US ex rel. Benjamin Carter v. Halliburton Company

Filing

PUBLISHED AUTHORED OPINION filed. Originating case number: 1:11-cv-00602-JCC-JFA. [1000128542]. [16-1262]

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 16-1262

UNITED STATES ex rel. BENJAMIN CARTER,
Plaintiff - Appellant,
v.
HALLIBURTON CO.; KELLOGG BROWN & ROOT SERVICES, INC.;
SERVICE EMPLOYEES INTERNATIONAL INC.; KBR, INC.,
Defendants - Appellees.
-------------------------------------CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA,
Amicus Supporting Appellees.

Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. James C. Cacheris, Senior District Judge. (1:11-cv-00602-JCC-JFA)

Argued: March 22, 2017

Decided: July 31, 2017

Before AGEE, WYNN, and FLOYD, Circuit Judges.

Affirmed by published opinion. Judge Floyd wrote the opinion, in which Judge Agee and
Judge Wynn joined. Judge Wynn wrote a separate concurring opinion.

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ARGUED: David Smart Stone, STONE & MAGNANINI LLP, Berkeley Heights, New
Jersey, for Appellant. John Patrick Elwood, VINSON & ELKINS LLP, Washington,
D.C., for Appellees. ON BRIEF: David Ludwig, DUNLAP, BENNETT & LUDWIG,
PLLC, Leesburg, Virginia; Robert A. Magnanini, STONE & MAGNANINI LLP,
Berkeley Heights, New Jersey, for Appellant. Craig D. Margolis, Jeremy C. Marwell,
Tirzah S. Lollar, Ralph C. Mayrell, VINSON & ELKINS LLP, Washington, D.C., for
Appellees. Kate Comerford Todd, Steven P. Lehotsky, U.S. CHAMBER LITIGATION
CENTER, Washington, D.C.; Jonathan S. Franklin, Mark Emery, NORTON ROSE
FULBRIGHT US LLP, Washington, D.C., for Amicus Curiae.

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FLOYD, Circuit Judge:
The False Claims Act (FCA) empowers private individuals acting on behalf of the
government to bring civil actions against those that defraud the government. The FCA
contains a provision, known as the “first-to-file” rule, which bars these private
individuals, known as relators, from bringing actions under the FCA while a related
action is pending. In this case, back before this Court for a third time, we consider
whether the first-to-file rule mandates dismissal of a relator’s action that was brought
while related actions were pending, even after the related actions have been dismissed
and the relator’s complaint has been amended, albeit without mention of the related
actions. We conclude that it does.
I.
A.
The FCA imposes liability for knowingly presenting false or fraudulent claims to
the government of the United States for payment or approval. 31 U.S.C. § 3729(a)(1).
“In adopting the FCA, ‘the objective of Congress was broadly to protect the funds and
property of the government.’” United States ex rel. Owens v. First Kuwaiti Gen. Trading
& Contracting Co., 612 F.3d 724, 728 (4th Cir. 2010) (quoting Rainwater v. United
States, 356 U.S. 590, 592 (1958)).
Liability under the FCA is no small matter.

An FCA violator may be held

responsible for treble damages in addition to civil penalties. See 31 U.S.C. § 3729(a)(1).
The FCA’s liability scheme is enforced through civil actions filed by the government, 31

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U.S.C. § 3730(a), as well as through civil actions—known as qui tam actions—that are
filed by private parties—known as relators—“in the name of the Government,” 31 U.S.C.
§ 3730(b)(1).
In a qui tam action under the FCA, a relator files the complaint under seal, and
serves a copy of the complaint and an evidentiary disclosure on the government. 31
U.S.C. § 3730(b)(2). This procedure enables the government to investigate the matter, so
that it may decide whether to take over the relator’s action or to instead allow the relator
to litigate the action in the government’s place. See Smith v. Clark/Smoot/Russell, 796
F.3d 424, 430 (4th Cir. 2015); 31 U.S.C. § 3730(b)(4).

A relator who brings a

meritorious qui tam action receives attorney’s fees, court costs, and a percentage of
recovered proceeds. See State Farm Fire & Cas. Co. v. United States ex rel. Rigsby, 137
S. Ct. 436, 440 (2016); 31 U.S.C. § 3730(d).
“Although designed to incentivize whistleblowers, the FCA also seeks to prevent
parasitic lawsuits based on previously disclosed fraud.” United States ex rel. Beauchamp
v. Academi Training Ctr., 816 F.3d 37, 39 (4th Cir. 2016). To that end, the FCA contains
strict limits on its qui tam provisions, including a statutory “first-to-file” rule. Under that
rule, “[w]hen a person brings an action under [the FCA], no person other than the
Government may intervene or bring a related action based on the facts underlying the
pending action.” 31 U.S.C. § 3730(b)(5). “If a court finds that the particular action
before it is barred by the first-to-file rule, the court lacks subject matter jurisdiction over

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the later-filed matter,” and dismissal is therefore required. United States ex rel. Carson v.
Manor Care, Inc., 851 F.3d 293, 303 (4th Cir. 2017). 1
B.
Appellees Halliburton Company; Kellogg Brown & Root Services, Inc.; KBR,
Inc.; and Service Employees International, Inc. (collectively, “KBR”), are a group of
defense contractors and related entities that provided logistical services to the United
States military during the armed conflict in Iraq. From January to April 2005, Appellant
Benjamin Carter worked for KBR at a water purification unit employed to provide clean
water to American troops serving in Iraq.
In June 2011, Carter filed a qui tam complaint against KBR in the Eastern District
of Virginia. See United States ex rel. Carter v. Halliburton Co. (the “Carter Action”),
No. 11-cv-602 (E.D. Va. filed June 2, 2011). In his complaint, Carter alleged that KBR
had violated the FCA by fraudulently billing the government in connection with its water
purification services. 2

1

We note briefly that two of our sister circuits have held that a first-to-file defect
bears only on the merits of a relator’s action, rather than on a district court’s jurisdiction
over it. See United States ex rel. Hayes v. Allstate Ins. Co., 853 F.3d 80, 85–86 (2d Cir.
2017); United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112, 119–21 (D.C. Cir. 2015).
We have previously held otherwise, see Carson, 851 F.3d at 303, and we do not attempt
to revisit this Circuit’s rule here.
2

The Carter Action was not Carter’s first attempt to sue KBR under the FCA. For
a discussion of unsuccessful, pre-Carter Action suits brought by Carter against KBR, see
United States ex rel. Carter v. Halliburton Co. (Carter II), 710 F.3d 171, 174–76 (4th
Cir. 2013).

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At the time the Carter Action was brought, two allegedly related actions were
already pending: United States ex rel. Duprey, No. 8:07-cv-1487 (D. Md. filed June 5,
2007) (the “Maryland Action”), and a sealed action filed in Texas in 2007 (the “Texas
Action”). However, the Maryland Action was dismissed in October 2011, and the Texas
Action was dismissed in March 2012.
In November 2011, the district court ruled that the Maryland Action was related to
the later-filed Carter Action, and that therefore the latter action was precluded by the
first-to-file rule. The fact that the Maryland Action had been dismissed prior to the
district court’s ruling on the Carter Action gave the court no pause, because it believed
that “whether a qui tam action is barred by [the first-to-file rule] is determined by looking
at the facts as they existed when the action was brought.” United States ex rel. Carter v.
Halliburton Co. (Carter I), No. 1:11-cv-602, 2011 WL 6178878, at *8 (E.D. Va. Dec. 12,
2011) (citation omitted). Because the Maryland Action was pending on the date the
Carter Action was brought, the Carter Action ran afoul of the district court’s
understanding of the first-to-file rule. 3
Additionally, the district court held that all but one of the Carter Action’s claims
fell outside the applicable six-year statute of limitations on civil actions. The court added
that all of the Carter Action’s claims would fall outside the limitations period if Carter
were to refile his action. Finally, the court explained that neither the Wartime Suspension

3

Because it did not have to reach the issue, the district court reserved judgment on
whether the Texas Action also precluded the Carter Action.

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and Limitations Act (WSLA) nor the principle of equitable tolling could toll the statute of
limitations on the Carter Action’s claims. See id. at *8–12 & n.11. As such, the district
court dismissed the Carter Action with prejudice.
Carter appealed the dismissal of the Carter Action to this Court. Carter’s appeal
centered on first-to-file issues, as well as the possibility that the WSLA tolled the statute
of limitations on his claims. Carter did not, however, contest the district court’s decision
to assess the first-to-file rule based on the facts as they existed at the time that the Carter
Action was brought.
This Court rejected the district court’s statute of limitations conclusion, reasoning
that the WSLA applied to civil actions and suspended the time for filing the Carter
Action. See Carter II, 710 F.3d at 177–81. Thus, we reversed the district court’s holding
that the claims in the Carter Action were time-barred.
We then addressed the first-to-file rule. We agreed with the district court that
courts must “look at the facts as they existed when the claim was brought to determine
whether an action is barred by the first-to-file bar.” Id. at 183. As such, we concluded
that the Carter Action must be dismissed under the first-to-file rule, because the Maryland
and Texas Actions were pending at the time the related Carter Action was brought. We
clarified, however, that “once a case is no longer pending the first-to-file bar does not
stop a relator from filing a related case.” Id. Applying this logic, and finding no statute
of limitations issue, we ruled that the district court’s dismissal of the Carter Action
should have been without prejudice instead of with prejudice.

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KBR subsequently petitioned the Supreme Court for certiorari. KBR’s petition
challenged this Court’s holding in connection with the WSLA, as well as its holding that
a relator could bring an FCA action after the dismissal of a related action. See Petition
for a Writ of Certiorari at 1–4, Kellogg Brown & Root Servs., Inc. v. United States ex rel.
Carter (Carter III), 135 S. Ct. 1970 (2015) (No. 12-1497), 2013 WL 3225969. Notably,
KBR’s petition never questioned this Court’s holding that the first-to-file analysis
depends on the set of facts in existence at the time an FCA action is filed.
Carter opposed certiorari, insisting that this Court “correctly decided that the
district court’s jurisdictional dismissal of the case should have been without prejudice.”
Brief in Opposition at 17, Carter III, 135 S. Ct. 1970 (No. 12-1497), 2013 WL 4541112.
He, too, did not question this Court’s decision to conduct its first-to-file analysis based on
the facts in existence at the time that the Carter Action was brought. 4
The Supreme Court granted certiorari, and then affirmed in part and reversed in
part this Court’s decision. See Carter III, 135 S. Ct. 1970. The Supreme Court began by
reversing this Court’s conclusion that the WSLA’s tolling provisions apply to civil
actions like the Carter Action. Id. at 1975–78.
The Supreme Court acknowledged, however, that Carter had raised additional
arguments that, if successful, could render at least one claim of his timely on remand.
Accordingly, the Court proceeded to explore the potential application of the first-to-file
4

In 2013, while the Supreme Court was still considering Carter’s petition for
certiorari, Carter refiled his complaint in the Eastern District of Virginia. The district
court, however, dismissed Carter’s 2013 complaint on first-to-file grounds, because it
was brought while the Carter Action was still pending before the Supreme Court.
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rule. The Court held that the first-to-file rule does not keep later actions out of court in
perpetuity, id. at 1978–79; rather, the rule only keeps later actions out of court if their
earlier-filed counterparts are “pending,” which the Court defined to mean “[r]emaining
undecided,” id. at 1979 (quoting Pending, Black’s Law Dictionary 1314 (10th ed. 2014)).
The Supreme Court, therefore, agreed with this Court’s conclusion that dismissal with
prejudice of any timely aspect of the Carter Action was improper. The Court then
remanded this case for further proceedings.
On remand, this Court addressed an argument pressed by Carter that he could rely
on the principle of equitable tolling to render the Carter Action timely. See United States
ex rel. Carter v. Halliburton Co. (Carter IV), 612 F. App’x 180 (4th Cir. 2015) (per
curiam). We held that Carter did not properly preserve the issue of equitable tolling, and
so we summarily affirmed the district court’s refusal to equitably toll the statute of
limitations. Id. at 180.
We acknowledged, however, that the district court’s judgment was not entirely
error-free, because dismissal with prejudice of the one claim Carter brought within the
limitations period was not called for under the first-to-file rule. Id. at 181. We therefore
remanded this case to the district court for further proceedings.
On remand, Carter objected to the applicability of the first-to-file rule. Carter
argued that the dismissals of the related Maryland and Texas Actions cured any first-tofile defect in the Carter Action.
Carter also filed a motion to amend the Carter Action complaint under Federal
Rule of Civil Procedure 15(a), and argued that an amendment would confirm the
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inapplicability of the first-to-file rule to the Carter Action.

Carter’s proposed

amendments, however, did not address the dismissals of the Maryland and Texas
Actions, but instead centered on elucidating his damages theories with information that
was available prior to the filing of the Carter Action.
Despite Carter’s objections, the district court on remand invoked the first-to-file
rule and dismissed the Carter Action without prejudice. United States ex rel. Carter v.
Halliburton Co. (Carter V), 144 F. Supp. 3d 869, 873 (E.D. Va. 2015). The court
reiterated its view that the date that an action is brought is dispositive in a first-to-file
analysis, and concluded that the fact that the Maryland and Texas Actions were both still
pending on the date the complaint in the Carter Action was filed rendered the Carter
Action precluded by the first-to-file rule. Id. at 877.
The district court also rejected Carter’s efforts to sidestep the first-to-file rule
through amendment. Id. at 883. The court explained that Carter’s proposed amendment
could not change the fact that the Carter Action was brought in violation of the first-tofile rule.

Accordingly, the court denied Carter’s motion for amendment on futility

grounds.
Subsequently, Carter requested reconsideration of the district court’s ruling
pursuant to Federal Rule of Civil Procedure 59(e). For support, Carter cited United
States ex rel. Gadbois v. PharMerica Corp., 809 F.3d 1 (1st Cir. 2015), an intervening
First Circuit decision holding that an FCA relator could cure a first-to-file defect by
supplementing his or her complaint—pursuant to Federal Rule of Civil Procedure

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15(d)—with an allegation that the earlier-filed, related actions that gave rise to the firstto-file defect had been dismissed.
The district court denied Carter’s motion for reconsideration, explaining that
Gadbois did not constitute new controlling law justifying reconsideration because it was
decided outside this Circuit. United States ex rel. Carter v. Halliburton Co. (Carter VI),
315 F.R.D. 56, 59 (E.D. Va. 2016). The court added that, in any event, it found Gadbois
unpersuasive. Id. at 59–60.
Carter timely noticed an appeal of the district court’s rulings dismissing the Carter
Action, denying Carter’s motion for amendment, and denying Carter’s motion for
reconsideration. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.
II.
This Court “reviews a dismissal for lack of subject matter jurisdiction and
questions of statutory interpretation de novo.” Carson, 851 F.3d at 302. We review a
denial of leave to amend a complaint for abuse of discretion. Franks v. Ross, 313 F.3d
184, 198 n.15 (4th Cir. 2002).

We likewise review a denial of a motion for

reconsideration under the deferential abuse of discretion standard.

United States v.

Holland, 214 F.3d 523, 527 (4th Cir. 2000). We may affirm on any ground apparent
from the record before us. United States v. Dozier, 848 F.3d 180, 188 (4th Cir. 2017).
III.
Although the Carter Action was brought while related FCA actions—namely the
Maryland and Texas Actions—were still pending, Carter argues that the intervening
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dismissals of the latter actions dictate that the dismissal of the Carter Action on first-tofile grounds was unwarranted. We disagree.
A.
1.
The first-to-file rule provides that “[w]hen a person brings an action under [the
FCA], no person other than the Government may intervene or bring a related action based
on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). Our first decision
in this case held that courts must “look at the facts as they existed when the claim was
brought to determine whether an action is barred by the first-to-file bar.” Carter II, 710
F.3d at 183. We reaffirm this holding today.
The basis for the above-described holding was the relevant statutory text, which
imposes a restriction on the “bring[ing]” of an “action.” 31 U.S.C. § 3730(b)(5). In
ordinary parlance, one “bring[s] an action” by “institut[ing] legal proceedings.” Bring an
Action, Black’s Law Dictionary 231 (10th ed. 2014). Put another way, “[o]ne ‘brings’ an
action by commencing suit.” United States ex rel. Chovanec v. Apria Healthcare Group,
Inc., 606 F.3d 361, 362 (7th Cir. 2010); see also Goldenberg v. Murphy, 108 U.S. 162,
163 (1883) (“A suit is brought when in law it is commenced.”); Harris v. Garner, 216
F.3d 970, 974 (11th Cir. 2000) (en banc) (“‘[B]rought’ and ‘bring’ refer to the filing or
commencement of a lawsuit, not to its continuation.”); Chandler v. D.C. Dep’t of Corr.,
145 F.3d 1355, 1359 (D.C. Cir. 1998) (“[T]he phrase ‘bring a civil action’ means to
initiate a suit.”).

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Accordingly, the appropriate reference point for a first-to-file analysis is the set of
facts in existence at the time that the FCA action under review is commenced. Facts that
may arise after the commencement of a relator’s action, such as the dismissals of earlierfiled, related actions pending at the time the relator brought his or her action, do not
factor into this analysis.
2.
Carter asserts that our prior holding that a first-to-file analysis turns on the set of
facts existing at the time an FCA action was commenced has been undermined by the
Supreme Court’s intervening decision in this case. See Carter III, 135 S. Ct. 1970. We
disagree.
As explained above, in our original decision in this case, we reversed the district
court’s dismissal of the Carter Action with prejudice, and remanded with instructions to
have the Carter Action dismissed without prejudice. The basis for our decision to dismiss
was our view that Carter had violated the first-to-file rule by bringing the Carter Action
while related FCA actions were still pending; the basis for our decision to dismiss without
prejudice was our view that Carter could refile his case following the dismissals of
earlier-filed, related FCA actions. See Carter II, 710 F.3d at 183.
Carter then petitioned for certiorari, and the Supreme Court granted that petition.
See Carter III, 135 S. Ct. at 1975. As relevant here, the Court in Carter III stated that it
was “consider[ing] whether [Carter’s] claims must be dismissed with prejudice under the
first-to-file rule.” Id. at 1978. The answer to this question turned on how a court should

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read the first-to-file rule’s prohibition on the bringing of an FCA action while a related
action is “pending.”

31 U.S.C. § 3730(b)(5).

The Supreme Court held that, in

accordance with the “ordinary meaning” of the term “pending,” a “qui tam suit under the
FCA ceases to be ‘pending’ once it is dismissed.” Carter III, 135 S. Ct. at 1978–79. The
Supreme Court concluded, “[w]e therefore agree with the Fourth Circuit that the
dismissal with prejudice of [Carter’s] one live claim was error.” Id. at 1979.
The Supreme Court in Carter III did not reject, or even comment on, this Court’s
holding that a court must “look at the facts as they existed when the claim was brought to
determine whether an action is barred by the first-to-file bar.” Carter II, 710 F.3d at 183.
As such, we conclude that Carter III left the above-described holding intact.
Carter resists this conclusion, based on unreasonable readings of certain
statements from Carter III. Carter first relies on the Supreme Court’s statement that “an
earlier suit bars a later suit while the earlier suit remains undecided but ceases to bar that
suit once it is dismissed.” Carter III, 135 S. Ct. at 1978. Carter, in effect, reads the
Court’s statement to mean that “an earlier suit bars the continuation of a later suit while
the earlier suit remains undecided but ceases to bar the continuation of that suit once it is
dismissed.” This reading would empower courts conducting a first-to-file analysis to
take into account the dismissals of an action giving rise to a relator’s first-to-file
problems.
We cannot support Carter’s reading.

Instead, we read the above-described

statement as simply providing that “an earlier suit bars the bringing of a later suit while
the earlier suit remains undecided but ceases to bar the bringing of that suit once it is
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dismissed.” When read in this manner, this Court’s holding regarding the temporal
dynamics of the first-to-file rule is left undisturbed.
Our reading respects the statutory text underlying the first-to-file rule. That text
does not purport to restrict the continuation of an FCA action while a related action is
pending; rather, it restricts the “bring[ing]” of an FCA action while a related action is
pending. 31 U.S.C. § 3730(b)(5). Presumably, the Supreme Court was aware of this
textual detail in making the pronouncements that it did in Carter III.
In contrast, we cannot presume that the Supreme Court intended, with one
ambiguous statement, to overrule this Court’s conclusion as to the proper temporal
reference point for a first-to-file inquiry. 5 This conclusion was never contested in the
parties’ briefing, and the Supreme Court did not present it as an issue before it in its
opinion. The Supreme Court, moreover, expressed agreement with this Court’s rejection
of dismissal with prejudice in this case, and it did not qualify this expression of
agreement with the significant caveat that it disagreed with this Court’s instruction of
dismissal without prejudice. For these reasons, we do not agree with Carter that the
above-described statement in any way undermined this Court’s initial first-to-file
analysis.

5

This conclusion, we add, was consistent with the conclusions of widespread, preCarter III circuit case law. See, e.g., Walburn v. Lockheed Martin Corp., 431 F.3d 966,
972 n.5 (6th Cir. 2005); Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279
(10th Cir. 2004); United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1188
(9th Cir. 2001).

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Next, Carter tries to rely on the Supreme Court’s statement that it “agree[s] with
the Fourth Circuit that the dismissal with prejudice of [Carter’s] one live claim was
error.” Carter III, 135 S. Ct. at 1979. Carter urges that the Supreme Court’s decision to
describe one of Carter’s claims as “live” was a manner of signaling that that claim is
unaffected by the first-to-file rule. We disagree. The lead-up to Carter’s second-quoted
statement confirms that the Court was only using the description “live” to mean “not
time-barred.” See id. at 1978 (explaining that because “at least one claim [may be]
timely on remand,” the Court must “consider whether [Carter’s] claims must be
dismissed with prejudice under the first-to-file rule”). The statement itself belies the
notion that “live” means not in violation of the first-to-file rule: The statement expresses
unqualified agreement with this Court, which had just issued a decision that both applied
the first-to-file rule to the Carter Action and called for dismissal without prejudice in lieu
of dismissal with prejudice. See Carter II, 710 F.3d at 183.
Accordingly, the Supreme Court’s decision in Carter III does not disturb our
initial holding that the reference point for a first-to-file analysis is the set of facts in
existence at the time that the action under review is commenced.
B.
Having discussed how this Court decides whether the first-to-file rule has been
violated, we now turn to analyzing the sanction for a first-to-file violation. Our precedent
on this issue is clear: The first-to-file rule is designed to restrict the bringing of certain

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types of suits, so when a relator brings an FCA action to court in violation of the first-tofile rule, “the court must dismiss the action.” Carson, 851 F.3d at 302.
A court’s lack of discretion when it comes to sanctioning first-to-file violations
was underscored in a recent Supreme Court decision. See Rigsby, 137 S. Ct. 436. In
Rigsby, the Supreme Court considered whether a violation of the FCA provision
mandating that relators file their complaints under seal could only be sanctioned with
dismissal. Id. at 439–40. The Court held that the appropriate response to a seal violation
was left to the discretion of the district court, in light of Congressional silence on the
issue of how to sanction a seal violation. Id. at 442–444. In the course of reaching this
holding, however, the Court contrasted the seal requirement with the first-to-file rule,
which the Court described as one of “a number of [FCA] provisions that do require, in
express terms, the dismissal of a relator’s action.” Id. at 442–43 (citing 31 U.S.C.
§ 3730(b)(5)). This reasoning by the Supreme Court confirms that the only appropriate
response for a first-to-file rule violation is dismissal.
C.
Carter takes issue with the policy implications of holding (i) that the first-to-file
rule is violated when an FCA action is brought while a related action is pending
(regardless of the eventual outcome of the latter action), and (ii) that a first-to-file
violation must be sanctioned with dismissal. Carter asserts that these holdings would
compel a court, sitting after the FCA’s limitations period has run, to dismiss a relator’s
timely FCA action brought during the pendency of a then-pending, but since-dismissed,

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related action, and thereby expose the relator (if he or she sought to file a new complaint)
to statute of limitations problems that the relator otherwise would not face.

This

arrangement, Carter contends, conflicts with the Supreme Court’s apparent policy
preference for interpretations of the FCA that facilitate government recoveries. See
Carter III, 135 S. Ct. at 1979 (asking rhetorically, “Why would Congress want the
abandonment of an earlier suit to bar a later potentially successful suit that might result in
a large recovery for the Government?”).
This policy argument offers no basis for disregarding the first-to-file rule’s
unambiguous statutory text.

“Our job is to follow the text even if doing so will

supposedly undercut a basic objective of the statute.” Baker Botts LLP. v. ASARCO LLC,
135 S. Ct. 2158, 2169 (2015) (internal quotation marks omitted). The first-to-file rule’s
statutory text, as explained above, plainly bars the bringing of actions while related
actions are pending, and affords courts no flexibility to accommodate an improperly-filed
action when its earlier-filed counterpart ceases to be pending. We follow this text today,
and decline to manufacture such flexibility, even if it may raise statute of limitations
problems for certain FCA relators. See Carter III, 135 S. Ct. at 1979 (“The False Claims
Act’s qui tam provisions present many interpretive challenges, and it is beyond our
ability in this case to make them operate together smoothly like a finely tuned
machine.”).
We hasten to add that although our holding may reduce the number of duplicative
actions that can survive the FCA’s limitations, this reduction should have no material
effect on the Act’s objective of ensuring that the government is put on notice of fraud.
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Such notice is already principally provided by first-filed actions. See Carson, 851 F.3d at
302–03 (“A belated ‘relator who merely adds details to a previously exposed fraud does
not help reduce fraud or return funds to the federal fisc, because once the government
knows the essential facts of a fraudulent scheme, it has enough information to discover
related frauds.’” (quoting United States ex rel. Branch Consultants v. Allstate Ins. Co.,
560 F.3d 371, 378 (5th Cir 2009))).
Finally, we note that KBR is not without policy arguments of its own. Were we to
hold that a statutorily-barred action (i.e., an action brought while a related action is
pending) could be revived by an event occurring outside the FCA’s limitations period
(i.e., dismissal of the related action), we would be undermining an FCA defendant’s
interest in repose and avoiding stale claims outside the limitations period. See Gabelli v.
SEC, 133 S. Ct. 1216, 1221 (2013) (describing the interests of defendants that are
advanced by statutes of limitations). Congress could certainly have enacted a revival
mechanism in the first-to-file rule statute notwithstanding repose and staleness concerns,
but it has not done so, and we are not at liberty to create one.
D.
With this understanding in mind, we reiterate the conclusion of our initial decision
in this case. See Carter II, 710 F.3d at 183. Because Carter commenced the Carter
Action while the Maryland and Texas Actions were still pending, he clearly “br[ought]”
an “action” while factually related litigation remained pending, 31 U.S.C. § 3730(b)(5),
and therefore violated the first-to-file rule. The subsequent dismissals of the Maryland

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and Texas Actions do not alter the fact that Carter brought the Carter Action while
factually related litigation remained pending, and those dismissals therefore do not cure
the Carter Action’s first-to-file defect.
Because the Carter Action violated the first-to-file rule, and because the only
remedy for such a violation is dismissal, the district court was correct to dismiss the
Carter Action.
IV.
Carter argues that even if the dismissals of the Maryland and Texas Actions did
not automatically cure the Carter Action’s first-to-file defect, his subsequent, Rule 15(a)based proposed amendment to his Carter Action complaint would have done so. The
district court rejected this argument, and consequently denied Carter’s proposed
amendment. We affirm.
Rather than address any matters potentially relevant to the first-to-file rule, such as
the dismissals of the Maryland and Texas Actions, the proposed amendment simply adds
detail to Carter’s damages theories. 6 As such, we see no reason why that proposal would

6

Although Carter and his counsel referenced the dismissals of the Maryland and
Texas Actions in their briefing and during oral arguments, these references do not rise to
the level of proposed revisions to a complaint. See S. Walk at Broadlands Homeowners
Ass’n, Inc. v. OpenBand at Broadlands, LLC, 713 F.3d 175, 184 (4th Cir. 2013) (“It is
well-established that parties cannot amend their complaint through briefing or oral
advocacy.”).

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have cured the first-to-file defect in the Carter Action. Therefore, Carter’s proposed
amendment was properly denied. 7
V.
Finally, Carter contests the district court’s denial of his Rule 59(e)-based motion
for reconsideration. Finding no error in the district court’s denial, we affirm.
“Rule 59(e) motions can be successful in only three situations:

(1) to

accommodate an intervening change in controlling law; (2) to account for new evidence
not available at trial; or (3) to correct a clear error of law or prevent manifest injustice.”
Zinkand v. Brown, 478 F.3d 634, 637 (4th Cir. 2007) (internal quotation marks omitted).
Carter contends that the first and third bases for reconsideration are implicated in this
case. This contention does not withstand scrutiny.
With respect to the first basis for reconsideration, Carter claims that the 2015
Gadbois decision—where the First Circuit held that an FCA action’s first-to-file defect
can be cured by a Rule 15(d) supplement clarifying that an earlier-filed, related action
that gave rise to the defect has been dismissed—constitutes an intervening change in
controlling law. See Gadbois, 809 F.3d at 4–6. We disagree for two reasons.
First, as an out-of-circuit decision, Gadbois cannot constitute controlling law in
this Circuit. See McBurney v. Young, 667 F.3d 454, 465 (4th Cir. 2012).

7

Because we need not do so, we decline to comment on the other reasons the
district court identified as justifying its rejection of Carter’s effort to circumvent
dismissal through amendment.

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Second, Gadbois is factually distinguishable. Gadbois only addressed a situation
where the relator sought to revise an FCA complaint with information pertaining to the
related action that gave rise to the first-to-file defect. Carter’s situation is different,
because his proposed revision makes no mention of the related Maryland and Texas
Actions. Thus, assuming for the sake of argument that Gadbois was correctly decided, 8 it
provides Carter no support.
With respect to the third basis for reconsideration, Carter argues that the district
court’s decision to dismiss the Carter Action and to deny his proposed amendment was
clearly erroneous and manifestly unjust. Having concluded that the above-described
decision was correct, we cannot agree with Carter’s argument.
Simply put, Carter was ineligible for relief on a motion for reconsideration, and
thus the district court did not err in denying him such relief.
VI.
This Court fully supports the FCA’s noble goal of protecting the government’s
funds and property against fraud. At the same time, we must adhere to the statutory
provisions and limitations that Congress put into place in pursuit of that goal. We do so
in this case by holding that because the Carter Action violated the FCA’s first-to-file rule
8

But see United States v. Medco Health Solutions, Inc., No. 11-684-RGA, 2017
WL 63006, at *12 (D. Del. Jan. 5, 2017) (arguing that Gadbois “failed to ‘give sufficient
weight to the plain language’ of the first-to-file bar”) (quoting Carter VI, 315 F.R.D. at
60); United States ex rel. Soodavar v. Unisys Corp., 178 F. Supp. 3d 358, 373–74 (E.D.
Va. 2016) (arguing that Gadbois conflicts with the first-to-file rule’s purpose of
foreclosing duplicative qui tam actions).

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in a manner not cured by subsequent developments, the action must be dismissed. The
district court’s judgments comport with this holding, and they are therefore
AFFIRMED.

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WYNN, Circuit Judge, concurring:
The False Claims Act’s “first-to-file” bar provides that “[w]hen a person brings an
action under [the False Claims Act], no person other than the Government may intervene
or bring a related action based on the facts underlying the pending action.” 31 U.S.C.
§ 3730(b)(5). The district court dismissed relator Benjamin Carter’s (“Relator”) False
Claims Act complaint against Defendant Halliburton Co., and several of its subsidiaries,
on grounds that at least two “related” actions were “pending” at the time Relator filed his
original complaint.

Following dismissal of all earlier-filed, related actions, Relator

sought leave to amend his complaint to avoid preclusion under the first-to-file bar.
Relator’s proposed amendment, however, did not reference, in any way, the first-to-file
bar or the dismissal of the two earlier-filed, related actions. The district court denied
Relator leave to amend on grounds of futility, holding as a matter of law that a relator
cannot cure a first-to-file defect by amending or supplementing his complaint after
dismissal of all earlier-filed, related actions.
I agree with the majority opinion’s conclusion that the dismissal of all earlierfiled, related actions does not, by operation of law, lift the first-to-file bar on a later-filed
action. The majority opinion further concludes that the district court did not abuse its
discretion in denying Relator leave to amend. I write separately to emphasize the narrow
scope of that conclusion. In particular, the majority opinion finds that the district court
did not reversibly err in denying Relator leave to amend solely on grounds that his
proposed amendment did not “address any matters potentially relevant to the first-to-file
rule, such as the dismissals of the [earlier-filed, related actions].” Ante at 20. To that
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end, the majority opinion does not address, much less adopt, the district court’s reasoning
that an amendment or supplement to a complaint cannot, as a matter of law, cure a firstto-file defect, id. at 21 n.8—a question that has divided district courts in this circuit and
around the country, see United States ex rel. Wood v. Allergan, Inc., No. 10-CV-5645,
2017 WL 1233991, at *10 (S.D.N.Y. Mar. 31, 2017) (collecting cases). Likewise, the
majority opinion does not address whether the district court’s rule categorically barring a
relator from supplementing a complaint to cure a first-to-file defect is consistent with this
Court’s decision in Feldman v. Law Enforcemt Associates Corp., 752 F.3d 339, 347 (4th
Cir. 2014), which held that “even when [a] District Court lacks jurisdiction over a claim
at the time of its original filing, a supplemental complaint may cure the defect by alleging
the subsequent fact which eliminates the jurisdictional bar.” Rather than resolving those
questions, the majority opinion simply holds that a proposed amendment or supplement
to a complaint cannot cure a first-to-file defect when the amendment or supplement does
not reference the dismissal of publicly disclosed, earlier-filed related actions.

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