Supreme Court reverses False Claims Act's lack of limitations on civil suits

The Supreme Court unanimously overturned a provision of the False Claims Act that applied the Wartime Suspension of Limitations Act (WSLA) to civil cases.

The case, Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, concerned KBR's allegedly fraudulent billing for water purification services provided by a contractor working for the federal government during the war in Iraq in 2005. Former KBR employer Benjamin Carter filed the case.

The qui tam whistleblower claim had been dismissed three times at the District Court level for failing to meet the False Claims Act's first-to-file rule, the Supreme Court decision noted--first because an earlier suit had made similar claims, then because its appeal was pending and finally because of another pending suit.

The Fourth Circuit Court of Appeals ruled in Cater's favor in 2013, stating that the WSLA applied to civil as well as criminal claims. Such a reading of the WSLA suspends any statute of limitations to fraud cases against the federal government.

The Supreme Court disagreed. "Converting the WSLA from a provision that suspended the statute of limitations for criminal prosecutions into one that also suspended the time for commencing a civil action would have been a big step," Justice Samuel J. Alito wrote in the opinion. "If Congress had meant to make such a change, we would expect it to have used language that made this important modification clear to litigants and courts."

The case is not over; as Business Insurance reported, the Supreme Court sent the case back to a lower court for further proceedings. In addition, the Supreme Court upheld the Fourth Circuit Court's ruling that the first-to-file provision only keeps new claims out of court while existing claims are still alive and not in perpetuity.

Despite a ruling in KBR's favor, federal False Claims Act scrutiny shows no signs of letting up, particularly when it comes to qui tam whistleblower cases, FierceHealthPayer: AntiFraud previously reported.

For more:
- read the Supreme Court opinion (.pdf)
- here's the Business Insurance article

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Legal report looks at key False Claims Act cases of 2014

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