Last Friday’s Eighth Circuit decision in Thayer v. Planned Parenthood of the Heartland favored the whistleblower in the ongoing controversy over specificity requirements in False Claims Act actions. The split had been even at four-to-four. The new decision makes it five-to-three in favor of the whistleblowers.
The plaintiff in Thayer claims to have first-hand knowledge that Planned Parenthood had submitted false claims. She should know because she personally oversaw the organization’s billing systems.
But she couldn’t identify any specific false bills. So the defendant asked for dismissal of the case, citing Federal Rule of Procedure 9(b), requiring that a fraud complaint be stated with “particularity.” That’s the basis on which Fourth, Sixth and Eleventh Circuits have all dismissed whistleblower cases.
The plaintiff argued that she didn’t need to have specific examples because she had first-hand knowledge of the false claims. The court agreed with her, joining the First, Third, Fifth and Ninth Circuits.
The plaintiffs’ bar rejoiced, claiming the specificity requirement can be unfair when whistleblowers don’t have access to defendants’ billing records. The defense bar warns that the decisions open the door to frivolous suits and fishing expeditions.
Note that the plaintiff was given a pass because she had so much knowledge of the defendant organization’s billing practices. Isn’t that backwards? Shouldn’t her first-hand knowledge increase rather than decrease the requirement to be specific?
