Eighth Circuit Court of Appeals Affirms Dismissal of False Claims Act Case

The federal Circuit Courts are sharply split over whether certain civil procedure pleading rules apply to cases filed under the False Claims Act.
Image source: ConstructionConnection.com

The False Claims Act is a federal statute and lawsuits filed thereunder are subject to the Federal Rules of Civil Procedure. These Rules are used to govern the civil litigation process from the initial filing through an appeal. Failure to adhere to the Rules can result in a dismissal of the case on a technicality..

Federal Rule of Civil Procedure Nine has proven to be a source of contention in False Claims Act cases, resulting in several incongruent rulings and general confusion as to its applicability. When a plaintiff decides to file a lawsuit, he must draft and file an official complaint in federal court. Generally, the complaint must set forth basic statements of fact about the incident in question such that the defendant is aware of and understands the allegations he must refute. In certain cases, however, Rule 9(b) requires more specific allegations than those required in a general complaint. Under Rule 9(b), cases raising fraud, mistake, or involving mental awareness must be “plead with particularity,” and will face dismissal if the complaint does not comply with this rule.

In the False Claims Act context, several federal Circuit Courts have held that Rule 9(b) does not apply, while several other Courts have held the opposite. As is usually the case when the federal Circuits disagree, an FCA case involving rule 9(b) applicability is pending review before the U.S. Supreme Court. The Supreme Court, in an effort to better understand the issue, has requested a brief from the U.S. Solicitor General as to whether the standard set forth by the Fourth, Sixth, Eighth, and Eleventh Circuits requiring heightened pleadings is appropriate, or the standard set forth by the First, Fifth, Seventh, and Ninth Circuits is sufficient, requiring “particular details” of the alleged fraudulent scheme.

Rule 9(b) Applicable According to Eighth Circuit

In a recent case considered by the Eighth Circuit, which includes Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota, the Court concluded that Rule 9(b) applies to plaintiff’s whistleblower complaint and it therefore must be dismissed for failing to specifically allege instances of fraud. The Court opined in United States ex rel. Dunn v. North Memorial Health Care that the relator had failed to allege even a single specific act of fraud, despite the relator’s assertions that the defendant’s regulator violations necessarily amounted to subsequent false claims for reimbursement.  In an all-too-familiar set of facts, the whistleblower alleged lack of physician oversight in cardiac and pulmonary rehabilitation services as required by Medicare and Medicaid guidelines. Therefore, the relator concluded, any invoice for reimbursement covering services performed by nurses or office staff violated the False Claims Act. While true, the Court reminded the plaintiff in its Order affirming defendants’ motion to dismiss that liability under the FCA is premised on allegations of fraudulent claims for reimbursement from the government, not regulatory violations. A successful relator must plead the time, place and content of the false acts, and is encouraged to provide “representative examples.” Therefore, failure to identify “even one example of an actual false claim submitted to [Medicare] for reimbursement” would necessarily result in a dismissal.

Conclusion

If you are unsure whether you can meet the specificity requirements for pleading your false claim, do not worry – a whistleblower attorney can help you gather the details of your claim and prepare the required documentation to defeat any motion to dismiss under Rule 9(b). For help with your whistleblower case, contact a reputable qui tam attorney today.

By | 2014-01-24T14:05:00+00:00 January 24th, 2014|False Claims Act Legal News|