The First Circuit Joins The D.C. Circuit In Hampering Relators’ Ability To Bring Duplicative Actions Under The False Claims Act’s First-To-File Rule

The First Circuit has become the fourth federal court of appeals to address whether a first-filed yet insufficient complaint still qualifies as a pending action under the first-to-file rule of the False Claims Act. It has joined the D.C. Circuit in holding that "the earlier-filed complaint need not meet the heightened pleading standard of Rule 9(b) [of the Federal Rules of Civil Procedure] to provide sufficient notice to the government of the alleged fraud and bar a later-filed complaint." U.S. ex rel. Heineman-Guta v. Guidant Corp., 12-1867, 2013 WL 2364172, at *7 (1st Cir. May 31, 2013).

The first-to-file rule bars a "person other than the Government" from "bring[ing] a related action based on the facts underlying the pending action." 31 U.S.C. § 3730(b)(5). The Sixth Circuit and the Ninth Circuit have both held that "jurisdictionally [under the FCA's jurisdictional requirements] or otherwise barred" complaints do "not properly qualify as a 'pending action' brought under the FCA." United States 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 (6th Cir. 2005); Campbell v. Redding Med. Ctr., 421 F.3d 817, 825 (9th Cir. 2005).

The D.C. Circuit disagreed in 2011 and rejected the "argument that first-filed qui tam complaints must meet a heightened pleading standard under Rule 9(b) in order to bar later-filed complaints." United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204, 1211 (D.C. Cir. 2011).

On Friday, the First Circuit weighed in.

In Guidant Corp.,the relator alleged that defendants used kickbacks to promote the sale and use of their medical devices. The district court dismissed the complaint because it alleged the same essential facts as another relator's complaint. Hence, it found, the government already had sufficient notice of a potentially fraudulent scheme from the first complaint. The relator appealed, arguing that the first complaint was required to meet Rule 9(b)'s particularity requirements but failed to do so.

The First Circuit disagreed with that argument and affirmed the district court.

In affirming, the First Circuit reasoned that:

"Had Congress wanted to incorporate Rule 9(b) particularity requirements into § 3730(b)(5), it could have done so." Guidant Corp...