Qui Notes
December 5, 2019

Supreme Court in No Particular Hurry to Weigh in on Rule 9(b) in FCA Cases

Qui Notes: Unlocking the False Claims Act

The Supreme Court recently took a pass on yet another cert. petition asking it to clarify how Rule 9(b)'s particularity requirement applies to False Claims Act claims. As we have written, federal circuit courts have adopted different views as to what precisely a relator must plead in order to satisfy Rule 9(b)—in particular (pun intended), whether a relator must identify specific, representative false claims. In nearly each of the past five Terms, the Supreme Court has denied at least one cert. petition raising this issue. The most recent was United States ex rel. Strubbe v. Crawford County Memorial Hospital, in which the Eighth Circuit had affirmed dismissal of an FCA claim for failure to adequately tie alleged fraudulent conduct to billing.

There, the relators were EMTs and paramedics for an Iowa hospital who alleged they were directed to perform certain fraudulent practices for "billing" and "cost reimbursement purposes." Under circuit precedent, relators could satisfy Rule 9(b) by pleading "the particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were submitted" without alleging a specific, representative false claim. Over a sharp dissent, however, the Eighth Circuit in this instance affirmed dismissal because the allegations showed only a "possibility" that false claims actually were submitted.

Relators sought cert. regarding "what specific knowledge a relator must have to be able to properly plead an FCA case when the relator does not have access to the physical bills sent to the government," outlining a potential split in the circuits as to what specificity is required absent allegations of particular false bills. The Supreme Court ordered defendants to respond, seeming to indicate at least some interest in the issues. Defendants argued that no split exists, asserting that any variation in the circuits' applications of Rule 9(b) amounted to mere "semantic differences." The Supreme Court denied cert. on November 25.

Although defendants in Strubbe downplayed the split, the fact remains that at least six circuits have adopted what they characterize as a "more lenient" pleading standard under Rule 9(b) that does not require the details of an actually-submitted false claim. See, e.g., United States ex rel. Prather v Brookdale Senior Living Communities, 838 F.3d 750 (6th Cir. 2016). Other circuits have professed to adopt a "stricter" standard that, at least as a general matter, requires the relator to identify specific claims for payment. See, e.g., United States ex rel. Grant v. United Airlines, 912 F.3d 190 (4th Cir. 2018). Although FCA watchers were hopeful the Supreme Court might finally take up the issue, the Court may have viewed Strubbe as a poor vehicle since the Eighth Circuit is already on the "relaxed" side of the split. In any event, the law on Rule 9(b) in FCA cases likely will remain muddled unless and until the Supreme Court weighs in.

© Arnold & Porter Kaye Scholer LLP 2019 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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