False Claims Act -- 2015

Kellogg, Brown and Root Services v. United States ex rel. Carter   (U.S. Supreme Court)

Applicability of the Wartime Statute of Limitations Act to qui tam claims

This is an appeal to the Supreme Court of a 4th Circuit decision concerning the applicability of the Wartime Statute of Limitations Act (WSLA), The WSLA is a 72-year-old criminal code provision that suspends the statute of limitations for “any offense” involving fraud or attempted fraud against the government when the United States is at war. The Department of Justice has argued, and some courts have agreed, that the statute now applies to civil violations as well, including qui tam claims brought by private relators. In addition to the impact on defense contractors, this expansive theory is increasingly being applied to other industries subject to qui tam claims. This expansive reading of the statute paired with the argument that the U.S. has been at war since September 11, 2001, leads to a tremendous expansion of potential liability for never-ending claims about which evidence may be long gone. This case presented the opportunity for the Supreme Court to prevent an unwarranted judicial expansion of the WSLA far beyond the plain text of the statute and contrary to congressional intent.

In its joint amicus brief with the National Defense Industrial Association and the Coalition for Government Procurement, the NAM argued that ample legislative history demonstrates that Congress never intended the WSLA to apply outside of the criminal context. To the contrary, the lack of direct language including civil claims in the WSLA – a Title 18 Criminal Code provision with suspension periods that mirror the length of the criminal statute of limitations – is evidence that Congress did not intend it to apply in the civil context.

In a May 26, 2015, decision (9-0), the Supreme Court agreed that the WSLA applies only to criminal offenses. The Court held that the WSLA’s text, structure and history are clear that the Act does not apply to civil claims. The earliest version of the WSLA was explicitly applicable only to criminal charges, and each subsequent iteration has been consistent with that original scope. Any ambiguity regarding the Act’s use of the term “offense” must be resolved in favor of the more narrow definition.

On May 26, 2015, the Supreme Court rendered its opinion. As shown by the Wartime Suspension of Limitations Act’s text, structure, and history, the Act applies only to criminal offenses, not to civil claims like those in this case. Moreover, the False Claims Act’s “first to file” bar keeps new claims out of court only while related claims are still alive, not in perpetuity.

Related Documents:
NAM brief  (September 5, 2014)


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