### INTHE UNI TED S TATESCOU RT OFAPPEALS FORTHE FIFTH CIRCU IT

N o. 07- 40963

U N IT E D S T A T E S O F A M E R IC A , e x re l. J A M E S H . G R U B B S , M .D

. P l a i n ti ff

- A p p ell a n t v. RA VI K U M AR KAN N EG AN TI , M

. D

. ; G EO RG E E

. G RO VE S, M

. D

. , KASH I S. B A G R I, M .D .; S H A R A D B . K U L KA R N I, M .D .; S R IYAD E S IL VA , M .D .; B A PT I ST H O SP I TA LS O F S O U TH E A ST TE X A S, doi ng busi nes s as Me mo r i a lHe r ma n n B a p t i s tB e a u mo n t Ho s p i t a l ; J OH N D OE O NE ; J OH N DOE TW O; J OH N DOE THREE; J OH N DOE FOUR; J OH N DOE FI VE; S UDHEE R KA Z A, M. D. ; a n d R AJ EN DE S AI , M. D. D efen da n t s- A pp el l ees

A p p ea lf

rom the U n i ted S tates D i stri ct C ou rt f or t h e E aster n D i st ri ctof T exas

B ef ore K IN G , H IG G IN B O T H A M , an d W IE N E R , C i rcui t Ju dg es . P A T R I C KE

. H I G G I N B O T H A M: Th i s i s an appeal f

r om a 12 (b) ( 6) di sm i ss alof a quit am a c t i o n und e rt he Fal se C l ai m s A c tbr ought by D r . G r ubbs agai nsthi s em p l oy er, M em or i al H erm an n B ap t i stB eau m on tH ospi t al , fi ve of t h e H ospi t al ’ s psychi atr i c doct ors, an d tw o ot h er doct ors. Th e act i on al l eg e s t h e H ospi t alan d d oct ors bi l l ed M edi c ar e a nd M edi c ai d f ors er vi c es notper f

or m ed. The di st r i c t c our t f ound t hat th e com p l a i n t l a ck ed s u ff i ci en t d eta i lre ga rd i n g fal se b i l l s ac tu a l l y p rese n ted to United States Court of App eals

Fifth Circuit 

### F I L E D April 8, 2009 Cha rl es R. F ulb ru g e II I ClerkN o. 07- 40963

See 3 1 U .S .C

. § 3 7 2 9 (a)( 1 -3): 1 Anyp er so nwho- - (1) k no w inglypre sents, or c ause s to be presented, toanofficer or e mployee of th e United State s Government or a member of the Armed Forces of the Unit ed State s a fa ls e or fr au dule nt cl aimf

orp ay me nt orapp rov al; (2) knowinglymakes, uses, o r causes to b e ma de o r used, a false record or statement toget a false or fr audulent cl aim paid or approved b y the Government; [or] (3) conspires to defrau d th e Governme nt bygettin g a false or fr audulent cl aim allowed o r paid

. . . isliab let o th e Unit edS tate s G overn me nt
. . . [. ]
Id

. § 3 7 2 9 (a). 2 S. Rep. N o . 9 9

- 3 4 5 , a t11 ( 1986) (quot ing U. S

. v. Gr is wo ld , 24F . 36 1, 2 66 (D. Or. 3 188 5)). Suits brought byprivate parties are on beh alf of th e exe c ut iv e br an ch of th e Government, which stillvocallymaintains the go al of u nc ov erin g frau d, especiallyinth e medical c ontext, as indic ated byPreside nt Obama’s Feb rua r y 24 , 2009speech to the jo int session of C ongress: “We will root out the waste, fraud, and abu se in our Medicare p rogram th at do es n ’tmakeo ur se niorsanyh ealthier. ” 2 t he G ove r nm entan d di sm i ss ed f orfai l ure t o pl ead f

r aud w i t h part i c ul ar i t y as
r equi r ed byF ED
. R. C IV
. P. 9 (b ).

I T h e F a lse C la im s A ct p ro h ib its, i n re lev a n t p a rt, 1 ) th e p re se n tm e n t o f a fal se claim to t h e G ov ern m en t, 2 ) th e use of a fal se record or sta tem en t t o g et a fal se c l ai m paid, an d 3) conspir aci es t o get a fal se c l ai m paid. Liabi l i t y f or 1 vi ol at i on i ncl udes a l i qui dat ed c i vi lpenal t y and dam ages , w hi c h need notbe
s ho w n t o s t at e a c l ai m b utw hi c h i f s ho w n wi l lb e do ubl e d a nd m ayb e t r e bl e d. 2 Th e Acti s r em edi al , f i r stpas se d att he be hes t of Pre si dent Li nco l n i n 1863 t o st em w i desp read f rau d by p ri vate U n i on A rm y sup pl i ers i n C i vi lW ar defen se c o nt r ac t s . I ti s “ i nt e nde d t o pr o t e c t t he Tr e as ury a ga i ns t t he hung r y and
u n scr u pu l ou s host t h at encom pa sses i t on every si de. ” T o ai d t h e root i n g ou tof 3N o. 07- 40963

U.S. ex rel. Milam v. Univ. of Tex. M.D. AndersonC ancer Ct r. , 96 1 F.2 d 46 , 49(4th 4 C ir

. 1 9 9 2 ). “ Q ui tam” is an abb reviation for q u ita mp rodo m i n ore geq u a mp ros ei

p s oi nh ac 5 parte seq uit ur , whichme a n s “wh o a s w ell fo r th e ki n ga s f or him se lf

su esinthismatt er .” Black ’s Law Dictio nary1 2 6 2 ( 7 the d. 1 9 9 9). 31 U.S.C . § 373 0(d)

. Underth e o riginal versionof the statut e, t he rel atorrec eived 6 one -half of the recovery . Act of Mar. 2, 1 863 , 2 Stat. 696
. 3 f r aud , t he Ac tpr o vi de s f o rc i vi lsui t s br o ugh t by bo t h t he A t t o r ne y G e ne r ala nd b y p riv a te p e rs o n s, ter m e d re la to rs , w h o se rv e a s a “p o ss e of ad hoc d ep u ti es to
unc o ve ra nd p r o s e c ut e f r aud s a ga i ns t the gove r nm e nt
. ” I n quit am su i ts 4 5 br o ugh t by pr i va t e pe r s o ns o n b e hal f o f t he G o ve r nm e ntt he s t at ut e e nt i t l e s t he
r e l at o rt o b e t w e e n t e n and t hi r t y pe r c e nt o f anyr e c o ve r y m ad e o n b e hal f o f t he G o ve r nm e nt , de pe ndi ng o n t he ex t e ntof t he re l at o r ’ s c o nt r i but i o n t o t he a c t i o n. 6 II A c c o r d in gto D r . G r u b b s ’ quit am com pl ai n t , M em ori alH erm an n B ap t i st B eaum ont H os pi t al hi r ed hi m i n January 2004 t o w or k as a psy c hi at ri st. In F ebru ary 200 4, an d bef ore h i s f i rst w eeken d on- cal l shi f t , t h e com pl ai n t al l eges t hatt w o D e fe nda nt s , D r . G r o ve s , t he Chai r m an o f t he M edi c alSt af

f o f t he H o s pi t al ’ s Ps yc hi at r i c Sub s e c t i o n, a nd D r. K anne ga nt i , a ps yc hi at r i s t a tt he H ospi t al , i n vi t ed D r. G rub bs t o di n n er ata P ap pa dea u x rest au ran t
. O ver di nne r , t he do c t o r s a l l e ge dl y di vul ge d t o hi m t he i r f r aud ul e ntb i l l i ng s c he m e a nd i n st ructed hi m on h ow he w as t o contr i bu t e t o t h e sc h em e. A ccord i n g t o D r. G r ubb s ’r e c i t at i o n o f t he c o nve r s at i o n, t he do c t o r s i ns t r uc t e d hi m t hatdur i ng
w eeken d on

- cal lsh if t s doct ors m eet w i t h t h e nu rsi n g st af f t o get up da t es on cu rr e n t pati en t s. Th e doct ors t h en see t h e pati en t s onl y “ as need ed” orw h en

“ som et h i n g acu t e’ s goi n g o n ,” bu t bi l levery day as a regul ar “ face- t o- face” h osp i tal vi sit

. D r . G r ubb s ’c o m pl ai ntf ur t he r a l l e ge s t hato ve r hi s o n- c al lw e e ke nd, t he
nurs i ng s t af

f di d i ndeed at t em pt t o a ss i sthi m i n re c or di ng fac e- t o- fac e phys i c i anN o. 07- 40963

A F alse Cl aims Act complaint is first served on the Government and remains under 7 seal for sixtyday s whil e th e Governme nt decide s wheth er to intervene and take over the a ctio n . 3 1 U .S .C

. § 3 7 3 0 (b)(2 ). “A dismissal fo r failure to pl ead frau dw it h p articularityu nder Rule 9(b) is tr eate d 8 as adismissal fo r failure to state acl ai mu nd erRule12 (b)(6).” U. S

. ex rel

. Thom

ps onv . Colu mbia/HCA Healthcare Cor p. , 1 2 5F .3 d 8 9 9 , 9 0 1 ( 5 thC ir

. 1 9 9 7).

4 vi si t s t h at had not oc curred an d t h at w ere based sol el y on i n f orm ati on obtai n ed th r o u g h n u r s in gco n ta c ts w ith th e p a tie n ts
. A p p a lle d , D r . G r u b b s a lle g e d ly report ed th e p ra ctice to a hospi t aladm i n i st rat or t h e nex t day , w h o t o D r. G r u b b s ’fu r th e rd is m a y , re to r te d : “Y o u ce r ta in ly fig u r e d th a t o u t q u ic k ly .” Fi f t ee n m ont hs l at er , G r ubbs f i l ed s ui t as a q u it a m r e l at o r a l l e gi ng vi o l ati o ns o f

t he Fal s e Cl ai m s Ac t ’ s pr e s e nt m e ntpr o vi s i o n i n § 3 72 9( a) ( 1) , t he fal se r ecord or st atem en t provi si on i n § 372 9( a) ( 2) , an d the conspir acy provi si on i n § 3729 ( a) ( 3)

. I n add i t i on t o t h e described schem e, t h e com pl ai n t avers atl east
o ne o ve r ta c to f

fal s e b i l l i ng f

o re ac h do c t o r , e ac h s i m i l art o t hi s pa r ag r ap h: D r . D es aibi l l ed M edi c ai d f or psy c hot her apy se r vi c es on Ja nuary 8, 20 04 , CPT Cod e # 90 80 5, w hi c h c o ns t i t ut e d a fal s e cl ai m i n t hatt he m edi c alr ec or ds i ndi c at e t hat n o psyc hot her apy w as pr ovi ded by D esaion that date. Ti m e wa s g i v e n f

o r t h e Uni t e d S t a t e s t o i n t e r v e n e , b u t a f t e r i t di d no t t he 7 di s t r i c tc o ur tuns e al e d t he s ui t
. Def e nda nt s t he n f

i l e dmul t i p l e s e p a r at e m o t i o ns to d ism iss for fa il u re to m e e t th e p lea d in g re q u ire m e n ts o f F ED
. R. C IV
. P. 9 (b ). 8 A m ag i s t r at e j udg e r e c o m m e nde d d i s m i s s alo f a l lc l ai m s fo r fai l ur e t o pl e ad t he ci rcum st an ces of

t h e al leg e d fr au d w i t h parti cul ari t y. D r. G rub bs f i l ed obj ect i on s t o t h e reportan d a m o tion seeki n g l eave to f i l e a T h i rd A m en ded C o m p la in t , w h ic h h e a t t a c h e d . T h e d is t r ic t c o u r t a d o p t e d th e m a g i s t r a t e ’s
r epo r ti n f

ul land di sm i ss ed w i t h prej udi c e, denyi ng D r . G r ubb’ s m ot i on f orl eaveN o. 07- 40963

U.S. ex rel. Russell v. Epic Health care Mgmt . Grou p , 1 9 3F .3 d 3 0 4 , 3 0 8( 5 thC ir

. 1 9 9 9). 9 Seei d

. at 308–09 (“A special r elaxingof Rule 9(b) is a qui tamplaintiff’s ticket toth e 10 di sc overyp ro ce ss th at th e st atuteits elf do esnotcontemp late .”); U. S

. ex rel

. Ka rv elasv . Melrose-Wakefield Hosp. , 360 F.3d220, 228 (1s t Cir. 2004) (l ist ing the cir cuit s thathave a pp li edRule9 (b)’ s h ei ghte n edp le a din gst a n dardt o F als e C laim s Actc om pl aints).

Bel l At la n t icC

or p. v . Tw om b ly , 5 5 0U .S

. 5 4 4 , 5 7 0(2 0 0 7). 11 Con ley v. Gibson , 3 5 5U .S

. 4 1 , 4 5

–4 6( 1 9 5 7). 12 5 t o am en d. D r. G rub bs now app eal s. W e revi ew t h e d istr ict court ’ s grant of D e fe n d a n t s ’mo t i o n t o d i s mi s s f o r fa i l u r e t o s t a t e a c l a i m de no vo . 9

III A W e ha ve he l d, a l o ng w i t h s e ve r alof o urs i s t e r c i r c ui t s , t hata c o m pl ai nt f i l ed u n der t h e F al se C l ai m s A ctm u stm eet t h e hei gh t en ed p l ead i n g st an da rd of R u l e 9 (b), w h i ch pr ov i d es: “I n all eg i n g f ra u d or m i stak e, a pa rty m u st state 10
w i t h par t i c ul ar i t y t he ci r c um st ance s c ons t i t ut i ng f r aud orm i st ake. ” Ru l e 9 (b) is a n e x c e p tio n to R u le 8 (a )’s s im p lifie d p le a d in gth a t c a lls fo r a “s h o r t a n d p la in
s tatem en t of th e cl a i m . ” T h e pa rti cu l a ri ty d em a n d ed b y R u l e 9(b) is
s upp l e m e nt alt o t h e S u p r e m e Co u r t ’ s r e c e n ti n t e r pr e t at i o n o f Rul e 8 ( a) r e qui r i ng “en o u g h fa c ts [ ta k en as tru e] t o sta te a claim to rel i ef t h a t i s p l a u sibl e on i ts face. ” Th e Tw om bl y st andard r epl ac es t he l eni entand l ongs t andi ng r ul e t hat 11 “a co m p la in t s h o u ld n o t b e d is m is s e d fo r fa ilu r e to s ta te a cla i m u n l e s s it
a p p e a r s b e y o n d d o u b t th a t th e p la in tiff c a n p r o v e n o s e t o f fa c ts in s u p p o r t o f h is
c l a i m w h i c h w o u ld e n tit le h im to re lie f.” T h e n e w re a d in gra is e s a h u r d le in 12 f ront of w h at c ou rt s had previ ou sl y seen as a plai n t i f f ’ s n i gh im m edi ate acc ess t o di scovery— m odest i n i t s dem an ds bu t w i de i n i t s s cope. I n c as e s o f

f r aud , Rul e 9 (b) ha s l o ng pl ay e d t hats c r e e ni ng f unc t i o n, s t a n d i n ga s a g a t e k e e p e rt o d i s c o v e r y , a t o o lt o w e e d o u t me r i t l e s s f r a u d c l a i msN o. 07- 40963

Williams v. WMX Techs., In c. , 1 1 2 F .3 d 1 7 5 , 1 7 8( 5 thC ir

. 1 9 9 7). 13 Id

. 14 Russ el l , 19 3 F .3d at 3 08. 15 2 9 0F .3 d 1 3 0 1 , 1 3 1 1 ( 1 1 thC ir

. 2 0 0 2 ). 16 6 s o o ne r t h a n l a t e r . W e a p p l y Ru l e 9 (b ) t o f r a u d c o m p l a i n t s wi t h “b i t e ” a nd

“ w i t h ou tapology, ” b u tal so aw are t h at R u l e 9(b) sup pl em en t s but does not 13 sup pl an tR u l e 8( a) ’ s n ot i ce pl ead i n g. R u l e 9(b) does n ot“ ref l ecta subscri pti on t o factp l ead i n g” an d requ i res on l y “ si m pl e, conci se, an d d i rect” al l egati on s of 14 t h e “ci rcum st an ces consti t u t i n g f rau d, ” w h i ch aft er Tw o m b ly m u st m ak e rel i ef p la u s ib le , n o t m e r e ly co n c e iv a b le , w h e n ta k e n a s tr u e . C o u r ts h a v e a tt e m p te d to cla r ify R u le 9 (b ) b y a r tic u la tin gw o r k a b le
c o ns t r uc t i o ns . The f

r e que nt l y s t at e d, j udi c i al l y- c r e at e d s t and ar d f o r a s uf f i c i e nt fr a u d co m p la in t, th e a p p l i c a b i lity o f w h ic h to th e F a ls e C la im s A c t w e w ill
c o ns i de r l at e r , i ns t r uc t s a pl ai nt i f f t o pl e ad “ t he t i m e , pl ac e a nd c o nt e nt s o f t he fal s e r e pr e s e nt at i o n[] , a s w el la s t he i de nt i t y o f t he pe r s o n m ak i ng t he
m is r e p r e s e n ta tio n a n d w h a t t h a t p e r s o n o b ta in e d th e r e b y .” 15 B S e v e r a lc i r c u i t s h a v e c o n s i d e r e d p a r t i c u l a r i t y c h a l l e n g e s t o F a l s e C l a i ms A c t c o m p la in ts , fo c u s i n gla r g e ly o n th e A c t’s p r e s e n tm e n t r e q u ir e m e n t. A f requ en t l y ci t ed case, an d the case pri m ari l y rel i ed on by the di st ri ctcourthere, i s Un i t ed S t ate s ex rel

. C l au sen v. L ab orat ory C orporati on of A m eri ca, I

n c. In 16 C l au sen , t he El e ve nt h Ci r c ui ta f f i r m e d t he di s m i s s alof a co m pl ai nti n whi c h a
c o m pa ny o ut s i dera l l e ge d a b i l l i ng s c he m e , c o nve ye d t o hi m b y a f r i e nd, a nd
c o n c lu s iv e ly s ta te d th a t t h e s c h e m e r e s u lte d in th e d e fe n d a n ts s u b m itt in gb ills t o t h e G overnm en t
. Th e courtst ated tha tp resentm en t of a fal se c l ai m i s t h e sin q u a non o f a Fa l s e Cl a i m s Ac t v i o l a t i o n wi t h o u t wh i c h “ t h e r e i s s i m pl y noN o. 07- 40963

Id

. 17 Id

. 18 See U.S. ex rel. Sikken ga v. Regence Blu ecrossB luesh ield of Utah , 47 2 F .3d 7 02, 727 19 (1 0 thC ir

. 2 0 0 6); U.S. ex rel. Kar velas v. Melrose-Wakefield Hosp. , 360 F.3d 220 , 23 2 (1 st C ir. 200 4). Th e SixthC ircuit has also cited Clausen to uphol d a dismissal ina False Cl aims Act case in whichth e relato r was “ un ab le t o id entify a spe cificcl aim submitted directly to the Unit ed S tates .” Th ere, however, the relator came forwar dw it h only a vague scheme and all eged th at virtuallyeveryclaim made by thedefendant was frau dule nt, with no indic atio n of whyo r h ow . Thus the complaint woul d have faile d for reaso ns mor e fundame ntal thannot of fe rin gth e co ntents of a sp ecif icc laim

. See Yuh asz v. BrushWellman, I nc. , 34 1 F .3d 5 59, 563–65(6th Cir. 20 03). The Seventh , Third, an d Ninth Circuits havealso cited Clausenfor the proposition that a relator must all ege details of a false clai m actu ally submitted t o t he Government, b ut the appeals in these c ir c ui t s were allbrought at the summaryj udgment st a ge, aft erdis coveryh a d b een com ple ted

. SeeU .S

. ex rel

. Cre ws v. NCS

Heal t h ca reof I

ll., In c. , 460F .3d 8 53 (7thC ir. 2 006) ; U.S. ex rel. Quin n v. Omnicare In c. , 382 F.3d 432(3d Cir. 200 4) ; U. S. ex

rel. Aflatoo n i v. K

itsa p P h ys ic ia ns Ser v. , 31 4 F .3d 9 95 (9thC ir. 2 002 )

. Requiring detailed evidence of a false claim post-discoveryis not nece ssarily indicativeof what details th es e co urt s w ouldr equir e at th e pl ea din gst a ge. 7 act i on able da m age to t h e pu bl i c f i sc. ” B ecau se of

t h e provi si on ’ s f

ocus on 17 presentm en t , i thel d that i ti s i n suff i ci en t fo r a p la i n t i f

f “ m erel y t o describe a privat e s c hem e i n det ai l ” w i t hout o ff er i ng “ so m e i ndi c i a o f r el i abi l i t y” t hat an act u alfa lse c la i m f

or paym en tw as m ad e t o t h e G overnm en t
. Th e C l au sen 18
c o ur tm ad e pl ai n i t s pos i t i o n t hatt o pl e ad a pr e s e nt m e ntc l ai m , t he m i ni m um in d ic ia o f r e lia b ility re q u ir e d to s a tis fy th e p a r tic u la r ity stan d a r d a r e th e s p e c ific
c o nt e nt s o f

a c t ual l y s ubm i t t e d c l ai m s , s uc h a s bi l l i ng num be r s , da t e s , a nd
a m o u n ts
. A t l east t w o ci rcui t s h ave favorab l y ci t ed the E l even t h C i rcui t ’ s C l au sen rul e. T h e F i rst C i rcui tconsi dered a case i n w h i ch a h ospi t alem pl oyee al l eged

19 t h a t th e h o sp ita l w a s s u b m ittin gM e d ica re cla im s fo r s e rv ice s th at w ere provi ded i m properl y or not at al l , bu tcoul d not provi de d et ai l s on speci f i c bi l l s. Th e F i rst Ci r c ui tuph e l d t he di s m i s s alb e c aus e t he c o m pl ai ntfai l e d t o m e e t t hi s s t and ar d:

[A ] rel atorm u stprovi de d et ai l s t h a t id en t i f y pa rt i cul ar fal se cl a i m s f or p a ym en t t h a t w ere s u b m i tted to the go ve rn m en t. In a c as e s uc h as t hi s , de t ai l s c o nc e r ni ng t he da t e s o f t he c l ai m s , t heN o. 07- 40963

Karvelas , 36 0 F .3d at 2 32– 33. 20 Id

. at23 3. 21 Sikke nga , 47 2 F .3d at 7 27–28. 22 8 content of

t h e f orm s orbi l l s s u bm i t t ed, t h ei r i den t i f i cat i on num be r s , t he a m o unto f m o ne y c har ge d t o t he g o ve r nm e nt , t he pa r t i c ul arg o o ds orse r vi c e s fo r w hi c h t he g o ve r nm e ntw as b i l l e d, t h e i n d i v i d u a l s i n v o l v e d i n t h e b i l l i n g , a n d t h e l e n g t h o f t i me betw een t h e al l eged f rau du l en t pract i ces an d t h e sub m i ssi on of c l ai m s bas ed o n t hos e pr ac t i c es ar e t he t ypes of i nf or m at i on t hat m ay hel p a r el at or t o st at e hi s or herc l ai m s w i t h part i c ul ar i t y. 20 Th e c om pl ai nt be f

or e t he Fi r stC i r c ui t of fer ed f ew det a i l s suppor t i ng an i n ference t h at bi l l s w ere presented. A s t h e court st ated: “ [ T ] h e com pl ai n t nev er s p e c ifie s th e d a te s o rco n te n t o f a n y p a r tic u la rfa ls e o r f ra u d u l e n t c la im a lle g e d ly
s ubm i t t e d f

o rrei m bur s e m e ntb y M e di c ar e o r M e di c ai d. I t pr o vi de s no i den t i f i cat i on num be r s o ra m o unt s c har ge d i n i n di vi du alcl ai m s f or s peci f

i c t est s, s u p p lie s , o rs e r v ic e s . It d o e s n o t id e n tify o r d e s c r ib e th e in d iv id u a ls in v o lv e d in t h e i m proper bi l l i n g or al l ege w i t h parti cul ari t y an y cert i f i cat i on of

com pl i an ce
w i t h federal regul ati o ns i n order t o obtai n pay m en t s. ” Th u s, al t h ou gh t h e F i rst 21 C i rcui tci t es C l au sen a n d fo r m u la te s its o w n s tr ic t s ta n d a r d , th e fa c ts b e fo r e it di d no tr e qui r e t he c o ur tt o r e ac h t he q ue s t i o n o f w he t he r a l lc o m pl ai nt s a l l e gi ng a F al se C l ai m s A ctpresentm en t cl ai m m u sti n cl u de d et ai l s of speci f i c bi l l s. Th e Tent h C i r c uit , a l so c i t i ng C l au sen , a n d q u o t in gth e F ir s t C ir c u it ’s stan d a rd , h a s si m i l a rl y h eld th a t a relator’ s com p l a i n t ag a i n st a h ea l th i ns ur anc e c o m pa ny f o rs ubm i t t i ng fal s e c l ai m s t o t he H e al t h Car e F i n anc i ng Aut ho r i t y l ac ke d t he r e qui s i t e pa r t i c ul ar i t y be c aus e i t fai l e d t o a l l ege “ t he
s pe c i f i c s o f a ny ac t ualc l ai m s s ubm i t t e d. ” U nf o r t unat e l y, w e c anno t de t e r m i ne 22 fr o m th e fa c ts in th a t c a s e w h e th e r th e co m p la in t a t is s u e s e t fo r th a n y in d ic ia th a t c la im s w e r e s u b m itt e d

. If s o , th is w o u ld m a k e th e d e m a n d fo r b illin gd e ta il
m u ch li k e th e str ict re q u ire m e n t of C l au sen , bu t as i t st an ds w e cann otbe sure.N o. 07- 40963

4 3 3F .3 d 1 3 4 9 , 1 3 6 0( 1 1 thC ir

. 2 0 0 5) (e mp h a si s a dd ed). 23 U.S. ex rel. Russell v. Epi cH e a lth care Mgmt . Grou p , 19 3 F .3d 3 04, 308(5th Cir. 24 1 9 9 9). 9 W hi l e t he Fi r st a n d T en t h ci r c ui t s have r el i ed, t o a s om ew hat uncl ear de gr e e , o n C l au sen , att he s am e t i m e t he E l eve nt h C i r c ui t i t se l f has m ove d aw ay f r o m C lau sen ’ s m o s te xa c t i ng l ang uag e , a c c e pt i ng l e s s b i l l i ng de t ai li n a c as e
w h e r e p a r tic u la r a lle g a tio n s o f a s c h e m e o ffe r e d in d ic ia o f r e lia b ility th a t b ills
w e r e pr e s e nt e d. I n U

. S

. ex rel

. W alkerv. R & F

P ropert i es of

L ak e Cou n ty, I

n c. , th e E l ev en th C i rcu i t h eld t h a t a F a l se C l a i m s A ct com p l a i n t m et the req u i sit e pa rt i cul ari t y based on a n u rse’ s al l egati on s t h at s h e “ bel i eved[th e h o s p ita l] sub m i t t ed fal se orf

rau du l en tcl ai m s” by bi l l i n g n u rses ’ser vi ces as i f perf orm ed b y a d octor. T h e nu rse did no t com e f orw a rd w i th a n y de tail s of th e con ten ts 23 of a c t ual l y sub m i t t ed cl ai m s, al l egi n g on l y t h e sc h em e t h at, accor di n g t o an of f i ce ad m i ni s t r at o r , nur s e a nd d o c t o r s e r vi c e s w e r e b i l l e d i de nt i c al l y. Al t ho ugh t he
c o u r t d id n o t s a y a s m u c h , in th e fa c e o f s tr o n ge v id e n c e o f a b illin gs c h e m e in
w h ic h it w a s lik e ly , a s o p p o s e d to s p e c u la tiv e , th a t fr a u d u le n t b ills w e r e a c tu a lly
su b m i t t e d , t he c o ur tf o un d r e l a t i v e l y s ki m p y d e t a i l s a b o utt he b i l l s t o be
su ff i ci en t. W h i l e t h i s C ou rtha s al so add ress ed the suff icien cy of

F al se C l ai m s A ct
c o m pl ai nt s , w e a r e y e tt o c o nf r o nt s qua r e l y w i t h w hat pa r t i c ul ar i t y a c o m pl ai nt
m ust pl ead t he ac t ualdet ai l s of t he fal se c l ai m i t se l f

. I t i s t r ue t hat w e have
s ai d “ s t at e m e nt s orcl ai m s ar e am o ng t he ci r c um s t anc e s c o ns t i t ut i ng f r aud i n a F a ls e C la im s A c t s u it, [a n d ] th e s e m u s t b e p le a d w ith p a r tic u la r ity ,” b u t t h is 24
s t at e m e nto nl y r e c i t e d Rul e 9 (b) ’ s r e qui r e m e ntt hatt he c i r c um s t anc e s o f f r aud be pl e d wi t h pa r t i c ul ar i t y; i tdi d no ts pe ak t o t he de t ai lr e qui r e d. W e now c ons i dert hat ques t i on as pr es ent ed byt hi s c as e a nd do so fors ec t i ons 3729( a) ( 1- 3) s e pa r at e l y and i n t ur n.N o. 07- 40963

Id

. 25 Williams v. WMX Techs., In c. , 1 1 2 F .3 d 1 7 5 , 1 7 8( 5 thC ir

. 1 9 9 7). 26 10 IV A D r. G rub bs’com pl ai n tf i rstal l eges vi ol ati on s of § 3729 ( a) ( 1) , w h i ch m ak es l i able an y person w h o “ kn ow i n gl y presents, or cau ses t o be p re se n te d” a fal se c l ai m t o t he G over nm e nt
. Thi s pr o vi s i o n i nc l ude s a n e xp r e s s pr e s e nt m e nt requ i rem en t
. A s t h e E l even t h C i rcui t describes i t , t h e provi si on ’ s si n e qua non i s t he pr es ent m entof a fal se c l ai m . O t herel em ent s i ncl ude t hat t he c l ai m w as fal se orf

r audul entand t hat t he ac t i on w as undert aken kn ow i n gly. N ot abl y, st ati n g a cl ai m u n der § 372 9( a) ( 1) does n otrequi re act u alor speci f i c dam ages, as t h e st atute i m poses a l i qu i da t ed ci vi lpen al t y on vi ol ator s. W e ha ve t radi t i on al l y requ i red t h at a f rau d com pl ai n t i n cl u de “t h e t i m e, pl ac e a nd c o nt e n t s of the fal s e r e pr e s e nt at i o n[] , a s w e l la s t he i de nt i t y o f t he p e r s o n m a k in gth e m is r e p r e s e n ta tio n a n d w h a t t h a t p e r s o n o b ta in e d th e r e b y .” 25 H ow ev er, w e h a ve a ck n ow l ed ge d th a t “ R u l e 9 (b)’ s u l ti m a te m ea n i n g is con tex ts p e c ific ,” a n d th u s th e r e is n o s in g le co n s tr u c tio n o f R u le 9 (b ) th a t a p p lie s in

26
a l lcon tex ts. D ep en d i n g o n the cl a i m , a p la in tiff m a y su ff

i ci en tl y “state w i th pa r t i c ul ar i t y t he c i r c u m s t a n c e s c o n s t i t u t i n gf r a u do r m i s t ak e ” w i t ho uti nc l udi ng al lt he de t ai l s o f

a ny s i ngl e cour t

- ar t i c ul at e d s t and ar d— i t de pe nds o n t he
e le m e n ts o f th e cla im a t h a n d

. T h e “ t i m e, pl ace, contents, an d i den t i t y” st an da rd ori gi n ated i n com m on l aw f rau d an d securi t i es f rau d cases m ak i n g i t no su rpri se t h at t h e el em en t s of t h ose c l ai m s m atc h t h e pl ead i n g st an da rd’ s r equ i rem en t s. Th e e l em en t s of
c o m m o n l aw f

r aud a r e “ 1) t hata m at eri al rep re s e nt at i o n was m ad e ; ( 2) t he representat i on w as fal se; ( 3) w h en t h e representat i on w as m ad e, t h e speak er kne w i tw as fal s e o rm ad e i tr e c kl e s s l y w i t ho uta ny kno w l e dg e o f t he t r ut h a ndN o. 07- 40963

Allstate Ins . Co. v. Receivab le F in. C o. , 501 F.3 d 398 , 406 (5th Cir. 200 7) (interpretin g 27 T ex a s l aw). The El eventhC ircuit’s statement th at without pre sentme nt“ t he r e i s simplyno 28 actionabledama geto the public fisc a s requir ed u nder theF alse Cl aims Act,” U. S

. ex rel

. Clausen v. Lab. C

orp. of Am., I

nc. , 29 0 F .3d 1 301 , 1 31 1 ( 11th C ir. 2 002 ), is inc orrect toth e exte nt th at iti s notlim it edt o se ctio n( a)( 1 ) a n d a dd s ad a ma gese le me nt toth e F als e C laim s Act, requirin g pay ment in addition to pr esent ment. The statut e offers acivil pe nalty for proof of f rau dule nt cl aim s wh eth ero r n otp aid

. 11 as a po s i t i ve a s s e r t i o n; ( 4) t he s pe ak e r m ad e t he r e pr e s e nt at i o n wi t h t he i nt e nt t hatt he o t he rpa rt y shou l d a c t upo n i t ; ( 5) t he pa r t y ac t e d i n r e l i anc e o n t he rep rese n tati on ; an d ( 6 ) th e p a rty th ere b y su ff ere d i nj u ry . ” G i ve n the elem en ts 27
o f r e l i anc e a nd d am ages, pl ead i n g com m on l aw f rau d w i t h par t i c ul ar i t y de m and s t he s pe c i f

i c s o f t he fal s e r e pr e s e nt at i o n— w i t ho utt he pr e c i s e c o nt e nt s o f t he
m i srepresentat i on t h e pl ai n t i f f cann otsh ow h e rel i ed on t h e m i srepresentat i on t o hi s de t r i m e nt
. I n o t he rw o r ds , c o m m o n l aw f r aud ’ s e l e m e nt s o f

r e l i anc e a nd da m ages are i n t ert w i n ed w i t h the m i srepresentat i on a n d h ei gh t en the n eed f or a tte n tion to th e m isre p re se n ta tion itse lf

. The Fal s e Cl ai m s Ac t , i n c o nt r ast, lacks t he e l e m e nt s o f r e l i anc e a nd d a m a ge s. R a th er, i t p ro tec ts t he Tre as ury f r om m onet ar y i nj ury. Put pl ai nl y, t he st at ut e i s r em edi aland ex pos es ev en unsuc c es sf ulfal se c l ai m s t o l i abi l i t y. 28 Ap e r s o n th a t p r e s e n te d fr a u d u le n t c la im s th a t w e r e n e v e r p a id re m a in s lia b le fo r t he Ac t ’ s c i v i l p e na l t y . I t i s a d e q ua t e t o a l l e g e t ha t a fa l s e c l ai m w as kn ow i n gl y presented regardles s of i t s exact am ou n t ; t h e contents of t h e bi l lare l ess si gn i f

i can tbecau se a c om pl ai n t need not al l ege t h at t h e G overnm en t rel i ed
on or w as dam aged by the fal se c l ai m . Th u s, a cl ai m un der t h e F al se C l ai m s A ct
a n d a cla im u n d e rco m m o n la w o r s e c u r itie s f r a u d a r e n o t o n th e s a m e p la n e in
m e e t i ng t he r e qui r e m e nto f “ s t at [ i ng] w i t h pa r t i c ul ar i t y” t he c o nt e nt s o f t he f r aud ul e ntm i s r e pr e s e nt at i o n.N o. 07- 40963

See T e l la bs , In c. v. Makor Issues & Rights, L td

. , 55 1 U .S. 30 8, --- (200 7) (“We 29 em ph a si z e, a s w ell, th at u n de r our co n structio nof th e ‘s tron ginfe re nce ’ st a n dard , ap laintiff is not fo rced to pl ead more than she would be required to prove at trial. A plaintiff all eging frau d ina § 1 0(b) action, we hold today , must plea d fact s r en d er ing aninference of scie nter at leastas likely a s anyplau sib leopp os in ginfe re nce . At trial, sh e mu stth enp rove h erc a se b ya‘ pr ep on de ranceo f th e evid ence .’ St ate d oth erwi se , sh e mu std em on strateth at iti s more likely than not that th e defendant acte d withscie nter .”). Altho ugh we refr ainfrom delving intoth e q ua gm ir e, aple adin g rul e th at requires the complaint to state mo re facts th an nece ssaryto prove elements of a cause of action to apre ponde rance at tri al summons Seventh Ame n dm ent co nce rn s.

See UMC Electroni cs Co. v. U. S. , 2 4 9F .3 d 1 3 3 7 , 1 3 3 8( F ed

. C ir

. 2 0 0 1 ). 30 The magistrat e’s report alsofaults the complaint for not identifying th e pe rson who 31 actu ally submitted the bills. Whe thera doctorput the clai ms inmotion byenterin g recor ds of unprovided or unn ecessary services into the hospital’ s standard billin g system, or wh ethe r the doctoractuallyhit the “send” button that presents the bills to the Government, doe s no t change th e nature of the fraud. The False Cl aims Act recogniz es this and requires only that a per s onkno wingly“causes [acl aim] to b e pr esent ed.” See U.S. ex rel. Rile y v. St . L uke ’s Episco pal Hosp. , 355 F.3d 37 0, 378(5th Cir. 200 4). Th e do ctor cancause the frau d byputtin g a fr audulent recor d into a system that he knows will mini steriallycrank o ut a fr audulent b ill to the Government. Describingsuch a sy stem serves th e sa me purpose for pl eadingas naming the indivi dualwho hit the submitbutton
. 12 A n d su re ly a p r o c e d u r a l ru le o u g h t n o t b e re a d to in sis t th a t a p la in tiff pl ead t h e l evelof

detai lrequi red t o prevai lat t ri al

. T h e F al se C l ai m s A cti s a 29
c i vi lpr ovi si on and u ndersec t i on ( a) ( 1) a pl ai nt i f f m ustpr ove pr es ent m entby a p r e p o n d e r a n c e o f th e e v id e n c e . F r a u d u le n t p r e s e n tm e n t r e q u ir e s p r o o f o n ly 30 of t he c l ai m ’ s fal si t y, not of i t s exac t c ont ent s. I f att r i ala quit am p la in tiff p r o v e s t h e e x is te n c e o f a b illin gs c h e m e a n d o ffe r s p a r tic u la r a n d re lia b le in d ic ia t h at fal se bi l l s w ere act u al l y sub m i t t ed as a resul t of t h e sc h em e— such as dates t h at s ervi ces w ere f

rau du l en t l y provi ded or recor ded , by w h om , an d evi den ce of t he depar t m ent ’ s st andard b i l l i ng pr oc edur e
— a rea son a b l e j u ry cou l d i n fert hat 31
m o r e lik e ly th a n n o t t h e d e fe n d a n t p r e s e n te d a fa ls e b ill to th e g o v e r n m e n t, th is d e s p i t e n o e v i d e n c e o f t h e p a r t i c u l a r c o n t e n t s o f t h e mi s r e p r e s e n t a t i o n. O f
c our se , t he e xac tdol l aram ount s f r audul ent l y bi l l ed w i l l of t en sur fac e t hro ugh di sc ove r y and w i l li n m ost ca ses be nec es sa r y t o s uf f i c i ent l y pr ove ac t ual da m ages abov e t h e A ct ’ s ci vi l pen al t y. N evert h el ess, a pl ai n t i f f doe s n otN o. 07- 40963

See U.S. ex rel. P

og ue v . D i a be tes Trea tmen t Ct rs. of Am., I nc. , 23 8 F .Supp.2 d 25 8, 32 2 6 9 (D. D. C

. 2 0 0 2 ) ( a gr e e i n g with th e di s s e nt in Clausenth at the Clausenmaj oritywas “s ee ki n gnotp articularityb ut proof. ”)

. 13 n ece ssa ri l y n ee d the ex a ct do l l a r am ou n ts, bil l i n g n u m b ers, or da tes to p rov e to
a prepon deran ce t h at f rau du l en t bi l l s w ere act u al l y sub m i t t ed. T o requi re t h ese det ai l s atpl eadi ng i s one sm al ls t ep s hy of r equi r i ng pr oduc t i on o f ac t ual doc um ent at i on w i t h t he c om pl ai nt , a l eve lof proo f notdem anded t o w i n at t r i al
an d si gn i f

i can t l y m ore t h an an y federal pl ead i n g rul e contem pl ates. 32 A pp el l ees r et ortt h at because presentm en t i s t h e condu ctt h at gi ves ri se t o § 3 72 9( a) ( 1) l i ab i l i t y, Rul e 9 (b) de m and s t hati t i s t he c o nt e nt s o f t he pres e nt e d b i l li t s e l f

t hatm us tb e pl e d wi t h pa r t i c ul arde t ai la nd n o t i n ferred f r o m t he c i r c um s t anc e s . W e m us t di s ag r e e w i t h t he s w e e p o f t hata s s e r t i o n. S t ati n g “ w i t h parti cul ari t y t h e ci rcum st an ces consti t u t i n g f rau d” does not
nec ess ar i l y and al w ays m ean s t at i ng t he c ont ent s of a bi l l

. Th e par t i c ul ar c i r c um s t anc e s c on st i t u t i n g t h e f rau du l en t presentm en t are o f t e n ha rbo r e d i n t he schem e. A h an d i n t h e cooki e j ar does n ot i t sel f am ou n t t o f

rau d sepa rat e f

rom t h e f i b t h at t h e t reat h as been earn ed w h en i n fact t h e chores rem ain u n d o n e. S t an di n g al on e, raw bi l l s— even w i t h nu m bers, dates, an d am o u n t s— are not f rau d w i t h ou tan un derl yi n g schem e t o subm i t t h e bi l l s f or un perf

orm ed or
u n n ecess ary w ork. I ti s t h e sc h em e i n w h i ch pa rt i cul ar ci rcum st an ces c ons t i tu ti n g fr aud m ay be f ound t hat m ake i t hi ghl y l i kel y t he f r aud w as consu m m ated t h rough t h e presentm en t of fal se bi l l s. In su m , the “t i m e, p l a ce, con ten ts, an d i den ti ty” stan d a rd i s n ot a s t r ai tj ac ke tf

o rRul e 9 (b)

. R ather, t he r ul e i s c o nt e xts pe c i f i c a nd f l e xibl e a nd
m u s t r e m a in s o to a c h ie v e th e re m e d ia l p u r p o s e o f th e F a ls e C la i m A c t
. W e reach f or a w orkab l e const ructi on of R u l e 9(b) w i t h com pl ai n t s un der t h e F al se C l a i m s A ct; th a t i s, on e t h a t effectu a tes R u l e 9(b) w i th ou t st ym i ein g legiti m a te
e f f o r t s t o e xp o s e f

rau d. W e ho l d t hatt o pl e ad w i t h pa r t i c ul ar i t y t heN o. 07- 40963

Me lder v . Mo rr is , 2 7F .3 d 1 0 9 7 , 1 1 0 0( 5 thC ir

. 1 9 9 4). 33 Appell ee Dr. Desai argues that some patie nt vi sits maynot be in the doctor s’ re cords 34 because regulation s allow apsychi atri sts to keep notes separate from a patie nt’s charts. Th e a pp licab ler egulationb elie s D r. De sai’ s argu me nt. “P sychoth er a py n ot ese xclu de s . . . coun selin g session start and stop ti mes.” 45 C.F .R. § 1 64.5 01. 14 c ir c u m s ta n c e s co n s tit u tin gfr a u d fo r a F a ls e C la im s A c t § 3 7 2 9 (a )(1 ) c la im , a rel ator ’ s com pl ai n t , if itcan n ota l l ege t h e detai l s of an act u al l y sub m i t t ed fal se cl a i m , m a y n ev erth eless su rv i ve by all eg i n g p a rti cu l a r d eta i l s of a sch em e to sub m i t fal se cl ai m s pa i red w i t h rel i able i n di ci a t h at l ead t o a stro n g in ference th a t c la im s w e r e a c tu a lly s u b m itt e d

. B Thi s s t and ar d c o m po r t s w i t h Rul e 9 (b) ’ s o bj e ct i ves o f e ns ur i ng t he
com p l a i n t “ p rov i d es d efen d a n ts w i th fair n oti ce of th e p l a i n ti ffs’claim s, pr otects defenda n t s f

rom h arm t o t h ei r r epu t ati on an d good w i l l , reduces t h e nu m ber of
s t r i ke sui t s , and pr e ve nt s pl ai nt i f fs f r o m f i l i ng ba s e l e s s c l ai m s t he n a t t e m pt i ng t o di scover u n kn ow n w rongs. ” U l t i m atel y, the qu est i on is w h at i s r equ i red f or 33 a ti cket t o t h e federal di scovery appa rat u s. C on fron ti n g F a l se C l a i m s A ct de fen d a n ts w i th bo th an a l l eg ed sch em e to
s u b mi tfa l s e c l a i ms a n d d e t a i l s l e a d i n gt o a s t r o n gi n fe r e n c e t h a t t h o s e c l a i ms
w e r e s ubm i t t e d— s uc h a s da t e s a nd d e s c r i pt i o ns o f r e c o r de d, b utunp r o vi de d,
s e r v i ces an d a d escr i p ti on of th e bi l l i n g system th a t th e record s w ere lik e ly
e nt e r e d i nt o
— give s de fe nda nt s ade qua t e not i c e of t he c l ai m s . I n m anyc as e s , t he defenda n t s w i l lbe i n possess i on of t h e m ostrel evan t records, such a s pati en t s’
c har t s , do c t o r s ’no t e s , a nd i n t er nalb i l l i ng r e c o r ds , w i t h whi c h t o de fe nd o n t he groun ds t h at al l eged fal sel y- recor ded servi ces w ere not recor ded , w ere not bi l l ed f o r , o rw e r e a c t ual l y pr o vi de d. 34 R ul e 9 (b) al so pr eve nt s nui sa nce s ui t s and t he f i l i ng of bas el es s c l ai m s as a pr etex t t o ga i n a cces s to a “fi sh i n g ex p ed i ti on . ” Acom p l a i n t t h a t i n cl u d es b othN o. 07- 40963

U.S. ex rel. Karvelas v. Melrose-Wakefield Hosp. , 3 6 0F .3 d 2 2 0 , 2 3 0

– 3 1 ( 1 stC ir

. 2 0 0 4). 35 15 pa r t i c ul arde t ai l s o f

a s c he m e t o pr e s e nt f r aud ul e nt bi l l s t o t he G o ve r nm e nta nd
a l l eg a ti on s m a k i n g itl i k ely b i l l s w ere actu a l l y su b m i tted li m i ts an y “fi sh i n g” to
a sm al l pon d t h at i s ei t h er st ocked or dea d. D efen da n t s ei t h er h ave or do n ot h ave evidence t h at t h e al l eged ph on y servi c e s w e r e a c t ual l y pr o vi ded ; t h ey ei t h er have o rdo nothave evi denc e th a t re c or ded, butunprov i ded o r unn ec es sa r y, s e r vi c e s di d no tre s ul ti n bi l l s t o t he G o ve r nm e nt
. D i s c o ve r y c an be po i nt e d a nd
e ffic ie n t, w ith a s u m m a r y j u d g m e n t fo llo w in go n th e h e e ls o f th e co m p la in t if bi l l i ng r e c o r ds di s c r e di tt he co m pl ai nt ’ s par t i c ul ar i z e d al l e ga t i o ns . Thati s t he balance R u l e 9(b) att em pts t o st ri ke. A n d i t w orks best w h en access t o di scovery does n oti n evi t ably i n cl u de alldi scovery’ s pow ers bu t i s t ai l ored by the dis t ri ct
c o u r t t o th e ca s e a t h a n d

. A n d th e d e t a i l m u s t b e s u ffic ie n t t o a llo w th is t ai l o r i ng. Rul e 9 (b) s ho ul d no t b e m ad e t o s ho ul de r a l lthe bur de n o f po l i c i ng abu si ve di scovery. It s ba l an ce d raw s u pon the vigi l an t ha n d of t h e di st ri ctcourt j u dg e. The Fi r s tC i r c ui tpoi nt s t o t he G o ve r nm e nti nt e r ve nt i o n pr o vi s i o n i n t he Acta s a r e as o n t o e nhan c e pr o t e c t i o n ag ai ns t unf o c us e d d i s c o ve r y. I t r e as o ns 35 t hat abs entdet ai l s i n t he c om p l ai nt abo ut f r audul entbi l l s subm i t t ed by defenda n t s, t h e G overnm en tw ou l d h ave to deci de w h et h er t o i n t ervene on i nc o m pl e t e i nf

o r m at i o n. The Fi r s t Ci r c ui t a c kno w l e dg e d t hatt he G o ve r nm e nt
c o u ld in te r v e n e a fte rd is c o v e r y , b u t a r g u e d t h a t b y th e n th e G o v e r n m e n t w o u ld h a v e l o s ti t s o p p o r t u n i t y t o c o n d u c t a c o n f i d e n t i a li n v e s t i g a t i o n o n i t s o w n t i me l i n e. E ven consi deri n g t h e i m portance of the G overnm en t ’ s ab i l i t y t o i n t ervene, as it i s t he t r ue pa r t y ati nt e r e s t i n q u it a m ac t i o ns , w e s e e t hi s i s a s t rai n ed
r at i onal e f

orov er l y st r i c t pl eadi ng. I t di sc our ages w hi st l ebl ow er s w ho m ay have sign i fi ca n t i n form a ti on f rom com i n g forw a rd w ith w h a t th ey k n ow i n ord er to p r o te c t t h e G o v e r n m e n t’s a b ility to in te r v e n e o n p e r fe c t d a ta
. S u c h a ru le w o u ldN o. 07- 40963

16 s w e e p t o o far . W hi l e R ul e 9(b) st and s as a hur dl e pr e ve nt i ng di s c o ve r y w he n a com p l a i n t fa i l s to s u fficien tl y d efi n e it s cl a i m s, i t do es n ot d o a w a y w i th di s c o ve r y al t o ge t he rb y al l o w i ng ac c e s s t o d i scov e r y o nl y w he n t he c o m pl ai nt
a lr e a d y co n ta in s a ll th e in fo r m a tio n n e c e s s a r y to s u c c e e d a t t r ia l. C G r ubb s ’c o m pl ai nts at i s f i e s Ru l e 9(b) o n i t s § 3 72 9( a) ( 1) c l ai m a s t o t he i n d i v i d u a ld o c t o r s . T h e c o mp l a i n t s e t s o u t t h e p a r t i c u l a r w o r k i n g s o f a s c h e me t hatw as co m m uni c at e d di r e c t l y t o t he re l at o r b y t ho s e pe r pe t r at i ng t he f r aud

. G r ubb s de s c r i be s i n de t ai l , i nc l udi ng t he da t e , pl ac e , a nd p ar t i c i pa nt s , t he d i n n er m ee ti n g a t w h i ch tw o d octors in h i s section a ttem p ted to b ri n g h i m i n to t h e f ol d of t h ei r on - goi n g f rau du l en t pl ot
. H e al l eges hi s f i rst

- h an d exp eri en ce o f th e s c h e m e u n fo ld in ga s it r e la te d t o h im , d e s c r ib in gh o w th e w e e k e n d o n -c a ll
n u rsing staff

attem p ted to assist him i n reco rd in g fac e-to- face p h ys i ci a n visi ts th a t h a d n o t o c c u r r e d

. A ls o a lle g e d a r e s p e c ific d a te s th a t e a c h d o c to r fa ls e ly
c l ai m ed t o have pr ovi ded s er vi c es t o pat i ent s and of t en t he ty p e of

m edi c al servi ce ori t s C u rrent P rocedural T erm i n ol ogy code that w ou l d h ave been used in th e b ill. T ak i ng t he a l l e ga t i o ns o f t he s c he m e a nd t he r e l at o r ’ s o w n a l l eged
e xp e r i e n c e a s t r u e , a s we mus t o n a mo t i o n t o d i s m i s s , a n d c o n s i d e r i n gt he
com pl ai n t ’ s l i stof

dates t h at s peci f

i ed, un provi ded s e rvi ces w ere r ecorded
am o unt s t o m o r e t han pr o ba bl e , ni gh l i ke l y, c i r c um s t ant i ale vi de nc e t hatt he d octors ’f

ra u d u l en t record s ca u sed the h osp i tal’ s bil l i n g sy stem in d u e cou rse to present f

rau du l en tcl ai m s to the G overnm en t
. I t w ou l d st ret ch the i m aginati on t o in fer t h e i n verse; t h at t h e defen da n t doct ors go t h rough t h e charad e of
m ee t i ng w i t h new l y hi r ed do c t or s t o de sc r i be t hei r f r audul entpr ac t i c e a nd t hat t h ey conti n u al l y recor d un provi ded servi ces on l y f or t h e schem e t o devi ate f rom t he r e gul arb i l l i ng t r ac k a tt he l as t m o m e nts o t hatt he recorded, b ut
u n p rov i d ed , serv i ces n ev er g et bil l ed

. T h a t f ra u d u l en t bil l s w ere pr ese n ted toN o. 07- 40963

See F om an v. Da vis , 371 U.S. 178, 181 –82(1962 ) (“Rule15 (a) de clar es th at leaveto 36 amen d ‘sh allbefreelygiven when ju stice so re quires’; this mandate is tobeh eeded.”). The district co urt has the discretion to r efuse leave to file amen dments after any amen dment file d on reman d. 17 t h e G overnm en ti s t h e l ogi calconcl u si on of t h e pa rt i cul ar al l egati on s i n G rub bs’
com pl ai n teven t h ou gh i tdoes not i n cl u de exa ctbi l l i n g n u m bers oram ou n t s. D Reg ar di ng t he H o s pi t al , howev e r , t he co m pl ai ntfai l s b e c aus e t he r e i s no in d ic a tio n th a t t h e H o s p ita l its e lf a c te d w ith t h e r e q u is ite in te n t. U n d e ra ll sect i on s of

th e F a lse C l ai m s A ct , t h e defen da n t m u stactw i t h t h e pu rpose of get t i ng a fal se c l ai m pa i d by t he G ove r nm ent
. G r ubbs di d notpl ead, ar gue at t he di st ri ct cour t , o ro n a ppe alt hatt he H o s pi t alw as v i c ar i o us l y l i ab l e f o rt he
ac t i o ns o f

t he do c t o r s o r n u rses . W i t ho uta n a t t r i but e d l i ab i l i t y t he o r y, no al l egat i ons i n t he c om pl ai nt al l ow a r eas onabl e i nfer enc e t hat t he H os pi t alhad t he req ui s i t e i nt e nt
. The H o s pi t alm ayha ve b e e n i nad ve r t e nt l y and i n t he
n o r m a lcou rse o f b u sine ss p roce ssing the cl a i m s of serv i ces frau d u l en tly exag gerated by i t s doct ors. W e ha ve n o basi s f or i n ferri n g ot h erw i se. H ow eve r , i n l i ght of t he sur vi val of t he ( a) ( 1) c l ai m s agai nstt he i ndi vi dual do c t o r s , i n fai r ne s s D r . G r ubb s s ho ul d be g r ant e d l e av e t o a m e nd h i s c o m pl ai nt
r e g a r d in gh is (a )(1 ) c la im s a g a in s t t h e H o s p ita l. 36 V W e now t u rn to § 372 9( a) ( 2) , w h i ch i m poses civi ll i abil i t y on an y person
w h o “ kn ow i n gl y m ak es, uses, or cau ses t o be m ad e or u sed, a fal se r ecord or
s t at e m e ntt o g e ta fal s e o rf r aud ul e nt cl ai m pa i d o r a ppr o ve d b y t he G ove r nm ent
. ” The di st r i c tc our t di sm i sse d G r ubbs’( a) ( 2) c l ai m s f ort he s am e reason i tdi sm i ssed t h e ( a) ( 1) cl ai m s; t h e com pl ai n t fai l ed to al l ege detai l s of f r aud ul e ntb i l l s a c t ual l y pr e s e nt e d t o t he G o ve r nm e nt
. Thi s w as e r r o r . As t he S u prem e C ou rtrecentl y set t l ed: “[ T ] h e con cept of presentm en t i s not m en t i on edN o. 07- 40963

Allison En

gine, C o. v. U.S. ex rel. Sanders , 1 2 8S .C t. 2 1 2 3 , 2 1 2 9(2 0 0 8). 37 18 in § 3 7 2 9 (a )(2 ). T h e in c lu s io n o f a n e x p r e s s p r e s e n tm e n t r e q u ir e m e n t in sub sect i on ( a) ( 1) , com bi n ed w i t h t h e absen ce of an ythi n g si m i l ar i n subsect i on ( a) ( 2) , s ugg e s t s t hatCong r e s s di d noti nt e nd t o i nc l ude a pr e s e nt m e nt
r e q u ir e m e n t in s u b s e c tio n (a )(2 ).” 37 W h at § 372 9( a) ( 2) requi res i s t h at t h e de fen d a n t m ad e a fal se r ecord or
s t at e m e ntf

o r the pu r po s e o f

g e t t i ng a fal s e o r f

r aud ul e ntc l ai m pa i d b y t he G o ve r nm e nt
. Fo rt hi s s e c t i o n, t he r e cordi n g o f a fal s e r e c o r d, w he n i t i s m ad e
w i t h t he r e qui s i t e i nt e nt , i s e no ugh t o s at i s f y t he s t at ut e ; w e ne e d no t m ak e t he
s t e p o f i nfe r r i ng t hat t he r e c o r d ac t ual l y c aus e d a c l ai m t o be pr e s e nt e d t o t he G ove r nm ent
. G r ubbs’c om pl ai nt partic ul ar l y al l ege s t hat att he Febr uary 5 di nne r , D r s . G r o ve s a nd Kanne ga nt i e xp l ai ne d ho w t he y m e e t w i t h t he nur s i ng s ta ff a n d “w r ite n o te s ” a b o u t p a tie n ts th a t t h e y o n ly s e e o n a n a s n e e d e d b a s is butb i l la s da i l y fac e - t o - fac e v i s i t s . H e a l s o a l l e ge s t hatt w o da ys l at e rt he
nurs i ng s t af

f “ at t em pt ed t o a ss i sthi m i n re c or di ng i nf or m at i on as physi c i an
v is its e v e n b e fo r e a n d w ith o u t h is a c tu a lly p e r s o n a lly s e e in gth e p a tie n ts .” S i m i l arl y, t h e com pl ai n t al l eges t h at “ [ o] n D ecem ber 4 an d 5, 200 4, D r. B agri
reco rd ed fa l se p rog ress n otes in T h e H osp i tal m ed i ca lre cord s for h osp i tal vi sit s
w i t h a pati en t , bu tt h e vi si t s di d n ota ct u al l y occur. ” Th ese are si m pl e, conci se, and pa r t i c ul ara l l e ga t i o ns o f t he c i r c um s t anc e s c o ns t i t ut i ng § 3 72 9( a) ( 2) f r aud and t hes e c l ai m s agai nstD r s. G r ove s, K annegant i , and B agr i sho ul d nothave been di sm i ssed at t h e pl ead i n g st age. VI G rub bs al so al l eges viola t i on s of t h e F al se C l ai m s A ct ’ s c on spi racy provi si on . S ect i on 372 9( a) ( 3) sub j ect s t o ci vi ll i abil i t y an y person w h o “ conspir es t o def rau d the G overnm en tby gett i n g a fal se o r frau du l en t cl ai m al l ow ed or pa i d. ” W e ha ve h el d that to p rove a F al se C l ai m s A ctcon spi racy, a rel atorm u stN o. 07- 40963

U.S. ex rel. F

armer v. Cit

y of Hous to n , 5 2 3F .3 d 3 3 3 , 3 4 3( 5 thC ir

. 2 0 0 8). 38 FC I nv. Grou p L C v. I

FX Markets, L td

. , 52 9 F .3d 1 087 , 10 97 (D. C. Ci r . 20 08). The 39 court ’ san aly s i sw a sc o u c h e da sj uri s dic ti o n al , b utth es t at e m e nth o l d stru ea sap urely procedural plea ding

requir ement
. See Farmer , 523 F.3 d at 344 . Whil e Farmer asked whethera “rea sonablej urycould 40 infe r” o n review of a summaryjudgment, the standard o n review of a motionto dismiss cannot be mo re exact ing. 19 sh ow “( 1 ) th e ex i sten ce of an u n l a w fu l a g ree m en t betw ee n de fen d a n ts t o g et a fal se orf

rau du l en tcl ai m al l ow ed or p a id by [ t h e G overnm en t ] an d ( 2) at l east
on e a ct pe rform ed i n f u rth era n ce of tha t ag ree m en t. ” T h e p a rti cu l a ri ty 38 requ i rem en t s of

R u l e 9(b) app l y t o t h e F al se C l ai m s A ct ’ s c on spi racy provi si on wi t h e q u a l f

o r c e a s t o i t s “ p r e s e n t m e n t ” a n d “ r e c o r d ” p r o v i s i o n s . As t he D

. C. C i r c ui t has st at ed, a pl ai nt i f f al l egi ng a c ons pi r ac y t o c om m i t f r aud m ust“ pl ead
w ith p a r tic u la r ity th e co n s p ir a c y a s w e ll a s t h e o v e r t a c ts
. . . ta k e n in fu r th e r a n c e o f th e co n s p ir a c y .” 39 To t he e xt e ntt hatt he di s t r i c t c o ur t di s m i s s e d t he ( a) ( 3) c l ai m b e c aus e t he
c o m pl ai ntdi d no ts uf f i c i e nt l y pl e ad a sp e c i f i c i ns t anc e o f

a pr e s e nt e d c l ai m , t he di st ri ctcourterr ed. A s i n § 3729 (a )(2), the consp i racy provi si on l acks a presentm en tel em en t , t h u s presentm en tof a fal se c l ai m need not be proven nor p le d to p r e v a il o n a F a ls e C la im s A c t c o n s p ir a c y ch a r g e . The di s t r i c tco ur tal s o re as o ne d t hatt he co m pl ai ntfe l lsho r t o f pl e ad i ng an agreem en t
. W e di sagree as t o D rs. G roves an d K an n egan t i , t h e t w o doct ors t h at arr an ged t h e P ap pa dea u x’ s m eet i n g, bu t agree as t o t h e ot h er defen da n t s. Th e c om pl ai nt at t r i but es spe c i f i c l anguage t o D r s. G r ove s and K annegant it hat occurred att h e P ap pa dea u x’ s m e e tin g an d w h i ch i n di cat es, or at l east f rom
w h i ch a r e as o nab l e j ur y c o ul d i nfe r , t hatt he y w e r e i n a gr e e m e ntb e t w e en 40 t h em sel ves an d som e m em bers of t h e n u rs in g st af

f t o i m properl y recor d unpr o vi de d s e r vi c e s f o rt he p u rpo s e o f

g e t t i ng f

r aud ul e ntc l ai m s pa i d b y t he G ov ern m e n t. T h e tem p ora lci rcu m stan ces o f th e m ee ti n g a l so su gg est aN o. 07- 40963

20 conspir ator i aldesi gn . Tw o d ays pri or to D r. G rub bs’fi rstw eeken d on callt h ese do c t o r s i nvi t e d hi m t o a di nne r a t w hi c h t he y de s c r i be d ho w t he y us e d t he
w e e ke nd on ca l l s t o per pe t r at e t he al l e ge d f r aud ul e ntsc he m e . To i nfe r t hatt he tw o d o c to r s w e r e in a g r e e m e n t is n o t c o n c lu s o r y o r s p e c u la t i v e , b u t n a tu r a lly in fe r r e d fr o m th e a lle g a tio n s . I tdo e s , ho w e ve r , s t r e t c h de duc t i o n t o c o nc l ude t h at t he r e m ai ni ng de fe nda ntdoc t o r s and t he H o s pi t alw e r e a l s o i n o n t he a gr e e m e nt
. Eve n t ak i ng t h e al l egati on s as tr u e— t h at vari ou s doct ors over a peri od of years each sub m i t t ed cert ai n fal se c l ai m s— does n ot , by i t sel f, do m ore t h an poi n t t o a p o s s i b i l i t y o f

a n a g r e e me n ta mo n gt h e m. R e g a r d in gD r s . G r o v e s a n d K a n n e g a n ti, th e tw o d o c to r s fo r w h ic h w e h o ld t he c om pl ai nt adeq uat el y al l ege s an agr ee m ent , G r ubbs pro vi des par t i c ul ar ci rc um s t anc e s o f

t he r e qui r e d o ve r t a c t s b y de s c r i bi ng hi s e xc hang e w i t h t he
n u rsi n g st af

f t w o da ys af

t er t h e m eet i n g. Th e nu rses , al t h ou gh not defen da n t s,
w e r e a w ar e o f

a pr ac t i c e he r e a l l e ge d t o ha ve b e e n a n a gr e e m e ntt o c he att he g o v e r n m e n t a n d a r e a s s e r te d to h a v e o ffe r e d to a s s is t G r u b b s in re c o r d in gth e ir
con feren ce a s fa ce-to- face v i sit s w i th pa ti en ts. A n oth er se p a ra te ov ert ac t, subs equentt o t he m ee t i ng, w as al l ege d r egar di ng D r . K annegant is pec i f i c al l y. Th e c om pl ai nt aver s t hat he bi l l ed M edi c ai d “ f or a ps yc hi at r i c di agnos t i c ex am on O c t obe r12, 2004, C PT C ode #90801 , ” ev en th ou gh “[ t ] he H os pi t alm edi c al
r ec or ds i ndi c at e t hat t he psych i at r i c ex am of t he pat i entw as c onduct ed bya
n u r s e .” A c c o r d in g ly , t h e d is tr ic t c o u r t e r r e d in d is m is s in gt h e co n s p ir a c y cla im
a s to d e fe n d a n ts G r o v e s a n d K a n n e g a n ti. V II Las t l y, w e a ddr e s s t h e di s t r i c t c o ur t ’ s f i ndi ng t hatG r ubb s ’c o m pl ai nt fa ile d fo rw a n t o f in d e p e n d e n tly o b ta in e d k n o w le d g e o f th e a lle g e d fr a u d

. T h is
r e qui r e m en t is m i s pl ac e d. A r e l at o r m us t ha ve di r e c t a nd i nde pe nde nt kno w l e dg e o n whi c h t he a l l e ga t i o ns a r e b as e d w he n t he ac t i o n i s “ba s e d up o n t heN o. 07- 40963

3 1 U .S .C

. § 3 7 3 0 (e)( 4)( A

–B). 41 See U. S. ex re l. Josep h Fr ie d v . W. Indep. Sch. D is t. , 52 7 F .3d 4 39, 441 –42(5th Cir. 42 200 8) ; U.S. ex re l

. Reaganv. E. Tex. Med. Ct r. Re g’l Health care Sys

. , 38 4 F .3d 1 68, 173(5th Cir. 2 004) (“Un der 31 U.S.C. § 3 730 (e)(4), we first ask ‘whe therth ere has bee n a public di sc lo sureo f all egation s or tr a n sactio n s.’”) (inte rn al qu ot ationmark s o mitt ed).

See Reagan , 38 4 F .3d at 1 74. 43 Id

. at17 5–7 6. 44 21 pu bl i c di scl o su re o f al l egati on s ort ran sact i on s i n a cr i m i n al , civi l , or ad m i ni s t r at i ve he ar i ng, i n a c o ngr e s s i o nal , ad m i ni s t r at i ve , or G o ve r nm e nt [ G e ne r al] Ac c o unt i ng O f f i c e r e po r t , he ar i ng, aud i t , o r i nve s t i ga t i o n, o r f r o m t he
new s m edi a. ” I n ot herw or ds, t he o r i gi nal

- so urc e i ndependent

- know l edge 41
r e q u ir e m e n t is o n ly tr ig g e r e d if th e cla im s a r e b a s e d o n in fo r m a tio n th a t is pub l i c l y di s c l o s e d. 42 G rub bs’com pl ai n ti s not based up on pu bl i cl y di scl osed al l egati on s. Pri or t o G r ubbs’c om pl ai nt , t her e w er e no c our t oradm i ni st ra ti ve pr oc ee di ngs reg a rd i n g th e a l l eg ed frau d a t th e H osp i tal, n or w ere the re G ov ern m en t rep orts
o ra udi t s c o nt ai ni ng i nf o r m at i o n o n whi c h G rubbs ’a l l e ga t i o ns a r e b as e d. G r ubb s ’c o m pl ai nt , i f t r ue , e xp o s e d a pr evi ous l y- unc o ve r e d f r aud b e i ng p e r p e tr a te d o n th e G o v e r n m e n t; a t le a s t o n th e s ta te o f th e p r e s e n t r e c o r d it is
n ota parasi t i c s u i tby an opp ort u n i st i c l ate- com er. 43 A pp el l ees, poi n t i n g t o R e ag an , a r gue t hata ny c i t i z e n c o ul d ha ve us e d t he F reedom of

I n f orm ati o n A ctt o obtai n bi l l i n g i n f orm ati on on w h i ch G rub bs’
ac t i o n i s pa r t l y ba s e d. I n R e ag an , w e h el d that an F O IArequest consti t u t es a p u b lic d is c lo s u r e , a s it is a n “a d m in is tr a tiv e . . . re p o r t,” a n e n u m e r a te d p u b lic di s c l o s ur e und e rt he s t at ut e . W e fo und t hatw e l ac ke d j ur i s di c t i o n b e c aus e t he 44
r el at orhad m ade and re c ei ved an FO I Ar epo r t pr i ort o f i l i ng herc om pl ai nt t hat

“ sub s t ant i at e d t he a l l e ga t i o ns s he m ad e i n . . . he r c ur r e ntc l ai m s und e rt heN o. 07- 40963

Id

. at17 6. 45 5U .S .C

. § 5 5 2 (b)( 6). 46 22 FC A. ” H e r e , i n c o nt r as t , no FO I A r e que s t had be e n m ad e a nd n o

45 ad m i ni s t r at i ve r e po r tw as i n e xi s t e nc e r e l at i ng t o t he a l l egati ons i n t he
c om pl ai nt at t he t i m e i t w as f i l ed. A ddi t i onal l y, w e doubt w he th er m edi c al b illin gin fo r m a tio n th a t c o m p r is e s th e cr u x o f th e c o m p la in t in th is ca s e w o u ld be a va i l ab l e t hr o ugh t he FO I A, w hi c h ex c l ude s “ pe r s o nne land m e di c alf i l e s a nd si m i l ar f

i l es th e d i scl osure of w h i ch w ou l d consti t u t e a cl earl y u n w arran t ed i n vasi on of

p ersonal p ri vacy. ” O n t h e show i n g t o date, t h e com pl ai n t does not 46 i ncl ude publ i c l y- di sc l os ed i nf or m at i on and t hus w het herG r ubbs w as an or i gi nal
s o ur c e b e ar i ng di r e c ta ndi n d e p e n d e n t l yo b t a i n e dk n o wl e d g e r e m a i n s u n d e c i de d. W e em p h a size th a t w e d ecide on l y th a t t h e a l l eg a ti on s ar e su ff i ci en t to gain D r. G rub bs acces s t o t h e di scovery proc ess. W e l eave to t h e abl e di st ri ct
c o ur tt o m ana ge t hi s ac c e s s — di s c o ve r y t ar ge t e d t o t he c l ai m s al l e ge d, a vo i di ng a s e a r c h fo rn e w cla im s . W e R E V E R S E an d R E M A N D t h e di sm i ssalof G rub bs’§ 3729 ( a) ( 1) cl ai m s, exc eptas t o t he H os pi t alw hi c h w e A FF I R M w i t hout pr ej udi c e, gr ant i ng G r ubbs l eave to am en d h i s c o m p la int. W e R E V E R S E an d R E M A N D t h e di sm i ssalof G r ubb s ’§ 3 72 9( a) ( 2) c l ai m s a s t o de fe nda nt s G r o ve s , K anne ga nt i , a nd Bag r ia nd A FF I R M as t o t he o t herdef endant s. W e RE V E R SE and R E M A N D t he di sm i ss al
o f G r ubb s ’§ 3 72 9( a) ( 3) c o ns pi r ac y c l ai m s a s t o d efen da nt s G r o ve s a nd K a n n eg a n tian d A F F IR M as to th e oth er d e fe n d a n ts. A F F IR M E D i n pa rt, R E V E R S E D an d R E M A N D E D i n pa rt.