Fourth Circuit Holds FCA Statute of Limitations Tolled by Wartime Suspension of Limitations Act

False Claims Act / FIRREA

The U.S. Court of Appeals for the Fourth Circuit recently held that the False Claims Act’s (FCA) statute of limitations can be tolled by the Wartime Suspension of Limitations Act (WSLA) in civil qui tam actions in which the government does not intervene. United States v. Halliburton ex rel. Carter, No. 12-1011, 2013 WL 1092732 (4th Cir. Mar. 18, 2013). A former employee of a defense contractor alleged that his employer fraudulently billed the United States for water purification services in Iraq that were never actually performed, and that the practice was consistent with a scheme to routinely bill the government set hours, regardless of actual hours worked. The government declined to intervene in the case, and the district court subsequently dismissed the complaint with prejudice, finding in part that the relator’s complaint was untimely filed after the FCA’s statute of limitations had expired. On appeal, the Fourth Circuit held that the WSLA applies to both civil and criminal fraud claims against the United States, regardless of whether the United States has intervened, and even without a formal declaration of war.  Based on those factors, the Fourth Circuit held that the relator’s FCA claims were not time-barred. The court reversed the district court’s decision, and remanded the case for further consideration.