If you’ve been following along, you’ll know that the federal Courts of Appeal are engaged in a near-even split with regard to the applicability of Federal Rule of Civil Procedure 9(b) in the False Claims Act context. In general, a civil plaintiff must set forth general facts in a complaint that tend to give rise to an actionable claim under a recognized civil law. However, Rule 9(b) imposes a concept known as “heightened pleading requirements” with regard to certain civil matters, including fraud. The same heightened pleading requirement is not mentioned in the language of the False Claims Act itself, resulting in a conflict between the courts as to the requisite specificity with which a plaintiff must describe the fraud they have witnessed.
Some courts take a more relaxed approach, holding that Rule 9(b) does not operate to require plaintiffs to include hyper-specific details in the complaint. Other courts, however, strictly construe Rule 9(b) to apply to any False Claims Act lawsuit, dismissing the case if the plaintiff has not particularly, specifically, and tediously set forth each instance of fraud alleged against the defendant.
Eighth Circuit Upholds District Court, In Part
The Eighth Circuit, which covers Arkansas, Minnesota, Iowa, Missouri, Nebraska, North Dakota, and South Dakota, recently reviewed the Rule 9(b) issue in the False Claims Act context in the case Thayer v. Planned Parenthood of the Heartland. This case involves several allegations of fraudulent claims for reimbursement on behalf of Medicaid patients. More specifically, the plaintiff alleged that defendants:
- Filed claims for birth control pills in excess of a necessary quantity, often without examination;
- Sought reimbursement for abortion-related services in violation of federal laws;
- Filed for reimbursements for services already partially covered by donations;
- Caused other hospitals to submit false claims by instructing patients with emergency abortion-related complications to categorize the incident as a “miscarriage;”
- Engaged in unlawful “upcoding” of services
The complaint alleges this conduct occurred between 2006 and 2008. However, the complaint did not include any “representative examples” of false claims submitted by Planned Parenthood to Medicaid for reimbursement. Therefore, the defendant was able to successfully have the case dismissed by the district court for failure to adequately plead the allegations with particularity, as required by Rule 9(b). The relator appealed to the Eighth Circuit, which upheld the District Court in part, and remanded the case for further analysis at the trial level.
The court reviewed the realtor’s assertions one-by-one, following its lengthy analysis of the applicability of Rule 9(b) to False Claims Act cases. In sum, the court held that, although a plaintiff is not required to include “specific details of every alleged fraudulent claim,” the complaint “must provide some representative examples of the [defendant’s] alleged fraudulent conduct.” In other words, “the complaint must identify the ‘who, what, where, when, and how of the alleged fraud.” The court further explained that the purpose of Rule 9(b) – were it applicable – would be to weed out baseless claims. In the plaintiff’s case, however, “[The relator] was the center manager for two of Planned Parenthood’s clinics, oversaw Planned Parenthood’s billing and claims systems, and was able to plead personal, first-hand knowledge of Planned Parenthood’s submission of false claims.”
Despite the Court’s holding that the relator’s complaint withstood Rule 9(b) scrutiny, it found that two of the relator’s allegations were “speculative” in nature or lacked reliability. Specifically, the court dismissed the relator’s allegation that Planned Parenthood defrauded Medicaid by instructing patients to lie to hospitals about miscarrying, as well as the claim that Planned Parenthood engaged in unlawful upcoding.
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