Whistleblower Can’t Use Discovery Info to Satisfy Rule 9(b)

Rule 9(b) requires a whistleblower alleging fraud to “state with particularity the circumstances constituting fraud.”  Tom Bingham provided the particularity, but his case was nevertheless dismissed because of the way he came by the information.

Tom filed a qui tam action against HCA alleging that it violated the Stark Law and Anti-Kickback Statute and therefore the False Claims Act through arrangements with physicians at two of its hospitals.  The court denied HCA’s Rule 9(b) motion to dismiss as to Centerpoint Medical Center.  But the court granted the motion as to Aventura Hospital, ruling that Tom had failed to make specific factual allegations.

Tom then filed an amended complaint leveling the same allegations at the Aventura arrangements, but this time bolstering the allegations with specific facts.  HCA cried foul, noting that Tom had gained those facts through discovery in the surviving action based on the Centerpoint allegations.  HCA pointed out that stripped of the facts gained through the Centerpoint discovery, Tom’s Aventura-based allegations would still fail Rule 9(b).

The court agreed and on Oct. 14 granted HCA’s motion to dismiss the Aventura-based complaint: “It is well settled that a qui tam relator may not present general allegations in lieu of the details of actual false claims in the hope that such details will emerge through subsequent discovery.”

The case is United States ex rel. Bingham v. HCA, Inc., No. 13-23671-Civ-COOKE TORRES (S.D. Fla., 2016).

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