1 The HONORABLE ANN D. MONTGOMERY, United States District Judge for the District of Minnesota. 

## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 07-3781

___________ United States ex rel Henry Roop, *
* Plaintiff - Appellant, * * Appeal from the United States v. * District Court for the * District of Minnesota. Hypoguard USA, Inc., et al., *
* Defendants - Appellees. *

___________ Submitted: October 14, 2008 Filed: March 17, 2009

___________ Before LOKEN, Chief Judge, JOHN R. GIBSON and MURPHY, Circuit Judges.

___________ LOKEN, Chief Judge.
Qui tam relator Henry Roop appeals the dismissal of his complaint alleging that his former employer, Hypoguard USA, Inc., violated the False Claims Act (“FCA”), 31 U.S.C. § 3729(a). Conceding that his in itial Complaint failed to plead an FCA claim with the particularity required by Ru le 9(b) of the Federal Rules of Civil Procedure, Roop argues that the district court 1 abused its discretion by denying him leave to amend and then denying his motion to alter or amend the judgment to permit him to file a proposed First Amended Complaint. We affirm.2 The FDA granted pre-market approval of the Hypoguard glucose monitoring products. See 21 U.S.C. §§ 360c(f), 360e; 21 C.F.R. Part 814. The MDR regulations require a medical device manufacturer to s ubmit an “adverse event report” to the FDA if it receives information suggesting that a device may have caused or contributed to a death or serious injury, or has malfunc tioned and would likely cause or contribute to a death or serious injury if the malfunction recurred. 21 C.F.R. § 803.50(a).
-2- Roop worked as a Medicare sales speci alist for Hypoguard, a Minnesota-based manufacturer of blood glucose monitoring syst ems that are sold to diabetics, many of whom are eligible under Medicare for fede ral reimbursement of their purchases. Hypoguard sells these medical devices to distributors who submit Medicare reimbursement claims for their sales to nursing homes and individual consumers.

Roop commenced this action in March 2004 by filing a sealed complaint in the Northern District of Mississippi. The complaint alleged, inter alia , that Hypoguard blood glucose monitors and test strips we re defective, and th at Hypoguard knew they were defective and failed to file reports of defects required by the Food and Drug Administration’s Medical Device Reporting (“MDR”) regulations, 2which caused Medicare to pay countless fraudulent reim bursement claims submitted by Hypoguard distributors. In May 2006, after a lengthy F DA investigation, the United States filed a Notice of Election to Decline Intervention. See 31 U.S.C. § 3730(b)(4)(B). Roop elected to continue the action. Hypoguard was then served and in October 2006 filed motions to dismiss and to transfer venue to the District of Minnesota.

In support of its motion to dismiss, Hypoguard argued that Roop failed to plead fraud with the specificity requi red by Rule 9(b) because he failed to allege “a single specific false claim or statement submitted to the government,” details concerning the alleged failures to submit pr oper MDRs, and “what was fals e in any statement to the Government, why it was false, and when the allegedly fraudulent statements were made.” In his Memorandum in Opposition, Roop argued at length that the complaint sufficiently pleaded an FCA claim and then concluded: “Alternativ ely, if this Court-3- finds that Plaintiff’s False Claims Act claims lack specificity as required by Rule 9(b), Plaintiff should be granted leave to file an amended complaint.” The Northern District of Mississippi transferred venue to the District of Minnesota in March 2007 without ruling on the motion to dismiss.

The district court held a hearing on Hypoguard’s motion to dismiss on September 6, 2007. Roop had not complied with the local rule requiring that a party who moves to amend a pleading “shall attacha copy of the amended pleading to the motion.” D. Minn. LR 15.1. Accordingly, at the hearing, the district court asked:

If I were to require there to be a realleging under Rule 9, what further facts do you think could be adduced to shore this up?

Counsel for Roop responded:

Well, number one, I can allege that people were injured by it. I do have evidence of that. My client as a regional sales mana ger was involved in some telephone conferences with groups of sales reps as well as management of Hypoguard in which people gave instances of where people were injured by the device, so I could allege that. . . . THE COURT: Injured in the se nse of requiring hospitalization -- [COUNSEL]: Yeah, and I think one person died. . . . I guess I could more clearly allege the re imbursement . . . it’s not Hypoguard being reimbursed, but that they’re causing reimbursements to be made. So I could more specifically allegeregarding the MDRs and that they were required to be re ported and not reported and provide the basis under the regulations with some evidence as to -- particular evidence as to people that were injured, or at least discussions where Hypoguard employees acknowledged that people were injured by the device. THE COURT: Okay.-4- [COUNSEL]: I would like the opportunity . . . to do Rule 26 disclosures and I’d like to take the depositions of some Hypoguard employees and some ex-employees . . . . And I would like to get copies of all the MDRs they did file and ju st internal documents regarding the device . . . .

After the hearing, the district court issued a Memorandum Opinion and Order dismissing Roop’s Complaint with prejudi ce and denying his request for leave to amend. United States ex rel. Roop v. Hypoguard USA, Inc. , 2007 WL 2791115 (D. Minn. Sept. 24, 2007). The court concluded that all claims “failed to meet the particularity requirements of Rule 9(b) ,” a conclusion Roop does not challenge on appeal. Noting that Roop neither specifiedin his memorandum what additional facts he would plead nor submitted a proposed ame nded complaint, the court denied leave to amend because “the potential amendmen t Roop’s counsel cited [at the hearing] would not cure the deficiencies in R oop’s Complaint and thus would be futile.”

On October 9, 2007, Roop f iled a Motion to Alter or Amend the Judgment and Motion for Leave to File a First Amende d Complaint, attaching a 25-page, 63- paragraph First Amended Complaint. His nine-page Memorandum in Support asserted that he “has now alleged in compliance with [Rule] 9(b) the instances of the false and fraudulent claims, and violations of FDA regulations,” but he failed to provide a detailed comparison of how th e lengthy First Amended Complaint cured deficiencies in the initial Complaint. Th e district court denied that motion in a Memorandum Opinion and Order explaining th at Roop “failed to present any reason why he is entitled to relief unde r Rule 59(e) or 60(b).” Un ited States ex rel. Roop v. Hypoguard USA, Inc. , 2007 WL 4224074, at *1 (D. Minn. Nov. 27, 2007).

1. On appeal, Roop first argues that th e district court abused its discretion in dismissing his Complaint with prejudice and denying as futile his request for leave to amend to cure its Rule 9(b) deficiencies. Futility is a valid basis for denying leave to amend. We review the denial of leave to amend for abuse of discretion and questions3 A claim under § 3729(a)(2) requires proof “that the defendant intended that the false record or statement be material to the Government’s decision to pay or approve the false claim.” Allison Engine Co. v. United States ex rel. Sanders , 128 S. Ct. 2123, 2126 (2008). Neither Roop’s Complaint nor his proposed First Amended Complaint alleged this element of the claim.
-5- of futility de novo . United States ex rel. Jo shi v. St. Luke's Hosp., Inc. , 441 F.3d 552, 555 (8th Cir. 2006). The district court prope rly rejected Roop’s request at the motion hearing for time to conduct disc overy to satisfy Rule 9(b)’s particularity requirement. Id. at 559.

The FCA imposes liability if a defendant(1) “knowingly presents, or causes to be presented, [to a federal official] a false or fraudulent claim for payment or approval,” or (2) “knowingly makes . . . a fa lse record or statement to get a false or fraudulent claim paid or appr oved.” 31 U.S.C. § 3729(a)(1)-(2). 3 Grounded in fraud, FCA claims must satisfy Rule 9(b)’s hei ghtened pleading requirement: “[A] party must state with particularity the circum stances constituting fraud or mistake.” To meet this standard and enab le the defendant to respond “s pecifically and quickly,” a complaint alleging fraud “must identify who, what, where, when , and how.” United States ex rel. Costner v. United States , 317 F.3d 883, 888 (8th Cir. 2003). If it alleges a systematic practice of submitting fraudulent claims, the FCA complaint “must provide some representative examples of [the] alleged fraudulent conduct,” specifying “the time, place, and content of the defendant's false representations, as well as the details of the defendant's fraudulent acts, including when the acts occurred, who engaged in them, and what was obtained as a result.” Joshi , 441 F.3d at 556-57; accordUnited States ex rel. Snapp, Inc. v. Ford Motor Co. , 532 F.3d 496, 506 (6th Cir. 2008). Roop concedes his original Complaint failed to meet this pleading standard.

Though the district court “should freely gi ve leave [to amend] when justice so requires,” Fed. R. Civ. P. 15(a)(2), plaintiffs do not enjoy “an absolute or automatic-6- right to amend” a deficient FCA Complaint. United States ex rel. Lee v. Fairview Health Sys. , 413 F.3d 748, 749 (8th Cir. 2005). Here, Roop’s Memorandum in Opposition, submitted almost a year before the motion hearing, argued that his initial Complaint satisfied Rule 9(b), alternativel y requested leave to amend in a concluding paragraph, and failed to describe the amendments he would submit. After transfer to the District of Minnesota, he failed to co mply with local Rule 15.1 for six months before the motion hearing. When the district court asked at that hearing how Roop would cure the Rule 9(b) deficiencies, counsel described add itional allegations of consumer injury and non-compliance with the MDR regulations, allegations arguably relevant to a products liability case but, as th e district court concluded, insufficient to satisfy the Rule 9(b) requirement that FCA fraud claims be pleaded with particularity. The court did not abuse its discretion in denying leave to amend. See Fairview Health Sys. , 413 F.3d at 750, and cases cited; accordUnited States ex rel. Williams v. MartinBaker Aircraft Co. , 389 F.3d 1251, 1259 (D.C. Cir. 2004).

2. Roop next argues that the district court abused its discretion in denying his motion to alter or amend the judgment to allow him to file the proposed First Amended Complaint. He complains on appeal that only after the court dismissed his Complaint did he become “aware . . . of the facts which the Court believed were required to be set forth withparticularity.” In a word , this is balderdash. Roop adopted a strategy of vigorously defending his initial Complaint, despite its numerous and obvious Rule 9(b) deficiencies. He now wants a judicial reprieve.

Review of this motion raises an issue of law ignored by the parties -- when a complaint is dismissed for failure to state a claim, and plaintiff files a post-judgment motion for leave to file an amended comp laint, is that motion reviewed under the liberal “freely give” standard of Rule 15(a )(2), or under the more restrictive standards applicable to post-judgment motions unde r Rules 59(e) and 60(b)? All circuits acknowledge that post-judgment leave to am end may be granted if timely requested. That conclusion is compelled by the Suprem e Court’s summary reversal of the denial-7- of such a motion in Foman v. Davis , 371 U.S. 178, 182 (1962). However, interests of finality dictate that leave to amend shoul d be less freely availabl e after a final order has been entered. As we have said in numerous cases, “[a]lthough leave to amend a complaint should be granted liberally whenthe motion is made pretrial, different considerations apply to motions filed afte r dismissal.” Briehl v. General Motors Corp. , 172 F.3d 623, 629 (8th Cir. 1999). Nevertheless, the customary Rule 59(e) standard, which bars attempts to “introdu ce new evidence, tender new legal theories, or raise arguments which could have beenoffered or raised prior to entry of judgment,” Innovative Home Health Care, Inc. v. P.T.-O.T. Assoc. of the Black Hills , 141 F.3d 1284, 1286 (8th Cir. 1998), and Rule 60(b)(1), which limits relief to showings of “mistake, inadvertence, surpri se, or excusable neglect,” seem ill-suited to the task of determining when a plain tiff who has failed to plead fraud with the particularity Rule 9(b) requires should be permitted, post-judgment, to try again.

We have found two circuits that have a ddressed this question in reviewing the denial of post-judgment motions for leave to amend an FCA complaint dismissed for failure to comply with Rule 9(b). Both he ld that Rule 59(e) and Rule 60(b) apply at this stage of the proceedings. But the Fifth Circuit held that, in this situation, “the considerations for a motion under Rule 59( e) are the same as those governing a motion under Rule 15(a).” United St ates ex rel. Hebert v. Dizney , 2008 WL 4538308, at *4 (5th Cir. Oct. 10, 2008) (unpublished) , applying Rosenzweig v. Azurix Corp. , 332 F.3d 854, 865 (5th Cir. 2003). On the other hand, the Sixth Circuit applied its normal, restrictive Rule 59 and Rule 60 principles, though the issue was of little importance because the court reversed th e denial of leave to amend based on an intervening change in controlling law, a ci rcumstance that cust omarily warrants postjudgment relief. Snapp, Inc. , 532 F.3d at 507.

In Parnes v. Gateway 2000, Inc. , 122 F.3d 539, 550-51 (8th Cir. 1997), we applied the “different considerations” standard and affirmed the denial of a motion for leave to amend a complaint dismissed under Rule 9(b) because plaintiffs “failed to4 Roop’s contention that the district court’s order explaining its denial of his post-judgment motion was a “nullity” because he had already appealed the earlier dismissal order is without merit. SeeFed. R. App. P. 4(a )(4)(B)(i); MIF Realty L.P. v. Rochester Assoc. , 92 F.3d 752, 755 (8th Cir. 1996).
-8- provide any valid reason for failing to ame nd their complaint prior to the grant of summary judgment against them.” We again recently applied the “different considerations” standard in B ills v. United States Steel LLC , 267 F.3d 785, 788 (8th Cir. 2001). From this survey of prior case law, we conclude that district courts in this circuit have considerable discretion to deny a post-judgment motion for leave to amend because such motions are disfavor ed, but may not ignore the Rule 15(a)(2) considerations that favor affording parties an opportunity to test their claims on the merits, particularly when a fraud complaint has been dismissed for failure to comply with the pleading requirements of Rule 9(b).

In this case, Roop did seek pre-judgment leave to amend his complaint, and that relief was properly denied. Thus, in de nying the post-judgment motion, the district court correctly observed that “Roop’s ar gument regarding Rule 15’s policy for granting leave to amend is an attempt to reargue an issue already addressed by this Court.” 4On appeal, Roop chides the districtcourt for failing to undertake a detailed analysis of whether his proposed First Amended Complaint was futile, or stated viable FCA claims. But the court’s lack of patience was understandable. Though Roopcorrected his pre-judgment failing by submitting a proposed pleading with his postjudgment motion, his supporting memoran dum did not explai n how this lengthy pleading -- on its face substantially similar to the initial Complaint -- cured the Rule 9(b) deficiencies in the initial Complain t. Roop’s Memorandum in Support gave the district court no reason to believe that the proposed First Amended Complaint was different than the insufficient amendments counsel orally described at the motion hearing. The court was not obligated to ferret out well-hidden changes in a postjudgment amended pleading without guidance from Roop. In these circumstances, there was no abuse of discretion in denying the post-judgment motion.-9- Moreover, our detailed review of th e proposed First Amended Complaint confirms that it did not cure the Rule 9(b) deficiencies in the in itial Complaint. The more-detailed allegations th at Hypoguard failed to file required MDR reports did not identify specific false or fraudulent Medicare reimbursement claims by Hypoguard distributors, nor did Roop allege that H ypoguard falsely “certifie[d] compliance with a statute or regulation as a condition to governmental payment.” Mikes v. Straus , 274 F.3d 687, 697 (2d Cir. 2001); seeUnited States ex rel. Hopper v. Anton , 91 F.3d 1261, 1266-67 (9th Cir. 1996). Likewise, additiona l allegations of pr oduct defects and consumer injury failed to cure deficienci es in the initial Complaint because sales of a defective product do not give rise to FCA liability absent proof that a party “knowingly or with deliberate ignorance charged the government for worthless services.” United States ex re l. Lee v. SmithKline Beecham, Inc. , 245 F.3d 1048, 1053 (9th Cir. 2001). “In a worthless servi ces claim, the performance of the service is so deficient that for all practical purpos es it is the equivalent of no performance at all.” Mikes , 274 F.3d at 703. That was not alle ged, only that Hypoguard’s products, when misused, have resulted in serious adverse consequences.

The proposed First Amended Complaint did not plead with particularity the details of any false Medicare reimbursement claim presented to, or paid by, the United States or its agent. See Joshi , 441 F.3d at 556. Nor did it allege with particularity how any product defect or failure to submit MDR reports to the FDA was material to -- that is, “capable of influencing” -- the government’s decisi ons to pay countless unidentified Medicare reimbursement cl aims submitted by Hypoguard distributors. Hays v. Hoffman , 325 F.3d 982, 992 (8th Cir. 2003); see Costner , 317 F.3d at 887. The conclusory allegation that uniden tified government agents “would not have reimbursed through Medicare individuals s ubmitting claims [for Hypoguard systems] if [they] had known of the defects and failureto comply with th e rules and regulations of the FDA” does not comply with Rule 9( b). Nor does the speculative allegation that Hypoguard products “would have been reca lled” had Hypoguard complied with the MDR regulations.-10- Finally, in paragraphs 56, 60, and 62 of the First Amended Complaint, Roop alleged for the first time that Hypoguard assisted one distributor in submitting fraudulent Medicare reimbursement claims by “artificially inflating” the price of blood glucose monitors and reducing the price of blood glucose test strips. He did not even mention these deeply-buried allegati ons in his Memorandum in Support to the district court. Thus, the issue was not pr operly preserved. And in any event, a postjudgment motion for leave to assert an entirely new claim is untimely.

For these reasons, and the reasons stated by the district court in its two opinions and orders, the judgment of the district court is affirmed.

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