Key Points:False Claims Act plaintiff cannot use discovery to satisfy Fed. R. Civ. P. 9(b).Payment of fair market value is a dispositive defense in FCA actions alleging a violation of the Anti-Kickback Statute.Qui tam plaintiffs cannot proceed with separate claims or against separate defendants once the government intervenes unless the government intervenes in the relator’s additional claims.CMS’s most recent Stark law interpretation significantly diverges from recent Stark law/FCA court decisions.Subregulatory guidance that is not tethered to a statute or regulation cannot serve as the foundation to an FCA action.

In Lawton v. Takeda Pharmaceutical Co. et al., 842 F.3d 125 (1st Cir. 2016), the First Circuit affirmed the lower court’s dismissal of a False Claims Act (“FCA”) suit alleging a drug maker fraudulently marketed a product for off-label uses. The decision focused on the application of Federal Rule of Civil Procedure 9(b) in FCA cases, explaining that a relator is required to plead with particularity both the alleged false or fraudulent statements and their connection to the allegedly induced false claims. Here the relator alleged the defendants violated the FCA by fraudulently marketing a drug for various off-label uses.

e complaint. See Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).1To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations,” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. As the Supreme Court reiterated, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.II. Rule 9(b)’s Particularity RequirementIn addition to the pleading standard explained by the Supreme Court in Twombly and Iqbal, Federal Rule of Civil Procedure 9(b) requires “particularity” when pleading “fraud or mistake.” Fed. R. Civ. P. 9(b). Rule 9(b) serves to deter suits filed for the purpose of discovering unknown wrongs and to enable a defendant to understand a plaintiff’s claim and effectively prepare a defense. E.g., Parnes v. Gateway2000, Inc., 122 F.3d 539, 549 (8th Cir. 1997); 5A Charles Alan Wright et al., Federal Practice & Procedure § 1296 (3d ed.) (updated Apr. 2016). It applies to all claims premised on fraud, including “claims of false advertising, deceptive trade practices, unlawful trade practices, and consumer fraud.” Select Comfort Corp. v. Sleep Better Store, LLC, 796 F. Supp. 2d 981, 983 (D. Minn. 2011); see also 5A Charles Alan Wright, et al., Federal Practice & Procedure § 1297 (3d ed.) (updated Apr. 2016) (“Even when a plaintiff is not making a fraud claim, courts will require particularity in the pleading if the cause of action is premised on fraudulent conduct.”).In this case, Rule 9(b) applies to all counts in the F

False Marking Claims Must Be Pled with Particularity 10-M960 March 15, 2011 Decision Last Month at the Federal Circuit - April 2011Judges: Lourie, Gajarsa, Linn (author) [Appealed from: N.D. Ill., Judge Gettleman] In In re BP Lubricants USA Inc., No. 10-M960 (Fed. Cir. Mar. 15, 2011), the Federal Circuit granted a petition for writ of mandamus in part and directed the district court to dismiss the respondent’s false marking complaint with leave to amend in accordance with the particularity requirements of Fed. R. Civ. P. 9(b) as described in the Court’s Order. BP Lubricants USA Inc. (“BP”) manufactures motor oil products under the brand name CASTROL. BP’s CASTROL products are distributed in a unique bottle design for which BP received a design patent.

On May 31, 2013, the First Circuit weighed in on a question concerning application of the False Claims Act’s first-to-file bar that has split the circuits. In United States ex rel. Heineman Guta v. Guidant Corp., et al., (12-1867), the First Circuit held that the first-filed complaint need not satisfy Fed. R. Civ. P. 9(b)’s heightened pleading standard in order to bar a later-filed complaint. In doing so, the court expressly rejected the Sixth Circuit’s approach.

The Complaint alleges that the defendants engaged in both unfair and deceptive trade practices. The defendants argue that Count I fails to state a claim upon which relief can be granted because there was no deception, as the packaging contains the very warning the plaintiff seeks.The defendants argue that Count I is subject to the pleading requirements of Federal Rule of Civil Procedure 9(b) because it sounds in fraud. Ordinarily, “[s]ince fraud is not a necessary element of a state CUTPA claim, seeMiller v. Appleby, 183 Conn. 51, 54–55 (1981), a plaintiff does not need to meet the heightened pleading requirements of Fed. R. Civ.

The Complaint alleges that the defendants engaged in both unfair and deceptive trade practices. The defendants argue that Count I fails to state a claim upon which relief can be granted because there was no deception, as the packaging contains the very warning the plaintiff seeks.The defendants argue that Count I is subject to the pleading requirements of Federal Rule of Civil Procedure 9(b) because it sounds in fraud. Ordinarily, “[s]ince fraud is not a necessary element of a state CUTPA claim, see Miller v. Appleby, 183 Conn. 51, 54–55 (1981), a plaintiff does not need to meet the heightened pleading requirements of Fed. R. Civ.

The First Circuit recently affirmed the dismissal of U.S. ex rel. Ge v. Takeda Pharmaceuticals, a whistleblower suit alleging that defendant’s failure to disclose certain risks relating to four drugs and to report adverse events under the Food & Drug Administration’s regulations resulted in FalseClaims Act (“FCA”) violations. The court affirmed the district court’s dismissal for failure to plead with sufficient particularity under Federal Rule of Civil Procedure 9(b). The court held without reservation that Rule 9(b) requires relators to plead with specificity that false claims were actually submitted, and that pleading circumstances that allegedly give rise to the inference that false claims were filed is not enough.

The Tenth Circuit reversed, holding that the relator need not allege those facts because they were in the defendant’s exclusive control and that allegations of knowledge need only be pleaded generally. Intermountain’s petition raises two questions: Can a plaintiff avoid Federal Rule of Civil Procedure 9(b)’s pleading requirements by asserting that only the defendant possesses the information needed to meet those requirements? Do the False Claims Act’s (FCA) qui tam provisions violate the Appointments Clause of Article II of the U.S. Constitution? Both questions have previously appeared in petitions for writ of certiorari, but neither question has been addressed by the Supreme Court.

Because qui tam claims sound in fraud, under precedent and Rule 9(b) of the Federal Rules of Civil Procedure, relators are required to plead their claims with a heightened degree of specificity that many, having limited access to inside information, struggle to meet.Defendants confronting a relator who chooses to proceed on their own in a declined qui tam frequently take advantage of this information deficit and seek dismissal for failure to plead in a manner consistent with Rule 9(b). The result over the years has been variability in the application of Rule 9(b) between circuits, and among panels within the same circuits. But in 2022, the Supreme Court again denied several petitions seeking clarity as to exactly what that specificity must include. Although every federal court of appeals has held that Rule 9(b) applies to claims under the FCA, the circuit courts have articulated different standards for applying the rule to the sine qua non of an FCA claim: the submission of a false claim to the government for payment. The Supreme Court’s denial of certiorari in Jolie Johnson, et al. v. Betha