Supreme Court to Take Up Kellogg Brown & Root Whistleblower Case

It’s impossible to understate the importance of strict adherence to procedure when initiating a qui tam action under the False Claims Act. Unfortunately under our legal system, otherwise meritorious claims can often be defeated merely because the proponent waited too long to act or otherwise failed to follow the rules. One such case recently reached the steps of the United States Supreme Court, which must now consider under what circumstances the deadline for filing qui tam claims can be extended.

The False Claims Act provides a six-year window in which a relator — one who brings a qui tam suit — must act in order to receive the benefits provided under the Act. In United States ex rel. Carter v. Halliburton, the district court dismissed a qui tam claim filed by Carter on the basis that it had been filed after the expiration of the six-year statute of limitations.

Carter’s complaint involved allegedly fraudulent billing by Halliburton and Kellogg Brown & Root in 2005, and the case took a long time to compile. After a complicated procedural history that included numerous complaints, dismissals, amended complaints and appeals, Carter filed his final complaint in 2011, more than six years after the event. The district court dismissed the complaint with prejudice, finding, among other things, that it was filed beyond the statute of limitations.

The Court of Appeals for the Fourth Circuit reversed the ruling based on the Wartime Suspension of Limitations Act (WSLA), citing the following:

  • The running of statutes of limitations relating to frauds against the United States is suspended during a period when the United States is at war.
  • The suspension is not lifted until the President or Congress has formally proclaimed a termination of hostilities.
  • Following termination of hostilities, the suspension continues for three years.

Not surprisingly, the defendants have appealed this case to the Supreme Court to rule on whether the United States was “at war” within the meaning of the WSLA, which would give Carter standing to file his claim. On July 1, 2014 the Supreme Court granted certiorari. Should the Court affirm, it could significantly broaden the ability of whistleblower attorneys in Texas and throughout the country to help relators bring qui tam claims against defense contractors.