Supreme Court Decision Could Help Reduce 'Forum Shopping' in False Claims Act Fraud Suits
The U.S. Supreme Court could be poised to deal a blow to so-called "forum shopping" and a stronger hand to companies and others defending themselves against would-be whistleblowers accusing them of defrauding the government.
Sara N. Gerber, an attorney with the firm of Blank Rome in Washington, D.C., whose practice involves government litigation and contracts, said a pending Supreme Court decision could end ambiguity in such cases, "provide uniformity ... and give defendants a greater degree of predictability about whether False Claims Act (FCA) cases brought against them" have been brought in a timely fashion.
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Gerber said the U.S. 11th Circuit Court of Appeals "held the relator’s claims were not time barred under Subsection 3731 (b)(2) and that it was the government’s knowledge, not the relator’s as some circuits have held, that triggered the running time of the limitations period,” Gerber said.
Uniformity in how the subsection would be applied to all FCA cases, even those in which the government does not intervene, has the potential to expand the time a whistleblower has to bring claims against a defendant, Gerber said. The section authorizes a lawsuit up to 10 years after fraud as long as the complaint is filed within three years of when the government knew or should have known of the fraud.
“This would seem to encourage realtors to delay filing a suit and is contrary to the purpose of the FCA to combat fraud quickly and efficiently,” Gerber said.
Circuit courts are split on whether the subsection should be applied in cases in which the government does not intervene, which Gerber said is the majority of the time. As a result, currently the question of whether an FCA lawsuit has been filed before the expiration of a statute of limitations can depend on where the case is filed - a factor that encourages "forum shopping," or the act of filing a lawsuit in a court in which the plaintiffs believe their lawsuit may receive a warmer reception than others, even if the alleged fraud occurred in a different jurisdiction.
"Supreme Court Decision Could Help Reduce 'Forum Shopping' in False Claims Act Fraud Suits," by John Sammon was published in Cook County Record on December 12, 2018.