Jolie Johnson, et al. v. Bethany Hospice and Palliative Care LLC

Federal Rule of Civil Procedure 9(b) provides that “circumstances constituting fraud” must be “state[d] with particularity.” The courts of appeals are divided over what Rule 9(b) requires in cases arising under the False Claims Act, 31 U.S.C. § 3729, which prohibits the submission of false or fraudulent claims for payment to the Government. A commonly recurring fact pattern is that the plaintiff has detailed knowledge of a fraudulent scheme to submit false claims, but does not have firsthand knowledge of actual claims submitted to the Government (for example, because the plaintiff was not personally involved in the billing). In this situation, courts of appeals are divided over whether and when the plaintiff can proceed. Most circuits allow plaintiffs to proceed if the submission of false claims can reasonably be inferred from other well-pleaded facts. But a minority, including the Eleventh Circuit, hold that the submission of claims cannot be inferred from circumstances, and that unless the plaintiff pleads specific details of the claims themselves, the complaint must be dismissed. The question presented is: Whether Rule 9(b) requires plaintiffs in False Claims Act cases who plead a fraudulent scheme with particularity to also plead specific details of false claims.