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.