The key litigated issues in U.S. ex rel. Carter v. Halliburton were whether the Wartime Suspension of Limitations Act (WSLA), 18 U.S.C. § 3287, tolled the statute of limitations in a case with civil fraud claims and whether the first-file-bar precluded a case from being refiled after related cases in other courts have been dismissed.

Benjamin Carter brought a qui tam lawsuit under the False Claims Act (FCA), 31 U.S.C. § 3729, which allows a private plaintiff to bring suit in place of the government and keep a share of the proceeds. Carter alleged that the defendant instructed its workers under government contract to submit false time sheets that inflated the amount of work the workers had actually performed.

After several initial dismissals, Carter refiled his complaint on June 2, 2011. The district court dismissed this complaint with prejudice because there were two allegedly related cases pending in other courts for purposes of the first-to-file bar. The district court also found that the case was time-barred and the WSLA did not apply to toll the six-year statute of limitations for qui tam actions.

In its March 18, 2013 opinion, the US Court of Appeals for the Fourth Circuit held in U.S. ex rel. Carter v. Halliburton that the WSLA applied to the plaintiff’s qui tam lawsuit under the FCA, reversing on several grounds and finding that:

The WSLA tolls the statute of limitations related to fraud offenses during times of war until the war is formally terminated. In using the same analysis as the US Court of Appeals for the Fifth Circuit, the court determined whether the US was at war in Iraq by looking at when the "at war" status was triggered (after Congress authorized the President to use military force on October 11, 2002) and when hostilities were terminated. Because the hostilities had not been formally terminated in this case by presidential proclamation or congressional resolution, the court concluded that the US was at war during the relevant time period. As such, Carter's claims were tolled under the WSLA and not time-barred.

Additionally, the court found that the WSLA:

Next, the court held that the FCA's first-to-file bar, which requires dismissal for all related cases filed after the first case, did not preclude Carter from refiling his case because the other related actions were subsequently dismissed. The Fourth Circuit found that Carter was therefore entitled to file a new complaint, reversing the district court's dismissal with prejudice.

The court further remanded the issue of dismissal under public disclosure provision, which removes subject matter jurisdiction for FCA claims that have been disclosed publicly, to the district court.

Attorneys should be aware of this expansion of the WSLA's reach to civil claims and to military actions that exist without formal declarations of war.