The Eighth Circuit recently joined the ranks of four other federal circuits allowing whistleblowers to plead False Claims Act (FCA) violations without identifying specific examples of false claims submitted for reimbursement.  In so doing, the Eighth Circuit concluded that the heightened federal pleading standards required for fraud claims are satisfied where a whistleblower can provide details of a fraudulent scheme paired with other “reliable indicia” that false claims were submitted.  The case is Thayer v. Planned Parenthood, No. 13-1654 (8th Cir. Aug 29, 2014).  The whistleblower alleged that Planned Parenthood wrongfully obtained Medicaid reimbursements for prescriptions and services that were either not reimbursable or not reimbursable at the amount claimed.  However, the whistleblower was unable to provide any examples of particular false claims submitted to the government.

Rule 9(b) of the Federal Rules of Civil Procedure requires that claims of fraud be pleaded with particularity.  In light of the rule, the Eighth Circuit previously required FCA whistleblowers to provide “some representative examples of [the defendant’s] alleged fraudulent conduct, specifying the time, place, and content of [the defendant’s] acts and the identity of the actors.”  Under this precedent, the district court dismissed the plaintiff’s complaint for failure to plead fraud with particularity, finding that it contained no specific examples of false claims that had been submitted for reimbursement.

The Eighth Circuit reversed on certain of the claims, holding that Rule 9(b)’s particularity requirement was satisfied.  The Court noted that although the whistleblower had not pleaded representative examples of false claims, she had provided “sufficient indicia of reliability to support her allegations” because she had identified particular individuals, offices, methods, and time periods connected with the alleged fraudulent scheme, as well as facts about her job responsibilities — which provided her access to billing systems — and specific details about the billing system and practices.  The Court further noted the plaintiff had pleaded that she had personal knowledge of the submission of false claims.  Together, these facts were sufficient to establish the bases for the plaintiff’s knowledge of the fraudulent scheme.  Accordingly, the Court concluded that the plaintiff had satisfied Rule 9(b)’s objectives of providing the defendant with adequate notice of the claim and protecting the defendant from baseless claims.

The Eighth Circuit’s decision aligns with decisions of the First, Third, Fifth, and Ninth Circuits and widens the existing circuit split from 4-4 to 5-3.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Heather Finstuen Heather Finstuen

Heather Finstuen has extensive experience advising clients on cross-border investment and U.S. national security matters, negotiating and implementing mitigation agreements, and leading internal investigations and responding to government inquiries related to U.S. national security risks. Clients regard Heather as “very thoughtful” and “superb…

Heather Finstuen has extensive experience advising clients on cross-border investment and U.S. national security matters, negotiating and implementing mitigation agreements, and leading internal investigations and responding to government inquiries related to U.S. national security risks. Clients regard Heather as “very thoughtful” and “superb at translating legal requirements to business realities” (Chambers USA).

Heather represents domestic and international companies in numerous industries in securing the approval of the Committee on Foreign Investment in the United States (CFIUS). She frequently advises clients on national industrial security program regulations and engages with the Defense Counterintelligence and Security Agency, the Department of Energy, and other cognizant security agencies on the determination and mitigation of foreign ownership, control, or influence (FOCI).

Heather has expertise in identifying CFIUS and FOCI mitigation solutions that support commercial strategic objectives and translating complex mitigation requirements into pragmatic business practices. She has been involved in many complex CFIUS and FOCI matters across all industry sectors, including Brookfield Asset Management and Cameco’s $7.9 billion acquisition of Westinghouse; Advent International’s $14 billion consortium investment in McAfee and $6.4 majority investment in Maxar Technologies; BAE Systems’ $5.5 billion acquisition of Ball Aerospace and $2 billion combined acquisition of Collins Aerospace’s military GPS business and Raytheon’s military radios business; Peugeot’s $58 billion merger with Fiat Chrysler Automobiles to create Stellantis N.V.; Nexen Inc.’s $15 billion sale to China National Offshore Oil Corporation; and GlobalFoundries’ $1 billion acquisition of the IBM Microelectronics Division.

Heather counsels U.S. government contractors on National Industrial Security Program Operating Manual (NISPOM) requirements, obtaining and maintaining facility and personnel security clearances, safeguarding requirements, and supply chain considerations. Heather has led numerous internal investigations relating to U.S. national security issues and compliance concerns and has counseled U.S. government contractors in connection with internal investigations, mandatory disclosures, federal inquiries and investigations, and compliance policies and procedures.

Heather was recognized as a Law360 International Trade MVP for 2021 and 2024.

Before joining the firm, Heather served as a law clerk to the Honorable Carolyn Dineen King of the United States Court of Appeals for the Fifth Circuit.