The U.S. Supreme Court has refused to hear a dispute over how precisely whistle-blowers must plead their False Claims Act cases, allowing the issue to be worked out among the circuit courts.
By declining to accept the case of Nathan v. Takeda, the Supreme Court is giving the circuit judges one last chance to resolve a dispute over whether a relaxed or stricter pleading standard applies to FCA whistle-blower cases.
In Nathan v. Takeda, a lawsuit was brought under the qui tam provision of the FCA alleging a pharmaceutical company caused false claims to be presented to Medicare and Medicaid by promoting one of its drugs for uses that had not been approved by the Food and Drug Administration. The case was dismissed for failing to plead fraud under the FCA with particularity. The dismissal was affirmed by the appellate court.
Federal Rule of Civil Procedure 9(b) applies to FCA claims and states a complaint must plead fraud with "particularity." The circuits are split on what pleadings are necessary to meet the "particularity" requirement of the statute.
According to the U.S. Solicitor General's brief in Nathan v. Takeda, the Sixth, Eighth and Eleventh Circuits have adopted stricter, pro-defendant interpretations of what is required to meet the pleadings standards in an FCA whistle-blower complaint. These districts have held a complaint must contain particular allegations that false claims were actually presented to the government.
The First and Fourth have adopted a more relaxed standard by holding it is enough to allege details of a scheme to submit false claims together with "sufficient indicia" that false claims were submitted, according to the brief.
In his brief, the U.S. Solicitor General requested the Supreme Court not hear Nathan v. Takeda because the circuits applying the stricter standard have not been consistent, which could mean a consensus will be reached among the circuits without the Supreme Court ruling on the issue.
The Supreme Court listened to the U.S. Solicitor General's wishes and declined to hear the case.
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