The United States Supreme Court granted certiorari on July 1, 2014 to review the
United States Fourth Circuit’s March 18, 2013, decision that reversed the
district court’s dismissal of a qui tam
petitioner’s False Claims Act (“FCA”) complaint, with prejudice. See United States v. Halliburton Co.,
710 F.3d 171 (4th Cir. 2013).
In his complaint, the petitioner alleged that Halliburton
Company, KBR, Inc., Kellogg Brown & Root Services, Inc. and Service
Employees International (collectively “KBR”) fraudulently billed the United
States for services provided to the military forces serving in Iraq. The
district court dismissed the petitioner’s complaint on two bases: (1) because
the district court lacked subject matter jurisdiction over the petitioner’s
claims under the “first-to-file” bar of the False Claims Act, 31 U.S.C. §
3730(b)(5) and (2) because the petitioner’s complaint was filed beyond the
six-year statute of limitations and had not been tolled by the Wartime
Suspension of Limitations Act (“WSLA”), 18 U.S.C. § 3287. The district court ruled
that the WSLA did not apply to non-intervened qui tam cases. The Fourth Circuit, however, reversed and held that
the district court did have jurisdiction and that the WSLA did apply to the qui tam action.
While there were
previously filed qui tam actions
against KBR urging false billing practices, the petitioner urged that those
cases did not bar his qui tam action
because they alleged false billing practices in different work scopes and by
different employees in different company divisions than those alleged in his
complaint. The Fourth Circuit, however, applied the “material elements test”
that had been adopted by the Third, Fifth, Sixth, Ninth, Tenth, and D.C.
Circuits, instead of a test requiring “identical” actions, and held that all of
the actions essentially involved submission of false time sheets in order to
falsely claim payment.
The petitioner further argued that, although the other
cases were active when his case was filed, they had since been dismissed, so
they were no longer a “pending” case giving rise to the “first-to-file” bar of
the statute. On this point, the Fourth Circuit agreed and held that the
district court’s dismissal with prejudice was incorrect.
Regarding application of the WSLA to toll the six-year
statute of limitations for an action under the FCA, the statute originally
tolled the statute of limitations regarding offenses involving defrauding or
attempting to defraud the United States that were “indictable under any
existing statutes,” but that requirement was deleted from the statute in 1944. KBR
argued that the use of the term “offense” in the statute maintained the
statute’s original intent to toll only criminal actions; therefore, the
petitioner’s civil qui tam action was
barred by the statute of limitations, which had not been tolled due to the Iraq
conflict. The Fourth Circuit, though, held that, if Congress had intended that
result, it could have done so by not deleting the “indictable” requirement in
1944, so the statute of limitations on the petitioner’s action had been tolled
by the WSLA.
On July 1, 2014, the U.S. Supreme Court granted certiorari to decide:
1. Whether the Wartime Suspension
of Limitations Act--a criminal code provision that tolls the statute of
limitations for "any offense" involving fraud against the government
"[w] hen the United States is at war," 18 U.S.C. § 3287, and which
this Court has instructed must be "narrowly construed" in favor of
repose--applies to claims of civil fraud brought by private relators, and is
triggered without a formal declaration of war, in a manner that leads to
indefinite tolling.
2. Whether, contrary to the
conclusion of numerous courts, the False Claims Act's so called
"first-to-file" bar, 31 U.S.C. § 3730(b)(5)--which creates a race to
the courthouse to reward relators who promptly disclose fraud against the
government, while prohibiting repetitive, parasitic claims--functions as a
"one-case-at-a-time" rule allowing an infinite series of duplicative
claims so long as no prior claim is pending at the time of filing.
We will
keep an eye out for a decision, but in the meantime, for your reference, the
U.S. Supreme Court docket information is linked here,
and the Fourth Circuit’s March 18, 2013, decision is linked here.
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