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Bothwell Law Group 304 Macy Dr, Roswell, GA 30076

Turning the Tide on Rule 9(b)

Our firm recently had a huge victory in the battle to have FCA cases decided on their merits.  Up to this point, courts had been more and more tightly focusing on form over substance and, in our estimation, turning 50 years of American jurisprudence on its head.  Courts are demanding “proof” at the pleading stage and asking for “evidence” of things that whistleblowers usually do not have access to, thus dismissing countless meritorious cases, undermining Congressional intent in amending the FCA in 1986, and letting legions of people and companies who have cheated U.S. taxpayers keep their ill-gotten gains.

The underlying premise of the overreaching Rule 9(b) analysis comes from the Clausen case where the Court boldly stated that the presentment of a claim was the “sine qua non” of an FCA action.  One glaring problem with this analysis is that the submission of a claim is only required for a claim under 31 U.S.C. 3729(a)(1) and there are six other subsections.  In the Sanders case in the Sixth Circuit, this distinction was laid bare.  Therefore, our firm argued that for any claims under 3729(a)(2) or (a)(3), the Rule 9(b) analysis requiring proof of a claim did not apply.

The case is a very substantial case against the largest government contractor in the United States for what was the largest government contract–the Lockheed Martin F-22 fighter jet.  The opinion in U.S. ex rel. Howard v. Lockheed Martin Corp., Civil Action No. 1:99-CV-285 (S.D. Oh. June 28, 2007) can be found at 2007 WL 1893215 and 2007 U.S. Dist. Lexis 47029.  In following our firm’s argument, the Court held that as to the (a)(1) claims, those would be dismissed with the expectation that they would be renewed as soon as discovery provided a claim and as to the (a)(2) and (a) (3) claims, they would not be dismissed.

It is time for courts across the nation to get back to the roots of American jurisprudence in the era of the Federal Rules of Civil Procedure as identified in cases such as Conley v. Gibson, 355 U.S. 41 (1957) and Foman v. Davis, 371 U.S. 178 (1962).  As the Supreme Court said in Rotella v. Wood, 528 U.S. 549, 560 (2000), in interpreting Rule 9(b) on a motion to dismiss, we cannot ignore “the flexibility provided by Rule 11(b)(3), allowing pleadings based on evidence reasonably anticipated  after further investigation or discovery.”  There should be no more FCA cases thrown out on Rule 9(b) grounds if the pleadings are based on evidence reasonably anticipated after discovery, and, the issue of whether or not the defendant actually submitted a claim to the government is easily determined in discovery.  If the defendant did not submit any claims, there will be no (a)(1) liability.  If they did, it does not make sense to dismiss the case simply because the third-party whistleblower did not get a copy before filing the case.