RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 17a0019p.06 

### UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

U NITED S TATES OF A MERICA ex rel. A NDREW H IRT , Relator-Appellant ,

v

.

W ALGREEN C OMPANY , Defendant-Appellee

. ┐ │ │ │ │ │ │ │ ┘ No. 16-6232

Appeal from the United St ates District Court for

the Middle District of Tennessee at Nashville. No. 3:13-cv-00870—William J. Haynes Jr., District Judge. Decided and Filed: January 25, 2017 Before: SUHRHEINRICH, SUTTON, and MCKEAGUE, Circuit Judges.

_________________ COUNSEL

ON BRIEF: G. Kline Preston IV, KLINE PR ESTON LAW GROUP, P. C., Nashville, Tennessee, for Appellant. Frederick R obinson, NORTON ROSE FULBRIGHT US LLP, Washington, D.C., for Appellee.

_________________ OPINION

_________________ SUTTON, Circuit Judge. Andrew Hirt, ow ner of Andy’s Pharmacies, alleges that Walgreen Company distributed kickbacks to Me dicare and Medicaid recipients when they transferred their prescrip tions to Walgreens. By sending thes e fraudulent insurance claims to the government, Hirt maintains that Walgreens violat ed the False Claims Act, and he filed this qui

tam claim as a result. The district court rejected Hirt’s claim as a matter of law. Because Hirt failed to state his claim with particularity, as Civil Rule 9(b) requires, we affirm. 

### >No. 16-6232 U.S. ex rel. Hirt v. Walgreen Co. Page 2

Hirt owns two pharmacies, one of which is located in Cookeville, Tennessee. His Cookeville pharmacy competes with a Walgreens in the area. Between November 19, 2012 and August 25, 2014, Hirt alleges that the Willow Walg reens offered $25 gift cards to lure his customers to Walgreens in violation of the An ti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and that Walgreens submitted the resulting prescription-drug claims by Medicare and Medicaid recipients to the government in violation of the False Claims Act, 31 U.S.C. § 3729.

Hirt filed this qui tam action under the whistleblower provision of the False Claims Act on behalf of himself and the United States. The government declined to intervene in the action, and Walgreens moved to dismiss it. The distri ct court granted the mo tion, holding (among other things) that Hirt failed to stat e his claims with sufficient partic ularity under Civil Rule 9(b).
The False Claims Act imposes civil liability for “knowingly present[in g] . . . a false or fraudulent claim” to the government “for paym ent or approval.” 31 U.S.C. § 3729(a)–(b). The statute provides for public enforcement and private ( qui tam ) lawsuits. Id. § 3730(b). At the same time that the statute encourages whistleb lowers, it discourages “ opportunistic” plaintiffs who “merely feed off a previous disclosure of fraud.” U.S. ex rel. Poteet v. Medtronic, Inc. , 552 F.3d 503, 507 (6th Cir. 2009). For that reason, individual plaintiffs cannot bring qui tam complaints based upon information already in the public domain. See 31 U.S.C. § 3730(e)(4). But if they can show that they are an orig inal source of the info rmation—someone “who has knowledge that is independent of and materially adds” to the prior public disclosure—the publicdisclosure bar does not apply. Id. ; see U.S. ex rel. Advocates for Basic Legal Equal., Inc. v. U.S. Bank, N.A. , 816 F.3d 428, 430 (6th Cir. 2016).
In addition to satisfying the Fa lse Claims Act’s requirements, qui tam plaintiffs must meet the heightened pleading standards of Civil Rule 9(b). U.S. ex rel. Bledsoe v. Cmty. Health Sys., Inc. , 501 F.3d 493, 503 (6th Cir. 2007). In all aver ments of “fraud or mistake,” the plaintiff must state with “particularity the circumstances constituting fraud or mist ake.” Fed. R. Civ. P. 9(b). The identification of at least one false cl aim with specificity is “an indispensable element of a complaint that alleges a [False Claims Ac t] violation in compliance with Rule 9(b).” Bledsoe , 501 F.3d at 504. Adherence to this requireme nt not only respects Civil Rule 9(b), but it also helps in determining whether the public-disclosure bar applies.No. 16-6232 U.S. ex rel. Hirt v. Walgreen Co. Page 3

Hirt has not met this standard. His compla int does not identify a single false claim. He describes the unlawful distri bution of gift cards in genera l but not the s ubmission of any claims obtained with those gift ca rds. All that Hirt says is that “his [Medicaid and Medicare] customers accepted the $25.00 gift cards to move their business to (Willow) Walgreens in Cookeville during the period November 19, 2012 through August 25, 2014,” and that Walgreens “induce[d] . . . false or fraudulent claims to th e United States Government for the payment of pharmaceuticals.” R. 29 at 5, 9. But he does no t identify any false cl aim arising from any of those (allegedly) induced customers. He does not tell us the names of any such customers or their initials. He does not tell us the dates on which they filled prescriptions at Walgreens. He does not tell us the dates on which Walgr eens filed the reimbursement claims with the government. He does not, indeed, even say that these unnamed customers filled any prescriptions at Walgreens at all, let alone that Walgreens processed them and filed reimbursement claims with the government. We ar e left to infer these essential elements from the fact that Hirt’s customers moved their bus iness from his pharmacies. But inferences and implications are not what Civil Ru le 9(b) requires. It demands sp ecifics—at least if the claimant wishes to raise allegations of fraud against someone.
Relying on an unpublished decision from the Elev enth Circuit, we ra ised the possibility in 2007 of “relaxing” the requirement that a pl aintiff identify at least one false claim with particularity if that plaintiff, through no fault of his own, “cannot allege th e specifics of actual false claims that in all likelihood exist.” Bledsoe , 501 F.3d at 504 n.12. But we did not resolve the point, ultimately “express[ing] no opinion as to the contours or existence of any such exception.” Id. In two later decisions, we repeated the “relax” language. Chesbrough v. VPA,
P.C. , 655 F.3d 461, 471 (6th Cir. 2011); U.S. ex rel. Prather v. Br ookdale Senior Living Comtys.,
Inc. , 838 F.3d 750, 769 (6th Cir. 2016). The Eleventh Circuit’s use of the word “relax,” and our repetition of it in later cases, r uns the risk of misleading lawyers and their clients. We have no more authority to “relax” the pleading standard established by Civil Rule 9(b) than we do to increase it. Only by following the highly reticul ated procedures laid out in the Rules Enabling Act can anyone modify the Civil Rules, whether in the direction of relaxing them or tightening them. See 28 U.S.C. §§ 2071–2077. To the extent the words of Civil Rule 9(b) needNo. 16-6232 U.S. ex rel. Hirt v. Walgreen Co. Page 4

elaboration, and it’s not obvious that they do, the most that can be said is that “particular” allegations of fraud may demand differe nt things in di fferent contexts.
In practice, we have applied the “relax[ed]” standard just once, and that application has no purchasing power here. See Prather , 838 F.3d at 769. Prather’ s allegations satisfied the particularity requirement because she had suff icient personal knowledge of the defendant’s claims submission and billing processes. He r job required her to review the company’s Medicare claims documentation to ensure co mpliance with state and federal insurance guidelines. Id. at 770. This review took place, accord ing to Prather, for the sole purpose of submitting the claims to Medicare. Compl. at 18, id. (No. 15-6377). After her review, Prather would deliver the claims documen ts to the billing department, whose job it was to submit the claims for payment. Id. at 19. In context, that set of pleading statemen ts sufficed to establish with particularity that the defendant “submitted a claim for payment,”—as it described when, where, and how the defendant submitted the claim. See U.S. ex rel. Marlar v. BWXT Y-12, LLC , 525 F.3d 439, 445 (6th Cir. 2008); Chesbrough , 655 F.3d at 470.
Hirt offers no equivalent basis for satisfying the par ticularity requirement here. The reason is straightforward. Unlike Prather, Hirt fa iled to provide the factua l predicates necessary to convince us that “actual false claims” “in all likelihood exist.” Bledsoe , 501 F.3d at 504 n.12. He does not allege personal knowledge of Walgreen’s claim submission procedures. Prather , 838 F.3d at 770. And he does not otherwise allege facts “from which it is highly likely that a claim was submitted to the government.” Chesbrough , 655 F.3d at 472. At the least, Hirt could have described a prescription filled by one of hi s previous customers at the Willow Walgreens. In the same way that Hirt discovered that his fo rmer customers had accepted the gift cards, he could have determined whether they used t hose gift cards when filling a prescription at Walgreens. And if that is so mehow not the case, how could he know that Walgreens violated the False Claims Act—the first requirement for filing an action?
Hirt’s general allegations that Walgreens offered gift cards and some Medicare and Medicaid recipients accepted them do not meet th e particularity requirement . “To conclude that a claim was presented” in this setting “requi res a series of assumptions,” leaving only a “possibility” of fraudulent submissions ra ther than an establ ishment of them. Id. Hirt failed toNo. 16-6232 U.S. ex rel. Hirt v. Walgreen Co. Page 5

describe even one unlawful prescription purch ase—that customer X of his pharmacy filled prescription Y with Willow Walgreens on date Z afte r receiving a gift card from Walgreens. If Hirt lacked the information to do even this, he was not the right pl aintiff to bring this qui tam claim—and almost certainly not the right one to do so in a way that would allow a court to decide whether the public -disclosure bar applies to the alle gation. We have no basis for excluding a lack of personal knowledge when it comes to the essential—the primary—illegal conduct at issue. Id. The point of Civil Rule 9(b) is to prev ent, not facilitate, casual allegations of fraud.
The privacy concerns reflected in the Health Insu rance Portability a nd Accountability Act (HIPAA) do not permit us to overlook this problem . Hirt could have used customer initials, dates, or other non-identifying de scriptions. Exposing a false cl aim with particularity does not require risking the personal privacy of the claimant.
For these reasons, we affirm.