In short, § 3731(b) contains (1) a six-year limitation

period and (2) a three-year limitation period cabined

by a ten-year repose period. See generally CTS Corp.

v. Waldburger, 573 U.S. 1, 7-10 (2014) (discussing

the distinction between a limitation period and a

repose period). But cf. United States ex rel. Tracy v.

Emigration Improvement Dist., 2018 WL 3111687 *3

n.5 (D. Utah June 22, 2018) (concluding that

§ 3731(b)(1)’s six-year period is, like § 3731(b)(2)’s

ten-year period, a period of repose).

Under § 3731(b)(1), Hunt’s action is barred:

Hunt filed more than six years “after the date” of the

alleged “violation.” Under § 3731(b)(2), however,

things are more complicated. No one disputes that

Hunt sued within ten years of Parsons’s and

Cochise’s alleged fraud. But Hunt must also

establish both (1) that he may invoke § 3731(b)(2) in

5

the first place and (2) that the pertinent “official of

the United States” learned of the alleged violation

less than three years before Hunt sued.

Granting motions to dismiss, the district court

concluded that Hunt cannot overcome these hurdles.

In the trial court’s view, either only the United

States may invoke § 3731(b)(2), or Hunt is himself

the relevant “official of the United States” whose

knowledge of the alleged violation triggered the

three-year limitation clock. Pet. App. 37a-39a & n.6.

The Eleventh Circuit reversed. Allowing Hunt to

invoke § 3731(b)(2), it concluded that “the phrase

‘civil action under section 3730’ . . . includes

§ 3730(b) qui tam actions when the government

declines to intervene.” Pet. App. 14a. And it declared

that the three-year limitation period in § 3731(b)(2)

can be triggered only by a true “official of the United

States”—not by a relator acting on the United

States’ behalf. Id. at 29a-31a.

This Court agreed to decide both “whether a

relator . . . may rely on . . . § 3731(b)(2)” and

“whether the relator constitutes an ‘official of the

United States’ for purposes of [that] section.” (Pet.

Br. i.) We address only the first of these two issues.

SUMMARY OF ARGUMENT

There are a number of signs that only the

government may invoke § 3731(b)(2). For one thing,

§ 3731(b)(2) “refers only to the United States—and

not to relators.” United States ex rel. Sanders v. N.

Am. Bus Indus., Inc., 546 F.3d 288, 293 (4th Cir.

2008). For another thing, letting a relator invoke

6

§ 3731(b)(2) would “produce the bizarre scenario in

which the limitations period in a relator’s action

depends on the knowledge of a nonparty to the

action.” Id. And Congress appears to have lifted the

language in § 3731(b)(2) directly from a tolling

statute “that applies only to actions brought by the

government.” Id. at 294. These points, and more, are

ably presented by Parsons and Cochise.

We write to expand on one reason, and to add

another, why § 3731(b)(2) is unavailable to relators:

1. The point of allowing qui tam actions is to

incentivize private parties promptly to raise claims

of fraud against the government. Once she learns of

fraudulent conduct, a private party can, more or less,

proceed straight to filing a lawsuit under the False

Claims Act. The government cannot act with such

dispatch. Before suing, it must conduct a

multi-agency investigation, compile the work of

numerous officials, and run the proposed lawsuit

through a formal approval process. The ten-year

repose period in § 3731(b)(2) ensures that the

government can, in most cases, complete its

pre-lawsuit peregrinations and still file a timely

complaint. That repose period serves no comparable

purpose for a private party.

2. A government investigation is a common

feature of a private qui tam action and a government

False Claims Act action. There is, however, a key

distinction: when the government sues, the

investigation precedes the lawsuit; whereas when a

relator sues, the investigation usually follows the

lawsuit. When the government sues at the edge of a

ten-year period, the time between the events at issue

7

and the commencement of the lawsuit is—about ten

years. But if a relator sues at the edge of such a

period, the lawsuit is likely still years away from

commencing. The lawsuit will remain under seal,

and the defendant ignorant of the claims against it,

while the government investigates the relator’s

claims and decides whether to intervene. So

although the repose period in a government lawsuit

is never more than the ten years set forth in

§ 3731(b)(2), that period could in a private lawsuit

stretch—in defiance of the statute’s text (“in no event

more than 10 years”)—without limit. It could stretch

for ten years plus as long as the government cares to

investigate—in other words, a mighty long time.

Not only does the defendant have no right to

receive notice of the allegations against it while the

lawsuit is under seal; it has no right to conduct

discovery parallel to the government’s investigation.

When the lawsuit is unsealed many years after the

events in question, the government is armed with all

the evidence it needs, while the defendant must

begin compiling its (incredibly stale) evidence from

scratch.

Allowing a private party to invoke § 3731(b)(2)

creates a lopsided litigation protocol, in which every

advantage rests with the relator and the

government. If today the Court opens § 3731(b)(2) to

private parties, tomorrow it will have to decide

whether the Due Process Clause has anything to

say—as it almost surely does—about letting the

government

complete

unilateral

discovery

before serving a complaint full of moldy allegations.

Rather than invite such an issue, the Court should

simply adopt the more sensible reading of

8

§ 3731(b)(2), under which only the government may

(at times) take up to ten years to sue.

ARGUMENT

I.

THE SECOND OF THE FCA’S TWO LIMITATION

PERIODS SERVES A DISTINCT END FOR A

DISTINCT PARTY.

The debate over whether a private party may

invoke § 3731(b)(2) centers on statutory text. This, of

course, is just as it should be. And the text is plain.

The three-year limitation period in § 3731(b)(2)

begins to run when “facts material to the right of

action” become known, or reasonably knowable, to

“the official of the United States charged with

responsibility to act in the circumstances” (emphasis

added). Section 3731(b)(2) points directly at the

party that may invoke § 3731(b)(2)—the United

States.

And as Parsons and Cochise thoroughly explain,

the False Claims Act’s structure and purpose

confirm what § 3731(b)’s text makes clear: a private

party has six years, not up to ten, to bring a qui tam

action.

But after the many strong interpretive grounds

for accepting Parsons’s and Cochise’s position have

been reviewed, it is still worth asking a simple

question. The False Claims Act long contained one

limitation period—the six-year period that today

resides in § 3731(b)(1). Then, in 1986, Congress

added the alternative period that resides in

§ 3731(b)(2). The question is this: Why would

9

Congress place two distinct limitation periods in the

False Claims Act?

The answer is as obvious as it is compelling: the

government moves slowly.

The False Claims Act says that “the Attorney

General diligently shall investigate” claims of fraud

against the government. 31 U.S.C. § 3730(a). It is

not in the nature of a “diligent” government

investigation to proceed quickly, and investigations

under the False Claims Act are no exception. In

investigating allegations of fraud, the Department of

Justice’s Fraud Section must “work closely with the

Department of Justice’s Criminal Division, US

[Attorneys Offices], the Federal Bureau of

Investigation, and the Offices of the Inspectors

General of [government] agencies.” Department of

Justice, Fraud Section, https://perma.cc/3BXVGVXD (Oct. 20, 2014). To assist the Fraud Section,

the pertinent government agencies must, in turn,

“enlist a myriad of [their] own program officials,”

“quality assurance representatives,” and “other

knowledgeable

witnesses”

to

evaluate

the

allegations. Joel D. Hesch, It Takes Time: The Need

to Extend the Seal Period for Qui Tam Complaints

Filed Under the False Claims Act, 38 Seattle U. L.

Rev. 901, 919 (Spring 2015). The government will

likely also question the alleged fraudster; the False

Claims Act empowers the government to conduct

such one-sided discovery without filing a lawsuit. 31

U.S.C. § 3733. If all this investigating reveals that

fraud likely occurred, the government will conduct a

final review process before the Fraud Section’s

director formally approves the filing of a lawsuit. See

Hesch, supra, at 919.

10

All told, the government is likely to need

“months or years of investigations, interviews,

subpoenas, and discussions with defense counsel”

before it is ready to file a complaint. Michael

Lockman, In Defense of a Strict Pleading Standard

for False Claims Act Whistleblowers, 82 U. Chi. L.

Rev. 1559, 1565 (Summer 2015). It can take

“between three and six years for the government to

properly investigate and bring a complex fraud

case.” Hesch, supra, at 903 (emphasis added).

While considering what came to be the 1986

amendments to the False Claims Act, the House

Judiciary Committee heard testimony from the head

of the Department of Justice’s Civil Division. He

informed the committee that a six-year limitation

period is sometimes too short to accommodate the

slow-moving gears of government:

I can say[,] Mr. Chairman, that I frequently

see requests to sue come in right on the

brink of the [six-year] statute of limitations,

and sometimes beyond, . . . because it has

just taken that long to discover the fraud

and get a case ready to pursue. [A longer

limitation period] would give us a little more

flexibility in bringing some cases that

otherwise would be barred.

United States ex rel. Sikkenga v. Regence Bluecross

Blueshield of Utah, 472 F.3d 702, 724 n.31 (10th Cir.

2006) (emphasis added) (quoting False Claims Act

Amendments: Hearings Before the H. Subcomm. On

Admin. Law and Governmental Relations of the H.

Comm. on the Judiciary, 99th Cong. 118, 159

11

(1986)). Congress obliged the government and

created the three-year discovery rule and ten-year

repose in § 3731(b)(2).

A relator’s situation is something else altogether.

A relator need not wait while his accusations

percolate through a bureaucracy. Nor need he

conduct a lengthy investigation; usually, in fact, he

is a firsthand witness of the alleged fraud. To begin

his lawsuit, he need do little more than choose an

attorney, tell her the details of the case, and sign the

contingency-fee agreement. His lawyer can trot into

the courthouse before the federal prosecutor has

laced her shoes.

A qui tam action “compare[s] with the ordinary

methods as the enterprising privateer does to the

slow-going public vessel.” United States v. Griswold,

24 F. 361, 366 (D. Or. 1885). It makes no sense,

therefore, to assume that § 3731(b)(2), with its tenyear repose period, is available equally to the

government and to private parties. To the contrary,

the only safe assumption is that Congress added

§ 3731(b)(2) to accommodate plodding government

investigations. Congress granted the government

extra time to shoulder its unique investigative

burden.

II.

THE FCA’S STATUTE OF LIMITATIONS MUST

BE READ IN HARMONY WITH THE FCA’S

SEAL PROVISION.

The False Claims Act authorizes the government

to investigate the allegations in a qui tam action

after the action begins, but before the action is

disclosed. The government is empowered, in effect, to

12

spend months or even years conducting discovery

before the defendant may even read the complaint.

This constitutionally suspect arrangement becomes

constitutionally intolerable if a relator may, by

invoking § 3731(b)(2), take up to ten years simply to

file the lawsuit that starts the government’s lengthy,

intrusive, one-sided, secret investigation. At the very

least, allowing a relator up to ten years to file suit

creates constitutional problems that are best

avoided.

A.

The FCA’s Seal Provision Creates

Due-Process Concerns.

Section 3731(b)(2) was just one of several

provisions Congress added to the False Claims Act in

1986. It also added (among other things) a rule

requiring a relator to file her complaint under seal.

The rule states that “the complaint shall be filed in

camera”; that it “shall remain under seal for at least

60 days”; and that it “shall not be served on the

defendant until the court so orders.” 31 U.S.C.

§ 3730(b)(2).

The seal rule’s primary purpose is to keep the

defendant in the dark while the government

investigates the relator’s claim and decides whether

to intervene in the suit. “By design, the seal

provision . . . deprives the defendant in an FCA suit

of the notice usually given by a complaint.” United

States v. The Baylor Univ. Med. Ctr., 469 F.3d 263,

270 (2d Cir. 2006), superseded by statute on other

grounds, 31 U.S.C. § 3731(c).

Congress understood that not every investigation

can be completed within 60 days, and so it

13

authorized the trial court, on the government’s

motion and “for good cause shown,” to extend the

seal. Id. § 3730(b)(3). Congress placed no limit on

either the number of extensions the government may

obtain or the time the complaint may remain under

seal. But in “the vast majority of cases,” the Senate

Judiciary Committee opined, “60 days is an adequate

amount of time to allow Government coordination,

review, and [a] decision” on whether to intervene.

S.Rep. No. 99-345 (1986). “Good cause” for extending

the seal, the committee continued, should “not be

established merely upon a showing that the

Government [i]s overburdened.” Id. The committee

expected the trial court to “weigh carefully” each

government request to extend a seal. Id.

In spite of this guidance, the government often

asks for many extensions, and the trial court often

grants these ex parte requests with little scrutiny. In

consequence False Claims Act lawsuits often remain

under seal for years on end. See, e.g., Baylor, 469

F.3d at 266 (sixteen ex parte extension requests

granted, resulting in an eight-year seal); In re

Pharm. Indus. Average Wholesale Price Litig., 498 F.

Supp. 2d 389, 392 (D. Mass. 2007) (“numerous”

extensions; nine-year seal); United States ex rel.

Sarmont v. Target Corp., 2003 WL 22389119 *1-*2

(N.D. Ill. Oct. 20, 2003) (fifteen extensions; sevenyear seal); United States ex rel. Lee v. Horizon West,

Inc., 2006 WL 305966 *1 (N.D. Cal. Feb. 8, 2006)

(five-year seal); see also Am. Civil Liberties Union v.

Holder, 673 F.3d 245, 263 (4th Cir. 2011) (Gregory,

J., dissenting) (noting that the 60-day limit “is

largely illusory” and that many FCA cases “are

under seal for at least two years”).

14

While the seal is in place, the government may

conduct depositions and serve interrogatories and

requests for documents. 31 U.S.C. § 3733. And if the

government decides, at long last, to intervene, its

complaint will relate back to when the relator filed

her complaint. 31 U.S.C. § 3731(c). So the

government—assuming it can convince the trial

court to go along (and it often can)—may continue its

investigation indefinitely, free of pressure from any

statute of limitations. The defendant has no

reciprocal discovery rights. Nor is it entitled to know

the nature of the allegations driving the

government’s investigation.

“There is a very real danger” that, under this

regime of closed judicial proceedings, intrusive but

unexplained government inquiries, and years-long

delays, “defendants’ due process rights have [been]

and will be violated.” Laura Hough, Finding

Equilibrium: Exploring Due Process Violations in the

Whistleblower Provisions of the Fraud Enforcement

and Recovery Act of 2009, 19 Wm. & Mary Bill Rts.

J. 1061, 1089 (May 2011).

B.

The FCA’s Statute Of Limitations

Should Not Be Read To Exacerbate

The Due-Process Concerns Created

By The FCA’s Seal Provision.

So the False Claims Act’s seal provision is on

shaky constitutional ground. The question arises,

then, whether any particular reading of the Act’s

statute of limitations aggravates the constitutional

problem.

15

When the United States brings a False Claims

Act suit on its own behalf, the government’s

investigation of the alleged fraud precedes the

action. Once the lawsuit begins, it begins in earnest.

Although the ten-year repose period in § 3731(b)(2)

is long, that period is—if the government is the

plaintiff—the maximum delay that can pass before

the defendant learns of the lawsuit and can begin

building a defense.

If a private party may use § 3731(b)(2)’s ten-year

repose period, the picture is very different. When a

relator sues, the lawsuit typically starts the

government investigation. If a relator may rely on

§ 3731(b)(2), a defendant can (1) discover it is the

target of a government investigation of events that

occurred more than a decade ago yet (2) still be

several years away from learning the allegations

against it. It is quite conceivable that some

defendants will not be handed a complaint until

15 or more years after the events in dispute.

True, recognizing that “defendants have a

legitimate interest in building their defense while

the evidence is still fresh,” some district judges will

eventually lift a seal against the government’s

wishes. United States ex rel. Costa v. Baker &

Taylor, Inc., 955 F. Supp. 1188, 1189 (N.D. Cal.

1997) (lifting an eighteen-month FCA seal sua

sponte). But no one is present to press the

defendant’s interests, and experience shows that,

lacking an adversarial presentation of the issues,

many judges will simply defer to the government.

Left to its own devices, the government will often

make a mockery of Congress’s insistence that most

investigations wrap up within 60 days or so.

16

The end of a repose period is normally a

definitive cutoff, after which a defendant may “put

past events behind him.” Waldburger, 573 U.S. at 9.

Unlike a limitation period, which can be tolled, a

repose period is “an absolute bar on a defendant’s

temporal liability.” Id. at 8. Yet if a relator may

invoke § 3731(b)(2), that section’s repose period is

not definitive and not absolute. Instead of setting

past events aside at the ten-year mark, a potential

defendant would have to spend an indeterminate

number of years more being wary of an ambush

complaint. That is not “repose.”

As time passes, moreover, “evidence spoils,

memories fade, and prejudice may result.” Pharm.

Indus., 498 F. Supp. 2d at 399 n.6. And the prejudice

is compounded by the parties’ asymmetrical access to

evidence. The government may complete a full

investigation—and share what it has learned with

the relator, see 31 U.S.C. § 3733(a)(1)—before the

defendant even knows what the allegations are.

Sometimes, it seems, the government will even build

its whole case and only then, when it is good and

ready, let the defendant in on the lawsuit. See Costa,

955 F. Supp. at 1190 (“The government appears to be

fully engaged in its discovery, without giving the

defendants the opportunity even to answer the

complaint.”). When the years have passed and the

seal is lifted, the government’s key witnesses will

have been interviewed. At least some of the

defendant’s key witnesses, meanwhile, will be

retired, remote, reclusive, senile, or deceased. The

longer the delay, the fewer witnesses available.

17

At some point the “egregious delay” created by a

qui tam seal, along with the one-sided discovery that

occurs while the seal is in place, becomes

“sufficiently prejudicial” to violate the defendant’s

right to due process. Pharm. Indus., 498 F. Supp. 2d

at 399. When does such prejudice graduate from

merely unfortunate to flatly unconstitutional?

Congress’s answer, at least, is right in the statute.

Section 3731(b) resolves the equation alleged false

claim + x years + sealed lawsuit + lengthy one-sided

government investigation + service of complaint =

constitutional. According to § 3731(b), x may equal

six but not ten. Ten years is allowed only when

x years

and

lengthy

one-sided

government

investigation are combined into one overlapping

period.

One way or the other, a government

investigation is going to introduce delay into a False

Claims Act dispute. The most sensible reading of

§ 3731(b)(2) is as a license for the government to

introduce that delay before a False Claims Act suit

begins. Under such a reading, § 3731(b)(2) is

unavailable to a private party.

Tardy relators regularly test the outer bounds of

the False Claims Act’s statute of limitations (see,

e.g., Sanders, 546 F.3d at 296 [collecting examples]),

and the government regularly tests the outer bounds

of its investigative authority (see the examples of

lengthy seals, above). So if the Court eschews the

narrower, government-only reading of § 3731(b)(2), it

will one day have to decide whether unsealing a

complaint containing 12-, 15-, or 18-year-old

allegations violates due process. The Court should

instead “construe the statute to avoid constitutional

18

problems.” Boumediene v. Bush, 553 U.S. 723, 787

(2008). Even if the broader and narrower readings of

§ 3731(b)(2) stand in equipoise—they don’t—the

narrower reading should govern.

CONCLUSION

The judgment should be reversed.

Respectfully submitted,

January 9, 2019

CORBIN K. BARTHOLD

Counsel of Record

CORY L. ANDREWS

WASHINGTON LEGAL

FOUNDATION

2009 Mass. Ave., NW

Washington, DC 20036

(202) 588-0302

cbarthold@wlf.org