Second Circuit Says Rule 9(b) Can Be Met With Examples — Leaves Open Its Scope for Reverse FCA Claims

Act (FCA) suit by a former reimbursement manager who alleged her employers exploited billing-system discrepancies that caused government overpayments, then concealed and kept those overpayments. The complaint included both direct FCA counts (submission of false claims or false statements) and a reverse FCA count (knowingly concealing or improperly avoiding an obligation to pay money to the government). The district court dismissed all claims under Rule 9(b). The relator appealed. What the court held about direct FCA claims The court reaffirmed a case-by-case approach to Rule 9(b) in direct FCA litigation. When a relator alleges a broad or complex fraudulent scheme, the complaint need not identify every false claim submitted to the government. Instead, the complaint must plead enough factual detail to create a strong inference that false claims were submitted, and specific examples of false claims can satisfy Rule 9(b) for complex schemes. The court did not excuse identifying any concrete false claim. Even with that relaxed approach, the relator failed to identify a specific false claim in her complaint. Because she did not plead at least one particularized false claim, the court affirmed dismissal of the direct FCA claims. What the court said about reverse FCA claims Reverse FCA claims under 31 U.S.C. § 3729(a)(1)(G) can cover conduct beyond classic fraudulent submissions: they can reach deliberate concealment of overpayments and acts that knowingly avoid or reduce an obligation to pay the government. That distinction matters for Rule 9(b). If a reverse claim rests on an affirmative misrepresentation or fraudulent concealment, then Rule 9(b)'s particularity requirement may apply. If instead the reverse claim alleges only that a defendant knowingly avoided an obligation to pay—conduct that may not involve fraud—the applicability of Rule 9(b) is less clear. The Second Circuit did not resolve that threshold question. It assumed Rule 9(b) applied to the relator's reverse FCA theory and then concluded the relator had pleaded that claim adequately. By assuming rather than deciding the rule's applicability, the court left open whether other reverse FCA theories must satisfy Rule 9(b). Practical implications for relators and defendants Relators: When alleging a broad or far-reaching fraudulent scheme, you can rely on representative examples of false claims to meet Rule 9(b), but you must still plead at least one identifiable false claim with sufficient detail to create a strong inference that false claims were submitted. Defendants: Attacking the sufficiency of pleading remains viable. If a complaint lacks a specific false claim tied to the scheme, courts may dismiss direct FCA counts even when the complaint alleges systemic or complex misconduct.

The Second Circuit eased the burden on relators alleging complex schemes by allowing representative examples to satisfy Rule 9(b) for direct FCA claims, but it confirmed a relator still must identify a specific false claim. The court left unresolved whether Rule 9(b) applies when a reverse FCA claim is grounded solely in avoidance of an obligation rather than fraud.