Yesterday, the Supreme Court granted certiorari in Kellogg
Brown & Root v. United States ex rel. Carter, No. 12-1497,
a case presenting two important issues under the False Claims Act
(FCA). The first is whether the Wartime Suspension of Limitations
Act—which tolls the limitations period during wartime for any
"offense" against the United States—applies to a
civil FCA claim brought by a qui tam relator. The second is whether
the FCA's "first-to-file bar"—which provides
that once a relator brings an FCA action, "no person other
than the government may intervene or bring a related action based
on the facts underlying the pending action"—precludes a
later action only so long as the earlier action is still
pending.1
Background
Petitioner Kellogg Brown & Root (KBR) provided logistical
services to the U.S. military during the Iraqi war. In 2006,
Respondent Carter, a former KBR employee, filed an FCA action
against KBR, alleging that KBR had fraudulently billed the
government. After a lengthy procedural history, the district court
(Cacheris, J.) dismissed the latest complaint with prejudice. The
court first held that the first-to-file bar, 31 U.S.C. §
3730(b)(5), precluded Carter's action because another FCA case
alleging similar facts had already pending in another federal
district court when Carter filed his operative complaint. Although
that other case had since been dismissed, the district court here
held that the first-to-file bar depended on the state of affairs at
the time of the filing of the complaint. The court also held that
most of Carter's claims were time-barred, rejecting his
argument that the Wartime Suspension of Limitations Act (WSLA), 18
U.S.C. § 3287, tolled the limitations period. The court ruled
that the WSLA does not apply to a civil fraud claim brought by a
qui tam relator.
The Fourth Circuit reversed. The court held that although the
complaint was properly dismissed under the first-to-file bar,
because the earlier-filed case had still been pending at the time
Carter filed his latest complaint, the dismissal should have been
without prejudice because the subsequent dismissal of that case
meant that the first-to-file bar no longer applied, leaving Carter
free to re-file. The court of appeals also held that Carter's
claims were not time-barred because the WSLA applies to civil FCA
suits, even those in which the government has declined to
intervene. One judge dissented from this portion of the court's
ruling, arguing that the WSLA does not apply to qui tam suits in
which the government has declined to intervene.
In its certiorari petition, KBR argues that the Fourth
Circuit's first-to-file rule would improperly allow relators to
bring case after related case based on very similar facts, so long
as they were brought seriatim. On the WSLA question, KBR contends
that the term "offense" is limited to crimes, that the
Fourth Circuit's approach is contrary to the WSLA's
purpose, and that the Fourth Circuit's decision would lead to
enormously long periods of tolling given the nature of the military
conflicts in which the United States is engaged.
Next Steps
The case will likely be argued in December 2014 or January 2015.
KBR's opening brief is due August 15, 2014 and Carter's
opposition brief is due September 15, 2014, though those deadlines
may well be extended.
1 The certiorari stage briefing is available here: http://www.scotusblog.com/case-files/cases/kellogg-brown-root-services-inc-v-united-states-ex-rel-carter.
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