Supreme Court’s opinion in Kellogg, Brown & Root Services, Inc. v. United States ex. Rel. Carter has mixed implications for both relators and the defense side. The court’s ruling on the Wartime Suspension of Limitations Act (WSLA) and the “first to file” provision of the False Claims Act has been highly anticipated by the False Claim Act (FCA) bar.
The Supreme Court decided that the Wartime Suspension of Limitations Act applied only to criminal offenses, and not to civil False Claims Act claims. This ruling gives an advantage to the defense bar. Prior to this Supreme Court ruling, WSLA could include “any offense” in which fraud was perpetrated against the federal government. The False Claims Act has a six-year statute of limitations. Had the Supreme Court decided that the WSLA applied to civil False Claims Act, claims, the tolling for FCA actions would have been triggered by the Authorization for Use of Military Force Against Iraq Resolution of 2002, and thus would have permitted the Department of Justice or relators to bring actions going back as early as 1996.
The Court also decided that the FCA’s first-to-file bar will only block a claim while a related action is actively pending, but not after it is dismissed, which is an asset for the relators who want to take a chance on a case already reported. The False Claims Act permits the government to intervene on qui tam suits only if the related action is “based on the facts underlying [a] pending action.” The first-to-file bar would now be lifted if the first-filed action ends, allowing another relator to file an action related to a previously dismissed case.
Healthcare providers are highly concerned by this decision. Relators would now be able to dismiss a complaint and then file a new one once the prior action is no longer “pending.” This makes it crucial that defendants in FCA actions understand the terms of a dismissal.
Evans Law Firm, Inc. handles qui tam (False Claims Act) claims, as well as whistleblower lawsuits. If you have a qui tam claim, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at firstname.lastname@example.org.