Understanding the False Claims Act Statute of Limitations—and the Debate Over the “Last Overt Act” Rule

The False Claims Act (FCA) is one of the federal government’s most powerful tools for combatting healthcare fraud.

Yet, as with any enforcement tool, its reach is constrained by a statute of limitations. The FCA statute of limitations provisions, set out in 31 U.S.C. § 3731(b), are surprisingly nuanced and often depend on when the government learns of the alleged misconduct. In practice, this framework often favors the government, yet these nuances are worth unpacking, which we do below.

The Statutory Framework

Under 31 U.S.C. § 3731(b), an FCA claim may not be brought:

1. More than 6 years after the date on which the violation of section 3729 is committed, or
2. More than 3 years after the date when facts material to the right of action are known, or reasonably should have been known, by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed,

whichever occurs last.

To understand these statutory limits, it helps to recall what qualifies as an FCA violation. Under 31 U.S.C. § 3729(a), liability arises when a person knowingly submits, or causes to be submits, a false or fraudulent claim for payment, or conspires to do so.

How the Statute of Limitations Works in Practice

For substantive FCA violations, the limitations period for charging a new violation often turns on when responsible government officials discovered – or should have discovered – the alleged fraud. If officials knew or reasonably should have known of the violation within three years of the occurrence of the alleged conduct, the standard six-year limitations period will apply. However, if the government learns of the alleged fraud more than three years after its occurrence, the time period for charging a substantive violation extends to three years from the date of discovery, even if this time period exceeds six years.

Notwithstanding the specific limitation period for charging a substantive FCA violation, the FCA’s ten-year statute of repose creates an absolute outer boundary. This means that no matter when the government acquires knowledge, an action cannot be filed more than ten years after the alleged violation. For example, if fraud is discovered nine years after the fact, the government has only one year left to bring a substantive FCA claim.

The Gray Area: Does the “Last Overt Act” Rule Apply to Alleged FCA Conspiracies?

In criminal conspiracy law, the “last overt act rule” provides that the statute of limitations begins to run only when the final overt act in furtherance of the conspiracy is committed by any conspirator. U.S. Dep’t of Justice, Justice Manual § 652, Statute of Limitations for Conspiracy (citing Fiswick v. United States, 329 U.S. 211 (1946). Because conspiracy is treated as a continuing offense, this rule often enlarges the limitations period. Whether this doctrine applies to civil FCA conspiracy claims, however, is unsettled. Courts are split on this issue, resulting in a lack of definitive guidance from federal circuits.

Various district courts have applied the last overt act rule to civil FCA conspiracy actions, holding that the statute of limitations runs from the date of the last overt act committed in furtherance of the conspiracy. U.S. ex rel. Fisher v. Network Software Assocs., Inc., 180 F. Supp. 2d 192 (D.D.C. 2002); United States v. Pac. Health Corp., No. CV1200960RSWLAJWX, 2018 WL 1026361 (C.D. Cal. Feb. 20, 2018); McIlwain v. Dodd, No. 22-5219, 2022 WL 17169006 (6th Cir. Nov. 22, 2022).  These decisions relied on precedent from their respective circuit courts which applied the last overt act rule in other civil conspiracy contexts, such as a civil rights conspiracy. Overall, the supporting case law is generally weak, as some of these cases have been overturned for unrelated reasons.

Conversely, the Second Circuit has expressly rejected the application of the last overt act rule in the FCA conspiracy context. In Busal Meats v. United States, affirmed by the Second Circuit, the court explicitly held that the “last overt act” rule does not apply to civil FCA conspiracies. Blusal Meats, Inc. v. United States, 638 F. Supp. 824 (S.D.N.Y. 1986), aff'd, 817 F.2d 1007 (2d Cir. 1987). District courts in the Second Circuit have declined to apply the last overt act rule as recently as 2020. United States v. Spectrum Painting Corp., No. 19 CIV. 2096 (AT), 2020 WL 5026815 (S.D.N.Y. Aug. 25, 2020) at *8 (“the last overt act rule does not apply to civil conspiracy claims under the FCA.”). To date, other federal circuits, such as the First Circuit, have not directly addressed the issue and have not explicitly adopted or followed the last overt act rule in civil FCA cases.

Bottom Line

The FCA’s statute of limitations framework is complex, especially when it comes to conspiracy claims. Although the government may take the position that the last overt act rule extends the filing window, courts remain divided on whether the last overt act rule may apply in the civil conspiracy context, and no uniform guidance has emerged on this issue. For now, litigants must navigate a patchwork of interpretations, making the timing of conduct, the discovery of such conduct, and alleged acts in furtherance of a conspiracy all critical considerations when evaluating FCA exposure. All of these considerations should be examined to determine whether a viable statute of limitations-based challenge exists