U.S. Solicitor General Explains the Inapplicability of Rule 9(b) in the False Claims Act

Applicability of rule 9(b) of the Federal Civil Procedure

The U.S. Supreme Court is expected to issue a ruling on Nathan v. Takeda once oral arguments conclude.
Image source: Wikimedia Commons

As we reported yesterday, the U.S. Solicitor General, upon request by the Supreme Court, submitted its amicus curiae brief in the hotly-contested False Claims Act case Nathan v. Takeda Pharmaceuticals. As a bit of background, this case involves the practice of off-label marketing, which occurs when a drug company promotes a product for the treatment of disorders outside of its official FDA-approved use. You may recall several other off-label marketing cases we have covered, including a recent case involving the unapproved marketing of Depakote to sedate dementia patients despite its limited approval for the treatment of epilepsy. In Nathan, the whistleblower relayed similar allegations of off-label marketing involving the drug Kapidex, which was approved for the treatment of esophageal erosion in 30 mg doses. The whistleblower contends that Takeda intentionally marketed Kapidex in 60 mg doses for the treatment of Gastro-Esophogeal Reflux Disease (GERD) and the FCA was violated with each submission of an invoice to Medicaid or Medicare for reimbursement.

The pivotal issue in this case involves whether the relator was required to include each instance of fraud in its complaint, or whether a general statement alleging the fraud is sufficient.

Details of Solicitor General’s Opinion

As discussed in yesterday’s post, the Solicitor concluded that Rule 9(b), which requires fraud to be plead with heightened specificity, does not necessarily apply in the FCA context, provided the plaintiff sets forth statements which lead to a reasonable inference of the occurrence of fraud. The Solicitor’s opinion continues by explaining that requiring an FCA plaintiff to plead the exact dollars and cents of every single instance of fraud would be an absurd interpretation of the FCA. The Solicitor pointed out that, even at a trial, a plaintiff need not plead with dollars, cents, and billing invoice numbers for every instance of fraud in order to convince a trial court that fraud has occurred. The Solicitor also pointed to several recently-decided cases within the rigid-9(b) jurisdictions that seem to suggest the Courts are lightening up on their interpretation of the rule. In one case out of the Sixth Circuit, which formerly adhered to the per se application of the rule, the Court opined “that the requirement that a relator identify an actual false claim may be relaxed when, even though the relator is unable to produce an actual billing or invoice, he or she has pled facts which support a strong inference that a claim was submitted.” Chesbrough v. VPA,P.C., 655 F.3d 461, 471 (2011).

The Solicitor’s opinion continues by pointing out that it would be an unnecessary waste of resources to require the relator to gather the evidence of false claims documentation that are more readily available and accessible by the government itself. The opinion states that otherwise ambitious relators may be dissuaded from filing a claim based on the sheer amount of evidence needed to properly submit a complaint.

The opinion unequivocally aligns its allegiance with those Circuits rejecting the view that Rule 9(b) applies in FCA cases and attempts to convince the Supreme Court that application of this rule would result in unintended and detrimental consequences for FCA litigants. In addition, the Solicitor opines that Nathan v. Takeda may not be appropriate for review by the Supreme Court because the plaintiff failed to plausibly allege false claims as required by Ashcroft v. Iqbal, 556 U.S. 662 (2009) and, even if the Court finds for plaintiff on the 9(b) issue, his case still likely does not meet other applicable standards.

Conclusion

If you are considering a whistleblower case, you may be unsure of the amount of evidence you need to properly start your claim. Perhaps you are fairly certain that fraud is occurring, but you do not have the documentation to back up your claim. The best course of action for you moving forward is to speak with a confidential, experienced whistleblower attorney about the information you have. Your attorney can help you properly decipher whether you have a likely successful claim and, if so, the amount of documentation you and your attorney will need to gather to succeed.

By | 2018-03-25T14:59:58+00:00 March 13th, 2014|False Claims Act Legal News, Healthcare Fraud|