United States District Court, E.D. Virginia, Alexandria Division
UNITED STATES ex rel. BENJAMIN CARTER, Plaintiff,
HALLIBURTON CO., et al., Defendants
Benjamin Carter, United States ex rel., Plaintiff: David
Ludwig, LEAD ATTORNEY, Christina Maria Heischmidt, Dunlap
Bennett & Ludgwig PLLC, Leesburg, VA USA; William Clifton
Holmes, LEAD ATTORNEY, Dunlap, Grubb & Weaver PLLC, Leesburg,
Halliburton Co., Kellogg Brown & Root Services, Inc., Service
Employees International, Inc., Kbr, Inc., Defendants: John
Martin Faust, Law Office of John M Faust PLLC, Washington, DC
USA; Kathryn Bridget Codd, Tirzah Sungyeh Lollar, Vinson &
Elkins LLP, Washington, DC USA.
United States of America, Interested Party: Richard W.
Sponseller, United States Attorney's Office, Alexandria,
C. Cacheris, UNITED STATES DISTRICT JUDGE.
seven years, qui tam relator Benjamin Carter's
allegations of defense contractors submitting false claims to
the Government have been before this Court. The case has
undergone " a remarkable sequence of dismissals and
filings." Kellogg Brown & Root Servs., Inc. v.
United States ex rel. Carter, 135 S.Ct. 1970,
1974, 191 L.Ed.2d 899 (2015). It is back now, on remand from
the Fourth Circuit after the Supreme Court found that this
Court erred by dismissing with prejudice under the False
Claims Act's (" FCA" ), 31 U.S.C. § §
3729-3733, first-to-file bar. Consistent with the Supreme
Court's opinion, this Court now dismisses Relator's
case under the first-to-file bar, this time without
matter came before the Court on Defendants Halliburton
Company; Kellogg Brown & Root Services, Inc.; Service
Employees International, Inc.; and KBR, Inc.'s
(collectively " Defendants" ) motion to dismiss
with prejudice. [Dkt. 99.] In response to that motion,
Relator Benjamin Carter (" Relator" or "
Carter" ) motioned to file an amended complaint. [Dkt.
105.] For the following reasons, the Court will deny
Relator's motion to amend and will dismiss Relator's
case without prejudice.
Court briefly discusses this case's "
remarkable" history so as to frame the present motions.
four months in 2005, Carter worked for Defendants in a water
purification unit employed to provide clean water to U.S.
troops at war in Iraq. (Compl. [Dkt. 1] ¶ ¶ 1-3.)
Carter alleges that during his time in Iraq, he never
performed " actual water purification or testing
duties." ( Id. ¶ ¶ 40, 43, 53.)
Instead, Defendants' personnel allegedly required Carter
and other employees to fill out timecards reporting twelve
hours of water purification work a day when they actually
performed zero. ( Id. ¶ ¶ 53-55.) Carter
also alleges that it was " routine practice" to
require " trade employees," such as him, to submit
timecards totaling eighty-four hours per week, regardless of
the actual work performed. ( Id. ¶ ¶
60-61, 65-68.) Through these allegedly false reporting
practices, Carter argues that false claims were submitted to
the Government and paid to Defendants.
filed his original complaint under the False Claims Act in
February 2006 in the U.S. District Court for the Central
District of California. United States ex rel.
Carter v. Halliburton Co., No. 06-cv-616 (C.D. Cal.
filed Feb. 1, 2006). In November 2008, after two years of
investigation, the case was transferred to this Court ("
Carter I " ). United States ex rel.
Carter v. Halliburton Co., No. 08-cv-1162 (E.D. Va.
transfer Nov. 7, 2008). Shortly before Carter I'
s trial date, the Government informed the parties of a
pending case filed in 2005 with related allegations of false
billing, United States ex rel. Thorpe v.
Halliburton Co., No. 05-cv-8924 (C.D. Cal. filed Dec.
23, 2005). In response to Thorpe and the FCA's
first-to-file bar, this Court dismissed Carter I
without prejudice and Carter appealed that dismissal.
the pendency of Carter I' s appeal,
Thorpe was dismissed for failure to prosecute. In
response, Carter filed a new complaint (" Carter
II " ), but he failed to dismiss his prior appeal.
United States ex rel. Carter v. Halliburton
Co., No. 10-cv-864 (E.D. Va. filed Aug. 4, 2010).
Because Carter I and Carter II were
substantively identical, this Court ruled that the
still-pending appeal barred Carter II. Thus,
this Court dismissed Carter II without
prejudice. 2011 WL 2118227, at *6. In response, Carter
voluntarily dismissed his appeal in Carter I and
again filed his complaint (" Carter III "
). United States ex rel. Carter v. Halliburton
Co., No. 11-cv-602 (E.D. Va. filed June 2, 2011).
Carter III is the case currently before this Court.
But Carter III underwent its own lengthy procedural
journey before arriving for these present motions.
time Carter III was filed in June 2011, two cases
alleging similar false billing by KBR were already pending in
other courts: United States ex rel. Duprey,
No. 8:07-cv-1487 (D. Md. filed June 5, 2007) (" Maryland
Action" ) and a sealed action filed in Texas in 2007
(" Texas Action" ). Defendants motioned to dismiss
Carter III, arguing again that the earlier-filed
cases destroyed this Court's subject matter jurisdiction
due to the first-to-file bar. This Court concluded that the
Maryland Action was related to Carter's claims and was
pending when Carter filed his suit. Thus, the Court dismissed
Carter III for lack of jurisdiction under the
first-to-file bar. Additionally, the Court found that most of
Carter III' s allegations of false claims fell
outside the FCA's six-year statute of limitations. In
total, only $673.56 in allegedly false claims were issued
within the six years prior to 2011. The Court, however, found
that those claims would also be untimely if Carter tried to
refile his case after dismissal. Therefore, the Court
dismissed Carter III with prejudice. 2011 WL
6178878, at *12.
noticed an appeal to the Fourth Circuit arguing, first, that
the Wartime Suspension of Limitations Act (" WSLA"
), 18 U.S.C. § 3287, tolled the statute of limitations
on his claims. See United States ex rel.
Carter v. Halliburton Co., 710 F.3d 171, 177 (4th
Cir. 2013). The Fourth Circuit agreed and reversed this
Court's statute of limitations conclusion by finding that
the WSLA did toll the statute and thus Carter's claims
were not time barred. Id. at 181.
Fourth Circuit then considered the effect of the
first-to-file bar. By the time of appeal, the Maryland and
Texas Actions had been voluntarily dismissed. Thus, Carter
argued that those earlier-filed cases were no longer "
pending" in a way that would bar his suit. The Fourth
Circuit rejected this argument, noting that the " plain
language of the first-to-file bar" required the court to
" look at the facts as they existed when the claim was
brought to determine whether an action is barred."
Id. at 183. Because the Maryland and Texas Actions
were " pending" when Carter III was filed,
the subsequent voluntary dismissal of those cases did not
remove the first-to-file bar. Thus, the Fourth Circuit agreed
with this Court that the first-to-file bar precluded
Carter III. Id.
Fourth Circuit then considered whether the earlier Actions
would continue to bar related suits in perpetuity, even
though those Actions were dismissed. The Fourth Circuit
appears to have reached this question due to its
interpretation that this Court dismissed Carter III
with prejudice under a perpetual-bar theory. The Fourth
Circuit concluded that dismissal with prejudice on
first-to-file grounds was error because " once a case is
no longer pending the first-to-file bar does not stop a
relator from filing a related case." Id.
Therefore, this Court should have dismissed without prejudice
to permit Carter to refile. Id. The Fourth Circuit
did not consider whether the statute of limitations would
have barred refiling, likely because the court found the WSLA
tolled the statute of limitations.
substantial litigation inertia carried Carter III
all the way to the Supreme Court. Kellogg Brown & Root
Servs., Inc. v. United States ex rel. Carter,
135 S.Ct. 1970, 191 L.Ed.2d 899
(2015) [hereinafter Kellogg ]. On the statute of
limitations question, the Supreme Court agreed with this
Court that " the WSLA does not suspend the applicable
statute of limitations." Id. at 1978. This
holding rendered all of Carter's claims time barred
except for $673.56 of false billing. Thus, the Supreme Court
proceeded to consider the application of the first-to-file
bar on those remaining claims. Looking at whether dismissal
with prejudice was required under the first-to-file bar, the
Supreme Court asked " whether the False Claims Act's
first-to-file bar keeps new claims out of court only while
related claims are still alive or whether it may bar those
claims in perpetuity." Id. at 1973. On this
question, the Supreme Court " agree[d] with the Fourth
Circuit that the dismissal with prejudice of respondent's
one live claim was error" because a case is no longer
" pending" once it has been dismissed. Id.
at 1978-79. Thus, the Supreme Court reversed in part and
affirmed in part and remanded the case. The Supreme Court
never addressed the question of whether the statute of
limitations or repose would preclude Carter from refiling
after dismissal without prejudice.
remand, the Fourth Circuit considered the " only issue
left for resolution . . . whether Carter timely filed his
complaint under the principle of equitable tolling."
United States ex rel. Carter v. Halliburton
Co., 612 Fed.Appx. 180, 180 (4th Cir. 2015). Finding
that Carter did not properly appeal the issue of equitable
tolling, the Fourth Circuit granted the "
extraordinary" remedy of summarily affirming this
Court's decision not to equitably toll the statute of
limitations. Id. at 180; see also 4th Cir.
R. 27(f) (" Motions for summary affirmance . . . are
reserved for extraordinary cases only and should not be filed
routinely." ). The Fourth Circuit noted, however, that
" the district court judgment was not wholly free from
error, as 'dismissal with prejudice of respondent's
one live claim' was 'not called for' under the
first-to-file rule." Id. at 181 (quoting
Kellogg, 135 S.Ct. at 1978-79). Therefore, the
Fourth Circuit remanded the case to this Court. Id.
this labyrinthine course, Carter's case is before this
Court again on Defendants' motion to dismiss with
prejudice pursuant to the first-to-file bar and the statute
of limitations and repose that Defendants argue would prevent
Carter from refiling. In response, Carter argues the
first-to-file bar no longer precludes his case and he seeks
to revive his time-barred allegations through amendment,
relation back, and equitable principles. For the following
reasons, the Court will deny Carter's motion to amend and
will dismiss this case without prejudice due to the
to Rule 12(b)(1), a claim may be dismissed for lack of
subject matter jurisdiction. Defendants raising a 12(b)(1)
challenge may contend that the complaint " fails to
allege facts upon which subject matter jurisdiction may be
based" or " that the jurisdictional allegations of
the complaint were not true." Adams v. Bain,
697 F.2d 1213, 1219 (4th Cir. 1982). In either case, the
" burden of proving subject matter jurisdiction on a
motion to dismiss is on the plaintiff, the party asserting
Rule 12(b)(6) allows a court to dismiss a suit which fails
" to state a claim upon which relief can be
granted." Fed.R.Civ.P. 12(b)(6). To survive a motion
to dismiss under Rule 12(b)(6), a complaint must contain
facts sufficient to
" state a claim to relief that is plausible on its
face." Bell A. Corp. v. Twombly, 550 U.S. 544,
570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). When reviewing
the complaint, the court " must accept as true all the
factual allegations contained in the complaint" and
" draw all reasonable inferences in favor of the
plaintiff." E.I. du Pont de Nemours & Co. v. Kolon
Indus., Inc., 637 F.3d 435, 441 (4th Cir. 2011).
FCA's qui tam provision incentivizes citizens to
report and prosecute knowingly false claims being submitted
to the Government. The FCA, however, places limitations on
qui tam suits to " prevent parasitic lawsuits
based on previously disclosed fraud." Carter,
710 F.3d at 181 (citing United States ex rel.
LaCorte v. SmithKline Beecham Clinical Labs., Inc.,
149 F.3d 227, 233 (3d Cir. 1998)). The first-to-file bar, 31
U.S.C. § 3730(b)(5), is one such limitation. Section
3730(b)(5) " precludes a qui tam suit
'based on facts underlying [a] pending action."
Kellogg, 135 S.Ct. at 1974. Specifically, the
statute states the following: " When a person brings an
action . . . no person other than the Government may
intervene or bring a related action based on the facts
underlying the pending action." § 3730(b)(5).
present case, it is uncontested that the Maryland and Texas
Actions were " pending" when Carter filed this suit
in June 2011. Carter argues that those Actions no longer bar
his suit because they were dismissed in October 2011 and
March 2012, respectively, making them no longer "
pending" under Kellogg' s recent definition
of that term. Thus, in Carter's view, he may proceed to
trial on his timely claims without dismissing his case or
amending his complaint. As an alternative position, Carter
argues that the ...