United States of America ex rel. Andrew Hirt, Relator-Appellant,
Walgreen Company, Defendant-Appellee.
from the United States District Court for the Middle District
of Tennessee at Nashville. No. 3:13-cv-00870-William J.
Haynes Jr., District Judge.
Kline Preston IV, KLINE PRESTON LAW GROUP, P.C., Nashville,
Tennessee, for Appellant.
Frederick Robinson, NORTON ROSE FULBRIGHT U.S. LLP,
Washington, D.C., for Appellee.
Before: SUHRHEINRICH, SUTTON, and MCKEAGUE, Circuit Judges.
SUTTON, Circuit Judge.
Hirt, owner of Andy's Pharmacies, alleges that Walgreen
Company distributed kickbacks to Medicare and Medicaid
recipients when they transferred their prescriptions to
Walgreens. By sending these fraudulent insurance claims to
the government, Hirt maintains that Walgreens violated the
False Claims Act, and he filed this qui tam claim as
a result. The district court rejected Hirt's claim as a
matter of law. Because Hirt failed to state his claim with
particularity, as Civil Rule 9(b) requires, we affirm.
owns two pharmacies, one of which is located in Cookeville,
Tennessee. His Cookeville pharmacy competes with a Walgreens
in the area. Between November 19, 2012 and August 25, 2014,
Hirt alleges that the Willow Walgreens offered $25 gift cards
to lure his customers to Walgreens in violation of the
Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and that
Walgreens submitted the resulting prescription-drug claims by
Medicare and Medicaid recipients to the government in
violation of the False Claims Act, 31 U.S.C. § 3729.
filed this qui tam action under the whistleblower
provision of the False Claims Act on behalf of himself and
the United States. The government declined to intervene in
the action, and Walgreens moved to dismiss it. The district
court granted the motion, holding (among other things) that
Hirt failed to state his claims with sufficient particularity
under Civil Rule 9(b).
False Claims Act imposes civil liability for "knowingly
present[ing] . . . a false or fraudulent claim" to the
government "for payment or approval." 31 U.S.C.
§ 3729(a)-(b). The statute provides for public
enforcement and private (qui tam) lawsuits.
Id. § 3730(b). At the same time that the
statute encourages whistleblowers, it discourages
"opportunistic" plaintiffs who "merely feed
off a previous disclosure of fraud." U.S. ex rel.
Poteet v. Medtronic, Inc., 552 F.3d 503, 507 (6th Cir.
2009). For that reason, individual plaintiffs cannot bring
qui tam complaints based upon information already in
the public domain. See 31 U.S.C. § 3730(e)(4).
But if they can show that they are an original source of the
information-someone "who has knowledge that is
independent of and materially adds" to the prior public
disclosure-the public-disclosure bar does not apply.
Id.; see U.S. ex rel. Advocates for Basic Legal
Equal., Inc. v. U.S. Bank, N.A., 816 F.3d 428, 430 (6th
addition to satisfying the False Claims Act's
requirements, qui tam plaintiffs must meet the
heightened pleading standards of Civil Rule 9(b). U.S. ex
rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493,
503 (6th Cir. 2007). In all averments of "fraud or
mistake, " the plaintiff must state with
"particularity the circumstances constituting fraud or
mistake." Fed.R.Civ.P. 9(b). The identification of at
least one false claim with specificity is "an
indispensable element of a complaint that alleges a [False
Claims Act] violation in compliance with Rule 9(b)."
Bledsoe, 501 F.3d at 504. Adherence to this
requirement not only respects Civil Rule 9(b), but it also
helps in determining whether the public-disclosure bar
has not met this standard. His complaint does not identify a
single false claim. He describes the unlawful distribution of
gift cards in general but not the submission of any claims
obtained with those gift cards. All that Hirt says is that
"his [Medicaid and Medicare] customers accepted the
$25.00 gift cards to move their business to (Willow)
Walgreens in Cookeville during the period November 19, 2012
through August 25, 2014, " and that Walgreens
"induce[d] . . . false or fraudulent claims to the
United States Government for the payment of
pharmaceuticals." R. 29 at 5, 9. But he does not
identify any false claim arising from any of those
(allegedly) induced customers. He does not tell us the names
of any such customers or their initials. He does not tell us
the dates on which they filled prescriptions at Walgreens. He
does not tell us the dates on which Walgreens filed the
reimbursement claims with the government. He does not,
indeed, even say that these unnamed customers filled any
prescriptions at Walgreens at all, let alone that Walgreens
processed them and filed reimbursement claims with the
government. We are left to infer these essential elements
from the fact that Hirt's customers moved their business
from his pharmacies. But inferences and implications are not
what Civil Rule 9(b) requires. It demands specifics-at least
if the claimant wishes to raise allegations of fraud against
on an unpublished decision from the Eleventh Circuit, we
raised the possibility in 2007 of "relaxing" the
requirement that a plaintiff identify at least one false
claim with particularity if that plaintiff, through no fault
of his own, "cannot allege the specifics of actual false
claims that in all likelihood exist." Bledsoe,
501 F.3d at 504 n.12. But we did not resolve the point,
ultimately "express[ing] no opinion as to the contours
or existence of any such exception." Id. In two
later decisions, we repeated the "relax" language.
Chesbrough v. VPA, P.C., 655 F.3d 461, 471 (6th Cir.
2011); U.S. ex rel. Prather v. Brookdale Senior Living
Comtys., Inc., 838 F.3d 750, 769 (6th Cir. 2016). The
Eleventh Circuit's use of the word "relax, "
and our repetition of it in later cases, runs the risk of
misleading lawyers and their clients. We have no more
authority to "relax" the pleading standard
established by Civil Rule 9(b) than we do to increase it.
Only by following the highly reticulated procedures laid out
in the Rules Enabling Act can anyone modify the Civil Rules,
whether in the direction of relaxing them or tightening them.
See 28 U.S.C. §§ 2071-2077. To the extent
the words of Civil Rule 9(b) need elaboration, and it's
not obvious that they do, the most that can be said is that
"particular" allegations of fraud may demand
different things in different contexts.
practice, we have applied the "relax[ed]" standard
just once, and that application has no purchasing power here.
See Prather, 838 F.3d at 769. Prather's
allegations satisfied the particularity requirement because
she had sufficient personal knowledge of the defendant's
claims submission and billing processes. Her job required her
to review the company's Medicare claims documentation to
ensure compliance with state and federal insurance
guidelines. Id. at 770. This review took place,
according to Prather, for the sole purpose of submitting the
claims to Medicare. Compl. at 18, id. (No. 15-6377).
After her review, Prather would deliver the claims documents
to the billing department, whose job it was to submit the
claims for payment. Id. at 19. In context, that set
of pleading statements sufficed to establish with
particularity that the defendant "submitted a claim for
payment, "-as it described when, where, and how the
defendant submitted the claim. See U.S. ex rel. Marlar v.
BWXT Y-12, LLC, 525 F.3d 439, 445 (6th Cir. 2008);
Chesbrough, 655 F.3d at 470.
offers no equivalent basis for satisfying the particularity
requirement here. The reason is straightforward. Unlike
Prather, Hirt failed to provide the factual predicates
necessary to convince us that "actual false claims"
"in all likelihood exist." Bledsoe, 501
F.3d at 504 n.12. He does not allege personal knowledge of
Walgreen's claim submission procedures. Prather,
838 F.3d at 770. And he does not otherwise allege facts
"from which it is highly likely that a claim was
submitted to the government." Chesbrough, 655
F.3d at 472. At the least, Hirt could have described a
prescription filled by one of his previous customers at the
Willow Walgreens. In the same way that Hirt discovered that
his former customers had accepted the gift cards, he could
have determined whether they used those gift ...