On June 8, 2015, the U.S. Court of Appeals for the Seventh Circuit rejected the doctrine of implied false certification in a False Claims Act (“FCA”) lawsuit, U.S. ex rel. Nelson v. Sanford-Brown Ltd. No. 14-2506, 2015 WL 3541422. In a welcome decision for government contractors, the Court held that the FCA is “not the proper mechanism” for Government enforcement of regulations. Instead, regulatory violations should be handled by the appropriate Government agency–not the courts.
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SCOTUS: No Unlimited Suspension of the Statute of Limitations Under the False Claims Act; “First-to-File” Doctrine Does Not Bar Related Suits in Perpetuity
In an opinion released May 26, 2015, Kellogg Brown & Roots Services, Inc. v. United States ex rel. Carter, the U.S. Supreme Court unanimously held that whistleblowers cannot extend the statute of limitations for war-related civil false claims under the Wartime Suspension of Limitations Act (“WSLA”), reinstating an already generous statute of limitations period under the civil False Claims Act (“FCA”). The Court also settled a split between the U.S. Courts of Appeals for the D.C. Circuit and the Fourth Circuit. For purposes of the FCA’s “first-to-file” bar, the FCA only limits a lawsuit based on the same underlying facts as another case that is actually open and pending when the later lawsuit is filed. In reaching these holdings, the Court relied heavily on the plain meaning of the statutory language, simultaneously handing a victory to both Defendants (on the statute of limitations issue) and Plaintiffs (on the first-to-file issue). But, the holding relating to the WSLA may prove to be the greatest legacy from the KBR decision, reigning in aggressive whistleblowers and government lawyers who would try to allege a case of “fraud” decades after the conduct occurred, and long after a Defendant is able to defend itself effectively.
Continue Reading SCOTUS: No Unlimited Suspension of the Statute of Limitations Under the False Claims Act; “First-to-File” Doctrine Does Not Bar Related Suits in Perpetuity