When people discuss the pleading requirements, what they really mean is the complaint. What has to be in the complaint to fulfill a pleading requirement is what is being dictated by the federal rules of civil procedure. When it comes to Rule 9B and complaints in False Claims Act cases, an experienced DC False Claims Act lawyer can help you draft the complaint and make sure that it includes a pleading requirement.
Failure to Meet the Pleading Requirement
If you cannot meet the burden of the pleading requirement, you can try again. You usually can file for leave to amend the complaint. The court doesn’t have to give you leave to amend more than once by right, but generally where you are just liberally granted if there’s good cause to show that if given leave you can amend the complaint sufficiently to overcome any pleading deficiencies. That’s not endless though and there’s only so much information you can obtain.
With that said, you can be dismissed for failure to plead a cause with particularity under rule 9B and it happens a lot when the plaintiff-relator can not obtain enough information to satisfy the rule to the court’s understanding. That’s why people pay a lot of attention to rule 9B.
The case can be dismissed for lack of pleading for particularity. In fact, usually that’s the first line of defense in a case the defendants will take a look at the case and the first notion that they will usually file is plaintiffs have failed to plead fraud with particularity under rule 9B and everybody is off to the races in terms of litigating that issue just to begin with.
The Importance of Thorough Investigations
With respect to cases that plaintiff’s file, you want to attempt to get all the information that the whistleblower has and put it together. There are two burdens: one is to the rule 9B, but also there is also the statutory duty to provide the government with all the evidence that we have in the case under the False Claims Act.
Obtaining information through the client and presenting that to the government, is something a DC whistleblower lawyer does. Once the government takes over the investigation after the initial complaint is filed, it’s the government’s investigation. The government generally does not want plaintiffs and their lawyers investigating the matter after the complaint has been filed. There are exceptions to this and it’s usually something the government works out with an individual later, but that’s usually the procedure that follows.
Generally, if the government intervenes in a case, they have the means through civil investigative demands and through other investigative techniques to obtain the information what would satisfy any pleading requirements. At some point, the case is likely, if the government intervenes, to be sufficiently well-pled and sort of substantial to overcome this burden. As a result, the government’s investigation can be helpful or can be a big part of overcoming that burden if the plaintiff has not been able to do so. It’s usually best to have a specific and as detailed a complaint as possible given all the other burdens that a plaintiff and a plaintiff’s attorney may have prior to filing the case.
The Heightened Pleading Requirement for Fraud
Rule 9B of the Federal Rules of Civil Procedure requires fraud to be pled with particularity. This creates a heightened pleading requirement, an additional burden on plaintiffs and the United States when filing a False Claims Act case. Put more simply, if you file a complaint in court for these particular kinds of cases, you are supposed to have more specificity in that complaint than you would for a typical tort case, such as a car crash. You have to be able to show the time, the place, and the events with some specificity in order to be able to maintain an action if it falls under the jurisdiction of rule 9B. Therefore, if interested in filing a 9B case, it is in your best interest to consult with a False Claims Act lawyer in DC first.
Federal Rules of Civil Procedure
The Federal Rules of Civil Procedure are, as the name implies, rules that apply to filing a case in federal court and a civil case. They are adopted by all federal courts in order to have some uniformity of procedure in any type of civil case. There are also local rules which are enacted pursuant to the specific Court regarding how to proceed. They tell you everything that one has to do to conform with the rules of the court in terms of where to file, how to file, what documents to file, what deadlines there are, and that sort of thing, as well as impose burdens such as rule 9B regarding the type of pleading that might be involved.
False Claims Act cases are filed as civil matters, and they therefore fall under the jurisdiction of the federal rules of civil procedure. False Claims Act law has within that its own procedural requirements, which conform to the federal rules of civil procedure but are also added to them. Most civil cases are not filed under seal in the way False Claims Act cases are. That’s certainly within the federal rules and certainly conforms to federal rules, but it is unusual to have a sealed case proceed in civil court. There are certain other kinds of cases that do have that happen. It does have its own procedure, in fact, in most cases.
Usually, when you file a complaint, you have to immediately serve it on the defendants. Under the federal rules, you have a certain amount of time to serve the defendants with the complaint. Under the False Claims Act, that step is suspended while the case is under seal. In other words, once the government then takes over the investigation, the time to serve the complaints is delayed until the government makes a decision about whether it’s going to join the case.
The Impact of Rule 9B on False Claims Cases
Courts have held that the False Claims Act, while not exactly a fraud statute, still falls under rule 9B, and that therefore a complaint filed under the False Claims Act has to conform to rule 9B for a plaintiff to maintain an action in court. So that imposes a burden on the plaintiffs, usually the whistleblower. Usually, the government can state pretty specifically what the defendants did that was in violation of the False Claims Act in order to maintain an action, because the government has the benefit of an investigation prior to filing its pleadings.
Courts have been stringent in upholding this requirement. There’s a feeling that you don’t want to let people just accuse a contractor of fraud without putting them on notice of exactly the behavior they are accused of doing which violates the law. In some instances, courts have gone too far, but that’s the overall direction that the courts have gone with respect to rule 9B.
Pleading Requirements in Different Courts
The interpretation of the Rule 9B pleading requirement in regard to False Claims Act cases differs from judge to judge. The reality of this is tricky. The fact is, judges see a case that is supported by the United States government, and the United States government having investigated the case is likely to also be able to produce more facts than a whistleblower and their whistleblower lawyer on their own. These cases are extremely fact-intensive, so it may not always be possible to tell from a previous ruling how a Court may act on this matter.
For whistleblowers acting on their own without the added benefit of a government investigation and additional facts, that burden is much greater and harder to maintain. Therefore, you see a lot of cases dismissed on rule 9B grounds when the government declines to intervene.
While requirements may technically differ from circuit to circuit as to what 9B is, judges have a great deal of leeway to determine what 9B means because it’s such a fact-based analysis. Our firm once had a case that had a great DC attorney who handled the appeals before the Circuit, but the case was dismissed ultimately for a lack of rule 9B. The court said they were dismissing it because our whistleblower was neither an outsider nor, strictly speaking, an insider to the action, which left me wondering in what metaphysical space my whistleblower actually was living, because if he wasn’t an outsider and he wasn’t an insider, I’m not exactly sure where he was.
The court nonetheless dismissed the case on that basis. That was a wrong decision by the court. I don’t know if the Court would have acted that way had the government intervened either. These are really fact-based analyses, and as a result, courts can make their own determinations as to rule 9B a great deal of the time.
The Chilling Effect of Rule 9B Interpretations
Certainly, this rule can discourage whistleblowers from bringing cases that are declined. It can make it very hard to maintain an action if you look at a string of cases saying that, absent government investigation and additional facts, the court will likely dismiss. That’s one of the things that rightfully deters counsel from telling clients, “Look, you have a declined case, but let’s go marching up the hill and try to pursue it anyway.”
It’s an added burden, and it serves to discourage bringing cases before the court. To be fair, though, a defense counsel would say fraud cases, or certainly false claims built around the False Claims Act with its treble damages provisions, is not the type of case that once should bring lightly ever.
Heightened pleading requirements may be appropriate. I just happen to think that it’s gotten too difficult for whistleblowers to overcome that burden and get a day in court, and so I think it’s gotten a little strenuous. But that’s an ongoing argument between plaintiffs, lawyers, and defense counsel, with the government sort of in the middle.
Seeking Legal Help with Rule 9B and Complaints in False Claims Act Cases
For more information on the importance of Rule 9B and complaints in False Claims Act cases, call a knowledgeable DC lawyer today.