First Circuit Deepens Circuit Split On Question Concerning The False Claims Act’s First-To-File Bar

On May 31, 2013, the First Circuit weighed in on a question concerning application of the False Claims Act's first-to-file bar that has split the circuits. In United States ex rel. Heineman Guta v. Guidant Corp., et al., (12-1867), the First Circuit held that the first-filed complaint need not satisfy Fed. R. Civ. P. 9(b)'s heightened pleading standard in order to bar a later-filed complaint. In doing so, the court expressly rejected the Sixth Circuit's approach. The First Circuit's opinion reaffirms that the first-to-file bar's focus is on whether the government has received adequate notice of potential fraud.

Disagreement Regarding the First-To-File Rule

Under the first-to-file provision of the FCA, when an individual files an action, "no person other than the government may intervene or bring a related action based on the facts underlying the pending action."31 U.S.C. § 3730(b)(5). In several cases over the past few years, the Sixth Circuit has refused to apply the first-to-file bar when the first-filed complaint failed to satisfy Rule 9(b)'s heightened particularity requirement, reasoning that a deficient complaint could "not properly qualify as a 'pending action'" under the FCA. United States v. ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503, 516 (6th Cir. 2009) (internal citations omitted); see also Walburn v. Lockheed Martin Corp., 431 F.3d 966, 972 (6th Cir. 2006).

In 2011, however, the D.C. Circuit departed from this approach, explaining that the language of the FCA's first-to-file provision does not incorporate Rule 9(b). United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204, 1210 (D.C. Cir. 2011). The court in Batiste distinguished the purpose of Rule 9(b)'s pleading requirement - to protect defendants from baseless suits - from the purpose of the FCA's first-to-file rule - to bar similar actions that offer the government little new material information about fraudulent conduct.

Other courts, while not directly ruling on this precise issue, have also discussed the intersection of Rule 9(b) and the FCA's threshold defenses. The Tenth Circuit has acknowledged "being uneasy with the . . . suggestion that Rule 9(b)'s particularity requirement should be applied to the first-to-file bar." United States ex rel. Wickliffe v. EMC Corp., 473 Fed. App'x 849, 852 (10th Cir. 2012). And the Eighth Circuit recently held Rule 9(b)'s pleading requirement need not be satisfied in determining whether a relator is entitled to her share of the...