Last week, the Supreme Court requested the Solicitor General’s views on United States ex rel. Owsley v. Fazzi Associates Inc. et al.,signaling the Court’s interest in potentially resolving a longstanding Circuit split. The circuit courts have been divided over the facts necessary to plead fraud with “particularity” under the False Claims Act (FCA), specifically whether Federal Rule of Civil Procedure 9(b)’s heightened pleading standard requires a party to plead details of specific false claims or whether the submission of a false claim can be inferred from details about a fraudulent scheme.
Rule 9(b) requires plaintiffs who allege fraud to “state with particularity the circumstances constituting fraud.” The circuits have been divided over how this standard applies in FCA cases. The First, Second, Fourth, Sixth, Eighth, and Eleventh Circuits generally require plaintiffs to allege at least one example of a false claim in their complaint. The other circuits, the Third, Fifth, Seventh, Ninth, Tenth, and D.C. Circuits, do not require a plaintiff to plead the details of representative false claims.
The Supreme Court’s interest in resolving this division among the Circuits appears to be growing. There are currently three petitions pending before the Supreme Court raising this split, two brought by relators and one by a defendant. (Johnson et al. v. Bethany Hospice and Palliative Care LLC, No. 21-462; United States ex rel. Owsley v. Fazzi Associates Inc. et al., No. 21-936; and...
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