On March 16, 2022, WLF asked the Supreme Court to review a Seventh Circuit decision that allows vague, generalized, and speculative allegations to survive a motion to dismiss in False Claims Act (FCA) cases. Here the district court correctly dismissed the relator’s complaint under Rule 9(b), which requires all fraud allegations to “state with particularity the circumstances constituting fraud.” The complaint’s lack of specificity should have doomed it, but the Seventh Circuit reversed, joining an acknowledged circuit split over whether FCA plaintiffs must identify any specific fraudulent claim for payment at the pleading stage. As WLF explains in its brief urging review, that entrenched circuit split is untenable. Allowing the lower courts to abdicate their responsibility to apply Rule 9(b) as a check on FCA relators who allege no specific false claims with particularity gives a green light to abusive litigation. Defendants targeted by these dubious lawsuits will face hydraulic pressure to settle, yielding in terrorem settlements that are a deadweight loss to the economy.

Documents:

WLF amicus brief