Supreme Court review of Rule 9(b)’s application in False Claims Act cases may finally be coming whether the Executive Branch likes it or not.

In January, the Supreme Court, which is considering a certiorari petition in Johnson v. Bethany Hospice and Palliative Care, LLC, asked the Solicitor General to weigh in on whether the Court should accept the case. The case presents the question of what Rule 9(b) requires in cases arising under the False Claims Act, which is an important threshold question in many False Claims Act cases resulting in significant motions practice.

As past Solicitors General have done before her, the current Solicitor General’s brief filed late on May 24 argued that the Supreme Court should not grant plenary review because there really isn’t a meaningful circuit split on the issue. The brief also argues that the case is not a good vehicle for Supreme Court review because the district court dismissed the relator’s case on the alternative ground that the relator had not adequately pleaded violations of the federal anti-kickback statute, an issue the U.S. Court of Appeals for the Eleventh Circuit did not reach on appeal.

Rule 9(b) in the context of the False Claims Act

For background, Rule 9(b) of the Federal Rules of Civil Procedure requires that a party alleging fraud or mistake state with particularity the circumstances constituting that fraud or mistake. The rule also permits that knowledge and other conditions of mind be alleged only generally.

In the petition under consideration in Bethany Hospice, the relator told the Supreme Court that the Eleventh Circuit and other circuits have split with regard to whether Rule 9(b) requires a relator to plead not only the details of the alleged fraudulent scheme but also the details of specific false claims submitted to the government.

Other petitions before the Court

In addition to Bethany Hospice, there are two other certiorari petitions before the Supreme Court asking the Court to take up the question of what exactly Rule 9(b) requires of False Claims Act plaintiffs.

A week ago, the Supreme Court asked the Solicitor General to weigh in on a petition seeking review of a similar question coming out of a case decided by the U.S. Court of Appeals for the Sixth Circuit, United States ex rel. Owsley v. Fazzi Associates. The Solicitor General hasn’t yet submitted her brief in that case and her brief in Bethany Hospice does not mention the Sixth Circuit case at all.

Additionally, a petition for review in a case arising from a decision of the U.S. Court of Appeals for the Seventh Circuit is currently pending before the Supreme Court. In Molina Healthcare of Illinois, Inc. v. Prose, the defendants argue that the Seventh Circuit erred in allowing the plaintiff to continue with his case despite failing to identify a specific false claim submitted to the government. Notably, the Molina Healthcare petition was supported by multiple amicus curiae briefs, including briefs filed by the U.S. Chamber of Commerce and AHIP.

What will the Court do and when?

With both the relator’s bar—in Bethany Hospice and Owsley—and the defense bar—in Molina Healthcare—asking the Supreme Court to review the Rule 9(b) issue, this may very well be one of those situations where at least four Justices disregard the Solicitor General’s advice and provide the necessary votes to grant certiorari. In fact, it is not uncommon for the Court to grant review against the recommendation of the Solicitor General.

For example, a skeptic might be forgiven for suspecting that the Solicitor General’s recommendation against the Court granting review in Bethany Hospice is driven mostly by an unstated concern that given the Court’s current composition, whatever legal standard the Court might establish will place a higher pleading burden on relators and thereby lead to more dismissals and less defense settlements. After all, the United States has a significant financial self-interest in such cases.  

As for the timing of Supreme Court action, even the most seasoned Court watchers cannot say with certainty when the Court will act. Bethany Hospice has not yet been distributed for a particular conference but will likely be considered before the Court recesses for the summer in late June or early July. Molina Healthcare, meanwhile, has already been distributed for review at the Justices’ June 2 conference. However, the Solicitor General’s amicus brief in Owsley is not expected until the fall.

It’s possible that the Supreme Court will rule on the petitions in Molina Healthcare and Bethany Hospice before the summer recess and not wait for the Solicitor General’s views in Owsley because the Solicitor General is now on record as recommending against the Court reviewing the Rule 9(b) issue. However, it’s also possible that the Court will hold the petitions in Molina Healthcare and Bethany Hospice in order to resolve them when the Court resolves the Owsley petition next Term. Only time will tell.

Reed Smith will continue to track the progress of these cases as they work their way through the Supreme Court’s docket. If you have any questions about this or about anything related to the False Claims Act, please do not hesitate to reach out to the healthcare attorneys at Reed Smith.