Kellogg Brown & Root Services, Inc. v. United States Ex Rel. Carter
135 S. Ct. 1970
SCOTUS2015Background
- Relator Benjamin Carter, a former water-purification operator in Iraq, filed successive qui tam suits under the False Claims Act (FCA) alleging fraudulent billing for water-purification services by defense contractors.
- Carter I (filed ~2005) was dismissed without prejudice under the FCA’s first-to-file bar because of similarity to an earlier Thorpe suit; appeal was pending.
- While that appeal was pending, Thorpe was dismissed; Carter filed Carter II, which was dismissed under first-to-file because Carter I was still on appeal; Carter then dismissed the appeal.
- In June 2011 (more than six years after the alleged fraud), Carter filed Carter III; the district court dismissed it with prejudice under the first-to-file bar (citing a Maryland suit) and held the Wartime Suspension of Limitations Act (WSLA) applies only to criminal charges, rendering most claims time-barred.
- The Fourth Circuit reversed: it held the WSLA tolled civil FCA claims and that the first-to-file bar ends when the earlier related action is dismissed, so refiling should be allowed (dismissal without prejudice).
- The Supreme Court granted certiorari to resolve (1) whether the WSLA applies to civil claims or only criminal offenses, and (2) whether the FCA first-to-file bar survives dismissal of the earlier action.
Issues
| Issue | Plaintiff's Argument (Carter) | Defendant's Argument (KBR et al.) | Held |
|---|---|---|---|
| Does the WSLA suspend limitations for civil FCA claims or only criminal offenses? | WSLA tolls limitations for fraud "offenses" against the U.S., and Congress intended wartime suspension to cover civil fraud suits against the government. | "Offense" means criminal charge; WSLA is in Title 18 and historically targeted crimes, so it does not toll civil claims. | WSLA applies only to criminal offenses, not civil FCA claims. |
| Does the FCA first-to-file bar preclude later suits permanently once an earlier related suit was filed? | The first-to-file bar should not block refiling once the earlier related action has been dismissed; "pending" ends with dismissal. | "Pending" should be read to mean the first-filed action (i.e., a continuing bar even after dismissal). | "Pending" means the earlier action remains undecided; once dismissed, the first-to-file bar no longer prohibits refiling. |
Key Cases Cited
- United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (convenience of syllabus does not make it part of the Court's opinion)
- United States v. Smith, 342 U.S. 225 (1952) (recognizing wartime opportunities for fraud and historical context for wartime tolling statutes)
- Bridges v. United States, 346 U.S. 209 (1953) (WSLA to be narrowly construed; interpret in favor of repose)
- Kansas v. Hendricks, 521 U.S. 346 (1997) (statutory placement can inform civil/criminal characterization)
- Jones v. R. R. Donnelley & Sons Co., 541 U.S. 369 (2004) (caution about reading too much into statutory placement)
- United States v. Scharton, 285 U.S. 518 (1932) (principle favoring narrow construction of tolling statutes)
