Summary
This Eleventh Circuit opinion addresses whether a relator in a False Claims Act qui tam action must plead with particularity under Federal Rule of Civil Procedure 9(b) that an actual false claim was submitted to the government. The court holds that subsection (a)(1)(B) of the False Claims Act requires pleading the submission of an actual false claim, but not necessarily by the defendant itself. The case is remanded for the district court to consider other elements like falsity, scienter, and materiality in light of recent Supreme Court precedent.
Topics
Practice areas
Questions Presented
- Whether a relator asserting liability under False Claims Act § 3729(a)(1)(B) must plead with particularity that an actual false claim was submitted to the government.
- Whether Olhausen pleaded with particularity that Arriva and Alere submitted false claims based on the alleged absence of assignments of benefits.
- Whether Olhausen pleaded with particularity that Arriva or Alere submitted claims involving undisclosed or unaccredited locations under the DMEPOS program.
- Whether the conspiracy claim in Count VI could proceed after the district court's dismissal of the underlying claims.
Holdings
- A relator asserting a False Claims Act claim under § 3729(a)(1)(B), like one proceeding under § 3729(a)(1)(A), must plead with particularity that an actual false or fraudulent claim was submitted or presented to the government. Section 3729(a)(1)(B) does not, however, require the defendant itself to have submitted the claim.
- Olhausen adequately pleaded with particularity that Arriva and Alere submitted allegedly false claims under Count II's assignment-of-benefits theory.
- Olhausen failed to plead with particularity that any claim involving the Philippines, Arizona, or Tennessee locations, or the DMEPOS contracts, was actually submitted to the government. The dismissal of Count IV was therefore affirmed.
- Because the court reversed the dismissal of Count II, it also reversed the dismissal of Count VI, which the district court had dismissed solely because it found no adequately pleaded underlying False Claims Act violation.
Key quotations
“We conclude that Section 3729(a)(1)(B), like Section 3729(a)(1)(A), requires plaintiffs to plead with particularity that an actual claim has been submitted.” (at 856)
“But unlike subsection (a)(1)(A), subsection (a)(1)(B) does not require plaintiffs to plead that the defendant itself submitted an allegedly false claim.” (at 856)
“The bottom line is that a relator must provide “some indicia of reliability . . . to support the allegation of an actual false claim for payment being made to the Government.”” (at 857)
“For these reasons, we vacate the dismissal of Counts II and VI. But we affirm the dismissal of Count IV. We remand the case to the district court for further proceedings consistent with this opinion.” (at 869)
Factual background
Olhausen alleged that Arriva and its parent companies, Alere and Abbott, submitted false claims to Medicare for diabetic supplies and other medical products. For Count II, he alleged that Arriva submitted claims while falsely representing that it had beneficiaries' assignments of benefits, and he relied on internal audits showing that assignments were missing from a substantial percentage of claims. For Count IV, he alleged that Arriva used undisclosed or unaccredited service locations in the Philippines, Arizona, and Tennessee in connection with DMEPOS contracts. The court held that the audit allegations sufficiently identified submitted claims for Count II but did not specifically connect any submitted DMEPOS claim to the allegedly undisclosed or unaccredited locations for Count IV.
Procedural history
Olhausen filed a qui tam action alleging that his former employers submitted fraudulent Medicare claims and conspired to do so. The district court dismissed the relevant counts under Federal Rule of Civil Procedure 9(b), concluding that Olhausen had not pleaded with particularity that false claims were actually submitted. The Eleventh Circuit initially affirmed on scienter grounds, but the Supreme Court vacated that judgment and remanded after deciding Schutte. On reconsideration, the Eleventh Circuit vacated the dismissal of Counts II and VI, affirmed the dismissal of Count IV, and remanded.
Remand instructions
The district court must consider in the first instance whether the complaint sufficiently alleges the remaining challenged elements of Count II, including falsity, scienter, and materiality. The court may direct new briefing addressing scienter in light of United States ex rel. Schutte v. SuperValu Inc. The case is remanded for further proceedings consistent with the opinion.