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Kellogg Brown & Root Services, Inc. v. United States Ex Rel. Carter
135 S. Ct. 1970
SCOTUS
2015
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Background

  • 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)
Read the full case

Case Details

Case Name: Kellogg Brown & Root Services, Inc. v. United States Ex Rel. Carter
Court Name: Supreme Court of the United States
Date Published: May 26, 2015
Citation: 135 S. Ct. 1970
Docket Number: 12–1497.
Court Abbreviation: SCOTUS