Relators Must Provide Necessary Details to Clear Evolving Pleading Standards

Claims brought under the FCA must comply with the particularity requirements of the Federal Rule of Civil Procedure Rule 9(b). United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir. 1997).  Rule 9(b) requires, at a minimum, “that a plaintiff set forth the ‘who, what, when, where, and how’ of the alleged fraud.” Id. While this journalistic formula seems simple enough, the real-world application has led to thousands of published district court opinions, wrestling with the application to the federal False Claims Act.

The problem is that an overly stringent Rule 9(b) pleading standard derails meritorious qui tam actions and subverts the very purpose behind the federal False Claims Act qui tam provisions. The reality is that in the vast majority of qui tam cases, the government does not need the assistance of relators in identifying specific false claims. Moreover, such a requirement would undermine the government’s enforcement efforts, for it would discourage the filing of qui tam suits by relators who would otherwise have both the means and the incentive to expose acts of fraud against the United States.

Fortunately, many circuits have honored the intent behind the False Claims Act qui tam provisions by adopting a looser application of Rule 9(b). For example, in the Fifth Circuit, a relator may survive Rule 9(b) even without claims information “by alleging the particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.” United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 190 (5th Cir. 2009).

The lowered Rule 9(b) standards are not a complete pass on providing sufficiently detailed information, however. For example, a district court in the Fifth Circuit recently held that a relator failed to satisfy the Grubbs Rule 9(b) standard, when the relator alleged a healthcare kickback scheme without providing any information about the recipients of the kickbacks. See United States ex rel. Nunnally v. West Calcasieu Cameron Hospital, No. 2:08CV0371 (W.D. La. May 21, 2012).


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