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Just when you thought you were out...They pull you back in.

Just when you thought you were in the clear and the U.S. Attorney was out of time to bring a false claims action against you, the Supreme Court of the United States may issue a decision that will keep you up at night.

On July 1, 2014, in Kellogg Brown & Root Services, Inc., et al. v. United States ex. rel. Carter, the Supreme Court decided that it will look at the applicability of the Wartime Suspension of Limitations Act (WSLA) to the statute of limitations applicable to False Claims Act (FCA) litigation.

Just when you thought you were in the clear and the U.S. Attorney was out of time to bring a false claims action against you, the Supreme Court of the United States may issue a decision that will keep you up at night.

On July 1, 2014, in Kellogg Brown & Root Services, Inc., et al. v. United States ex. rel. Carter, the Supreme Court decided that it will look at the applicability of the Wartime Suspension of Limitations Act (WSLA) to the statute of limitations applicable to False Claims Act (FCA) litigation.

By way of background, an action was brought against Kellogg Brown & Root Services, Inc., alleging that the company had fraudulently billed the United States for services provided to the U.S. military in Iraq in 2005. The court initially dismissed the complaint as being beyond the FCA’s statute of limitations. That decision was reversed on appeal. The Circuit Court found that the WSLA tolls the statute of limitations for “any offense” involving fraud against the federal government “[w]hen the United States is at war.” 18 U.S.C. § 3287. The court also held that the Act “does not require a formal declaration of war,” reasoning that such a requirement “would be an unduly formalistic approach that ignores the realities of today[.]” The United States had not formally declared war since World War II. Given the current military conflicts like Afghanistan and Iraq, as well as past military operations such as Operation Desert Shield in 1990 and Desert Storm in 1991, this decision effectively repeals the statute of limitations for civil fraud claims and authorizes an indefinite tolling of FCA claims pursuant to the WSLA. I wait with trepidation to see how the Supreme Court will handle this issue.

If you ever find yourself facing a false claim action or are unsure of your legal footing, feel free to contact Connell Foley’s New York Construction Law Group for guidance on this or any other construction-related issue.

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