Eighth Circuit Rules Certain FCA Whistleblowers Are Not Required To Identify Specific Examples of Fraud Under Rule 9(b)

King & Spalding

On August 29, 2014, the Eighth Circuit ruled that False Claims Act (FCA) whistleblowers with knowledge of employer billing practices are not necessarily required to identify specific examples of fraud to survive a Rule 9(b) challenge. In Thayer v. Planned Parenthood of the Heartland, the whistleblower filed a qui tam action against Planned Parenthood, alleging that it violated the federal FCA and the Iowa FCA by submitting false or fraudulent claims for Medicaid reimbursement. The whistleblower, a former center manager for a Planned Parenthood clinic, alleges that she was personally responsible for overseeing clinic billing and had personal knowledge of defendant’s billing systems. The district court had dismissed her complaint for failure to plead fraud with the particularity required by Federal Rule of Civil Procedure 9(b). The Eighth Circuit reversed the district court, holding that a lawsuit may survive a Rule 9(b) motion to dismiss even without examples of actual claims that are purported to be fraudulent.

While Rule 9(b) does require allegations of fraud to be pled with “particularity,” the Eighth Circuit held that here the whistleblower met that standard, stating that “a relator who provides sufficient indicia of reliability to support her allegations that false claims were submitted, such as by pleading details about the defendant’s billing practices and pleading personal knowledge of the defendant’s submission of false claims, fulfills Rule 9(b)’s objective of protecting the defendant from baseless claims.” This decision alters the Eighth Circuit’s standard requiring the pleading of actual billing examples to survive Rule 9(b) motions to dismiss. Though specific claim examples will continue to be generally required, the Eighth Circuit will now allow suits to proceed where, as here, whistleblowers assert that they have first-hand knowledge that false claims were submitted.

For the full Eighth Circuit Opinion, click here.

Reporter, Katy Lucas, Atlanta, +1 404 572 2822, klucas@kslaw.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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