Amicus Curiae Brief — United States, et al., ex rel. Cathy Owsley, Petitioner v. Fazzi Associates, Inc., et al.
Supreme Court briefSep 9, 2022
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No. 21-936
In the Supreme Court of the United States
UNITED STATES, ET AL., EX REL. CATHY OWSLEY,
PETITIONER
v.
FAZZI ASSOCIATES, INC., ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
ELIZABETH B. PRELOGAR
Solicitor General
Counsel of Record
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
MALCOLM L. STEWART
Deputy Solicitor General
MICHAEL R. HUSTON
Assistant to the Solicitor
General
CHARLES W. SCARBOROUGH
MCKAYE L. NEUMEISTER
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Whether petitioner’s complaint in her qui tam action
under the False Claims Act, 31 U.S.C. 3729 et seq.,
pleaded respondents’ submission to the government of
false claims for payment with sufficient particularity to
satisfy Federal Rule of Civil Procedure 9(b).
(I)
TABLE OF CONTENTS
Page
Interest of the United States....................................................... 1
Statement:
A. Legal background ..................................................... 1
B. The present controversy .......................................... 4
Discussion ...................................................................................... 7
A. The court of appeals held that an FCA
complaint must allege facts supporting a
strong inference that the defendant submitted
false claims, and must give the defendant
adequate notice of particular claims that are
alleged to be false ...................................................... 8
B. The courts of appeals have largely converged
on the Rule 9(b) pleading standard in FCA
cases .......................................................................... 14
C. The court of appeals’ decision does not warrant
this Court’s review .................................................. 21
Conclusion ................................................................................... 22
TABLE OF AUTHORITIES
Cases:
Carrel v. AIDS Healthcare Found., Inc.,
898 F.3d 1267 (11th Cir. 2018) ........................................... 20
Chesbrough v. VPA, P.C., 655 F.3d 461
(6th Cir. 2011)................................................................ 11, 12
Ebeid v. Lungwitz, 616 F.3d 993 (9th Cir.),
cert. denied, 562 U.S. 1102 (2010) ............................... 14, 16
Foglia v. Renal Ventures Mgmt., LLC,
754 F.3d 153 (3d Cir. 2014) ................................................ 14
Sanderson v. HCA-The Healthcare Co.,
447 F.3d 873 (6th Cir.),
cert. denied, 549 U.S. 889 (2006) ......................................... 6
(III)
IV
Cases—Continued:
Page
United States ex rel. Atkins v. McInteer,
470 F.3d 1350 (11th Cir. 2006) ........................................... 21
United States ex rel. Bledsoe v. Community Health
Sys., Inc., 501 F.3d 493 (6th Cir. 2007) ............................. 11
United States ex rel. Chorches for the Bankr. Estate
of Fabula v. American Med. Response, Inc.,
865 F.3d 71 (2d Cir. 2017) ...................................... 15, 18, 20
United States ex rel. Clausen v. Laboratory Corp. of
Am., Inc., 290 F.3d 1301 (11th Cir. 2002),
cert. denied, 537 U.S. 1105 (2003) ..................................... 16
United States ex rel. Customs Fraud Investigations,
LLC. v. Victaulic Co., 839 F.3d 242 (3d Cir. 2016),
cert. denied, 138 S. Ct. 107 (2017) ..................................... 16
United States ex rel. Eberhard v. Physicians Choice
Lab. Servs., LLC, 642 Fed. Appx. 547
(6th Cir. 2016)...................................................................... 12
United States ex rel. Grant v. United Airlines Inc.,
912 F.3d 190 (4th Cir. 2018) ............................................... 19
United States ex rel. Grubbs v. Kanneganti,
565 F.3d 180 (5th Cir. 2009) ........................................... 9, 16
United States ex rel. Heath v. AT&T, Inc.,
791 F.3d 112 (D.C. Cir. 2015),
cert. denied, 579 U.S. 927 (2016) ....................................... 16
United States ex rel. Hirt v. Walgreen Co.,
846 F.3d 879 (6th Cir. 2017) ................................... 12, 13, 19
United States ex rel. Ibanez v. Bristol-Meyers
Squibb Co., 874 F.3d 905 (6th Cir. 2017),
cert. denied, 138 S. Ct. 2582 (2018) ............................... 6, 12
United States ex rel. Lusby v. Rolls-Royce Corp.,
570 F.3d 849 (7th Cir. 2009) ............................................... 17
United States ex rel. Mamalakis v.
Anesthetix Mgmt. LLC, 20 F.4th 295
(7th Cir. 2021)................................................................ 16, 17
V
Cases—Continued:
Page
United States ex rel. Marlar v. BWXT Y-12, L.L.C.,
525 F.3d 439 (6th Cir. 2008) ............................................... 11
United States ex rel. Nargol v. DePuy Orthopaedics,
Inc., 865 F.3d 29 (1st Cir. 2017),
cert. denied, 138 S. Ct. 1551 (2018) ................................ 18
United States ex rel. Nathan v. Takeda Pharms.
N. Am., Inc.:
707 F.3d 451 (4th Cir. 2013),
cert denied, 572 U.S. 1033 (2014) .............................. 11
572 U.S. 1033 (2014) ....................................................... 9
United States ex rel. Polukoff v. St. Mark’s Hosp.,
895 F.3d 730, 745 (2018),
cert. dismissed, 139 S. Ct. 2690 (2019) ........................... 17
United States ex rel. Prather v. Brookdale Senior
Living Communities, Inc., 838 F.3d 750
(6th Cir. 2016)............................................................. passim
United States ex rel. Sheldon v. Kettering Health
Network, 816 F.3d 399 (6th Cir. 2016) .......................... 6, 11
United States ex rel. Sibley v. University of Chicago
Med. Ctr., 44 F.4th 646 (7th Cir. 2022) ............................. 17
United States ex rel. Strubbe v. Crawford County
Mem’l Hosp., 915 F.3d 1158 (8th Cir.),
cert. denied, 140 S. Ct. 553 (2019) ............................... 16, 20
Statutes, regulations, and rules:
False Claims Act, 31 U.S.C. 3729 et seq. ............................... 1
31 U.S.C. 3729(a)(1)(A) ................................................. 1, 5
31 U.S.C. 3729(a)(1)(C) ..................................................... 5
31 U.S.C. 3729(a)(1)(G) ..................................................... 5
31 U.S.C. 3729(b)(2)(A)(i) ................................................. 2
31 U.S.C. 3730(a) ............................................................... 2
31 U.S.C. 3730(b)(1) .......................................................... 2
VI
Statutes, regulations, and rules—Continued:
Page
31 U.S.C. 3730(b)(2) .......................................................... 2
31 U.S.C. 3730(b)(3) .......................................................... 2
31 U.S.C. 3730(b)(4)(A) ..................................................... 2
31 U.S.C. 3730(b)(4)(B) ..................................................... 2
31 U.S.C. 3730(c)(3) ........................................................... 2
31 U.S.C. 3730(d) ............................................................... 2
Indiana Medicaid False Claims and Whistleblower
Protection Act, Ind. Code Ann. § 5-11-5.7-2(b)
(LexisNexis 2020) ................................................................. 5
Medicare Act, 42 U.S.C. 1395 et seq. ..................................... 2
42 U.S.C. 1395d(a)(3) ........................................................ 3
42 U.S.C. 1395f .................................................................. 3
42 U.S.C. 1395h.................................................................. 3
42 U.S.C. 1395x(m) ............................................................ 3
42 C.F.R.:
Section 484.45 .................................................................... 3
Section 484.55 .................................................................... 3
Section 484.55(c) ............................................................... 3
Section 484.55(c)(8) ........................................................... 4
Section 484.60 .................................................................... 4
Section 484.205 .................................................................. 3
Section 484.205(c) .............................................................. 4
Fed. R. Civ. P. 9(b) ....................................................... passim
In the Supreme Court of the United States
No. 21-936
UNITED STATES, ET AL., EX REL. CATHY OWSLEY,
PETITIONER
v.
FAZZI ASSOCIATES, INC., ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
INTEREST OF THE UNITED STATES
This brief is submitted in response to the Court’s
order inviting the Solicitor General to express the views
of the United States. In the view of the United States,
the petition for a writ of certiorari should be denied.
STATEMENT
A. Legal Background
1. The False Claims Act (FCA or Act), 31 U.S.C.
3729 et seq., imposes civil liability for a variety of deceptive practices involving government funds and property. Inter alia, the Act imposes liability on any person
who “knowingly presents, or causes to be presented,
a false or fraudulent claim for payment or approval.”
31 U.S.C. 3729(a)(1)(A). The “claim[s]” subject to the
FCA include “any request or demand * * * for money
(1)
2
or property” that is “presented to an officer, employee,
or agent of the United States.” 31 U.S.C. 3729(b)(2)(A)(i).
The Attorney General may bring a civil action if he
finds that a person has violated the FCA. 31 U.S.C.
3730(a). Alternatively, the Act permits private parties
(known as relators) to bring suit “in the name of the
Government” against persons who have violated the
Act, 31 U.S.C. 3730(b)(1), through a mechanism commonly known as a “qui tam” action. When a qui tam suit
is filed, the government may “elect to intervene and
proceed with the action” during an initial 60-day period
(which may be extended “for good cause shown”) while
the relator’s complaint remains under seal. 31 U.S.C.
3730(b)(2) and (3). If the government intervenes during
the seal period, “the action shall be conducted by the
Government.” 31 U.S.C. 3730(b)(4)(A). If the government declines to intervene, the relator may proceed
with the litigation, 31 U.S.C. 3730(b)(4)(B), though the
district court “may nevertheless permit the Government to intervene at a later date upon a showing of good
cause,” 31 U.S.C. 3730(c)(3). If a qui tam action results
in the recovery of damages or civil penalties, the award
is divided between the government and the relator.
31 U.S.C. 3730(d).
2. This qui tam action alleges that respondents, providers of home health services and related entities, violated the FCA by submitting inflated claims for reimbursement to federal healthcare programs including
Medicare, which provides federally funded health insurance to eligible elderly and disabled persons. See Medicare Act, 42 U.S.C. 1395 et seq. In general, when a
healthcare provider performs a Medicare-covered service for an eligible patient, the provider submits a claim
for payment to a federal contractor, which reimburses
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the provider on behalf of the United States for the service in accordance with the Medicare Act and applicable
regulations. See 42 U.S.C. 1395h.1
Medicare coverage includes some home health
services—that is, services that are provided at a patient’s home and furnished or arranged by private home
health agencies. See 42 U.S.C. 1395f, 1395d(a)(3), and
1395x(m). Medicare reimburses a home health agency
using a prospective payment system, under which a
qualified physician or registered nurse assesses the
patient at the outset of the episode of care, and the home
health agency requests and obtains an initial payment
based on a projection of the cost of the patient’s care.
See 42 C.F.R. 484.45, 484.55. When the care concludes,
the home health agency submits a final claim to obtain
a residual final payment. 42 C.F.R. 484.205.
In order for home health agencies’ services to be eligible for Medicare reimbursement, each patient must
be regularly assessed by a qualified medical professional. See 42 C.F.R. 484.55. That assessment evaluates, among other things, the patient’s eligibility for
home health services, her “current health, psychosocial,
functional, and cognitive status,” and her care needs.
42 C.F.R. 484.55(c). During the assessment, a qualified
professional must complete the Outcome and Assessment Information Set (OASIS), a tool used by the CenPetitioner alleges that respondents also submitted claims for
reimbursement for patients covered by two other government
healthcare programs: Medicaid and CHAMPUS/TRICARE. See
Pet. App. 36a, 42a; see also id. at 49a-50a. But petitioner has not
identified any relevant distinctions between the programs, and she
describes Medicare as the program through which the government
“principally” pays for the home health services at issue in this case.
Pet. 2. This brief accordingly focuses on Medicare.
1
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ters for Medicare & Medicaid Services to collect data
about patients. See 42 C.F.R. 484.55(c)(8). OASIS data
are used to establish a patient’s plan of care and to complete a home health agency’s requests for reimbursement. See 42 C.F.R. 484.60, 484.205(c).
B. The Present Controversy
1. Respondents are healthcare organizations, home
health agencies, and a contractor (Fazzi Associates)
that those entities hired to handle their healthcare coding. Pet. App. 11a-12a. Petitioner worked as a quality
assurance nurse at Care Connection of Cincinnati, one
of the respondent home health agencies. Id. at 4a.
Petitioner alleges that, during her employment with
Care Connection, respondents regularly violated the
FCA by using fraudulent patient data to submit inflated
claims for Medicare reimbursement. Pet. App. 47a.
Specifically, petitioner alleges that, after she and other
medical professionals completed care assessments for
patients, she observed Fazzi Associates employees “altering OASIS data by enhancing existing diagnosis
codes and adding new codes that were not supported by
any medical documentation.” Id. at 48a; see id. at 47a57a. Petitioner further alleges that respondents “use[d]
the fraudulently altered OASIS data to complete Plans
of Care” that called for higher rates of reimbursement
and then submitted those plans to Medicare. Id. at 48a;
see id. at 48a-50a. Petitioner alleges that she reported
Fazzi’s fraudulent “upcoding” practice to her supervisors but was ignored or dismissed. See id. at 50a-51a,
54a-55a. Petitioner also alleges that respondents’
fraudulent upcoding has been occurring since approximately December 2014; that it affects nearly half of
respondents’ OASIS forms; and that it extends beyond
5
Care Connection to other home health agencies that use
Fazzi’s services. Id. at 5a, 22a-23a.
2. Petitioner filed the current (amended) complaint
in March 2017. Pet. App. 34a-66a. As relevant here,
petitioner alleges that respondents presented false
claims for payment to the government in violation of the
FCA, 31 U.S.C. 3729(a)(1)(A), by submitting claims for
Medicare reimbursement based on falsified patient
assessments and diagnoses. Pet. App. 61a; see id. at
46a-60a. The United States investigated petitioner’s
allegations and declined to intervene. Id. at 18a.
The district court dismissed petitioner’s complaint
with prejudice. Pet. App. 10a-33a. The court held that
petitioner had failed to plead “with particularity,” pursuant to Federal Rule of Civil Procedure 9(b), that respondents “present[ed], or caus[ed] to be presented, a
false [or] fraudulent claim for payment or approval.”
Pet. App. 21a (quoting 31 U.S.C. 3729(a)(1)(A)); see id.
at 21a-27a. The court found that, while petitioner had
“provide[d] examples of allegedly altered OASIS data,”
id. at 23a, she “ha[d] not directly identified an example
of a fraudulent bill that was submitted to the government,” ibid., or alleged that she was involved in submitting false claims for payment, id. at 25a.2
Petitioner’s operative complaint additionally included claims for
making or using false records in violation of the FCA, 31 U.S.C.
3729(a)(1)(G); conspiring to violate the FCA, 31 U.S.C. 3729(a)(1)(C);
and violating the Indiana Medicaid False Claims and Whistleblower
Protection Act, Ind. Code Ann. § 5-11-5.7-2(b) (LexisNexis 2020).
Pet. App. 62a-65a. The district court determined that petitioner’s
failure to allege with particularity that respondents had submitted
false claims for payment also required dismissal of her other federal
FCA claims and her Indiana state-law claim. Id. at 27a-31a.
2
6
3. The court of appeals affirmed. Pet. App. 1a-9a.
Taking all of petitioner’s factual allegations as true,
Pet. App. 2a, the court of appeals held that petitioner’s
complaint “describe[d], in detail, a fraudulent [upcoding] scheme” by respondents, id. at 6a. The court also
found, however, that petitioner had “ma[de] little effort
* * * to ‘identify any specific claims’ that Care Connection submitted pursuant to the scheme.” Id. at 7a (quoting Sanderson v. HCA-The Healthcare Co., 447 F.3d
873, 877 (6th Cir.), cert. denied, 549 U.S. 889 (2006)).
The court observed that the FCA “attaches liability, not
to the underlying fraudulent activity or to the government’s wrongful payment, but to the claim for payment.” Id. at 6a (quoting United States ex rel. Sheldon
v. Kettering Health Network, 816 F.3d 399, 411 (6th Cir.
2016)). “For that reason,” the court stated, the Sixth
Circuit “has imposed a ‘clear and unequivocal requirement that a relator allege specific false claims when
pleading a violation of ’ the Act.” Ibid. (quoting Sheldon,
816 F.3d at 411).
The court of appeals found that petitioner had not
appropriately utilized either of the two methods that the
court had previously accepted for pleading the submission of a false claim. The most common method is for
an FCA relator to “identify a ‘representative claim that
was actually submitted to the government for payment.’ ” Pet. App. 7a (quoting United States ex rel.
Ibanez v. Bristol-Meyers Squibb Co., 874 F.3d 905, 915
(6th Cir. 2017), cert. denied, 138 S. Ct. 2582 (2018)). But
petitioner “did not do that here.” Ibid.
“Alternatively,” the court of appeals explained, an
FCA relator may “ ‘otherwise allege facts—based on personal knowledge of [the defendant’s] billing practices—
supporting a strong inference that particular identified
7
claims were submitted to the government for payment.’ ” Pet. App. 7a (quoting United States ex rel. Prather v. Brookdale Senior Living Communities, Inc.,
838 F.3d 750, 771 (6th Cir. 2016)). But here, although
petitioner’s complaint “describe[d] several instances of
upcoding,” she “did not allege facts that identify any
specific fraudulent claims” for payment that were submitted in connection with those patients. Ibid.; see id.
at 7a-8a. The court observed that it had previously recognized various ways for an FCA relator to create a
strong inference supporting the submission of specific
false claims, id. at 8a-9a, and it described “the touchstone” of the inquiry as “whether the complaint provides the defendant with notice of a specific representative claim that the plaintiff thinks was fraudulent,” id.
at 9a. But the court found that petitioner had not
provided adequate notice here because her complaint
did not enable respondents to “pluck out”—from “the
hundreds or likely thousands” of claims for payment
that respondents had “presumably submitted” to the
government—any particular claim that petitioner alleges was fraudulent. Id. at 2a, 9a. The court therefore
concluded that petitioner’s complaint “did not satisfy
Civil Rule 9(b).” Id. at 9a.3
DISCUSSION
Petitioner urges this Court to grant review “to resolve” what she describes as “a longstanding circuit
split about how Rule 9(b) works in FCA cases.” Pet. 10.
Petitioner also suggests (Pet. 20-21; Pet. Reply Br. 1-3)
that the Sixth Circuit requires every FCA relator to
The court of appeals also affirmed the district court’s decision to
dismiss petitioner’s other claims and to deny petitioner leave to
amend her complaint a second time. Pet. App. 9a.
3
8
plead, in addition to the details of a fraudulent scheme,
the details of specifically identified false claims submitted to the government. If the courts of appeals were
applying a per se rule that every relator must plead the
details of specific false claims, this Court’s intervention
might be warranted. In recent years, however, the
courts have largely converged on an approach that
allows relators either to identify specific false claims or
to plead other sufficiently reliable indicia supporting a
strong inference that false claims were submitted to the
government.
The Sixth Circuit’s recent decisions, read as a whole,
have adhered to that standard. The divergent outcomes
in the courts of appeals that petitioner views as evidence
of disarray simply reflect courts’ application of a factintensive standard to a range of different types of allegations. Further review by this Court would not likely
produce greater uniformity or materially clarify the
Rule 9(b) pleading standard for FCA complaints. And
the court of appeals’ fact-bound conclusion that petitioner’s particular allegations were insufficient to satisfy Rule 9(b) does not warrant this Court’s review.
The petition for a writ of certiorari should be denied.
A. The Court Of Appeals Held That An FCA Complaint
Must Allege Facts Supporting A Strong Inference That
The Defendant Submitted False Claims, And Must Give
The Defendant Adequate Notice Of Particular Claims
That Are Alleged To Be False
Petitioner asserts (Pet. 20) that the Sixth Circuit has
adopted a “rigid approach” to Rule 9(b) in FCA cases
and that the decision below is representative of that
approach. Petitioner points to the court of appeals’
statement that “[i]t is not enough” for an FCA relator
to plead facts describing a fraudulent scheme “ ‘in
9
detail.’ ” Pet. Reply Br. 2 (quoting Pet. App. 6a). Rather, the relator must “allege specific false claims” and
identify “at least one false claim with specificity.” Ibid.
(quoting Pet. App. 6a). Petitioner distills from those
statements a firm rule that relators must “plead details
of false claims in addition to details of fraudulent
schemes,” and that “the presentment of claims [cannot]
be inferred from circumstances.” Pet. 10.
In an invited amicus curiae brief in United States ex
rel. Nathan v. Takeda Pharmaceuticals North America, Inc., 572 U.S. 1033 (2014) (No. 12-1349), the United
States (at 10) opposed “a per se rule that a relator must
plead the details of particular false claims—that is, the
dates and contents of bills or other demands for
payment—to overcome a motion to dismiss.” The government explained that such a “per se rule is unsupported by Rule 9(b) and undermines the FCA’s effectiveness as a tool to combat fraud against the United
States.” Ibid. Instead, the government argued, “a relator’s complaint satisfies Rule 9(b) if it ‘alleges particular details of a scheme to submit false claims paired
with reliable indicia that lead to a strong inference that
claims were actually submitted.’ ” Id. at 11-12 (quoting
United States ex rel. Grubbs v. Kanneganti, 565 F.3d
180, 190 (5th Cir. 2009)) (brackets omitted).
The court of appeals in this case did not adopt a per
se rule like the one the United States opposed in
Nathan. To be sure, some of the court’s statements,
read in isolation, could suggest an unduly strict view of
Rule 9(b) in FCA cases. See Pet. App. 6a (“[O]ur circuit
has imposed a ‘clear and unequivocal requirement that
a relator allege specific false claims when pleading a[n
FCA] violation.’ ”) (citation omitted); ibid. (“[T]he identification of at least one false claim with specificity is an
10
indispensable element of a[n FCA] complaint.”) (citation omitted). But the court went on to clarify that there
is more than one way for an FCA relator to satisfy Rule
9(b). Id. at 7a.
While the “default” approach is to “identify a ‘representative claim that was actually submitted to the government for payment,’ ” Pet. App. 7a (citation omitted),
the decision below does not limit relators to that approach. The court of appeals endorsed its prior holding
in United States ex rel. Prather v. Brookdale Senior
Living Communities, Inc., 838 F.3d 750 (6th Cir. 2016),
that a relator can satisfy Rule 9(b) by “otherwise alleg[ing] facts—based on personal knowledge of billing
practices—supporting a strong inference that particular identified claims were submitted to the government
for payment,” Pet. App. 7a (quoting 838 F.3d at 771), so
long as the relator gives the defendant adequate “notice
of a specific representative claim that the plaintiff
thinks was fraudulent,” id. at 9a. The court did not narrowly cabin the types of factual allegations that can create such a “strong inference”; rather, it identified some
allegations that it had found sufficient in prior cases
but also stated that such allegations are “not * * *
require[d]” and that “the facts of a particular case
should not be mistaken for its rule.” Id. at 7a, 9a.
Taken as a whole, the court of appeals’ opinion is best
read to hold that an FCA relator must either plead
details concerning specific false claims for payment presented to the government or identify another reliable
basis for concluding that such claims were submitted
and give the defendant sufficient notice of a claim that
was allegedly fraudulent. That standard is not significantly different from the one that the United States
endorsed in Nathan, see p. 9, supra, and that several
11
courts of appeals have applied in recent years, see Part
B, infra.
Other Sixth Circuit decisions confirm that the court
does not impose the sort of rigid Rule 9(b) requirements
that the United States criticized in Nathan. In Prather,
the court held that Rule 9(b) can be satisfied not only
with details about particular false claims, but also by
pleading “specific allegations of the defendant’s fraudulent conduct” that “necessarily le[a]d to the plausible
inference that false claims were presented to the government.” 838 F.3d at 773 (quoting United States ex
rel. Nathan v. Takeda Pharms. N. Am., Inc., 707 F.3d
451, 457 (4th Cir. 2013), cert. denied, 572 U.S. 1033
(2014)). The Prather court observed that, while it had
in the past required a relator to “ ‘identify an actual false
claim,’ ” it had also “consistently suggested that the exception” to that general rule “would apply” if the relator
“ ‘has pled facts which support a strong inference that a
[false] claim was submitted.’ ” Id. at 769, 771 (quoting
Chesbrough v. VPA, P.C., 655 F.3d 461, 471 (6th Cir.
2011)); see also United States ex rel. Sheldon v. Kettering Health Network, 816 F.3d 399, 413-414 (6th Cir.
2016); United States ex rel. Marlar v. BWXT Y-12,
L.L.C., 525 F.3d 439, 446-447 (6th Cir. 2008); United
States ex rel. Bledsoe v. Community Health Sys., Inc.,
501 F.3d 493, 504 n.12 (6th Cir. 2007).
The Prather court “confirm[ed] [its] adoption of that
exception” and “formally applied it.” 838 F.3d at 771772. The court held that, although the relator there had
not “sufficiently allege[d] the submission of particular
requests for anticipated payment,” id. at 769, she had
satisfied Rule 9(b) by pleading sufficient facts based on
her personal billing-related knowledge to establish a
“strong inference” that the defendant had submitted
12
specific false claims for payment, id. at 769-771. The
court based that conclusion on the relator’s detailed
allegations concerning the dates of care and of physician certifications for various patients, id. at 769-770,
and on additional detailed allegations creating a “strong
inference” that Medicare claims for those patients had
ultimately been submitted, id. at 770. Since Prather,
the Sixth Circuit has reiterated that an FCA relator can
satisfy Rule 9(b) with “allegations showing ‘specific personal knowledge’ supporting a ‘strong inference that
a false claim was submitted.’ ” United States ex rel.
Ibanez v. Bristol-Meyers Squibb Co., 874 F.3d 905, 914
(2017) (quoting Prather, 838 F.3d at 769) (brackets
omitted), cert. denied, 138 S. Ct. 2582 (2018).
Petitioner states (Pet. Reply Br. 3) that Prather’s
rule is “not the same as” the one adopted by other
courts of appeals because other circuits do not “require
a plaintiff to identify particular claims based on her own
personal knowledge of billing-related practices.” But
the Sixth Circuit has acknowledged the possibility that
a relator can satisfy Rule 9(b) even without “personal
knowledge of [the defendant’s] claim submission procedures” if she “allege[s] facts ‘from which it is highly
likely that a claim was submitted to the government.’ ”
United States ex rel. Hirt v. Walgreen Co., 846 F.3d 879,
882 (6th Cir. 2017) (citation omitted); see Chesbrough,
655 F.3d at 471-472 (recognizing that “other situations”—
beyond personal billing-related knowledge—could
potentially “support a strong inference that a [false]
claim was submitted”); United States ex rel. Eberhard
v. Physicians Choice Lab. Servs., LLC, 642 Fed. Appx.
547, 553 (6th Cir. 2016) (“[P]ersonal knowledge is only
one way in which a plaintiff may establish a ‘strong inference’ that false claims were submitted.”). The court
13
has also recognized that “ ‘particular’ allegations of
fraud may demand different things in different contexts.” Hirt, 846 F.3d at 881. Those statements, especially in combination with the court’s reminder that “the
facts of a particular case should not be mistaken for its
rule,” Pet. App. 9a, show that the Sixth Circuit recognizes a variety of types of factual allegations by which
FCA relators can creates a strong inference that the defendant submitted false claims.
Petitioner next observes (Pet. Reply Br. 3) that Prather is the court of appeals’ only decision applying the
“exception” it recognized, and she dismisses Prather as
“the exception that proves the Sixth Circuit’s generally
rigid rule.” But the court’s other decisions have not undermined Prather; they have simply concluded, based
on the particular facts alleged in the relevant complaints, that the relators had not given the defendants
adequate notice of particular false claims that were
alleged to be fraudulent. See, e.g., Pet. App. 9a (finding
that petitioner did not offer allegations like those that
were found sufficient in Prather); Hirt, 846 F.3d at 881882 (similar). Those fact-bound conclusions do not cast
doubt on the court’s continuing adherence to the descriptions in Prather and other Sixth Circuit opinions of
the Rule 9(b) standard for FCA cases.
Finally, the court below affirmed the dismissal of the
complaint in this case primarily because petitioner’s
complaint did not do “enough for [respondents] reasonably to pluck out—from all the other claims they
submitted—the [ones] that [petitioner]” alleges violated the FCA. Pet. App. 9a. As stated above, the court
described the “touchstone” for an adequate FCA complaint as whether it “provides the defendant with notice
of a specific representative claim that the plaintiff
14
thinks was fraudulent.” Ibid. Here, the court found
that, while petitioner had described various instances of
upcoding, id. at 7a-8a (quoting id. at 48a-50a ¶ 38), she
had not included any details that would enable respondents to identify the claims for payment that were associated with those instances, or any other claims “that
she thinks were fraudulent,” id. at 2a; see id. at 8a-9a.
Requiring that fraud allegations give defendants “notice of the particular misconduct which is alleged to constitute the fraud charged,” so that the defendants can
adequately “defend against the charge,” is not an unduly rigid approach to Rule 9(b). Ebeid v. Lungwitz,
616 F.3d 993, 999 (9th Cir.) (citation omitted), cert.
denied, 562 U.S. 1102 (2010); see Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d 153, 156-157 (3d Cir. 2014)
(endorsing the United States’ brief in Nathan and stating that “the more ‘nuanced’ approach” to Rule 9(b) in
FCA cases can “provide[ ] defendants with fair notice of
the plaintiffs’ claims”) (citation and footnote omitted;
brackets in original).
In sum, when the decision below is read as a whole
and against the backdrop of relevant Sixth Circuit precedent, that decision does not reflect an outlier standard
for applying Rule 9(b) to FCA complaints. And the
court of appeals’ fact-bound conclusion that petitioner’s
particular allegations here were insufficient does not
warrant this Court’s review.
B. The Courts Of Appeals Have Largely Converged On The
Rule 9(b) Pleading Standard In FCA Cases
Petitioner contends (Pet. 25) that the question presented is the subject of an “open and acknowledged circuit split” that is “entrenched.” After surveying multiple
decisions applying Rule 9(b) in FCA cases, however,
courts of appeals have observed that “the reports of a
15
circuit split are * * * ‘greatly exaggerated.’ ” United
States ex rel. Chorches for the Bankr. Estate of Fabula
v. American Med. Response, Inc., 865 F.3d 71, 89 (2d
Cir. 2017); see Prather, 838 F.3d at 772 (“This split is
not nearly as deep as it first appears.”). “As the various
Circuits have confronted different factual variations,
differences in broad pronouncements in early cases
have been refined in ways that suggest a case-by-case
approach that is more consistent than might at first
appear.” Chorches, 865 F.3d at 89.
1. The United States’ 2014 amicus brief in Nathan,
supra (No. 12-1349), explained (at 10-14) that, while
some courts of appeals had erroneously articulated a
per se rule requiring all FCA relators to plead the details of specific false claims, those courts “ha[d] not consistently adhered to th[at] rigid understanding of Rule
9(b),” so that the “extent of the disagreement among the
lower courts” was “uncertain” and might “be capable of
resolution without this Court’s intervention.” Since
then, the specific disagreement that was the focus of the
United States’ brief in Nathan has been largely resolved. No court of appeals now applies a per se rule
requiring every FCA complaint to identify representative examples of specific false claims. See Prather, 838
F.3d at 772 (“Every circuit” that previously required relators to plead specific false claims “has retreated from
such a requirement in cases in which other detailed factual allegations support a strong inference that claims
were submitted.”); see also Br. in Opp. 8-12.
Instead, the courts of appeals have largely converged on a more flexible standard, asking whether an
FCA relator’s complaint—in addition to providing detailed allegations describing the defendant’s fraudulent
scheme—contains some “indicia of reliability” to sup-
16
port a strong inference that the defendant submitted
false claims for payment to the government. The Eleventh Circuit has endorsed that standard, notwithstanding petitioner’s characterization of that court (Pet. 20)
as having taken a “rigid approach to Rule 9(b).” See,
e.g., United States ex rel. Clausen v. Laboratory Corp.
of Am., Inc., 290 F.3d 1301, 1311 (11th Cir. 2002) (stating that “some indicia of reliability must be given in the
complaint to support the allegation of an actual false
claim for payment being made to the Government”),
cert. denied, 537 U.S. 1105 (2003). Five other courts of
appeals have articulated essentially the same standard,
under which an FCA complaint satisfies Rule 9(b) if it
“alleg[es] particular details of a scheme to submit false
claims paired with reliable indicia that lead to a strong
inference that claims were actually submitted.”
Grubbs, 565 F.3d at 190 (5th Cir.); see United States ex
rel. Strubbe v. Crawford County Mem’l Hosp., 915 F.3d
1158, 1163 (8th Cir.), cert. denied, 140 S. Ct. 553 (2019);
United States ex rel. Customs Fraud Investigations,
LLC. v. Victaulic Co., 839 F.3d 242, 258 (3d Cir. 2016),
cert. denied, 138 S. Ct. 107 (2017); United States ex rel.
Heath v. AT&T, Inc., 791 F.3d 112, 126 (D.C. Cir. 2015),
cert. denied, 579 U.S. 927 (2016); Ebeid, 616 F.3d at
998-999 (9th Cir.).
The Seventh Circuit has not used the term “reliable
indicia,” but its articulation of the Rule 9(b) standard
does not appear to be meaningfully different. In United
States ex rel. Mamalakis v. Anesthetix Mgmt. LLC,
20 F.4th 295 (7th Cir. 2021), the court stated that an
FCA relator can plead the submission of false claims
“by including particularized factual allegations that
give rise to a plausible inference of fraud,” even if the
relator “has not identified specific false invoices.” Id. at
17
301; see ibid. (stating that it is “ ‘essential [for a relator]
to show a false statement,’ ” but “the relator need not
‘produce the invoices (and accompanying representations) at the outset of the suit’ ”) (quoting United States
ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 854
(7th Cir. 2009)). 4
The Tenth Circuit has similarly stated that an FCA
relator “need only show the specifics of a fraudulent
scheme and provide an adequate basis for a reasonable
inference that false claims were submitted as part of
that scheme.” United States ex rel. Polukoff v. St.
Mark’s Hosp., 895 F.3d 730, 745 (2018) (citation omitted), cert. dismissed, 139 S. Ct. 2690 (2019). The Second
Circuit’s standard is similar with one caveat: it holds
that relators can satisfy Rule 9(b) with “plausible allegations * * * that lead to a strong inference that specific claims were indeed submitted,” as opposed to
“details of actual bills or invoices submitted to the
Another Seventh Circuit panel recently invoked Mamalakis for
the proposition that, “[u]nder Rule 9(b), * * * to defeat dismissal,
‘specific representative examples’ of false submissions are required.” United States ex rel. Sibley v. University of Chicago Med.
Ctr., 44 F.4th 646, 656 (2022) (quoting 20 F.4th at 301-302); see id.
at 659. But the Sibley panel appears merely to have recognized that,
in Mamalakis, it was the relator’s alleged “specific representative
examples of fraudulent billing” that caused that complaint to satisfy
Rule 9(b), 20 F.4th at 301-302, and to have determined that similarly
specific allegations were necessary to give indicia of reliability to the
scheme at issue in Sibley. See Sibley, 44 F.4th at 656 (“Mamalakis
teaches that the relators here must allege specific examples of patient debts.”). Reading Mamalakis to hold that specific examples
of invoices are always required would mistake the facts of that case
for its rule, and would contradict the Seventh Circuit’s explicit—and
repeated—holding that a relator “need not ‘produce the invoices
* * * at the outset of the suit.’ ” 20 F.4th at 301 (quoting Lusby, 570
F.3d at 854).
4
18
government”—“so long as” the relator alleges “that
information about the details of the claims submitted
are peculiarly within the opposing party’s knowledge.”
Chorches, 865 F.3d at 93.
Although the First, Fourth, and Sixth Circuits have
placed greater emphasis than other courts of appeals on
FCA relators pleading details regarding specific false
claims for payment, each of those courts has recognized
that such details are not invariably required.
As discussed above, the Sixth Circuit has stated that
it usually requires specific allegations concerning the
defendant’s claims for payment, but it has also allowed
a relator to satisfy Rule 9(b) by pleading other facts
“supporting a strong inference that particular identified
claims were submitted to the government for payment.”
Prather, 838 F.3d at 771; see pp. 10-13, supra.
The First Circuit generally expects relators to “allege the essential particulars of at least some [specific]
false claims,” but it recognizes that, “where the defendant allegedly ‘induced third parties to file false claims
with the government[,] a relator could satisfy Rule 9(b)
* * * without necessarily providing details as to each
false claim’ ” by alleging “the details of the scheme”
combined with “ ‘reliable indicia that lead to a strong inference that claims were actually submitted.’ ” United
States ex rel. Nargol v. DePuy Orthopaedics, Inc., 865
F.3d 29, 39 (2017) (citation and ellipsis omitted), cert.
denied, 138 S. Ct. 1551 (2018). The Fourth Circuit likewise generally requires relators to describe specific
false claims, but it has also permitted relators to “allege
a pattern of conduct that would ‘necessarily have led to
the submission of false claims’ to the government for
payment.” United States ex rel. Grant v. United Air-
19
lines Inc., 912 F.3d 190, 197 (2018) (brackets and citation omitted).
In sum, the circuit disagreement identified in the
United States’ Nathan brief has now subsided, and the
courts of appeals permit at least some FCA relators to
plead the defendant’s submission of false claims for payment even without identifying representative examples
or specific details of the defendant’s claims.
2. Petitioner contends (Pet. Reply Br. 1-2) that the
courts of appeals continue to disagree over whether,
“when the plaintiff pleads a fraudulent scheme with particularity, it is plausible to infer that false claims were
presented to the government,” or whether instead the
relator must “also plead the presentment of specific
false claims with particularity.” But no court of appeals
holds that alleging a fraudulent scheme with particularity is sufficient by itself to support a strong inference
that the defendant submitted false claims. Instead, the
courts consider each FCA complaint individually to determine whether it contains reliable indicia to support
that inference. Compare, e.g., Prather, 838 F.3d at 773
(yes), with Hirt, 846 F.3d at 882 (no).
To the extent that petitioner has identified disagreement among the courts of appeals, that disagreement
concerns the kinds of allegations that can adequately
substitute for representative examples in supplying reliable indicia that false claims were submitted. Cf. Pet.
Reply Br. at 1, Johnson v. Bethany Hospice & Palliative Care LLC, No. 21-462 (filed Dec. 28, 2021) (arguing
that “the split is over what a relator must plead if she
lacks representative examples, i.e., what counts as ‘reliable indicia’ ”) (emphasis omitted). But it is unsurprising that various courts of appeals, in the course of
applying the fact-intensive “reliable indicia” standard,
20
have reached divergent results across cases involving a
wide range of factual allegations.
In addition, while courts of appeals have expressed
different degrees of willingness to infer the submission
of false claims from probability, circumstantial evidence, and logic, the courts’ statements generally appear to reflect different judges’ subjective assessments
of the reliability of the particular allegations at issue,
rather than a choice among competing legal standards.
Compare, e.g., Chorches, 865 F.3d at 84-85 (discussed at
Pet. 16-19) (finding that complaint created “a strong inference that” “false claims were submitted to the government” by alleging, inter alia, “specific instances in
which [defendant’s] supervisors expressly asked for a
[patient report] to be falsified in order to qualify a [service] for Medicare reimbursement”), with Strubbe, 915
F.3d at 1164-1165 (discussed at Pet. 22) (finding that
complaint lacked “sufficient indicia of reliability leading
to a strong inference that claims were actually submitted” where relators “did not include any details about
[defendant’s] billing practices,” did not allege “personal
knowledge of the billing system or the submission of
false claims,” and “pleaded many key facts upon information and belief, without providing a ‘statement of
facts on which the belief is founded’ ”) (citation omitted),
and Carrel v. AIDS Healthcare Found., Inc., 898 F.3d
1267, 1277 (11th Cir. 2018) (discussed at Pet. 23-24)
(finding that relators “failed to offer sufficient ‘indicia
of reliability . . . to support’ ” the submission of false
claims for payment where they “allege[d] a mosaic of
circumstances that are perhaps consistent with their
accusations that the [defendant] made false claims,” but
“fail[ed] to allege with particularity that these back-
21
ground factors ever converged and produced an actual
false claim”) (citation omitted).
Moreover, the question that once divided the circuits—
whether qui tam relators are categorically required to
identify illustrative false claims in order to plead fraud
with the “particularity” that Rule 9(b) requires—
presented the courts with a binary choice and was susceptible of definitive resolution through a yes-or-no
answer. As events transpired, the courts of appeals
have effectively resolved that question in the negative
without this Court’s intervention. See pp. 15-19, supra.
By contrast, the question “What allegations will provide
sufficient indicia of reliability in cases where illustrative
false claims are unavailable?” is not subject to any single answer. The existing disuniformity in lower court
decisions does not appear to be materially greater than
what would be expected from the application of a factintensive standard. And under any formulation of the
governing standard that this Court might announce,
lower courts would still be required to evaluate whether
each FCA complaint satisfies Rule 9(b) “on a case-bycase basis.” United States ex rel. Atkins v. McInteer,
470 F.3d 1350, 1358 (11th Cir. 2006).
C. The Court Of Appeals’ Decision Does Not Warrant This
Court’s Review
As a result of the courts of appeals’ general convergence toward a fact-driven and flexible Rule 9(b) standard in FCA cases, the question of the appropriate pleading standard does not warrant this Court’s review.
Even if every court of appeals articulated precisely the
same standard for applying Rule 9(b) in FCA cases, the
application of such a general standard to each case’s
individual facts would necessarily produce some variations and differing glosses. This Court’s review there-
22
fore could not reasonably be expected to produce a
bright-line rule or otherwise eliminate all disuniformity
among the courts of appeals.
Moreover, the question presented arises only in the
subset of FCA cases where the plaintiff can describe in
detail the defendant’s fraudulent scheme, but is unable
to plead details concerning the false claims for payment
that the defendant submitted to the government. FCA
claims litigated by the United States should rarely if
ever present that circumstance, because the United
States will typically have access to any claims for payment that the defendant submitted. Further review is
not warranted.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
ELIZABETH B. PRELOGAR
Solicitor General
BRIAN M. BOYNTON
Principal Deputy Assistant
Attorney General
MALCOLM L. STEWART
Deputy Solicitor General
MICHAEL R. HUSTON
Assistant to the Solicitor
General
CHARLES W. SCARBOROUGH
MCKAYE L. NEUMEISTER
Attorneys
SEPTEMBER 2022
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.