First Circuit Joins Circuit Split, FRCP 9(b) Particularity Not Required for First-Filed FCA Complaint | Practical Law

First Circuit Joins Circuit Split, FRCP 9(b) Particularity Not Required for First-Filed FCA Complaint | Practical Law

In Heineman-Guta v. Guidant Corp., the US Court of Appeals for the First Circuit joined the DC Circuit in a circuit split, ruling that a first-filed complaint does not need to be pled with particularity under Federal Rule of Civil Procedure (FRCP) 9(b) to provide sufficient notice to the government and bar later-filed complaints.

First Circuit Joins Circuit Split, FRCP 9(b) Particularity Not Required for First-Filed FCA Complaint

by PLC Litigation
Published on 04 Jun 2013 • USA (National/Federal)
In Heineman-Guta v. Guidant Corp., the US Court of Appeals for the First Circuit joined the DC Circuit in a circuit split, ruling that a first-filed complaint does not need to be pled with particularity under Federal Rule of Civil Procedure (FRCP) 9(b) to provide sufficient notice to the government and bar later-filed complaints.
On May 31, 2013, the US Court of Appeals for the First Circuit in its decision in Heineman-Guta v. Guidant Corp., joined the DC Circuit in holding that the False Claims Act (FCA) does not require a first-filed complaint to comply with the particularity requirements of FRCP 9(b) to bar a subsequent filing. A first-filed complaint that contains essential facts that give the government sufficient notice to start an investigation is adequate. In contrast, US Courts of Appeals for the Sixth and Ninth Circuits have held that a first-filed complaint can only bar a later-filed complaint if it is sufficiently pled under FRCP 9(b).
In November 2009, the plaintiff Heidi Heineman-Guta, a former account manager for Boston Scientific Corp. (BSC), brought an action against BSC in the District of Massachusetts as a relator under the FCA, alleging that BSC engaged in a scheme to provide kickbacks to physicians to encourage the use of and referrals for certain devices. Before the plaintiff filed her initial complaint, however, former BSC employee Elaine Bennett filed a relator action against BSC in the District of Maryland, alleging that BSC engaged in a similarly described kickback scheme. The government decided not to intervene in Bennett's case and the case was voluntarily dismissed by the government and Bennett in October 2011. In January 2012, after Bennett's case was dismissed, the plaintiff amended her complaint.
BSC moved to dismiss the case under the FCA's first-to-file provision, which bars a party other than the government from bringing a related action based on the same facts underlying a pending action. The plaintiff argued that because Bennett's complaint did not meet the particularity requirements of FRCP 9(b), it could not serve as a preclusive first-filed complaint. The district court disagreed and dismissed the matter.
The First Circuit agreed with the district court, finding that:
  • The purpose of permitting individuals to bring an action under the FCA is to reduce fraud against the government.
  • A first-filed complaint must provide the government with the essential facts to put the government on sufficient notice to launch an investigation of the alleged fraud.
  • The statutory text of the first-to-file rule does not incorporate FRCP 9(b)'s particularity requirement.
The First Circuit, in joining the DC Circuit, protects potential FCA defendants from multiple lawsuits as long as the first lawsuit provides essential facts to put the government on notice of the alleged fraud. Practitioners should be aware, however, that compliance with FRCP 9(b)'s particularity requirements still is required in the Sixth and Ninth Circuits.
Court documents: