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United States ex rel. Hirt v. Walgreen Co.

United States Court of Appeals for the Sixth Circuit · Civil Procedure

Civil ProcedureFalse Claims ActRule 9(b) particularityQui tam pleadingRule 9(b)False Claims Actqui tamparticularity

Facts

Hirt owned pharmacies in Cookeville, Tennessee, including one competing with a nearby Walgreens. He alleged that between November 19, 2012 and August 25, 2014, the Walgreens offered $25 gift cards to induce his Medicare and Medicaid customers to transfer prescriptions there, allegedly in violation of the Anti-Kickback Statute. He further alleged that Walgreens submitted the resulting prescription-drug claims to the government in violation of the False Claims Act. But his complaint did not identify any specific customer, prescription fill, reimbursement claim, or date of claim submission.

Issue

Whether Hirt's qui tam complaint satisfied Civil Rule 9(b) by pleading False Claims Act fraud with particularity when it alleged a general kickback scheme but did not identify any specific false claim submitted to the government. The court also addressed whether Rule 9(b)'s specificity requirement could be 'relaxed' in this context.

Rule

In a False Claims Act case, Rule 9(b) requires a plaintiff to state fraud with particularity, and identifying at least one false claim with specificity is an indispensable element of a compliant complaint. Courts have no authority to 'relax' Rule 9(b), although what constitutes sufficiently particular allegations may depend on context; in some contexts, detailed allegations about when, where, and how claims were submitted may suffice if they establish with particularity that a claim for payment was submitted.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Dayton, Ohio, relator Nolan Pierce sues Lakeview Oncology Group under the False Claims Act, alleging the clinic gave grocery vouchers to Medicare patients to keep them from switching doctors. His complaint says the vouchers were distributed for eight months and that the clinic therefore must have billed Medicare for resulting visits, but it identifies no patient, no visit date, and no reimbursement submission.

Should the court deny the clinic's motion to dismiss because the complaint sufficiently pleads fraud under Rule 9(b)?

Explanation. Rule 9(b) requires particular allegations of fraud in an FCA case, and identifying at least one false claim with specificity is indispensable unless the complaint otherwise alleges with particularity when, where, and how claims were submitted. A complaint describing only an unlawful scheme and inviting the court to infer claim submission from that scheme does not suffice. The majority rejected reliance on implications alone and required specifics showing an actual submitted claim or facts making submission highly likely. (Derived from United States ex rel. Hirt v. Walgreen Co. (n.d.).)