business discounts on spectrum licenses by using shell companies and secret agreements. The district court found that the bar applied based on a prior FCC administrative proceeding involving the same allegations and reached two notable holdings. First, the bar is not tied to the actual imposition of penalties and instead only requires that the allegations at issue be the “ subject of ” an administrative civil monetary penalty proceeding, “leaving open the logical possibility” that a government investigation occur that uncovers no wrongdoing that would support a penalty (as happened here). Second, the bar is not limited to particular parties , as it applies on the basis of “allegations or transactions.” On this point, the relator argued that the government action bar should not
since the government was on notice of the allegations in its complaint at least as of July 26, 2011, the date of a surreptitious recording referenced in the government’s complaint. The district court rejected this argument, finding that while the recording provided some pertinent information, the complaint contained extensive allegations that went well beyond the information contained in the recording and were based on the government’s continued investigation and the defendants’ 2013 responses to government subpoenas. 160 In United States v. Aniemeka , the government filed a complaint on May 26, 2017, alleging that the defendants accepted kickbacks between February 24, 2009, and August 16, 2010. The defendants moved to dismiss on statute of limitations grounds, attaching an affidavit that explained that while one of the defendants signed a tolling agreement that would render the complaint timely, she did so unwillingly and not understanding the full consequences of the agreement. Explaining that a statute of limitations affirmative defense may be granted on a motion to dismiss only when the allegations of the complaint itself set forth everything necessary to satisfy the affirmative defense, the district court took notice of the tolling agreement – which the government attached to its opposition to dismissal – for the limited purpose of determining that the allegations in the complaint did not set forth everything necessary for the defense and denied the motion to dismiss. The defendants filed motions for reconsideration and for leave to file a motion for judgment on the pleadings, arguing the relevant dates for the statute of limitations defense were contained in the complaint and that the district court was wrong to consider the existence of the tolling evidence when deciding otherwise. The district court denied both motions, citing various cases that also relied on the existence of tolling agreements for the limited purpose of determining that the allegations of the complaint itself did not set forth everything necessary to satisfy the defendants’ affirmative statute of limitations defense. 161 Similarly, the district court in U.S. ex rel. Sperandeo v. Neurological Institute and Specialty Ctrs., Inc. , rejected the defendants’ motion to dismiss argument that any allegations of conduct prior to six years before the relator’s complaint were barred by the statute of limitations. The relator countered that he alleged an ongoing fraud, and although some of the alleged violations occurred more than six years before the filing of the complaint, none occurred more than 10 years prior to the complaint. Without discussing the relator’s ongoing fraud argument, the district court decided that the allegations in the complaint did not set forth all of the elements necessary to satisfy the affirmative defense of a statute of limitations violation and thus the defense was not an independent ground on which the complaint could be dismissed. 162 In contrast, the district court determined that the FCA’s statute of limitations barred the relator’s claims in U.S. ex rel. Allen v. Good Samaritan Hosp. of Cincinnati . The relator accused a hospital of submitting false claims related to medically unnecessary surgeries by a neurosurgeon, with the last such claim submitted in August 2010. The district court held that the suit should have been brought no later than August 2016 – six years after the last fraudulent act alleged in the complaint (August 8, 2010), or three years after the U.S. Attorney investigated the healthcare fraud scheme and indicted the neurosurgeon
The government action bar originates from the FCA’s statutory text, which states that “[i]n no event may a person bring [a qui tam action] which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil monetary penalty proceeding in which the Government is already a party.”
apply to certain defendants who were not parties to the FCC proceeding. The district court disagreed, reasoning that the relator’s interpretation of the bar was inconsistent with the statute’s text and the “broader purpose” of the bar was to preclude qui tam actions that take “support” from the government’s “host case” “without giving any proper or useful return to the government.” STATUTE OF LIMITATIONS The statute of limitations can significantly limit or require dismissal of an FCA claim. Under 31 U.S.C. § 3731(b), an action asserting FCA claims must be brought within the later of: (1) six years after the FCA violation occurred; or (2) three years after the United States official charged with responsibility to act knew or should have known the material facts, up to 10 years after the violation. In the 2019 decision Cochise Consultancy v. U.S. ex rel. Hunt , the Supreme Court held that both limitation periods apply to a declined qui tam action. 159 That is, a relator may proceed with a declined qui tam action filed more than six years after the FCA violation occurs if it is filed within three years of when the relevant government official – and not the relator – should have known the material facts. In United States v. Reliance Medical Systems, LLC , the district court rejected the defendants’ argument that certain of the government’s claims were time-barred by the six year statute of limitations in § 3731(b)(1). The government filed a complaint on September 8, 2014. The defendants argued that claims based on acts prior to September 8, 2008 were time-barred, reasoning that the three year statute of limitations in § 3731(b)(2) did not apply
160 2021 WL 5234401 (C.D. Cal. Nov. 10, 2021). 161 2021 WL 949344 (N.D. Ill. Mar. 12, 2021). 162 2021 WL 1177071 (N.D. Ind. Mar. 29, 2021).
159 139 S. Ct. 1507 (2019).
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