Supreme Court Denies Cert. in U.S. ex rel. Nathan v. Takeda Pharmaceuticals

Yesterday, the Supreme Court declined to hear the case from the Fourth Circuit, U.S. ex rel. Nathan v. Takeda Pharmaceuticals. The issue in Takeda was the standard for pleading with particularity under Rule 9(b).  The Takeda court put forth the following standard, stating that when a defendant’s actions, as alleged and as reasonably inferred from the allegations could have led, but need not necessarily have led, to the submission of false claims, a relator must allege with particularity that specific false claims were actually presented to the government for payment.”  See Takeda, 707 F.3d 451, 457 (4th Cir. 2013).

Back in November, we wrote that the Supreme Court had invited the views of the Solicitor General on Takeda and another Fourth Circuit case, U.S. ex rel. Carter v. Haliburton Co.  The Solicitor General did issue a brief in Takeda in late February.  Therein, the Solicitor General recommended that the Court decline certiorari because not only was the Takeda complaint found by the Fourth Circuit to be insufficient under 9(b) particularity grounds but  also failed to meet plausibility standards under Iqbal.  Brief for the United States as Amicus Curiae, U.S. ex rel. Nathan v. Takeda Pharmaceuticals, No. 12-1349, at 11 (Feb. 2014). Takeda, thus, in the Solicitor General’s view, was “not a suitable vehicle for resolving the question presented.”   Id.  The Solicitor General did voice opposition to the notion that 9(b) should be governed by a per se rule requiring that the relator show specific false claims for payment:

Subjecting qui tam relators to a per se rule requiring the identification of specific false claims is especially unwarranted because  it attaches dispositive significance to the relator’s awareness of details that in most instances are already known to the government.  The government rarely if ever needs a relator’s assistance to identify claims for payment that have been submitted to the United States. Rather, relators typically contribute to the government’s enforcement efforts by bringing to light other information that shows those claims to be false. Requiring qui tam complaints to identify specific false claims thus would not meaningfully assist the government’s enforcement efforts. To the contrary, the likely effect of such a requirement would be to discourage the filing of qui tam suits by relators . . . who would otherwise have the means and the incentive to expose frauds against the United States.

Id. at 16.  The Solicitor General additionally noted that the Fourth Circuit declined to adopt a per se standard in Takeda and that its holding is not as strict as has been suggested:

The [Fourth Circuit] explained, moreover, that a relator’s complaint is sufficient if the defendant’s actions “as alleged and as reasonably inferred from the allegations” would “necessarily have led[] to the submission of false claims.” That formulation suggests that petitioner’s complaint would have satisfied the court’s standard if petitioner had alleged facts sufficient to support a reasonable inference that false claims were submitted.

Id. at 17, n. 6.  According to the Solicitor General’s brief, even those circuits who have adopted a strict standard in some cases have not “consistently adhered to this rigid understanding”, suggesting that courts may be “retreat[ing] from a rigid application” of Rule 9(b).  Id. at 13, 14.

The Solicitor General has not yet submitted a brief in Carter.

 

If you have a False Claims Act case, please contact the Rabon Law Firm for a free consultation.

 

 

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