Opinion ID: 40112
Heading Depth: 3
Heading Rank: 1

Heading: Violation of the FCA

Text: Claims brought under the FCA must be pleaded with particularity pursuant to Federal Rule of Civil Procedure 9(b). United States ex rel. Doe v. Dow Chemical Co., 343 F.3d 325, 328 (5th Cir. 2003). A dismissal for failure to meet the requirements of Rule 9(b) is a dismissal for failure to state a claim, thus review is de novo. Id. We also review a dismissal for failure to state a claim under Rule 12(b)(6) de novo. Id. To satisfy Rule 9(b) the complaint must allege the “who, what, when, where, and how of the alleged fraud.” United States ex rel. Thompson v. Columbia/HCA Healthcare Corp.,125 F.3d 899, 903 (5th Cir. 1997) (internal quotations omitted) (quoting Williams v. WMX Tech., Inc., 112 F.3d 1 Appellee also filed a motion to extend the automatic sixty-day seal placed on the record, and the district court entered an order temporarily extending the seal. Because we conclude that the district court properly dismissed Appellant’s claims, we need not reach Appellant’s contention that the district court erred in granting Appellee’s motion to continue the seal beyond the automatic sixty-day period. 3 175, 179 (5th Cir.1997)). Appellant alleged that Appellee violated the FCA by sending bills for ambulance runs representing that the patients’ signatures were on file, when Appellee knew that the signatures were not on file. He further alleged that these violations occurred nationwide and cost the government approximately $200 million annually spanning a period of five years, “[f]rom 1999 to the present.” Appellant has failed to plead any particular facts showing that Appellee was aware of the actions of its emplo yees and intentionally filed false claims with the government. The complaint alleges that when Appellant conducted training sessions with the billing clerks, they complained that they were required to check the box indicating the patient’s signature was on file when they knew there was no signature on file. Appellant asserts that he did not name the individual billing clerks because he contends that seventy-five individual corporations perpetrated the fraud. The complaint alleges that Appellant told his supervisor about the billing clerks’ complaints and that Appellee’s vice president criticized Appellant for instructing the clerks not to bill without a signature. Thereafter, Appellant was promoted to Director of Compliance and, in that capacity, he conducted an audit and submitted the results in a memo to, inter alia, Appellee’s corporate officers. These are the only allegations that Appellee was aware of the actions of its employees. The complaint includes no more than the conclusory assertions of Appellee’s knowledge and intent to file fraudulent claims. Cf. United States ex rel. Williams v. Bell Helicopter Textron, Inc., 417 F.3d 450, 454 (5th Cir. 2005) (“Williams’ complaint fails to plead any particular facts showing that Bell Helicopter was aware of the actions of its employees, [and] that it had intentionally filed these false claims with the government . . . .”). Further, the complaint alleges that on or about August 31, 2001, Appellant was fired, but does not allege how Appellant knows that Appellee submitted false billing statements after that time. 4 The audit only spanned one year, thus the allegations of fraud outside of that time frame are based on Appellant’s extrapolations and good faith belief; this is simply not sufficient under Rule 9(b). See Columbia/HCA Healthcare, 125 F.3d at 903 (rejecting relat or’s claim that there was reasonable probability based on statistical studies performed by the government, that forty percent of the claims submitted by the defendants violated the anti-kickback law or were not medically necessary). The complaint does not ident ify a single false claim that was actually submitted to the government. Appellant contends that his complaint is “perfectly analogous” to the complaint held sufficient in Benchmark Electronics, Inc. v. Huber Corp., 343 F.3d 719 (5th Cir. 2003). To the contrary, the complaint in Benchmark referred to specific documents alleged to contai n false or misleading statements, as well as the month and year in which the documents were sent, see id. at 724, whereas Appellant’s complaint alleges the billing statements were sent from 1999 to the present and that they occurred nationwide and in the Port Arthur, Portland, and Kennesaw offices. He does not contend that all of the billing statements submitted from 1999 to the present contained false statements; instead he alleges that the audit revealed a noncompliance rate between thirty-five percent and forty-five percent. Nevertheless, the complaint does not identify particular invoices containing false statements by number, date, or otherwise. While we understand that Appellant’s contention that he was prevented from reentering his office after Appellee terminated his employment, it defies credulity that he is unable to identify any details of a single false claim submitted to the government. Appellant contends that he is entitled to a relaxed Rule 9(b) standard because the audit is the only evidence of Appellee’s false statements and it is exclusively within Appellee’s control. This court has stated that the Rule 9(b) standard may be relaxed when the facts relating to the alleged fraud are peculiarly in the defendant’s control; however, a plaintiff is not entitled to the relaxed standard where 5 the information is available from another source or where the defendant fails to allege a factual basis for his beliefs. See United States ex rel. Russell v. Epic Healthcare Mgmt. Group, 193 F.3d 304, 308 (5th Cir. 1999); Columbia/HCA Healthcare Corp., 125 F.3d at 903. Appellant has not alleged a sufficient factual basis for his beliefs, nor has he argued that he tried but failed to obtain the information. We are not persuaded by his argument that he could not obtain the information from the billing clerks. The rules of professional conduct prevent counsel from contacting persons represented by counsel but do not “prohibit communication between a lawyer’s client and persons, organizations, or entities of government represented by counsel, as long as the lawyer does not cause or encourage the communication without the consent of the lawyer for the other party.” Tex. Gov’t Code Ann. art. 10, § 9, Rule 4.02 cmt. 2 (Vernon 2005). Thus, nothing prevented Appellant from contacting Appellee’s employees on his own, whether before commencing the litigation or after. Accordingly, the district court properly granted Appellee’s motion to dismiss Appellant’s claim for violation of the FCA for failure to plead with particularity and failure to state a claim.