Pleading Standards in the Eighth Circuit

Federal Rule of Civil Procedure Rule 9(b)

Relators in qui tam cases under the False Claims Act (“FCA”) face considerable challenges in meeting pleading requirements in many circuits, including the 8^th Circuit.

The Rule 9(b) standard in the Eighth Circuit is well described by the Court in United States ex rel. Joshi v. St. Luke’s Hospital, Inc., 441 F.3d 552 (8th Cir. 2006):

Because the FCA is an anti-fraud statute, complaints alleging violations of the FCA must comply with Rule 9(b).  Under Rule 9(b), the circumstances constituting fraud … shall be stated with particularity. Rule 9(b)’s particularity requirement demands a higher degree of notice than that required for other claims, and is intended to enable the defendant to respond specifically and quickly to the potentially damaging allegations. To satisfy the particularity requirement of Rule 9(b), the complaint must plead such facts as the time, place, and content of the defendant’s false representations, as well as the details of the defendant’s fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as a result.  Put another way, the complaint must identify the who, what, where, when, and how of the alleged fraud.

Id. at 556 (citations and internal quotation marks omitted).  In meeting this burden, a Relator need not plead details of any specific false claims, as long as there is sufficient indicia of reliability that false claims were submitted.  See United States ex rel. Thayer v. Planned Parenthood of the Heartland, 765 F.3d 914, 917-918 (8th Cir. 2014).  When considering a motion to dismiss, the Court must view the Complaint in the light most favorable to Relator, and the facts alleged in the Complaint must be accepted as true.  Hamm v. Gruse, 15 F.3d 110, 112 (8th Cir. 1994).

Federal Rule of Civil Procedure Rule 12(b)

Recognizing that the FCA is to be applied broadly and flexibly to reach all types of whistleblower fraud that cause financial loss to the government, the Supreme Court, when evaluating claims under the Act, has “consistently refused to accept a rigid, restrictive reading.” United States v. Neifert-White Co., 390 U.S. 228, 233 (1968).  Attempts to cabin a Relator’s claims into judicially-created categories would result in exactly the kind of “rigid, restrictive reading” Congress has cautioned against and the Supreme Court “has consistently refused” to adopt. Id. at 232.

To survive a motion to dismiss under Rule 12(b)(6), a Realtor’s complaint need only “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007)).  In making this determination, the court accepts the Relator’s allegations as true and draws all reasonable inferences in favor of Relator.  Crooks v. Lynch, 557 F.3d 846, 848 (8th Cir. 2009).  Accordingly, when reviewing a defendant’s motion to dismiss under Rule 12(b)(6), it is error to either ignore reasonable inferences supported by the allegations in the complaint or to draw any inferences in the defendant’s favor.  See Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 595 (8th Cir. 2009).

Conclusion

The pleading standards in the 8^th Circuit are similar to the pleading rules in many other circuits.  In short, Relators in qui tam cases under the False Claims Act  face considerable challenges in reaching the discovery aspect of litigation.  Engaging a whistleblower lawyer with considerable experience is critical to meeting the pleading rules.