Consumer Fraud

U.S. Supreme Court to review whistleblower lawsuit against KBR, Halliburton

osha whistle U.S. Supreme Court to review whistleblower lawsuit against KBR, HalliburtonThe U.S. Supreme Court said that it will review a whistleblower lawsuit against KBR Inc. (Kellogg, Brown and Root) and Halliburton Co. alleging the corporations overbilled the U.S. government for work they performed on water-purification projects at two camps in Iraq.

The Justices said on Tuesday that they will consider whether the lawsuit, filed by former KBR employee Benjamin Carter under the federal False Claims Act, should move forward. KBR, a global engineering and construction firm, has appealed the decision of a lower court reinstating Mr. Carter’s whistleblower lawsuit.

According to the Associated Press, a federal judge had tossed the suit, saying that Mr. Carter failed to file it within the six-year time period set for whistleblower lawsuits under the False Claims Act.

The 4th Circuit Court of Appeals overruled the federal judge’s decision, saying that such cases can be filed after the normal deadline when the country is at war. The appellate court based its decision on the Wartime Suspension of Limitations Act, which extends the deadlines for such claims during war times of war.

KBR has appealed that decision, arguing that the appellate court’s interpretation effectively means that no deadline for whistleblower lawsuits involving government contractors would occur until years after the president or Congress officially ends the conflict, in this case the wars in Iraq and Afghanistan.

KBR and Halliburton also argue that Mr. Carter’s case should be stopped because another employee made similar allegations against the companies in an earlier lawsuit filed in California.

The False Claims Act allows individuals to sue on behalf of the U.S. government when they have good, original evidence that a taxpayer-funded government agency or program has been defrauded by government contractors or other entities seeking reimbursement for products and services. In return, whistleblowers receive 15 to 30 percent of any recovery the government makes as a result of their case.

The Obama Administration has urged the Supreme Court to reject KBR’s appeal. The Supreme Court is expected to review the case in the fall.

Sources:

Associated Press
Bloomberg