By Brent Kendall
WASHINGTON--The Supreme Court ruled on Tuesday that
whistleblowers don't get extra time to file civil false-claims
lawsuits when the U.S. is at war, in a win for military contractors
Halliburton Co. and KBR Inc.
The court's ruling could knock out most legal claims by
plaintiff Benjamin Carter, who did contracting work in Iraq in
early 2005 and alleged the companies fraudulently billed the
government for water purification work that wasn't actually
performed.
The contractors denied the allegations.
Under the False Claims Act, private litigants can bring civil
lawsuits alleging fraud against the government and share in any
legal winnings.
A key issue in the case was the meaning of the Wartime
Suspension of Limitations Act, which extends the time for bringing
cases of fraud against the government while the U.S. is engaged in
military operations.
The Supreme Court, in a ruling by Justice Samuel Alito, said the
law only suspends time limits during wartime for the prosecution of
criminal cases alleging fraud against the U.S.
Civil lawsuits like Mr. Carter's don't get the extra time, the
court said in a unanimous decision.
The relevant version of Mr. Carter's lawsuit wasn't filed until
mid-2011, which would make most of his claims untimely under the
normal statute of limitations in the False Claims Act.
The Supreme Court left open the possibility at least one of Mr.
Carter's claims could survive, but left it to a lower court to sort
out other legal considerations in the case.
The justices also ruled against the contractors on one issue,
rejecting the companies' arguments that once a whistleblower files
a lawsuit, all later lawsuits alleging the same claims should be
prohibited even if the first case was dismissed.
Halliburton referred requests for comment to KBR, its former
subsidiary. Washington lawyer John Elwood of Vinson & Elkins
LLP, who argued the case for the contractors, said KBR was pleased
with the ruling on wartime time limits, which he said was the key
to the case. Mr. Elwood said KBR would ask a U.S. appeals court to
dismiss the entire case.
Mr. Carter's lawyer, David Stone of Stone & Magnanini LLP,
said he was still hopeful at least part of the lawsuit would
survive. He said the portion of the ruling he won would blunt one
tactic that companies have sought to use to prevent false-claims
allegations from moving forward.
Other false-claims cases working their way through the courts
have raised similar issues, including one currently pending at the
Supreme Court involving Purdue Pharma L.P. and its marketing of the
painkiller OxyContin. That case has been on hold while the justices
considered the KBR case.
Write to Brent Kendall at brent.kendall@wsj.com
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