The Supreme Court has picked up a False Claims Act case that raises questions about the law’s statute of limitations during periods of war, reports Law360.
In doing so, the Court “has a chance to bring a quick stop to a new body of case law that has dramatically expanded contractors’ potential liability for dated fraud claims.”
The Fourth Circuit’s ruling in U.S. ex rel. Carter v. Halliburton held that the Wartime Suspension of Limitations Act (WSLA) “applies to whistleblower suits even when they’re unrelated to any war contracts and even when the government declines to intervene.”
The WSLA keeps claims alive until five years after the formal end of U.S. wars.
The Supreme Court granted certiorari on Tuesday in the Carter case. KBR Inc. asked the Supreme Court to reverse the Fourth Circuit on two issues “widely applicable in False Claims Act litigation”: the application of the WSLA, which tolls deadlines for fraud allegations during periods of war, and the “first-to-file” bar, which bars new FCA suits from being filed while other litigation based on the same claims is pending.
“Many attorneys stressed the Carter case’s potential to eviscerate statute of limitations defenses,” reports Law360, “even for claims well past the FCA’s six-year statute of limitations or its 10-year statute of repose.”
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