02 December 2014

Reply Brief Filed in Supreme Court Case Concerning Statute of Limitations & First to File Bar; Case Set for Argument

Posted by Kristin Graham Koehler and Monica Groat

As we previously have written about, the Supreme Court has agreed to decide two important issues relating to the FCA in Kellogg Brown & Root v. Carter: (1) whether the Wartime Suspension of Limitations Act (WSLA) applies to toll the statute of limitations in civil FCA cases, and (2) whether the first-to-file bar ceases to apply once a first-filed case is settled or dismissed. Earlier this month, petitioners KBR Inc. and Halliburton Co. (collectively, KBR) filed their reply brief.

With respect to the application of the WSLA to civil FCA cases, KBR asserted that the relator Benjamin Carter and the Solicitor General (participating as amicus curiae) fundamentally have misinterpreted the statutes by ignoring the text, structure, history and purpose of the Act and suggesting that the WSLA’s references to an “offense” include civil violations as well as criminal offenses. Rejecting the argument that amendments to the statute have expanded its scope, KBR maintained that “Congress has repeatedly amended the WSLA to ensure symmetry with the criminal, not civil, statute of limitations.” The petitioners also rejected several policy arguments in favor of applying the WSLA to the FCA, including the Government’s argument that evidence for FCA cases may be difficult to obtain during times of war. KBR noted that “[m]ost FCA claims involve domestic conduct unrelated to war” and that the “record number” of FCA cases suggests that “wartime exigencies are not impairing the government and relators.” The petitioners also noted that the effect of the WSLA on FCA litigation can already be felt; the Government has begun to frequently invoke the statute, including “in cases having nothing to do with war.”

Regarding the FCA’s first-to-file bar, KBR argued that the FCA’s text, structure, and purpose cannot and should not be read to permit a relator to re-file a complaint after an earlier case is dismissed or settled. The petitioners also rejected several arguments in favor of additional flexibility for both relators and the Government.

KBR thus urged the Court to reverse the Fourth Circuit’s decision, which, according to the petitioners, read both the FCA and the WSLA to “effectively repeal[ ] the statute of limitations for claims of civil fraud against the government in the post-9/11 world, and give[ ] private relators leave to re-file duplicative claims indefinitely.”

The case is now fully-briefed and has been set for oral argument on Tuesday, January 13, 2015. The Solicitor General requested and was granted leave to participate in the argument as an amicus curiae on behalf of the respondent. A decision in this important FCA case is expected by June 2015.

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