Introduction
Statutes of limitations are periods within which lawsuits can be filed. These periods are usually established in years and can range from one year to a couple of decades. Statutes of limitations encourage people to file lawsuits promptly. This limits the time during which a party can be held liable for their actions and assures that evidence is still available to all parties involved and that witnesses accurately recall what they saw.
Concerning the starting point for a statute of limitations, it is often the moment when the action that gives rise to the lawsuit occurs. For example, for a medical malpractice lawsuit, the applicable statute of limitations would start when the malpractice occurred. Under some laws, the period begins when the affected party becomes aware of the facts giving rise to the lawsuit. Once the period starts, a plaintiff must file their complaint before it ends or runs out. They can no longer file a lawsuit if the period runs out since courts will not have jurisdiction over the action.
Whistleblower Actions and Statutes of Limitations
The following table includes information for various whistleblower statutes and programs, together with the applicable statutes of limitations.
Law or Program | Statutes of Limitations | Alternate Statutes of Limitations |
Federal False Claims Act | 6 years after the date of the violation | 3 years from when the government should have known of the violation, but never more than 10 years after it occurred. |
California False Claims Act | 6 years after the date of the violation | 3 years from when the Attorney General or prosecuting authority should have known of the violation, but never more than 10 years after it occurred. |
New York False Claims Act | 6 years after the date of the violation | 3 years from when the government should have known of the violation, but never more than 10 years after it occurred. |
Securities and Exchange Commission Whistleblower Program | 5 years after the date of the violation | N/A |
Commodity Futures Trading Commission | 5 years after the date of the violation | N/A |
Internal Revenue Service Whistleblower Program | 3 years after a return was filed or is due, whichever is later | 6 years if the tax return substantially understates income. Indefinitely if the taxpayer submitted a false or fraudulent return, willfully evaded taxes, or failed to file a return. |
Anti-Money Laundering Whistleblower Program administered by the Financial Crimes Enforcement Network | 6 years for civil actions and 5 years for criminal penalties | N/A |
Sarbanes-Oxley Anti-retaliation provision | 180 days after the violation or after the employee became aware of the violation | N/A |
Federal False Claims Act and State Analogues
The Federal False Claims Act has a statute of limitations with two periods. One starts when the false claim occurs, and another begins when the government becomes aware, or should have become aware, of the violation. The lengthier period applies, leading to an extended period under certain circumstances. The first period is six years and starts when a violation occurs. The second period is three years and begins when the government becomes aware or should have become aware of the offense. Under this second period, lawsuits cannot be filed more than ten years after the violation. This second 3-year period effectively can extend the period within which a case can be filed, depending on when the government becomes aware of the fraud, up to 10 years.
Many states have adopted similar statutes to the Federal False Claims Act. These allow states to recover fraudulently paid out state monies. Regarding statutes of limitations, many have adopted similar provisions to those included in the federal law. For example, New York and California have False Claims Statutes that mirror the federal law in terms of statutes of limitations. They both have dual period statutes of limitation, with one period applying from the date of the violation and another from the date when the government becomes aware of the fraud.
Conclusion
Many laws and programs exist which allow whistleblowers to come forward with information on fraud and other wrongdoing. Given various policy and practical implications, these have statutes of limitations that limit the time that can go by from the moment the misconduct occurs and the moment when a whistleblower comes forward. If a whistleblower wants to come forward with information on fraud, they should do so in a timely manner to avoid any jurisdictional issues that may arise if they do not. If you believe you may have information on fraud that may be actionable under any of the statutes mentioned above, please get in touch with our firm. In addition to evaluating your matter, we will be able to determine if an action can be filed within any applicable statute of limitations.