Supreme Court Set to Decide Important False Claims Act Issue

The U.S. Supreme Court has agreed to review a case involving the Wartime Suspension of Limitations Act — an issue that has been central to recent False Claims Act litigation.

The WSLA was enacted to lengthen the time allowed to prosecute fraud offenses against the U.S. and its agencies during times of war "until 5 years after the termination of hostilities as proclaimed by a presidential proclamation, with notice to Congress, or by a concurrent resolution to Congress."

In the Fourth Circuit case of Kellogg Brown & Root Services, Inc., et al. v. United States ex rel. Carter — a False Claims Act case — the court applied the WSLA. The court held the False Claims Act statute of limitations had been suspended since the beginning of the war in Iraq, and the statute of limitations would not begin to run until five years after the president or Congress proclaims the hostilities are terminated.

Two other district courts have similarly held the False Claims Act statute of limitations was suspended as a result of the war in Iraq, which began in 2003, as well as the war in Afghanistan, which began in 2001.

None of the cases suspending the statute of limitations have involved hospitals or healthcare providers. However, the suspension could still be applied to False Claims Act cases in the healthcare industry since the decisions in the cases were not industry specific.

If the Supreme Court applies the WSLA to False Claims Act cases, the ruling could present tremendous risk to hospitals and other healthcare providers. The False Claims Act statute of limitations is six years, meaning a case alleging violations of the Act could not be pursued if the alleged illegal conduct occurred before July 2008. However, if the WSLA is applied, cases could be brought for conduct that occurred as early as 2001, when the armed conflict in Afghanistan began.

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