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FCA Claim Was Not Alleged with Sufficient Particularity

The Court of Appeals for the Sixth Circuit affirmed the denial of a motion to file an amended False Claims Act complaint because the federal district court did not abuse its discretion in finding the relator did not allege the existence of a FCA claim with sufficient particularity. The district court dismissed the relator's complaint, which alleged the defendant obtained government contracts by fraudulently exaggerating the extent of its dealings with small and minority-owned businesses. In a prior decision (52 CCF 78,966), the appellate court affirmed the dismissal. However, it vacated the district court's denial of the relator's motion to file a second amended complaint and remanded the case for consideration in light of U.S. ex rel. Bledsoe v. Community Health Systems, Inc. (501 F3d 493). Bledsoe held a relator who alleges a "complex and far-reaching fraudulent scheme" need not state with particularity all of the false claims made over the course of the scheme but must include specific examples of the payment claims that are characteristic examples illustrative of the class of all claims covered by the fraudulent scheme.

Basis for Holding Unchanged

On remand, the district court concluded the proposed amended complaint, which included a list of contracts and alleged payments on those contracts, failed to meet the pleading requirements of Federal Rule of Civil Procedure 9(b) (53 CCF 79,129). According to the district court, Bledsoe did not alter the requirement for a relator to plead at least one claim characteristic of the type of claims being asserted, and it did not make a listing of contracts awarded, the value of the contracts, and the number of items awarded the same as a "request or demand ... for payment" under 31 USC 3729. The Court of Appeals affirmed, finding none of the holdings in Bledsoe changed the basis on which the district court initially denied the motion to amend. Bledsoe did not change the requirement for a relator to plead at least one claim with specificity or provide support for the proposition that even an "especially well-identified" contract is a "claim" within the meaning of the FCA. Therefore, the district court did not abuse its discretion in relying on its rationale from its earlier decision in denying the motion. The Court of Appeals did not have to reach "the question of whether a listing of contracts might, under some circumstances, suffice to meet the requirement that an FCA complaint plead a false claim with particularity." (U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., CA-6, 54 CCF 79,414)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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