The Supreme Court of the United States tightened the time limits for whistle-blower lawsuits that accuse contractors of overbilling the federal government during overseas conflicts. The ruling is a victory for KBR Inc. and Halliburton Co.
The justices Tuesday unanimously said people filing civil suits under the U.S. False Claims Act can’t take advantage of a World War II-era law that extends the deadlines for criminal prosecutions during wartime.
The ruling will help KBR and Halliburton stop a lawsuit accusing them of overbilling the U.S. for work on water-purification projects at two camps in Iraq. The suit is being pressed by Benjamin Carter, who was hired to work on the projects in 2005.
The ruling is a defeat for the Obama administration, which argued that the 1942 Wartime Suspension of Limitations Act extends the deadlines for civil suits, as well as criminal prosecutions.
A separate aspect of the decision may hurt government contractors in other contexts. The high court rejected the companies’ argument that Carter’s case was barred because of an earlier suit that made similar allegations.
The False Claims Act says that contractors don’t have to face duplicative suits and that only the first plaintiff to raise an issue can press a claim. The Supreme Court said that rule doesn’t apply when the earlier suit has been dismissed.
The False Claims Act lets whistle-blowers sue on behalf of the federal government and collect a portion of any damages awarded.
The case is Kellogg Brown & Root v. United States ex rel. Carter, 12-1497.