Supreme Court urged to restore heightened pleading standard in FCA cases

The AHA and Federation of American Hospitals today urged the U.S. Supreme Court to review a federal appeals court decision that allows False Claims Act whistleblowers to accuse a hospital or other defendant of fraud and proceed to discovery without articulating specific facts demonstrating the circumstances or scope of the alleged fraud.
 
“The question here is whether private plaintiffs pursuing FCA claims should have to follow the same basic rules of civil litigation that apply to every other plaintiff pursuing a fraud claim, or whether they should be treated as a special class of plaintiff entitled to a court-made exception from those rules,” the associations said in a friend-of-the-court brief filed in the case. “Amici and their members submit that they should not be. … The Tenth Circuit’s relaxed standard strips away the protections [Federal Rule of Civil Procedure 9(b)] affords other defendants. Discovery in FCA cases can be enormously expensive, even when it confirms that the relator could not plead the circumstances of any fraud because no fraud occurred. For all hospitals, the costs are an unnecessary diversion of resources from patient care; for community hospitals in particular, these consequences can be devastating. This Court should grant certiorari to restore the consistent application of the plain text of Rule 9(b) in all fraud cases, including those brought under the FCA.”