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Third Time is Not the Charm – Supreme Court Denies Cert. on Rule 9(b) Split Again

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On October 17, the U.S. Supreme Court summarily denied three petitions asking the Court to resolve a growing circuit split on the application of Federal Rule of Civil Procedure 9(b) in False Claims Act lawsuits.

This had been a much-watched issue after the Court declined to hear similar cases in 2010 and 2014—with many commentators speculating that this would be the year the Supreme Court would finally tackle Rule 9(b).

The question raised in the petitions was whether False Claims Act complaints must plead an example of a false claim that has been submitted for reimbursement or if the complaint need only provide reliable indicia that such claims have been submitted. The petitions argued that there was a growing split among the circuits, with some requiring representative examples of claims submitted and others accepting allegations that would lead to a strong inference that claims were submitted.

In two of the cases, U.S. ex rel. Owsley v. Fazzi Associates, Inc., and Johnson v. Bethany Hospice & Palliative Care LLC, the Court invited the Solicitor General to file a brief “expressing the views of the United States.” These requests for input signaled to many that the Court would take up the issue and resolve the split. The Solicitor General’s briefing, however, discouraged the Court from granting certiorari, arguing that there was no true circuit split and that the different outcomes from lower courts have varied primarily on the “fact-intensive nature” of the cases.

The Court’s decision leaves the lower courts’ rulings in place.  Although the Department of Justice has argued that a true circuit split does not exist, the likely result is that Rule 9(b) may continue to be applied differently depending on the approach adopted by the circuit or district where the False Claims Act lawsuit was filed.

To read more about the application of Federal Rule 9(b), check our prior posts on the topic. To follow along with other updates on the False Claims Act, please subscribe to the Inside the False Claims Act blog and check out our Healthcare Fraud & Abuse Resource Center, where you can access a searchable database of False Claims Act settlements from the last decade. If you have questions about the False Claims Act, please contact a member of Bass, Berry & Sims’ Healthcare Fraud & Abuse Task Force.

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