Last Tuesday, the U.S. Supreme Court issued its opinion in Kellogg Brown & Root Services, Inc. (KBR) v. United States ex rel. Carter, resolving two questions that had previously divided lower courts interpreting the federal False Claims Act (FCA): whether the Wartime Suspension of Limitations Act (WSLA) indefinitely tolls the statute of limitations for FCA actions brought during periods of U.S. military conflict, and whether the FCA’s “first-to-file” bar applies to qui tam actions that are based on allegations of a previously filed, but dismissed, complaint. The Supreme Court’s opinion presents some good news and some bad news for companies that do business with the government, as the Court answered both questions in the negative. Companies will no longer have to defend against FCA allegations that have expired under the FCA’s statute of limitations, but they may be forced to defend against duplicative qui tam lawsuits so long as no previously filed lawsuit remains pending.

Wartime Does Not Suspend the Statute of Limitations in Civil Fraud Claims.

In the decision below, a panel of the Fourth Circuit held that the WSLA—a criminal code provision that tolls the statute of limitations for “any offense” involving fraud against the government during times of war—tolls actions brought under the False Claims Act. The Supreme Court reversed, holding that the WSLA applies only to claims of criminal fraud. The Court reached this decision through consideration of dictionary definitions of the word “offense” and the place where the WSLA is coded within the United States Code. Specifically, Congress codified the WSLA in Title 18 of the United States Code, which governs “Crimes and Criminal Procedure.”