On October 17, 2022, the Supreme Court denied certiorari in three cases asking the court to resolve a circuit split regarding the application of the particularity pleading requirement for allegations of fraud in False Claims Act (FCA) cases, as required under Federal Rule of Civil Procedure 9(b). The cases are: Johnson, et al. v. Bethany Hospice, 21-462; U.S., ex rel. Owsley v. Fazzi Associates, Inc., et al., 21-936; and Molina Healthcare, et al. v. Prose, 21-1145. Molina also presented a second question over which circuits had split, regarding the correct interpretation of Universal Health Services, Inc. v. United States ex rel. Escobar and whether a request for payment without specific representations can be actionable under an implied false certification theory. (Petition for Writ of Certiorari).
In Molina, the Court of Appeals for the Seventh Circuit allowed a whistleblower’s complaint to move forward without specific details of the alleged false claims, based on the argument that fraud could be inferred from the allegations. In Johnson and Owsley, the Eleventh and Sixth Circuit Courts affirmed dismissals on the ground that the whistleblowers did not allege details about the specific fraudulent invoices and bills. The petitioners in Johnson and Owsley both claimed that there was sufficient detail of the “who, what, when, where, and how,” but the courts held that the details regarding the actual specific submission of claims was insufficient.
The whistleblowers in all three cases alleged that the actual submission of the false claim could be inferred based on the other circumstances pled and asked the Supreme Court for clarity on the pleading standards for alleging health care fraud. However, the United States Solicitor General submitted briefs in Johnson and Owsley stating there was no circuit split but rather a difference in underlying facts leading to the different outcomes and asked that the Supreme Court deny the petitions.
The Supreme Court did not release an opinion explaining the denial. Without guidance from the Supreme Court it will be interesting to monitor Circuit Court rulings on motions to dismiss for False Claims Act cases and potential whistleblower forum shopping going forward.