On June 23, 2015, the United States Court of Appeals for the District of Columbia Circuit issued a helpful decision for qui tam whistleblowers in U.S. ex rel Heath v. AT&T, Inc., Case No. 14– 7094, 2015 WL 3852180 (D.C. Cir. 2015).
The issue concerns the level of factual detail that a whistleblower must allege in his or her complaint in order to survive a motion to dismiss under Federal Rule of Civil Procedure 9(b). Under that rule, plaintiffs who allege fraud must do so “with particularity.” In the context of qui tam whistleblower claims, many courts have applied an overly strict construction of Rule 9(b) by requiring that whistleblowers know the precise details of the exact “false claims” that were submitted to and paid by the government.
This level of detail can be impossible for many whistleblowers to allege. As an example, an employee of a fraudulent healthcare facility may know precise details as to when and how his or her employer is paying kickbacks to physicians in order to generate referrals of patients. These types of kickbacks make all claims submitted to Medicare “false” within the meaning of the False Claims Act. The whistleblower may be able to allege the details of the kickback scheme with great specificity. However, because he or she does not work in the billing department, he or she probably has little, if any, of the precise details regarding the exact “claims” submitted to Medicare or Medicaid. Under those circumstances, many courts have taken the view that the whistleblower’s claim lacks “particularity.”
In the Heath case, the D.C. Circuit joined the growing trend of cases moving away from this overly strict application of Rule 9(b). Heath involved a conspiracy by AT&T to cause inflated bills to be submitted to the federal government. The whistleblower had a great deal of knowledge about the conspiracy, but not the dates and amounts of the bills themselves. AT&T argued the lawsuit should be dismissed because the whistleblower could not point to any specific bills that had been paid by the government.
In a helpful decision, the D.C. Circuit rejected this argument:
“We accordingly join our sister circuits in holding that the precise details of individual claims are not, as a categorical rule, an indispensable requirement of a viable False Claims Act complaint, especially not when the relator alleges that the defendant knowingly caused a third party to submit a false claim as part of a federal regulatory program.” See U.S. ex rel Heath v. AT&T, Inc., 2015 WL 3852180, * 12 (D.C. Cir. 2015).
This case should prove helpful to whistleblowers who have valid information about schemes to defraud the government but do not have the dates, times, and amount of the actual bills sent to the government.