UPDATE: SCOTUS Holds in Favor of Kellogg, Brown & Root; Rejects Applicability of the Wartime Suspension of Limitations Act

In a unanimous decision, the U.S. Supreme Court rejected a controversial False Claims Act argument in favor of applying the Wartime Suspension of Limitations Act to non-criminal fraud claims.
Image source: Wikimedia Commons

In yesterday’s post, we reviewed the arguments presented to the U.S. Supreme Court both for and against the applicability of the Wartime Suspension of Limitations Act (WSLA), which works to extend statutes of limitations in times of war. The case involved allegations against Kellogg Brown & Root by a False Claims Act relator pertaining to false claims under a $40 billion contract for military logistics services in the Middle East. On appeal from the Fourth Circuit, KBR argued that the WSLA should not extend to cover non-criminal offenses, while the realtors argued that Congress clearly intended the Act to include fraud against the government during wartime.

In a 9-0 unanimous verdict, the Court held in favor of KBR and restricted the applicability of the WSLA to criminal offenses only.

The case holding will have enormous implications to False Claims Act plaintiffs with cases stemming from the Iraq and/or Afghanistan conflicts, as the six-year statute of limitations will work as a hard deadline for filing a claim, and any complaint filed too late will be dismissed.

Court’s analysis of WSLA applicability

The bulk of the Court’s job in this case was to interpret the legislative intent behind the enactment and amendment of the WSLA, which was enacted during World War I. First, the Court pointed out that Congress has traditionally and consistently used the word “offense” to refer to criminal infractions in other statutes, and it stands to reason it meant to use the word in a similar vein in the WSLA.

Second, the Court noted that the WSLA appears in Title 18 of the United States Code, otherwise known as “Crimes and Criminal Procedures.” In this analysis, it reasoned that in no other section of Title 18 is the word “offense” contemplated to include a civil offense, except in limited instances where a civil penalty is attached to a criminal offense (e.g., restitution). While the Court acknowledged its hesitance to place too much weight on the location of a statute within the U.S. Code, it pointed to several past cases in which the placement of a certain statute with a designated Title “[was] relevant in determining whether its content is civil or criminal in nature.” See Kansas v. Hendricks, 521 U. S. 346, 361 (1997).

Lastly, the Court addressed an amendment entered by Congress in 1948 wherein legislators changed the language of the WSLA from offenses “now indictable under any existing statutes” to “any offense against the laws of the United States.” While relators and the U.S. government argued that this change clearly signified a broadening of the statute, the Court held that Congress would have used “language that made this important modification clear to litigants and courts.” Further, the Court reasoned that Congress likely changed the language to expand the scope of the WSLA to “not just….offenses committed in the past during or in the aftermath of particular wars, but also to future offenses committed during future wars.”

Contact a whistleblower attorney today

If you are aware of fraud under a government contract, please do not hesitate to contact Berger & Montague, P.C. today. With the laws constantly changing, you need an attorney you can trust to file your claim thoroughly, properly, and on time.

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By | 2018-03-26T09:42:58+00:00 June 17th, 2015|Military Contractor Fraud|