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United States ex rel. Carter v. Halliburton Co.

United States District Court, E.D. Virginia, Alexandria Division

May 2, 2014

UNITED STATES ex rel. BENJAMIN CARTER, Plaintiff,
v.
HALLIBURTON CO., et al., Defendants

For Benjamin Carter, Unted States, ex rel, Plaintiff: David Ludwig, LEAD ATTORNEY, Dunlap Weaver PLLC, Leesburg, VA; Christina Maria Heischmidt, DunlapWeaver PLLC (Richmond), Richmond, VA.

For Halliburton Co., Kellogg Brown & Root Services, Inc., Service Employees International, Inc., KBR, Inc., Defendants: John Martin Faust, LEAD ATTORNEY, Law Office of John M Faust PLLC, Washington, DC; Tirzah Sungyeh Lollar, LEAD ATTORNEY, Vinson & Elkins LLP, Washington, DC.

For United States of America, Interested Party: Richard W. Sponseller, LEAD ATTORNEY, United States Attorney's Office, Alexandria, VA.

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MEMORANDUM OPINION

James C. Cacheris, UNITED STATES DISTRICT COURT JUDGE.

At issue in this qui tam action brought under the False Claims Act (" FCA" ) is whether the FCA's first-to-file bar is triggered when an earlier-filed suit based on the same material elements of fraud continues on direct review before the Supreme Court. After careful consideration of the parties' arguments and applicable

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law, the Court concludes that the first-to-file bar prohibits later-filed FCA actions while a related case awaits a decision from the Supreme Court regarding certiorari.

Currently pending is Defendants KBR, Inc., Halliburton Company, Kellogg Brown & Root Services, Inc., and Service Employees International, Inc.'s (collectively " Defendants" ) Motion to Dismiss. [Dkt. 20.] For the reasons that follow, the Court will grant Defendants' motion.

I. Background

The Court is well versed in the subject matter underlying this case on account of its recurring appearance before the undersigned. In brief, Benjamin Carter (" Carter" or " Plaintiff" ) alleges that Defendants falsely billed the government for services provided to United States military forces in Iraq in violation of the FCA. (Compl. [Dkt. 1] at 12-19.) These allegations stem from Carter's work as a reverse osmosis water purification unit operator from mid-January 2005 until April 2005. ( Id. at 12-13.) Carter claims that Defendants invoiced the United States for purification work during this period although water purification did not begin until approximately May 2005. ( Id. at 16.) Carter maintains that he and his fellow employees were instructed to submit time sheets for purification work that was never in fact performed. ( Id. at 12-14.) Carter also contends that, as part of an overall scheme to overbill the government, Defendants required all trade employees to submit time sheets totaling exactly twelve hours per day regardless of the actual hours worked. ( Id. at 33.)

The procedural history of this case can only be described as arduous. Carter filed his original complaint under seal on February 1, 2006, in the United States District Court for the Central District of California. See United States ex rel. Carter v. Halliburton Co., No. 06-cv-0616 (C.D. Cal. filed Feb. 1, 2006). In May 2008, after extensive investigation, the action was unsealed and transferred to this Court. See United States ex rel. Carter v. Halliburton Co., No. 1:08-cv-1162 (E.D. Va. filed Feb. 1, 2006). Upon transfer, Carter amended his complaint.

By order dated January 13, 2009, the Court dismissed Carter's first amended complaint without prejudice for failure to plead fraud with particularity. (1:08-cv-1161 [Dkt. 90].) Carter submitted a second amended complaint on January 28, 2009. (1:08-cv-1161 [Dkt. 92].) Defendants then moved to dismiss Carter's second amended complaint under Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. (1:08-cv-1161 [Dkt. 105].) Following a hearing on this matter, the Court dismissed Counts 2 and 3 in their entirety, and temporally narrowed Counts 1 and 4. (1:08-cv-1161 [Dkt. 122].) At this point, Defendants answered the remaining allegations and the case proceeded through discovery.

In March 2010, one month before the scheduled trial date, the Department of Justice contacted the parties and informed them of a similar case pending in the United States District Court for the Central District of California since 2005. See United States ex rel. Thorpe v. Halliburton Co., No. 05-cv-08924 (C.D. Cal. filed Dec. 23, 2005). Defendants then moved to dismiss Carter's suit under the FCA's " first-to-file bar," which precludes related claims that have been previously filed by another relator. See 31 U.S.C. § 3730(b)(5). Finding Defendants' argument persuasive, the Court granted Defendants' motion and dismissed Carter's action without prejudice on May 10, 2010. (1:08-cv-1161 [Dkt. 307].) Carter filed a notice of appeal to the Fourth Circuit on July 13, 2010. (1:08-cv-1161 [Dkt. 325].)

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On July 20, 2010, the District Court for the Central District of California dismissed the Thorpe action. In response, Carter re-filed his complaint in this Court. See United States ex rel. Carter v. Halliburton Co., No. 1:10-cv-864 (E.D. Va. filed Aug. 4, 2010) . Carter simultaneously moved to dismiss his pending appeal, which the Fourth Circuit granted on February 14, 2011. (1:08-cv-1161 [Dkt. 331].)

On May 24, 2011, the Court dismissed Carter's 2010 complaint without prejudice on grounds that Carter had filed the 2010 case when the first suit remained pending on appeal, thereby creating his own jurisdictional bar under the FCA's first-to-file provision. (1:10-cv-864 [Dkt. 47].) Carter did not appeal this ruling.

On June 2, 2011, Carter again re-filed his complaint. See United States ex rel. Carter v. Halliburton Co., No. 1:11- cv-602 (E.D. Va. filed June 6, 2011). After the case was unsealed, Defendants moved to dismiss the action under the FCA's first-to-file bar and the FCA's public disclosure bar. See 31 U.S.C. § § 3730(b)(5), (e)(4)(A). Defendants further argued that even if neither jurisdictional bar applied, ...


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