Fourth Circuit Expands FCA Limitations Period

Summary: In United States ex rel. Carter v. Halliburton, a divided panel of the United States Court of Appeals for the Fourth Circuit expanded the scope of potential FCA liability for government contractors by holding that the Wartime Suspension of Limitations Act (WSLA) suspends the six-year statute of limitations in False Claims Act (FCA) qui tam cases even where the Government has not intervened in the litigation. Only one other modern court has held that the WSLA suspends the statute of limitations under the FCA, and, as the Carter dissent notes, "no case has ever held (other than in dicta) that the WSLA applies to civil cases where the United States is not a plaintiff or intervenor in the qui tam action." The Carter decision reflects a substantial expansion of the applicability of the WSLA.

In United States ex rel. Carter v. Halliburton, a divided panel of the U.S. Court of Appeals for the Fourth Circuit expanded the scope of potential False Claims Act (FCA) liability for government contractors by holding that the Wartime Suspension of Limitations Act (WSLA) suspends the six-year statute of limitations in qui tam FCA cases even when the government has not intervened.1 The WSLA, located in the U.S. Criminal Code, suspends the limitations periods for fraud "offenses" against the United States while the country is engaged in a declared war or armed hostilities and for five years thereafter.2 Only one other modern court has held that the WSLA suspends the statute of limitations in civil FCA cases,3 and, as the Carter dissent notes, "no case has ever held (other than in dicta) that the WSLA applies to civil cases where the United States is not a plaintiff or intervenor in the qui tam action."4 By suspending the express FCA limitations period in a potentially wide range of cases, the Carter decision reflects a substantial expansion of the applicability of the WSLA that appears inconsistent with the intent of Congress expressed in the FCA's qui tam provisions.

History of the WSLA

Congress enacted the WSLA in 1942 to codify temporary measures that had been put in place to protect the government from increased fraud during World Wars I and II.5 In 2008, Congress expanded the WSLA by (1) extending the tolling of the limitations period from three to five years after the end of hostilities and (2) broadening its application from declared wars to all authorized military conflicts.6 As expanded, the WSLA provides:

"When the United States is at war...