Statute of Limitations for False Claims Act Suspended for War

Handling Whistleblower Cases Nationwide from Newport News, Virginia

In the previous post I discussed the statute of limitations for Whistleblower cases (suits filed under the False Claims Act).  Last year, the United States Court of Appeals for the Fourth Circuit ruled on an interesting issue as to whether the statute of limitations was suspended due to the fact that the United States had been at “war” in the case of Carter v. Halliburton, 710 F.3d 171 I(4th Cir. 2013).   Carter alleged that the defendant (KBR) falsely billed the United States for services performed in Iraq.  KBR provided services to the U.S. military in Iraq under a government contract. Carter worked for KBR as a water purification unit  operator at two camps in Iraq from mid-January 2005 until April 2005. Carter was hired to test and purify water for the troops in Iraq and claimed that KBR was not purifying water during the time period but had misrepresented to the government that it had.

The defendant argued at the district court held that Carter’s suit had been filed beyond the False Claim Act’s six-year statute of limitations and was time barred. As a result, the court dismissed the case. The district court further held that Carter’s action was not tolled by the Wartime Suspension of Limitations Act (WSLA).  The WSLA was enacted in 1942 to extend the time for prosecution to bring charges relating to fraud against the United States during times of war. 

The Fourth Circuit reviewed the district court opinion and first analyzed the WSLA prior to October 4, 2008, which provided that “[w]hen the United States is at war the running of any statute of limitations applicable to any offense (1) involving fraud or attempted fraud against the United States … shall be suspended until three years after the termination of hostilities as proclaimed by the President or by a concurrent resolution of Congress.”  The court than observed that in 2008, the Wartime Enforcement of Fraud Act amended the WSLA to expand its times of operation to “[w]hen the United States is at war or Congress has enacted specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution.   Additionally, the suspension period was extended until  5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress.”  The Fourth Circuit ruled that it did not need to determine which version of the statute was applicable as the the United States was at “war” under either version inasmuch as neither version required that war be “declared.”  As a result, the court ruled that the statute of limitations was tolled.  

The Defendant has appealed this ruling to the United Sates Supreme Court and it remains to be seen whether the court will review the ruling.  In the interim, this is a victory for whistleblowers that have discovered fraud committed against the government.  If you have any questions about the False Claims Act, feel free to contact us.