The FCA prohibits any person from making false or fraudulent claims for payment to the United States. 31 U.S.C. § 3729(a). Persons who submit such claims are subject to civil penalties of up to $11,000 per claim plus treble damages. Id. (Civil penalties under 31 U.S.C. § 3729(a) were increased from $5,000 to $10,000 per claim to $5,500 to $11,000 per claim to account for inflation in 1999. See 64 Fed. Reg. 47,099, 47,104 (Aug. 30, 1999).) Section 3730 of the FCA sets forth three separate enforcement mechanisms. First, the Attorney General may bring a civil action to remedy violations of the FCA. 31 U.S.C. § 3730(a). Second, private individuals, called "relators," may file a qui tam action in the government's name for damages under the FCA. 31 U.S.C. § 3730(b)(1). Relators must give the government notice of a qui tam claim and the government may then intervene in the lawsuit. 31 U.S.C. § 3730(b)(2). Relators may receive up to 30 percent of the proceeds of the action and may recover attorney's fees and costs. 31 U.S.C. §§ 3730(d)(1), (2). Finally, the FCA permits a private individual to bring a separate claim for retaliation upon being "discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer" for initiating or assisting in an FCA investigation or proceeding. 31 U.S.C. § 3730(h). Remedies for retaliation include reinstatement, twice the amount of back pay plus interest, special damages, litigation costs, and attorney's fees. Id.

Although all three enforcement mechanisms arise from section 3730 of the FCA, the past several years have seen considerable disagreement over the time period within which retaliation claims must be brought under the FCA. The FCA's statute of limitations, as amended in 1986, provides in pertinent part that "a civil action under section 3730 may not be brought more than 6 years after the date on which the violation of section 3729 is committed." 31 U.S.C. § 3731(b)(1) (emphasis added). Because retaliation claims derive from section 3730(h) of the FCA, some courts have found such claims constitute "a civil action under section 3730" and have applied the FCA's six-year limitations period to retaliation claims. See Neal v. Honeywell Inc., 33 F.3d 860, 865-866 (7th Cir. 1994). Other courts, however, have held the FCA's six-year limitations period inapplicable to retaliation claims brought under section 3730(h) because such claims are independent of any section 3729 violation, the triggering event for the FCA's six-year limitations period. See United States ex rel. Lujan v. Hughes Aircraft Co., 162 F.3d 1027, 1034-35 (9th Cir. 1998). In Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 125 S. Ct. 2444 (2005), the Supreme Court resolved the conflict among the circuits regarding the statute of limitations applicable to retaliation claims brought under the FCA, and held that the FCA's six-year limitations period does not apply. Rather, the Court held that the "the most closely analogous state statute of limitations" will apply to retaliation claims brought under 31 U.S.C. § 3730(h). Id. at 2453.

The Court's holding means that there is no uniform statute of limitations period for retaliation claims brought under the FCA. The most closely analogous state limitations period will differ depending on the state in which the case if filed and the state cause of action deemed to be the "most closely analogous" to an FCA retaliation claim. In most cases, the "most closely analogous" state limitations period will be significantly shorter than the FCA's six-year period. A good example is found in the Wilson case itself. There, the relator, Karen Wilson, brought an FCA qui tam and retaliation action against her employer. Because the case was brought in the Western District of North Carolina, the district court borrowed North Carolina's three-year statute of limitations period for retaliatory discharge actions and granted the defendant's motion to dismiss the retaliation portion of the action because the plaintiff filed it more than three years after her discharge. Wilson, 125 S. Ct. at 2448. Given the uncertainty regarding the appropriate limitations period for retaliation claims under the FCA, the district court certified its dismissal order for interlocutory appeal.

On interlocutory appeal, a divided panel of the Fourth Circuit reversed. The majority held that the statute of limitations period for retaliation claims under the FCA is supplied by section 3731(b)(1) because retaliation claims derive from section 3730(h) and because the plain language of section 3731(b)(1) applies its six-year limitations period to "[a] civil action under section 3730." Wilson, 125 S. Ct. at 2448 (citing Wilson, 367 F.3d at 251). The Supreme Court reversed the decision of the Fourth Circuit, finding the language of section 3731(b)(1) to be ambiguous, rather than clear, about whether an FCA retaliation action is a "civil action under section 3730." Wilson, 125 S. Ct. at 2449.

The Wilson Court found that applying the FCA's six-year limitations period to retaliation claims, as the Fourth Circuit had done, could lead to anomalous results. Under the Fourth Circuit's interpretation, the statute of limitations for FCA retaliation claims would begin to run on the date of the actual or suspected FCA violation. Because an actual or suspected FCA violation necessarily must precede a valid retaliation claim, the Forth Circuit's reading starts the time limit running before the retaliation action accrues. It follows that a retaliation action could be time barred before it ever accrues-for example, when an employer discovers more than six years after the suspected FCA violation that an employee assisted in the fraud investigation, and then retaliates. The Supreme Court found such a result to be inconsistent with the default rule that Congress generally drafts statutes of limitations to begin when the cause of action accrues. Wilson, 125 S. Ct. at 2450.

The Supreme Court's decision in Wilson means that the limitations period for FCA retaliation claims will usually start when the retaliation occurs. This is so because "the likely analogous state statutes of limitations virtually all start to run when the cause of action accrues — in retaliation actions, when the retaliatory action occurs." Wilson, 125 S. Ct. at 2451. In Footnote 3, the Court identifies for each state "the likely analogous state statutes of limitations" that may apply to FCA retaliation claims. Counsel involved in FCA retaliation litigation must now consider what limitations period, as determined by state law, will apply and would be wise to consider the state statutes identified by the Supreme Court in Wilson.