In a recent split decision, United States ex rel. Carter v. Haliburton Co., 2013 U.S. App. LEXIS 5309 (4th Cir. March 18, 2013), the Fourth Circuit took a broad reading of the Wartime Suspension of Limitations Act (WSLA) and applied the Act to hold that a relator’s suit was not barred by the FCA’s six-year statute of limitations. The relator, a former employee of one of the defendants, was hired to test and purify water for U.S. troops in Iraq. The relator alleged that from January 2005 to April 2005 his company was not purifying the water as claimed and that, despite not working any hours on water purification, the relator was instructed to submit time sheets indicating twelve-hour work days.
The WSLA suspends statutes of limitations for fraud committed against the government during times of war. Prior to 2008 the WSLA provided:
When 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.
18 U.S.C. § 3287 (2006). In 2008, the WSLA was amended, and the triggering language of the statute was changed to “[w]hen the United States is at war or Congress has enacted specific authorization for the use of the Armed Forces . . . .” 18 U.S.C. § 3287. The amendments also extended the tolling period to five years after the end of hostilities.
In Carter, the relator appealed the dismissal of his suit by the district court. The district court had held, in part, that the relator’s claims were barred by the FCA’s six-year statute of limitations because the WSLA did not apply to non-intervened FCA actions so as to suspend the statute of limitations.
The Fourth Circuit first considered the effect of the 2008 amendments to the WSLA. The Fourth Circuit held that during the period relevant to the alleged false claims the U.S. was “at war” in Iraq under either version of the WSLA because the WSLA does not require a formal declaration of war. The court noted that interpreting the WSLA in such a way as to require a declaration of war “would be an unduly formalistic approach that ignores the realities of today.”
The court rejected the argument that the WSLA only applies to criminal cases, citing several cases that have held that the WSLA applies to civil claims and noting that statutory language clearly indicating that the WSLA only applied in criminal cases had long been removed from the statute. Likewise, the court rejected the notion that the Act only applies when the United States is a party, stating that the application of the WSLA “depends upon whether the country is at war and not who brings the case” and that applying the WSLA to civil claims is in line with WSLA’s purpose.
Carter is an obvious win for relators. The practical takeaway is that relators may be able to “reach back” more than six years to fraudulent conduct by wartime fraudsters, or maintain a suit under the FCA when relator’s claims would otherwise be time-barred. Carter is a win for the Government as well, as the Fourth Circuit’s holding allows for war-time fraudsters to be more fully held accountable, or be held accountable at all, for their frauds through relator-filed FCA actions.
If you believe you have a Defense Contracting Fraud claim, or other False Claims Act claim, contact the Rabon Law Firm for a free consultation.