Opinion ID: 793698
Heading Depth: 2
Heading Rank: 3

Heading: Denial of Request for Leave to Amend the Complaint

Text: 15 Under Federal Rule of Civil Procedure 15(a), a court should grant leave to amend freely when justice so requires. However, denial of leave to amend may be justified by undue delay, bad faith on the part of the moving party, futility of the amendment or unfair prejudice to the opposing party. United States ex rel. Gaudineer & Comito, L.L.P. v. Iowa, 269 F.3d 932, 936 (8th Cir.2001) (internal quotation omitted). 16 In denying Dr. Joshi's motion for leave to amend the complaint on the basis of futility, the district court held Dr. Joshi's proposed amendments did not cure the complaint's deficiencies because St. Luke's and Dr. Bashiti were still forced to speculate as to names of patients, supplies, prescriptions, and claims over a sixteen-year period to determine what activity allegedly violate[d] the FCA. The district court also held that because the specific instances of fraud cited by Dr. Joshi all occurred in November 1995 and Dr. Joshi failed to tie the allegations into a continuous pattern of conduct by St. Luke's and Dr. Bashiti, the six-year statute of limitations barred the additional claims. On appeal, Dr. Joshi contends the district court erred in denying his motion, arguing the proposed amendments are timely and would not have been futile. We reject both contentions. 17 First, Dr. Joshi's proposed amendments do not eliminate the complaint's deficiencies. Neither proposed amendment indicates Dr. Joshi's basis for knowledge concerning the alleged submission of fraudulent claims, and the amendments thus lack sufficient indicia of reliability to satisfy Rule 9(b). See Corsello, 428 F.3d at 1013-14. Dr. Joshi's vague and limited allegations concerning events occurring in November 1995 do not qualify as representative examples of a scheme alleged to have occurred over a sixteen-year period. Furthermore, basing Count II's proposed amendment on information and belief does not strengthen Dr. Joshi's complaint when Dr. Joshi neglects to set forth the source of the information and the reasons for the belief. See Parnes, 122 F.3d at 550 (citation omitted). Even accepting the allegations as true and drawing all reasonable inferences in Dr. Joshi's favor, the proposed amendment fails to contribute the requisite specificity to Dr. Joshi's nebulous complaint. Thus, we agree with the district court, Dr. Joshi's proposed amendment does not satisfy the heightened pleading standard of Rule 9(b). 18 Second, the proposed amendments are untimely. Dr. Joshi filed his complaint in the present action in April 2004. We agree again with the district court. Dr. Joshi failed to tie his additional allegations, which allege specific instances of fraud occurring in November 1995, into a continuous pattern of conduct, and the proposed amendments are barred by the applicable six-year statute of limitations. See 31 U.S.C. § 3731(b)(1). Furthermore, the three-year tolling provision of 31 U.S.C. § 3731(b)(2) does not alter our conclusion. Section 3731(b)(2) provides an action under the FCA may not be brought more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances. Dr. Joshi did not specifically argue the applicability of § 3731(b)(2) before the district court, 3 and we therefore need not consider this argument. See Wever v. Lincoln County, Neb., 388 F.3d 601, 608 (8th Cir.2004) (Ordinarily, this court will not consider arguments raised for the first time on appeal.) (citation omitted); Hartford Acc. & Indem. Co. v. Shaw, 273 F.2d 133, 140 (8th Cir.1959) ([A]n appellant cannot for the first time in an appeal raise an issue that was not presented to the trial court and upon which the trial court had no opportunity to pass.). 19 However, in short, we are satisfied Dr. Joshi's belated argument on the applicability of § 3731(b)(2) lacks merit. Dr. Joshi alleged he is an original source of the complaint's allegations, he worked at St. Luke's only until January 1996, and Dr. Joshi's staff position is the sole basis alleged for his knowledge of the fraudulent billing. Assuming, without deciding, § 3731(b)(2) applies to a private individual where the government declines to intervene, Dr. Joshi's allegations support a conclusion he was aware of the alleged FCA violations well before April 2001, more than three years before suit was filed. Thus, we conclude the district court did not err in denying Dr. Joshi's motion for leave to amend the complaint. 20