High Court Appears to Back Generous Time Limit for Whistleblower

A view of the Supreme Court in Washington on March 15, 2019. (AP Photo/Susan Walsh)

WASHINGTON (CN) – A government contractor said to have lined its pockets in part by tricking a legally blind official appeared unlikely Tuesday to have the Supreme Court nix claims against it under the False Claims Act.

At issue are competing time limits that the law gives for whistleblowers to file suit. One sets a six-year window to sue after the alleged violation, but another provision allows a suit to be filed within three years after the U.S. government first learns of the alleged fraud. This provision caps the claims so that they may not be filed more than 10 years after the alleged fraud occurred.

“This is a terribly drafted statute,” Justice Samuel Alito said of the law this morning. “It may serve wonderful purposes, but if I were to grade whoever drafted it – anyway, I’ll pass that.”

Billy Joe Hunt brought suit the suit here in 2013 over a contract meant to clean up munitions left behind by retreating forces during the war in Iraq.

Parsons Corp. was awarded the contract, and tapped Cochise Consultancy for security work.

Noting that the security job was initially awarded to a different, cheaper company, Hunt claims Cochise bribed someone within the government to steer the security services portion of the contract. As part of the scheme, Hunt says that person put a forged document in front of a legally blind official without telling him that it would rescind the award the government had given to the other company so it could be reawarded to Cochise.

Hunt did not fare well with the suit originally: After the government declined to intervene, the District Court tossed out the suit as untimely.

His luck changed, however, when the 11th Circuit staked out a position in a tangled circuit split on the question of whether the federal government must intervene in the suit in order for a relator to take advantage of the second, potentially more generous statute of limitations.

Arguing for the contractors this morning, Gibson Dunn attorney Theodore Boutrous Jr. said said it “makes no sense” to bestow the benefit of a longer statute of limitations in cases where the government has opted out.

“Congress would never have thought that in putting an equitable tolling principle into the statute, that it would allow the plaintiff to just lay back and wait for years and years and years to file the lawsuit,” Boutrous said. “It’s contrary to the very essence of what equitable tolling is.”

But the justices struggled to see where in the law Boutrous was finding support for his claim that the longer statute of limitations only opens up when the government intervenes in a case.

“That may be a bad policy choice, but you can imagine reasons Congress would have made that choice,” Justice Elena Kagan said Tuesday.

Hunt’s attorney, Earl Mayfield with Juris Day, said the text of the law says nothing about the government having to intervene to unlock the longer statute of limitations. Mayfield said the court should not read it to say so based on assumptions of what lawmakers must have wanted to do.

“Statutes are not ephemeral, they are not shape shifters,” Mayfield said. “We do not give them different meanings because we would prefer a different outcome.”

He also said the contractor’s suggestion that potential whistleblowers would sit on fraud claims for years is a fantasy because whistleblowers who did so would risk someone beating them to the courthouse and taking their potential cut of the award.

“It would be like taking a lottery ticket and dropping it in the toilet,” Mayfield said. “No one does that.”

Alito was the most active questioner of both Mayfield and Assistant to the Solicitor General Matthew Guarnieri, who argued for the U.S. government in support of Hunt’s position. Alito pressed Mayfield in particular on why Congress would set different rules for cases in which the government knew about a fraud and cases in which it didn’t.

“I still don’t quite understand your reason for saying Congress would have treated those two cases differently,” Alito said.

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