The U.S. Supreme Court’s recent refusal to hear a dispute over how precisely whistleblowers must plead their False Claims Act cases gives circuit judges the opportunity to resolve a split in the circuits. By declining to accept the Nathan v. Takeda case, the high court bowed to the wishes of U.S. Solicitor General Donald B. Verrilli, Jr. After being invited to express the administration’s views, the Solicitor General asserted that circuits are getting close to a consensus on what it means to plead an FCA suit with “particularity.”
This was the second time in recent years that the justices agreed with the Solicitor General in a FCA case involving Rule 9(b), an important procedural section. The high court is taking the right approach in letting the circuits settle their differences if that can be accomplished.
At issue is how much detail whistleblowers must provide in order to get to discovery – a crucial moment in FCA litigation. Debate centers on whether it’s enough to describe a scheme that strongly suggests false claims were submitted, as opposed to identifying actual false claims, and if so, how strong the circumstantial evidence must be.
A key dispute in the Takeda case was whether the administration distorted reality when it claimed that circuits have been coalescing on Rule 9(b) interpretation. For example, the Solicitor General noted that the Eighth Circuit recently allowed an FCA complaint to proceed despite an absence of specific false claims, which loosened its historical stance and brought it more in line with some other circuits. The solicitor general wrote:
Disagreement among the circuits therefore may be capable of resolution without this court’s intervention.
Hopefully, the Circuit Courts of Appeal will collectively recognize that the federal trial judges should be able to exercise discretion when deciding issues under rule 9(b) and then give them the necessary latitude to do their job. I believe that will likely happen.
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