Tuesday, July 1, 2014

Worth the Read: The Third Circuit Adopts a Lenient Application of Rule 9(b)

I commend to you the recent blog post, "Third Circuit Adopts More Lenient Application of Rule 9(b) in FCA" by Robert Conlan, Jr. of Sidley Austin's Original Source False Claims Act blog. Rule 9(b) of the Federal Rules of Civil Procedure is crucial for defendants in staving off the numerous False Claims Act suits which lack merit by requiring the relator to plead a defendant's alleged fraud "with particularity." The blog post highlights the Third Circuit's recent case, U.S. ex rel. Foglia v. Renal Ventures Mgmt., LLC, 2014 U.S. App. LEXIS 10549 (3d Cir. June 6, 2014), which addressed the application of Rule 9(b) to False Claims Act cases. Mr. Conlan explains how the Court rejected the more restrictive Rule 9(b) pleading standard of the Fourth, Sixth, Eighth, and Eleventh Circuits and instead sided with the "less restrictive approach" found in the First, Fifth and Ninth Circuits. (I think, however, Foglia is even more lenient than the less restrictive approach.) Indeed, Foglia, Mr. Conlan points out, is no surprise, given that the Court drew its interpretation of Rule 9(b) in part from a "Solicitor General's amicus curiae brief" wherein the government argued that "the more rigid pleading standard is unsupported by Rule 9(b)" because it "undermines the FCA's effectiveness as a tool to combat fraud against the United States." As Mr. Conlan observes, Foglia is further evidence that the Supreme Court needs to resolve this circuit split.

A. Brian Albritton
July 1, 2014

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