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DOJ Argues Wartime Suspension Act Applies to False Claims Act Cases

The Solicitor General of the United States has filed an amicus brief with the Supreme Court persuasively arguing that the Wartime Suspension of Limitations Act, 18 U.S.C. § 3287 (“WSLA”), applies to a civil fraud claim brought by a private whistleblower under the False Claims Act, and effectively extends the FCA’s statute of limitations so long as the United States is at war. At issue is whether a FCA case brought against Kellogg Brown & Root may proceed as the Fourth Circuit Court of Appeals found or whether it is barred by the FCA’s statute of limitations.

The WSLA enacted during WWII and amended in 2008, tolls the statute of limitations for “offenses” involving fraud against the United States. It has been dusted off as a result of the Iraq war and the war on terrorism, and was utilized by the United States to extend the statute of limitations in criminal cases as early as 2008. More recently, DOJ began to use the WSLA in civil fraud cases arguing successfully that the word “offenses” applies to both criminal and civil violations of law, including the FCA.

While the rationale of the WSLA was in part that the United States and its agencies would lack the resources to investigate fraud during times of war and that it could also take time after a war ends for fraud to be discovered, the WSLA has been used successfully not only in cases alleging fraud against the Departments of Defense and Homeland Security, but also in cases involving bank fraud, health care fraud, and highway construction fraud. See, e.g., id. at 23 (on the pdf pages not on the brief).

Indeed, this would seem to make sense given that the enormous cost of over a decade of war has drained and diverted money and personnel from fraud investigations as evidenced, for example, by cuts in funding at DOJ and other agencies charged with fighting fraud.  And, tolling the statute of limitations is of great advantage to the government since it expands the time period for which it can collect damages and civil penalties under the False Claims Act.

Since there is to date no disagreement in the courts that the WSLA applies to civil fraud cases, DOJ has told the Supreme Court that the issue does not merit its granting Kellogg’s petition for a writ of certiorari and reviewing the Fourth Circuit’s opinion. Brief at 15-24 (these are the pdf pages not the briefs pages).