Kellogg Brown & Root Services, Inc. v. United States Ex Rel. Carter
2015 U.S. LEXIS 3407, 191 L. Ed. 2d 899, 135 S. Ct. 1970 (2015)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The Wartime Suspension of Limitations Act (WSLA) applies only to criminal offenses, not to civil claims, and therefore does not toll the statute of limitations for civil qui tam actions under the False Claims Act (FCA). The FCA’s first-to-file bar only precludes a later-filed qui tam action while a related, earlier-filed action is actually "pending" (undecided), ceasing to apply once the earlier action is dismissed.
Facts:
- From January to April 2005, Benjamin Carter worked in Iraq for one of the petitioners, a defense contractor, providing logistical services to the United States military.
- Petitioners allegedly fraudulently billed the Government for water purification services that were not performed or not performed properly.
- An earlier-filed qui tam lawsuit, United States ex rel. Thorpe v. Halliburton Co., was discovered to contain claims arguably similar to those brought by Carter.
Procedural Posture:
- Benjamin Carter filed a qui tam complaint (Carter I) against petitioners in District Court, alleging fraudulent billing.
- The District Court dismissed Carter I without prejudice under the first-to-file bar due to the related, earlier-filed Thorpe suit.
- Carter appealed the dismissal of Carter I to the Fourth Circuit Court of Appeals.
- While Carter I's appeal was pending, the Thorpe suit was dismissed for failure to prosecute.
- Carter then filed a new complaint (Carter II) in District Court.
- The District Court dismissed Carter II under the first-to-file rule because Carter I's own appeal was still pending.
- Carter subsequently voluntarily dismissed his appeal of Carter I.
- In June 2011, Carter filed another complaint (Carter III) in District Court.
- The District Court dismissed Carter III with prejudice, ruling that it was barred by a pending Maryland suit under the first-to-file rule, and that the WSLA applied only to criminal charges, making most of Carter's civil claims untimely.
- Carter appealed the dismissal of Carter III to the Fourth Circuit Court of Appeals (appellant Carter, appellee Kellogg Brown & Root Services, Inc.).
- The Fourth Circuit Court of Appeals reversed the District Court's decision, holding that the WSLA applied to civil claims and that the first-to-file bar ceases to apply once a related action is dismissed. The Fourth Circuit then remanded Carter III with instructions to dismiss without prejudice.
- After the remand, Carter filed Carter IV, which the District Court dismissed because the petition for a writ of certiorari in Carter III was still pending before the Supreme Court.
- Petitioners (Kellogg Brown & Root Services, Inc.) sought a writ of certiorari from the Supreme Court on the Fourth Circuit's decision regarding Carter III.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
1. Does the Wartime Suspension of Limitations Act (WSLA) apply to civil qui tam claims under the False Claims Act (FCA), or is its application limited solely to criminal offenses? 2. Does the False Claims Act's "first-to-file bar" permanently preclude a later-filed qui tam suit based on the facts underlying an earlier-filed action, even after the earlier action has been dismissed, or does it only apply while the earlier action is genuinely "pending"?
Opinions:
Majority - Alito, J.
No, the Wartime Suspension of Limitations Act (WSLA) applies only to criminal offenses, not to civil claims like those in this case. The Court reasoned that the WSLA's text uses the term "offense," which is most commonly understood to refer to crimes, especially given its placement in Title 18 of the U.S. Code, titled "Crimes and Criminal Procedure," where no provision uses "offense" to denote a civil violation. The legislative history further supports this, as earlier versions of the WSLA explicitly applied to "indictable" offenses, and the 1944 deletion of "now indictable under any statute" was intended to make the Act prospective, not to expand its scope to civil claims. The Court also emphasized that any ambiguity in the WSLA’s language should be resolved in favor of a narrower definition, in line with prior precedent that the WSLA should be "narrowly construed." Therefore, the WSLA does not suspend the statute of limitations for Carter's civil claims. No, the False Claims Act's (FCA) first-to-file bar does not permanently preclude new claims once related earlier actions are dismissed; it only applies while those related claims are still "pending." The Court found that the ordinary dictionary meaning of "pending" means "remaining undecided; awaiting decision." Interpreting "pending" to mean "first-filed" and thus permanently barring subsequent related actions, even after the first action's dismissal, would stretch the term beyond its common usage and lead to "strange results," such as barring a potentially meritorious suit simply because an earlier one was abandoned (e.g., for failure to prosecute, as with the Thorpe suit). While acknowledging potential practical problems for defendants regarding settlement, the Court held that the plain meaning of "pending" must govern, ensuring the bar is temporary rather than perpetual.
Analysis:
This decision significantly clarifies the temporal scope of two key provisions affecting False Claims Act litigation. The explicit ruling that the WSLA applies only to criminal offenses prevents its broad application to civil qui tam claims, solidifying the importance of adhering to the FCA's specific statute of limitations for civil actions and limiting avenues for extending filing deadlines. Concurrently, the Court's interpretation of the first-to-file bar as temporary rather than permanent provides crucial clarity for relators. This prevents meritorious qui tam suits from being indefinitely blocked by earlier-filed, but subsequently dismissed, actions, thereby balancing the goal of preventing duplicative litigation with the overarching objective of encouraging whistleblowers to report fraud against the government. This could incentivize relators to refile viable claims if prior ones are not pursued or are dismissed for non-merits reasons.
