Fourth Circuit Applies the Wartime Suspension of Limitations Act to False Claims Act Relators and Limits the FCA’s First-to-File Bar


The U.S. Court of Appeals for the Fourth Circuit, in United States ex rel. Carter v. Halliburton Co, et. al (No. 12-1011), recently vitiated two traditional defenses in actions under the False Claims Act (“FCA”). First, the Court held that, under the Wartime Suspension of Limitations Act (“WSLA”), the armed conflict in Iraq suspended the statute of limitations in FCA suits brought by relators and not just those brought directly by the United States. Second, the court took a narrow view of the scope of the FCA’s first-to-file bar by holding that as long as a first-filed action is no longer an open case when the applicability of the bar is litigated, the bar does not apply, even to an identical later-filed action. In so doing, the court made it easier for relators in the Fourth Circuit to avoid the first-to-file bar by filing a succession of complaints.

In Carter, the relator filed a qui tam action alleging fraudulent billing practices by a number of government contractors for services provided to military forces serving in Iraq during the first half of 2005. Relator filed his original complaint in February 2006, but the action was ultimately dismissed. He then amended his complaint and re-filed as a separate action in 2009 (“Carter 2009”). In March 2010, the parties learned that relator’s allegations were similar to those made in a case filed under seal in December 2005 in California. Defendants moved to dismiss Carter 2009 under the first-to-file bar, and the district court dismissed the action without prejudice. Relator appealed. After the California complaint was dismissed, relator re-filed his complaint in a separate action (“Carter 2010”) and moved to dismiss his appeal. The district court, however, dismissed Carter 2010 because the Carter 2009 appeal was still pending when the complaint was filed. Relator then filed yet another complaint in 2011 (“Carter 2011”), which was substantively identical to the complaints in Carter 2009 and Carter 2010.

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