In a long-awaited ruling, the Supreme Court held that the Wartime Suspension Limitations Act (WSLA) does not toll the statute of limitations in civil FCA actions, as the WSLA applies only to criminal actions. After lying dormant for more than 40 years, the WSLA had threatened to upend the FCA’s limitations period and expose defendants to open-ended and extensive liability for otherwise stale FCA claims.
Amended in 2008, the WSLA provides that the statute of limitations applicable to any offense involving fraud against the United States during a time of war or when Congress has enacted a specific authorization for the use of military force is suspended until five years after the termination of hostilities. In a number of recent cases, relators had begun relying on the WSLA as a means to avoid dismissal of claims brought outside of the FCA’s limitations period.
In Kellogg Brown & Root Service, Inc. v. U.S. ex rel. Carter, the Supreme Court unanimously reversed a 2013 opinion by the Fourth Circuit, which had held that a relator could rely upon the WSLA to toll the FCA’s limitations period. The Supreme Court rejected the notion that the WSLA should apply to civil claims as well as criminal charges and provided much needed certainty for defendants facing untimely FCA claims.
The Supreme Court’s opinion also addressed the first-to-file rule in FCA cases. That rule provides that “[w]hen a person brings an action . . . no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” In considering whether a dismissed action would be considered “pending” while on appeal, the Supreme Court explained that a qui tam suit under the FCA ceases to be “pending” once it is dismissed.