Last summer, a federal judge in Houston ruled that the Wartime Suspension of Limitations Act (WSLA), found in Title 18, § 3287 of the U.S. Criminal Code, applied to a civil False Claims Act (FCA) case and suspended the statute of limitations until five years after the conclusion of the conflicts in Iraq and Afghanistan. While the decision was novel at the time, the government’s continued reliance on the WSLA threatens to make it more difficult for FCA defendants, including healthcare providers, to assert a statute of limitations defense.
Congress initially enacted the WSLA for World War I and repealed it in 1927. Congress reenacted the WSLA in 1942 for World War II. The current version of the WSLA provides, in pertinent part, as follows:
When the United States is at war or Congress has enacted a specific authorization for the use of the Armed Forces . . . the running of any statute of limitations applicable to any offense (1) involving fraud or attempted fraud against the United States shall be suspended until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress.
United States v. BNP Paribas
The government’s newfound reliance on the WSLA to save civil FCA cases that are time-barred by the statute’s six-year statute of limitations appears to have begun with the decision in United States v. BNP Paribas SA, 884 F. Supp. 2d 589 (S.D. Tex. 2012). In BNP, the government alleged false claims by BNP to a U.S. Department of Agriculture program, with the last claim occurring in September 2005. The complaint was filed in October 2011, one month beyond the statute of limitations. BNP moved to dismiss, and the government invoked the WSLA. BNP argued that the WSLA, a criminal statute, had no application in civil cases -- namely, the term "offense" in the WSLA evidenced Congress’s intent that it apply only to criminal violations, where that term is ordinarily found. In rejecting BNP’s argument, the district court focused on Congress’s 1944 amendment to the WSLA, in which Congress deleted the phrase "now indictable" from the 1942 version, to support its finding that the WSLA could be applied in civil cases.
WSLA and Healthcare Fraud Cases
The decision in BNP signals that the WSLA might be invoked successfully in otherwise time-barred FCA cases brought for false claims submitted to the Medicare and Medicaid programs. Additional case law may be on the horizon and provide additional guidance as to whether the WSLA applies to a civil case involving a domestic program with no relationship to war. For example, in United States v. Wells Fargo Bank, N.A., No. 12-CV-7527 (S.D.N.Y. filed Oct. 9, 2012), the district court soon will decide whether the statute of limitations on seven-year-old claims brought by the government against Wells Fargo -- for allegedly defrauding a domestic lending program -- was suspended by the WSLA.
Moreover, while the WSLA does not appear to have been tested with regard to FCA cases involving Medicare and Medicaid, the government may find it necessary to invoke the WSLA in such cases, particularly as the number of healthcare fraud investigative leads continue to rise and resources decline due to recent federal sequester measures (arguably, the result of war costs), including the furloughing of prosecutors. Apart from the applicability of the WSLA, the larger concern for the government in evaluating the strength of an otherwise time-barred case should always include the potential disinterest of many judges and jurors in hearing "stale" cases.