In Foglia v. Renal Ventures Management, LLC, the Third Circuit reversed a New Jersey district court’s order dismissing an FCA case for failure to satisfy Federal Rule of Civil Procedure 9(b), holding that the court applied an overly demanding pleading standard to relator Thomas Foglia’s complaint.  The United States did not intervene in this case. 

In his complaint, Foglia claimed that his former employer, Renal Ventures, violated the FCA by falsely certifying to Medicare that it was in compliance with state regulations regarding quality of care, falsely submitting claims for reimbursement for the drug Zemplar, and reusing single-use Zemplar vials.  The district court held that Foglia failed to satisfy the “particularity” requirement of Rule 9(b) because his complaint did not provide a “representative sample” or “identify representative examples of specific false claims made to the Government.”

Circuit Courts disagree as to the what a plaintiff must show at the pleading stage for an FCA claim.  The Fourth, Sixth, Eighth, and Eleventh Circuits have held that a plaintiff must show “representative samples of the alleged fraudulent conduct, specifying the time, place and content of the acts and the identity of the actors.”  In contrast, the First, Fifth and Ninth Circuits have held that it is sufficient for a plaintiff to allege “particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.” 

The Third Circuit joined the First, Fifth, and Ninth Circuits in their “more nuanced” reading of Rule 9(b).  The Court reasoned that “it is hard to reconcile the text of the FCA, which does not require that the exact content of the false claims in question be shown, with the ‘representative samples’ standard favored by the Fourth, Sixth, Eighth, and Eleventh Circuits.”  The Court further stated that “requiring this sort of detail at the pleading stage would be ‘one small step shy of requiring production of actual documentation with the complaint, a level of proof not demanded to win at trial and significantly more than any federal pleading rule contemplates.’”  The Court also cited a recent amicus brief filed by the Solicitor General in connection with a writ of certiorari, in which the Solicitor General stated that “the heightened or ‘rigid’ pleading standard required by the Fourth, Sixth, Eighth, and Eleventh Circuits is ‘unsupported by Rule 9(b) and undermines the FCA’s effectiveness as a tool to combat fraud against the United States.” 

The Third Circuit went on to hold that Foglia’s complaint satisfied Rule 9(b)’s requirements because it “suffice[d] to give Renal notice of the charges against it[.]”  This decision deepens the circuit split on the application of Rule 9(b) to FCA claims, and highlights the need for Supreme Court guidance on this issue.