United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 24, 2015 Decided June 23, 2015

No. 14-7094

UNITED STATES OF AMERICA, EX REL. TODD HEATH, ET AL.,

AND TODD HEATH,

APPELLANT

v.

AT&T, INC., ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:11-cv-01897)

Rose F. Luzon argued the cause for appellant. With her 

on the briefs were Scott R. Shepherd, Jonathan W. Cuneo, 

Matthew E. Miller, and James E. Miller.

Andrew J. Pincus argued the cause for appellees. With 

him on the brief was Paul W. Hughes. 

Before: GRIFFITH and MILLETT, Circuit Judges, and 

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge MILLETT. 
2

MILLETT, Circuit Judge: Todd Heath appeals the 

dismissal of his False Claims Act qui tam suit against AT&T, 

Inc. and nineteen of its subsidiaries across the United States. 

The first question presented is whether an earlier and stillpending qui tam lawsuit filed against a single AT&T 

subsidiary bars this suit under the False Claims Act’s first-tofile rule, 31 U.S.C. § 3730(b)(5), which prohibits qui tam 

actions that rely on the same material fraudulent actions

alleged in another pending lawsuit. We hold that the first-tofile bar does not apply because the Wisconsin action alleges 

fraud based on affirmative pricing misrepresentations by 

seemingly rogue Wisconsin Bell employees. The present 

complaint, by contrast, alleges fraud and its concealment 

arising from a centralized and nationwide corporate policy of 

failing to enforce known statutory pricing requirements. 

As a backup, AT&T proposes affirmance on the 

alternative ground that the complaint fails to plead the alleged 

fraud with sufficient particularity, as required by Federal Rule 

of Civil Procedure 9(b). We disagree. The complaint lays out 

in detail the nature of the fraudulent scheme, the specific 

governmental program at issue, the specific forms on which 

misrepresentations were submitted or implicitly conveyed, the 

particular falsity in the submission’s content, its materiality, 

the means by which the company concealed the fraud, and the 

timeframe in which the false submissions occurred. That is 

sufficient on this record for the particular type of statutory 

fraud asserted in this case.

We accordingly reverse the judgment of the district court 

and remand for further proceedings. 
3

I

Statutory Framework 

The False Claims Act

The False Claims Act, 31 U.S.C. §§ 3729 et seq., broadly 

proscribes the knowing or reckless submission of false claims 

for payment to the federal government or within a federally 

funded program. See United States ex rel. Oliver v. Philip 

Morris USA Inc., 763 F.3d 36, 39 (D.C. Cir. 2014). As 

relevant here, the Act imposes liability on “any person” who 

“knowingly” (i) “presents, or causes to be presented, a false or 

fraudulent claim for payment or approval,” 31 U.S.C. 

§ 3729(a)(1)(A), (ii) “makes, uses, or causes to be made or 

used, a false record or statement material to a false or 

fraudulent claim,” id. § 3729(a)(1)(B), or (iii) “makes, uses, 

or causes to be made or used, a false record or statement 

material to an obligation to pay,” or “conceals * * * an 

obligation to pay or transmit money or property to the 

Government,” id. § 3729(a)(1)(G).

The False Claims Act defines the type of “claim” subject 

to those prohibitions as “any request, or demand, whether 

under a contract or otherwise, for money or property and 

whether or not the United States has title to the money or 

property,” if that claim is “presented” or “made” to (i) “an 

officer, employee, or agent of the United States,” or to (ii) “a 

contractor, grantee, or other recipient, if the money or 

property is to be spent or used on the Government’s behalf or 

to advance a Government program or interest” in which the 

United States government either “provides or has provided 

any portion of the money or property requested or 

demanded,” or “will reimburse such contractor, grantee, or 

other recipient for any portion of the money or property which 

is requested or demanded.” 31 U.S.C. § 3729(b)(2)(A). 
4

The False Claims Act’s prohibitions can be enforced 

through both criminal and civil actions by the federal 

government. See 18 U.S.C. § 287; 31 U.S.C. § 3729. In 

addition, the Act authorizes private individuals—known as 

relators—to bring a qui tam civil action “in the name of the 

Government,” 31 U.S.C. § 3730(b)(1), and to share in any 

damages recovered, id. § 3730(d). See generally Vermont 

Agency of Natural Resources v. United States ex rel. Stevens, 

529 U.S. 765, 768–770 (2000). 

Qui tam actions augment the government’s limited 

resources by “creating a strong financial incentive for private 

citizens to guard against efforts to defraud the public fisc.” 

United States ex rel. Totten v. Bombardier Corp., 286 F.3d 

542, 546 (D.C. Cir. 2002). But because that incentive 

structure can give rise to opportunistic and abusive behavior, 

Congress interposed a number of conditions that limit qui tam 

suits to those that expose previously undiscovered fraud or 

provide new, helpful information to the government. See 

United States ex rel. Hampton v. Columbia/HCA Healthcare 

Corp., 318 F.3d 214, 217 (D.C. Cir. 2003) (discussing 

Congress’s “efforts to walk a fine line between encouraging 

whistle-blowing and discouraging opportunistic behavior”). 

One such limitation is known as the “first-to-file” rule. It 

provides that, once a qui tam action has been brought, “no 

person other than the Government may intervene or bring a 

related action based on the facts underlying the pending 

action.” 31 U.S.C. § 3730(b)(5). Actions are “related” if they 

assert the “‘same material elements of fraud’ as an earlier suit, 

even if the allegations ‘incorporate somewhat different 

details.’” Hampton, 318 F.3d at 217 (quoting United States 
5

ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1189 

(9th Cir. 2001)).1

The Universal Service Fund

In the Telecommunications Act of 1996, Congress 

charged the Federal Communications Commission (“FCC”) 

with promoting universal access to advanced 

telecommunications and information services at just, 

reasonable, and affordable rates. Telecommunications Act of 

1996, Pub. L. No. 104-104 § 254, 110 Stat. 56, 71–75. Under 

the 1996 Act and the FCC’s implementing regulations, every 

interstate telecommunications carrier must contribute a 

portion of its quarterly interstate and international 

telecommunications revenue to the Universal Service Fund. 

See 47 C.F.R. §§ 54.706, 54.709. That portion is established 

by the Commission “on an equitable and nondiscriminatory 

basis.” 47 U.S.C. § 254(d). The FCC appointed the 

Universal Service Administrative Company to administer the 

Fund, 47 C.F.R. § 54.701(a), and to use the money to support 

the cost of providing low-cost telecommunications services to 

schools, libraries, health-care providers, low-income 

consumers, and subscribers in high cost-areas. See 47 U.S.C. 

§ 254(b); 47 C.F.R. § 54.701(c)(1). 

One of the many programs administered through the 

Fund is the Schools and Libraries Program, commonly known 

as “E-Rate.” See 47 U.S.C. § 254(h)(1)(B). The E-Rate 

program entitles qualifying schools and libraries to receive 

Internet and telephone services at discounted rates. See 

 

1

 The Supreme Court recently clarified that this bar on related 

actions lasts only as long as the first-filed case remains pending. 

See Kellogg Brown & Root Servs., Inc., et al. v. United States ex 

rel. Carter, No. 12-1497, 575 U.S. ___, slip op. at 11–13 (2015). 
6

generally United States v. Green, 592 F.3d 1057, 1060–1061 

(9th Cir. 2010). To receive those discounts, the schools and 

libraries must first conduct a “competitive bidding process” 

that is open to all telecommunications service providers. 47 

C.F.R. § 54.503(a). As a condition of participation, service 

providers may only submit bids at or below the “lowest 

corresponding price” offered by the company. Id.

§ 54.511(b). That is the “lowest price that a service provider 

charges to non-residential customers who are similarly 

situated.” Id. § 54.500(f); see also 47 U.S.C. § 254(h)(1)(B) 

(the rates charged must be “less than the amounts charged for 

similar services to other parties”).

The schools and libraries must then select the most costeffective service from among those bids. 47 C.F.R. 

§ 54.511(a). Once the schools and libraries have reached an 

agreement with a service provider, they can submit a request 

for funding approval to the Universal Service Administrative 

Company. Id. § 54.504(a). Once the agreement is approved, 

the Company will either reimburse the school or library for its 

payments to the service provider, or will pay the service 

provider’s invoices directly. Id. § 54.514(a) & (c). 

Factual and Procedural Background

At this procedural juncture, we take the facts in the light 

most favorable to Heath. See Navab-Safavi v. Glassman, 637 

F.3d 311, 318 (D.C. Cir. 2011). 

1. Todd Heath operates a business that audits 

telecommunications bills to identify improper charges. In 

October 2011, Heath filed a qui tam suit against AT&T, Inc. 

and nineteen of its subsidiaries on behalf of the United States 

government, seventeen States, the District of Columbia, 

Chicago, and New York City. The complaint alleges that 

AT&T and its named subsidiaries fraudulently overbilled the 
7

Universal Service Fund from 1997 through 2009. Complaint, 

United States ex rel. Heath v. AT&T, Inc., et al., No. 11-1897 

(D.D.C. Oct. 28, 2011) (“AT&T Nationwide Complaint”). 

More specifically, Heath alleges that AT&T orchestrated 

and implemented through its subsidiaries a corporate-wide 

scheme to have false claims submitted to the Universal 

Service Fund by depriving schools and libraries in the E-Rate 

program of the lowest corresponding price for services. 

Schools and libraries, unaware of those overcharges, then 

passed those inflated costs on to the federal government for 

reimbursement through the Universal Service Fund. 

Heath also asserts that AT&T is a “recidivist E-Rate 

Program violator” that “previously has been investigated on 

multiple occasions for other significant violations of the ERate program.” AT&T Nationwide Complaint ¶ 63. One 

particular investigation led to an administrative consent 

decree before the FCC, in which AT&T (without conceding 

liability) agreed to pay the federal government $500,000 and 

to institute a plan to ensure compliance with the program, 

standardize all billing procedures, and designate coordinators 

to answer employees’ questions about E-Rate compliance. 

See In the Matter of SBC Communications, Inc., 19 FCC Rcd. 

24014, 2004 WL 2913392 (FCC 2004); see generally FCC v. 

AT&T, Inc., 562 U.S. 397 (2011). 

According to Heath, AT&T began to require employees 

to participate in E-Rate training in 2005, but AT&T chose not 

to train its employees in the lowest-corresponding-price 

requirement. AT&T Nationwide Complaint ¶¶ 69–70. 

Employees remained ignorant of the requirement until AT&T 

revamped its pricing scheme in 2009. Id. ¶ 76. Heath alleges 

that, as a result of AT&T’s knowing or reckless decision not 

to train its employees, AT&T’s sales representatives 
8

nationwide overbilled E-Rate schools and libraries—that, in 

turn, passed those inflated costs onto the Universal Service 

Fund—for more than a decade. Id. ¶ 107–110. According to 

the complaint, AT&T’s employees certified to the schools and 

libraries that every invoice complied with the FCC’s rules, id.

¶¶ 81–94, and AT&T corporate personnel “ratified and 

approved” all of these actions, id. ¶ 41. 

Heath further alleges that AT&T knew that compliance 

with the lowest-corresponding-price requirement was an 

express and material condition for reimbursement from the 

Universal Service Fund, yet it knowingly or recklessly failed 

to ensure that its employees complied with that requirement. 

AT&T Nationwide Complaint ¶ 101. Finally, Heath alleges 

that, at least since 2009, AT&T has been aware of its past 

violations of the lowest-corresponding-price rule, and yet 

concealed that information from the Universal Service Fund 

to avoid having to repay it. Id. ¶ 98–100.

2. This case is not Heath’s first qui tam suit. In 

October 2008, Heath filed a False Claims Act qui tam 

complaint against Wisconsin Bell, Inc., a wholly owned 

subsidiary of AT&T. Complaint, United States ex rel. Heath 

v. Wisconsin Bell, Inc., No. 08-cv-00876 (E.D. Wis. Oct. 16, 

2008) (“Wisconsin Bell Complaint”). In that case, Heath’s 

audit work for several Wisconsin school districts uncovered 

that Wisconsin Bell charged some E-Rate eligible schools 

more than others, and that Wisconsin Bell generally failed to 

provide school districts with the benefit of the favorable 

pricing it offered to state departments, agencies, and 

universities. Wisconsin Bell Complaint ¶¶ 31–39. When 

informed of this pricing discrepancy, Wisconsin Bell’s sales 

representatives “regularly denied the existence of the 

agreements” between Wisconsin Bell and other Wisconsin 

agencies, and continued to “submit[] billings” for 
9

reimbursement (or offset) from the Fund every month, 

“knowing that [its] billings were excessive and did not reflect 

the lowest corresponding prices[.]” Id. ¶ 39. See generally 

United States ex rel. Heath v. Wisconsin Bell, Inc., 760 F.3d 

688, 689 (7th Cir. 2014). It was “[o]nly after Heath obtained 

a copy of” an agreement between AT&T and the Wisconsin 

Department of Administration “through a public records 

request, [that] AT&T beg[a]n acknowledging that the contract 

existed and that, under it, substantially more favorable rates 

were available to AT&T’s E-Rate school district customers.” 

Wisconsin Bell Complaint ¶ 37. Last year, the Seventh 

Circuit reversed the district court’s dismissal of the Wisconsin 

Bell Complaint, and the case remains pending in the Eastern 

District of Wisconsin. See United States ex rel. Heath v. 

Wisconsin Bell, Inc., No. 08-cv-00724 (E.D. Wis.).

3. In the case at hand, AT&T moved to dismiss Heath’s 

AT&T Nationwide Complaint pursuant to Federal Rules of 

Civil Procedure 9(b), 12(b)(1), and 12(b)(6). AT&T argued 

that the complaint was barred by both the first-to-file rule, 31 

U.S.C. § 3730(b)(5), and the public-disclosure bar, id.

§ 3730(e)(4)(a), and that it was pled with insufficient factual 

specificity. 

The district court dismissed the complaint for lack of 

jurisdiction, holding that the previously filed Wisconsin Bell 

case barred Heath’s suit under the first-to-file rule. United 

States ex rel. Heath v. AT&T, Inc., et al., 47 F. Supp. 3d 42, 

47 (D.D.C. 2014). Specifically, the district court reasoned 

that, because Wisconsin Bell’s relationship to its parent 

AT&T is apparent from the face of the Wisconsin Bell 

Complaint, any federal personnel or agency investigating 

Heath’s original allegations “would be aware of the fact that 

there are many other state or regional AT&T operating 

companies that provide precisely the same services and are 
10

owned and controlled by the same parent.” Id. Since the ERate program operates nationally, the government would 

logically “see if there was an organization-wide practice or 

procedure outlined by parent AT&T, Inc., and whether other 

AT&T operating companies were abiding by the rules.” Id. 

II

Analysis

A. The First-to-File Bar

In dismissing Heath’s complaint as jurisdictionally barred 

by the first-to-file rule, the district court doubly erred. The 

first-to-file rule is not jurisdictional and, on the merits, it does 

not apply to Heath’s complaint. 

We decide de novo whether the statutory first-to-file 

limitation on qui tam lawsuits is jurisdictional. We also 

review the dismissal of a complaint for failure to state a claim 

de novo, treating Heath’s factual allegations as true and giving 

him the benefit of all plausible inferences that can be derived 

from the facts alleged. See Kowal v. MCI Communications 

Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). 

Jurisdiction

The district court is to be forgiven for treating the first-tofile rule as jurisdictional. That is how numerous courts of 

appeals have characterized it. See, e.g., United States ex rel. 

Ven-A-Care of the Florida Keys, Inc. v. Baxter Healthcare 

Corp., 772 F.3d 932, 936 (1st Cir. 2014); United States ex rel. 

Carter v. Halliburton Co., 710 F.3d 171, 181 (4th Cir. 2013). 

And last year, this court affirmed a district court’s 

jurisdictional dismissal under Federal Rule of Civil Procedure

12(b)(1) of a complaint under the first-to-file bar, albeit 
11

without specifically addressing whether the bar is 

jurisdictional. See United States ex rel. Shea v. Cellco 

Partnership, 748 F.3d 338 (D.C. Cir. 2014), vacated, 83 

U.S.L.W. 3116 (June 1, 2015).2

Confronting the jurisdictional question was not necessary 

in Shea because the only issue presented on appeal was 

whether the district court properly dismissed the case as 

barred by the first-to-file rule. Even if the district court 

wrongly characterized its dismissal as jurisdictional, we could 

sustain that judgment for failure to state a claim under Rule 

12(b)(6). See Shea, 748 F.3d at 345 (Srinivasan, J., 

concurring in part & dissenting in part) (“The court’s 

affirmance, however, should not be understood as a holding 

that the first-to-file bar is a jurisdictional limitation.”); see 

also Morrison v. National Australia Bank Ltd., 561 U.S. 247, 

254 (2010); Sierra Club v. Jackson, 648 F.3d 848, 854 (D.C. 

Cir. 2011). 

Because this appeal, by contrast, raises issues under both 

the first-to-file bar and Federal Rule of Civil Procedure 9(b)’s 

heightened pleading requirement for fraud and because there 

is recurring confusion in the district courts, the time has come 

to resolve that jurisdictional question. Indeed, the Supreme 

Court has “endeavored in recent years to ‘bring some 

discipline’ to the use of the term ‘jurisdictional,’” Gonzalez v. 

Thaler, 132 S. Ct. 641, 648 (2012); see also United States v. 

Kwai Fun Wong, 135 S. Ct. 1625, 1632 (2015); Sebelius v. 

Auburn Regional Medical Ctr., 133 S. Ct. 817, 824 (2013), 

and we aim to do the same today. 

 

2

See also United States ex rel. Batiste v. SLM Corp., 659 F.3d 

1204, 1208 (D.C. Cir. 2011) (affirming a district court’s 

jurisdictional dismissal based on the first-to-file bar without 

specifically addressing whether the bar is jurisdictional).
12

Truly jurisdictional rules “govern ‘a court’s adjudicatory 

authority,’” obligating courts to “consider sua sponte issues 

that the parties have disclaimed or have not presented.” 

Gonzalez, 132 S. Ct. at 648. Such objections may be raised 

“at any point in the litigation, and a valid objection may lead a 

court midway through briefing to dismiss a complaint in its 

entirety.” Id. Courts should not lightly attach such drastic 

consequences to a procedural requirement. Instead, such rules 

will be held to “cabin a court’s power only if Congress has 

‘clearly state[d]’ as much.” Kwai Fun Wong, 135 S. Ct. at 

1632 (alteration in original). Absent such a clear statement,

“courts should treat the restriction as nonjurisdictional in 

character.” Auburn Regional, 133 S. Ct. at 824 (internal 

quotation marks omitted). 

The first-to-file bar provides that, once a qui tam action 

has been brought on a claim, “no person other than the 

Government may intervene or bring a related action based on 

the facts underlying the pending action.” 31 U.S.C. 

§ 3730(b)(5). That language “does not speak in jurisdictional 

terms or refer in any way to the jurisdiction of the district 

courts.” Arbaugh v. Y&H Corp., 546 U.S. 500, 515 (2006) 

(quoting Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 

394 (1982)). The text speaks only to who may bring a private 

action and when; it says nothing about the court’s “power” to 

consider claims. Kwai Fun Wong, 135 S. Ct. at 1632. 

The statutory structure confirms what the plain text 

indicates. When Congress wanted limitations on False 

Claims Act suits to operate with jurisdictional force, it said so 

explicitly. For example, while the first-to-file bar appears in a 

subsection labeled “Actions by Private Persons,” a 

neighboring subsection is labeled “Certain Actions Barred” 

and a number of those provisions are expressly couched in 

jurisdictional terms. Section 3730(e)(1) directs that “[n]o 
13

court shall have jurisdiction over an action brought by a 

former or present member of the armed forces * * * against a 

member of the armed forces arising out of such person’s 

service[.]” 31 U.S.C. § 3730(e)(1) (emphasis added). Section 

3730(e)(2) likewise commands that “[n]o court shall have 

jurisdiction over an action brought * * * against a Member of 

Congress, a member of the judiciary, or a senior executive 

branch official if the action is based on evidence or 

information known to the Government when the action was 

brought.” Id. § 3730(e)(2)(A) (emphasis added). 

Congress, in other words, knew how to reference 

“jurisdiction expressly” in the False Claims Act if “that [was] 

its purpose.”3 But it did not do so in the first-to-file rule.4 

Because nothing in the text or structure of the first-to-file rule 

suggests, let alone “clearly state[s],” that the bar is 

jurisdictional, Kwai Fun Wong, 135 S. Ct. at 1632, we hold 

 

3

 Equal Employment Opportunity Comm’n v. Lutheran Social 

Services, 186 F.3d 959, 962 (D.C. Cir. 1999) (quoting I.A.M. 

National Pension Fund Benefit Plan C v. Stockton Tri Industries, 

727 F.2d 1204, 1208 (D.C. Cir. 1984)); see United States v. 

Papagno, 639 F.3d 1093, 1099 (D.C. Cir. 2011) (“As the Supreme 

Court has often stated, when ‘Congress includes particular language 

in one section of a statute but omits it in another section of the same 

Act, it is generally presumed that Congress acts intentionally and 

purposely in the disparate inclusion or exclusion.’”) (quoting 

Kucana v. Holder, 558 U.S. 233, 249 (2010)).

4

 It is noteworthy that, in its most recent False Claims Act case, the 

Supreme Court addressed the operation of the first-to-file bar on 

decidedly nonjurisdictional terms, raising the issue after it decided 

a nonjurisdictional statute of limitations issue. Moreover, nothing 

in the Court’s analysis sounded in jurisdictional terms. Kellogg 

Brown & Root, No. 12-1497, slip op. at 11–13. 
14

that the first-to-file rule bears only on whether a qui tam

plaintiff has properly stated a claim. 

Application of the First-to-File Rule

Once a suit has been filed under the False Claims Act, the 

first-to-file rule prohibits any person, other than the 

government, from “bring[ing] a related action based on the 

facts underlying the pending action.” 31 U.S.C. § 3730(b)(5). 

A second action is “related,” within the meaning of the firstto-file bar, if the claims incorporate “the same material 

elements of fraud” as the earlier action, even if the allegations 

incorporate additional or somewhat different facts or 

information. Hampton, 318 F.3d at 217. Similarity is 

assessed by comparing the complaints side-by-side, and 

asking whether the later complaint “alleges a fraudulent 

scheme the government already would be equipped to 

investigate based on [the first] [c]omplaint.” United States ex 

rel. Batiste v. SLM Corp., 659 F.3d 1204, 1209 (D.C. Cir. 

2011). 

That comparative analysis demonstrates that Heath’s two 

complaints target factually distinct types of frauds. The 

Wisconsin Bell Complaint alerted the federal government 

only to a limited scheme by Wisconsin Bell to defraud the ERate program within Wisconsin. That alleged fraud was 

accomplished, in part, through affirmative misrepresentations 

by Wisconsin Bell employees to schools and libraries within 

Wisconsin, in which those employees openly denied the 

existence of a state contract with a lower corresponding price. 

In contrast, the AT&T Nationwide Complaint alleges a 

different and more far-reaching scheme to defraud the federal

government through service contracts entered into across the 

Nation, and then to cover up that fraud. Critically, the alleged 

fraud was accomplished not through affirmative 
15

misrepresentations about the lowest corresponding price, but 

through institutionalized disregard of the lowestcorresponding-price requirement altogether in AT&T’s 

employee-training and billing procedures. According to the 

AT&T Nationwide Complaint, AT&T and its subsidiaries 

deliberately failed to enforce that lowest-price mandate by

refusing to train or even tell employees about that limitation 

on charges, and by failing to incorporate that limitation into 

its billing practices. AT&T Nationwide Complaint ¶¶ 70–71. 

As a result, AT&T knowingly or recklessly caused schools 

and libraries to overbill the E-Rate Program. Id. ¶¶ 107–109. 

Heath further alleges that, in 2009, AT&T rectified its 

practices to ensure, for the first time, that its employees 

complied with the lowest-corresponding-price requirement. 

AT&T Nationwide Complaint ¶ 76. But even though AT&T 

knew “the full extent of its past wrongdoing” and knew it had 

a clear duty to tell the government about the overbilling, it did 

not do so. Id. ¶ 79. Instead, the complaint alleges, AT&T 

knowingly concealed those violations to avoid having to 

reimburse the Universal Service Fund, in violation of 31 

U.S.C. § 3729(a)(1)(G). Id. ¶ 110. 

On its face, the Wisconsin Bell complaint discloses 

nothing more than the rogue actions of individuals within a 

single AT&T subsidiary and their specific, overt 

misrepresentations. Nothing in the complaint would have 

alerted the United States government to a nationwide scheme 

centered in AT&T’s corporate headquarters of mischarging 

the E-Rate program and subsequently concealing those 

overpayments. Nor, given the affirmative misrepresentations 

at issue, would the Wisconsin Bell Complaint have pointed 

the federal government to AT&T’s systematic refusal to 

institutionalize compliance by employees with the lowestcorresponding-price requirement. 
16

The fraud thus manifested itself in sufficiently distinct 

ways in the two cases that the material elements of the fraud 

differ. As the Seventh Circuit has recognized, “to understand 

whether the suits materially overlap we must know whether 

the initial suit[] alleged frauds by rogue personnel at scattered 

offices or instead alleged a scheme orchestrated by * * * 

national management.” United States ex rel. Chovanec v. 

Apria Healthcare Group, Inc., 606 F.3d 361, 364 (7th Cir. 

2010). Because the Wisconsin Bell Complaint alleged only 

the former, it did not disclose the nationwide fraud grounded 

in institutionalized training and enforcement failures, and 

compounded by efforts at concealment, that is the focus of 

Heath’s later complaint. 

The cases on which AT&T relies presented the obverse 

scenario. Shea, Hampton, and Batiste all involved situations 

where the first complaint alleged a broad fraudulent scheme 

orchestrated by a national or parent company, and the second 

complaint merely added additional facts or widened the circle 

of victims of the same fraudulent conduct. For example, in 

the now-vacated decision in Shea, the relator’s first complaint 

alleged that Verizon had engaged in “uniform billing 

practices” that had improperly charged a number of 

government agencies. 748 F.3d at 342. The second 

complaint alleged the exact same fraudulent scheme, adding 

only that Verizon’s fraudulent uniform billing practices also 

swept in government contractors. Id. The first-to-file rule 

barred the second action because the first complaint had 

already put the government on notice of both the nature and 

reach of the alleged fraud. Id. (“Presumably, if Verizon’s 

billing practice was truly uniform, it was so as to all 

government contracts, not just [as to those alleged in the first 

complaint].”). 
17

Likewise, in Hampton, the first complaint alleged “a 

corporate-wide problem” in which the parent company 

“perpetrated fraud in providing home health care services 

through numerous subsidiaries” in 37 States. 318 F.3d at 218. 

The first-to-file bar applied because the second complaint did 

nothing more than allege that another subsidiary perpetuated 

the same fraud in six more States. Id.; see also Batiste, 659 

F.3d at 1209 (first-to-file rule applied when the first complaint 

alleged that “corporate policies” perpetuated a “nationwide 

scheme attributable not only to the subsidiary, but also to [the 

parent company],” and the second complaint simply asserted 

the same fraudulent practices in another subsidiary). 

Those cases stand for the simple proposition that the 

greater fraud often includes the lesser. The problem for 

AT&T is that the lesser fraud does not, without more, include 

the greater. The Wisconsin Bell Complaint did not allege that 

AT&T encouraged Wisconsin Bell’s fraud or affirmative 

misrepresentations, or even knew anything about them. Nor 

did the Wisconsin Bell Complaint suggest that AT&T and its 

subsidiaries engaged in “uniform billing practices” across the 

United States. Shea, 748 F.3d at 342. There simply is no hint 

in the Wisconsin Bell Complaint of a country-wide, 

institutionalized corporate practice of disregarding the lowestprice requirement or of a calculated refusal to educate or train 

employees. 

AT&T emphasizes that E-Rate is a national program so 

that the government “naturally would have examined the 

actions of the other operating subsidiaries.” AT&T Br. 19. 

Surely AT&T does not mean that, every time a handful of 

individuals within a single subsidiary engage in fraud, the 

federal government should presume that the misconduct was 

orchestrated, as a matter of corporate policy, from AT&T’s 

central headquarters. Without more, one subsidiary’s 
18

infractions do not presumptively symptomize a corporatepervading problem. A single broken branch does not mean 

that the entire tree is diseased. 

AT&T is, of course, correct that the E-Rate program is a 

national program. So is virtually every law policed by the 

federal False Claims Act. To hold, as AT&T suggests, that 

the first-to-file bar kicks in every time an initial complaint 

alleges that a subsidiary of a national company violated a 

national law would erase a broad swath of False Claims Act 

coverage. The point of the first-to-file bar is not to allow 

isolated misconduct to inoculate large companies against 

comprehensive fraud liability. The point, instead, is to 

prevent copycat litigation, which tells the government nothing 

it does not already know. Because Heath’s complaints go 

after two materially distinct fraud schemes, the first-to-file bar 

does not apply. 

B. Federal Rule of Civil Procedure 9(b)

AT&T argues that the district court’s judgment can be 

affirmed on the alternative ground that Heath’s complaint 

failed to plead the alleged fraud with the particularity that 

Federal Rule of Civil Procedure 9(b) requires.5 AT&T raised 

this argument before the district court, but the district court 

did not reach the issue. Heath, 47 F Supp. 3d at 44 n.2. We, 

however, can affirm a judgment on any basis adequately 

preserved in the record below. Queen v. Schultz, 747 F.3d 

879, 884 (D.C. Cir. 2014); see also Kaemmerling v. Lappin, 

553 F.3d 669, 676 (D.C. Cir. 2008) (compliance with Rule 

 

5

“In alleging fraud or mistake, a party must state with particularity 

the circumstances constituting fraud or mistake. Malice, intent, 

knowledge, and other conditions of a person’s mind may be alleged 

generally.” Fed. R. Civ. P. 9(b). 
19

9(b)’s pleading requirement may be independently assessed 

by the court of appeals in the first instance). 

Rule 9(b) requires Heath to “state with particularity the 

circumstances constituting fraud[.]” Fed. R. Civ. P. 9(b). The 

rule serves to “discourage[] the initiation of suits brought 

solely for their nuisance value, and safeguards potential 

defendants from frivolous accusations of moral turpitude.” 

United States ex rel. Williams v. Martin-Baker Aircraft Co., 

Ltd., 389 F.3d 1251, 1256 (D.C. Cir. 2004) (quoting United 

States ex rel. Joseph v. Cannon, 642 F.2d 1373, 1385 (D.C. 

Cir. 1981)). In addition, “because ‘fraud’ encompasses a 

wide variety of activities,” the complaint must be particular 

enough to “guarantee all defendants sufficient information to 

allow for preparation of a response.” Id. 

Heath’s AT&T Nationwide Complaint satisfies Rule 

9(b). It sets forth in sufficient detail the time, place, and 

manner of AT&T’s scheme to defraud the Universal Service 

Fund. From 1997 to 2009, the complaint alleges, AT&T 

knowingly failed to enforce institutional compliance with the 

lowest-corresponding-price requirement. AT&T Nationwide 

Complaint ¶¶ 61–62. That behavior continued even after the 

2004 consent decree obligated AT&T to standardize billing 

practices and to train its employees. Id. ¶¶ 64–70. Because 

AT&T “continued to ignore the Company’s responsibility to 

offer” the lowest corresponding price, AT&T’s employees 

remained ignorant of the requirement and consistently 

overcharged E-Rate eligible schools and libraries. Id. ¶ 71. 

As a result, AT&T “knowingly has caused school districts and 

libraries to submit false claims for payment to [the Universal 

Service Administrative Company], knowing that such false 

claims would be submitted * * * for reimbursement” from the 

federal program. Id. ¶ 108. 
20

To support those allegations, the complaint includes 

copies of AT&T’s training materials. AT&T Nationwide 

Complaint Exhibit 3, Appendix 150–279. The complaint also 

alleges that an audit of AT&T’s bills to the Detroit public 

school system revealed that, between 2005 and 2010, AT&T 

overbilled the E-Rate eligible schools by at least $2.8 million. 

AT&T Nationwide Complaint ¶¶ 103–104. 

In short, Rule 9(b)’s requirements of particularity as to 

who (AT&T), what (detailed identification of a centralized 

and institutionalized failure to comply with the lowestcorresponding-price requirement, which resulted in massive 

overbilling of a governmental program), where (through 

nineteen subsidiaries and their interactions with E-Rate 

schools and libraries across the Country), and when (1997 to 

2009) have been satisfied. The complaint thus put AT&T on 

fair notice of the fraud of which it is accused: That, even in 

the wake of a consent decree pertaining to pervasive E-Rate 

problems, AT&T persisted in knowingly or recklessly failing 

to comply with the lowest-corresponding-price requirement, 

which it knew was a material condition for E-Rate 

reimbursement, which caused false claims to be submitted

and their payment later concealed. 

AT&T makes three objections to the complaint’s 

sufficiency, none of which succeeds. First, AT&T stresses 

that the complaint fails to identify specific, affirmative 

misrepresentations to the United States government. More 

specifically, AT&T notes that Heath’s complaint relies on the 

FCC’s Form 473, which requires AT&T to confirm annually 

“that the invoice forms submitted by each service provider are 

in compliance with the FCC’s rules[.]” AT&T Nationwide 

Complaint ¶ 82. According to AT&T, during the complaint’s 

time period, Form 473 did not require companies to certify 

compliance with the lowest-corresponding-price requirement. 
21

While the absence of allegations of affirmative 

misrepresentations might underscore a difference between this 

case and the Wisconsin case, the argument does not help 

AT&T because fraud could be proven even without explicit 

certifications of compliant rates. A fraud case can rest on 

“implied” certifications if the defendant knowingly “withheld 

information about its noncompliance with material contractual 

requirements.” United States v. Science Applications Int’l 

Corp., 626 F.3d 1257, 1269 (D.C. Cir. 2010). 

The AT&T Nationwide Complaint includes sufficient 

allegations of such implicit certifications. According to 

Heath, during all relevant periods, the lowest-correspondingprice requirement “was an express requirement of the E-Rate 

program.” AT&T Nationwide Complaint ¶ 101. Compliance 

“was a material condition for reimbursement,” id., and if the 

Universal Service Administrative Company had known about 

AT&T’s noncompliance, “it would have deemed all requests 

for reimbursement for AT&T’s services ineligible, and would 

not have issued payments on invoices submitted by AT&T, or 

by the schools and libraries, for E-Rate Program services 

provided by AT&T,” id. ¶ 99. Furthermore, Heath alleges 

that AT&T knew that compliance was a material and express 

condition for reimbursement. Id. ¶ 99–101. 

Second, AT&T objects that the complaint fails to identify 

the specific actors who made the false statements or 

misrepresentations. But unlike cases in which relators have 

vaguely alleged that ‘some managers’ perpetuated fraud, 

Heath does identify a specific actor—AT&T itself. See Cook 

County v. United States ex rel. Chandler, 538 U.S. 119, 125–

126 (2003) (“While § 3729 does not define the term ‘person,’ 

* * * [t]here is no doubt that the term then extended to 

corporations[.]”); cf. Williams, 389 F.3d at 1256. The 

complaint alleges that AT&T deliberately omitted E-Rate’s 
22

lowest-corresponding-rate requirements from its pricing and 

billing scheme and chose not to train its employees in E-Rate 

compliance, leaving its subsidiaries’ employees unaware of 

the illegality of their actions. 

For a fraud like that, alleging with specificity how the 

company itself institutionalized and enforced its fraudulent 

scheme, and how it was manifested in corporate training 

materials and audit reports, sufficiently identifies who 

committed the fraud for the purposes of Rule 9(b). The 

complaint makes clear, in other words, that corporate levers 

were pulled; identifying precisely who pulled them is not an 

inexorable requirement of Rule 9(b) in all cases. See United 

States ex rel. Bledsoe v. Community Health Systems, Inc., 501 

F.3d 493, 509 (6th Cir. 2007) (“[W]here the corporation is the 

defendant in a [False Claims Act] action, we hold that a 

relator need not always allege the specific identity of the 

natural persons within the defendant corporation * * *. 

[S]uch information is merely relevant to the inquiry of 

whether a relator has pled the circumstances constituting 

fraud with particularity.”). 

Third, AT&T argues that the complaint lacks 

“representative samples” of the claims that specify the time, 

place, and content of the bills. That goes too far. Rule 9(b) 

does not inflexibly dictate adherence to a preordained 

checklist of “must have” allegations. See Thayer v. Planned 

Parenthood of the Heartland, 765 F.3d 914, 918 (8th Cir. 

2014) (“Rule 9(b) is context specific and flexible[.]”) (internal 

quotation marks omitted); United States ex rel. Grubbs v. 

Kanneganti, 565 F.3d 180, 188 (5th Cir. 2009) (“Rule 9(b)’s 

ultimate meaning is context-specific, and thus there is no 

single construction of Rule 9(b) that applies in all contexts.”).
23

Instead, the point of Rule 9(b) is to ensure that there is 

sufficient substance to the allegations to both afford the 

defendant the opportunity to prepare a response and to 

warrant further judicial process. See Williams, 389 F.3d at 

1256. What allegations are needed to invest the complaint 

with indicia of reliability, moreover, may depend on the 

nature of the fraud alleged and its statutory or common-law 

source. See generally Grubbs, 565 F.3d at 188–189. 

For example, False Claims Act qui tam complaints, 

unlike common law or securities fraud claims, do not require 

the plaintiff to prove either that a party relied on a specific 

representation or that there has been a monetary injury. 

Grubbs, 565 F.3d at 189. A person that presented fraudulent 

claims that were never actually paid remains civilly liable. Id. 

In that context, providing identifying details about specific 

payments is less important to put the defendant on notice. 

Nor would such details serve the purpose of the False Claims 

Act in this context. The federal government itself already has 

records of those payments and thus “rarely if ever needs a 

relator’s assistance to identify claims for payment that have 

been submitted[.]” See Br. for the United States as Amicus 

Curiae at 16, United States ex rel. Nathan v. Takeda Pharm. 

N. Am., Inc., 134 S. Ct. 1759 (2014). Instead, in such cases, 

the greater concern is with the “other information” relators 

have “that shows those claims to be false.” Id.

We accordingly join our sister circuits in holding that the 

precise details of individual claims are not, as a categorical 

rule, an indispensable requirement of a viable False Claims 

Act complaint, especially not when the relator alleges that the 

defendant knowingly caused a third party to submit a false 

claim as part of a federal regulatory program. See Foglia v. 

Renal Ventures Mgmt., LLC, 754 F.3d 153, 156–157 (3d Cir. 

2014); Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993, 
24

998–999 (9th Cir. 2010); United States ex rel. Lemmon v. 

Envirocare of Utah, Inc., 614 F.3d 1163, 1172–1173 (10th 

Cir. 2010); United States ex rel. Lusby v. Rolls-Royce Corp., 

570 F.3d 849, 854 (7th Cir. 2009); United States ex rel. 

Duxbury v. Ortho Biotech Prods., LP, 579 F.3d 13, 29 (1st 

Cir. 2009); Grubbs, 565 F.3d at 190. The central question, 

instead, is whether the complaint alleges “particular details of 

a scheme to submit false claims paired with reliable indicia 

that lead to a strong inference that claims were actually 

submitted.” Grubbs, 565 F.3d at 190. 

Heath’s complaint passes that test. He provides factual 

specificity concerning the type of fraud, how it was 

implemented, and the training materials used, all of which is 

then corroborated by the concrete example of the Detroit audit 

documenting the very type of overbilling that follows the 

complaint’s pattern. 

AT&T relies on a handful of cases from outside this 

circuit to suggest that relators must always plead specific, 

representative samples. AT&T Br. 27 (citing United States ex 

rel. Dunn v. North Mem’l Health Care, 739 F.3d 417, 418 

(8th Cir. 2014); United States ex rel. Nathan v. Takeda 

Pharm. N. Am., Inc., 707 F.3d 451, 456–460 (4th Cir. 2013), 

cert. denied, 134 S. Ct. 1759 (2014); United States ex rel. 

SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496, 503 (6th Cir. 

2008); United States ex rel. Joshi v. St. Luke’s Hospital, Inc., 

441 F.3d 552, 557 (8th Cir. 2006)). Those circuits, however, 

do not read their precedent as rigidly as AT&T does and, in 

fact, have acknowledged the need for some functional 

flexibility in reviewing a complaint’s allegations. See, e.g., 

Thayer, 765 F.3d at 918 (“We agree that ‘[s]tating “with 

particularity the circumstances constituting fraud” does not 

necessarily and always mean stating the contents of a bill.’”) 

(alteration in original); Nathan, 707 F.3d at 457 (requiring 
25

only “some indicia of reliability” that a false claim had been 

presented to the government); Chesbrough v. Visiting 

Physicians Ass’n, 655 F.3d 461, 471 (6th Cir. 2011) (“[W]e 

do not foreclose the possibility that this court may apply a 

‘relaxed’ version of Rule 9(b) in certain situations[.]”). 

Moreover, to require relators to plead representative 

samples of claims actually submitted to the government 

would require relators, before discovery, to prove more than 

the law requires to be established at trial. See Lusby, 570 F.3d 

at 854–855; Grubbs, 565 F.3d at 188–189. To win his case, a 

relator does not need to identify “exact dollar amounts, billing 

numbers, or dates to prove to a preponderance that fraudulent 

bills were actually submitted.” Grubbs, 565 F.3d at 190. We 

decline to read Rule 9(b) as requiring more factual proof at 

the pleading stage than is required to win on the merits.6

IV

Conclusion

The first-to-file rule is a nonjurisdictional procedural bar 

that does not apply here because the frauds alleged in Heath’s 

two cases differ in material respects. We also hold that the 

AT&T Nationwide Complaint complies with the pleading 

requirements of Federal Rule of Civil Procedure 9(b). We 

accordingly reverse the judgment of the district court 

dismissing the complaint and remand for further proceedings. 

So ordered.

 

6 AT&T argued below that the public-disclosure bar, 31 U.S.C. 

§ 3730(e)(4)(a), also requires dismissal of the complaint. That 

argument was not pressed here, and we take no position on it.