Courts Continue to Sensibly Lower the Pleading Standard for Qui Tam Relators

Recently, the Ninth Circuit opined that allegations cleared the heightened evidentiary standard applied to False Claims Act actions, even though the Relator did not identify specific false claims that were actually submitted to the government. While this was an unpublished opinion, it was noteworthy because the Ninth Circuit further aligned itself with a growing majority of jurisdictions that sensibly applied the so-called “Rule 9(b) pleading standard” to the False Claims Act.

In these circuits, Relators can proceed with qui tam actions, even when they do not identify representative examples of false claims that were actually submitted to the government. In most of these jurisdictions, Relators simply need to allege particular details of a fraud scheme paired with reliable indicia that that claims were actually submitted to the government.

For instance, in most jurisdictions, physicians may be able to bring a successful qui tam action alleging upcoding, even if they do not have access to the actual Medicare claims that were submitted to the government. Unfortunately, some courts have embraced the other extreme, employing a draconian reading of the law that requires relators to identify actual claims at the pleading stage of litigation.

This trend toward a more lenient, commonsensical application of Rule 9(b) has gained steam in recent years, particularly after the False Claims Act Amendments of 2009. Interestingly, in 2009, Congress considered codifying the more lenient standard into the Act; however, the proposed language was ultimately stricken from the final bill. With that being said, the proposed language has spotlighted Congress’ concerns and swayed a number of courts since 2009. For the sake of Medicare fraud qui tam relators and the public fisc, hopefully more courts will echo the Ninth Circuit’s recent decision.

More information for whistleblowers is located at the Nolan Auerbach & White website.