Claris Law Legal Blogging Community

Editor: Mike Bothwell
Profession: Qui Tam Attorney

Category: Legal Analysis

In U.S. ex rel. Sanderson v. HCA-The Healthcare Company, Civil Action No. 04-6342, 2006 U.S. App. Lexis 11765 (6th Cir. May 12, 2006), it appears that another circuit court has embraced the silly heightened pleading standard first established by the absurd 2-1 decision in Clausen v. Laboratory Corp. of America, Inc., 290 F.3d 1301 (11th Cir. 2002).

Here, as in the Eleventh Circuit's Clausen case, the plaintiff's complaint "does not identify any specific claims that were submitted to the United States or identify the dates on which those claims were presented to the government and relies [instead] exclusively on conclusory allegations of fraudulent billing." Id. at 1311 (citations omitted). But, as the Clausen opinion notes, "the False Claims Act does not create liability merely for a health care provider's disregard of Government regulations or improper internal policies unless, as a result of such acts, the provider knowingly asks the Government to pay amounts it does not owe." Id. As a result, Rule 9(b) "does not permit a False Claims Act plaintiff merely to describe a private scheme in detail but then to allege simply . . . that claims requesting illegal payments must have been submitted, were likely submitted or should have been submitted to the Government." Id.

Seemingly ignoring a reasonable Rule 9(b) standard that had existed in the Sixth Circuit for almost 20 years, Michaels Bldg. Co. v. Ameritrust Co., N.A., 848 F.2d 674, 679 (6th Cir. 1988), the Sanderson court took a turn toward the set of cases that not only adopts a draconian pleading standard unique to False Claims Act actions, but essentially makes it impossible for qui tam plaintiffs to prevail on cases irrespective of their merit. Apparently, few panels these days are heeding the insightful words of the dissent in the Clausen case:

The majority wants Clausen to provide "copies of bills or payments." But that is to say the majority asks for proof, and proof is not required at the pleading stage. The majority also wants identification of the amounts of charges and the actual dates of claim submission. But the majority does not suggest that Clausen had any pre-discovery means of obtaining that information, so it asks for the impossible. Finally, the majority wants "policies about billing" or "second-hand information about billing practices." Perhaps Clausen could have found some information indicating that LabCorp--whose business is to perform medical tests for payment--had a policy of billing for the tests it performed. But here, the majority simply asks for the obvious.

It may be that the majority reaches the conclusion it does because it suspects that Clausen's lawsuit is without merit. I do not know whether the suit has merit or not, but in any event, it is not relevant to the question before us. A court should not rely on its estimation of the merits of the underlying suit when deciding whether a complaint has complied with the requirements of Rule 9(b). My concern with the law the Court makes today is that it is undiscriminating, as likely to result in the dismissal of meritorious lawsuits as it is to protect defendants from unwarranted litigation.

Clausen, at 1317-1318 (footnote omitted).