United States: Is It Hot In Here, Or Is It Just 9(b)?

One relator's hopes sizzled in the summer heat last week when the Eleventh Circuit affirmed the Southern District of Florida's decision to contemporaneously dismiss and grant summary judgment against the relator on two halves of the same complaint. United States ex rel. Bingham v. HCA, Inc., No. 16-17059, 2019 WL 3451045 (11th Cir. July 31, 2019). The somewhat unusual procedural posture of this case arose because the district court denied a motion to delay discovery pending adjudication of the defendant's motion to dismiss. Dismissal was granted for part of the case for lack of particularity under Rule 9(b) and just a month and a half later, the relator amended his complaint based on facts learned through discovery attempting to revive his dismissed allegations.

The defendant moved to strike all allegations from the amended complaint relating to the previously dismissed allegations based on facts learned through discovery. Simultaneously, the defendant moved for summary judgment in its favor on the allegations that had not previously been dismissed. The district court agreed with the defendant across the board, and on Wednesday of last week, so did the Eleventh Circuit.

While the summary judgment holding is fairly straightforward (the court found there simply was no evidence of kickbacks or improper remuneration as alleged), the court's holding on the motions to strike and dismiss is noteworthy. Typically, plaintiffs have free rein to amend complaints with facts learned through discovery, but here the court held that in the False Claims Act context such amendment is inappropriate "if the amendment would allow the plaintiff to circumvent the purpose of Rule 9(b)." That is, the rule is meant to deny a ticket to discovery for meritless qui tams that are a mere "pretext to uncover unknown wrongs." With that purpose in mind, it was no difficult task to affirm the district court's decision to excise facts learned during discovery from the 9(b) analysis.

In retrospect, it might have simplified matters if the court had simply granted the parties' request to stay discovery pending decision on the motion to dismiss, as many courts generally do and we continue to recommend this as the matter of course in FCA cases to prevent such complications in the future.

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