Florida vs. Federal False Claims Act: Pleading Requirement

This page is the second part of an interview (click here for part 1) between Tony Munter and Gary Farmer, a False Claims Act attorney in Florida. In this section of the interview, Tony and Gary discuss the pleading requirement (Rule 9(b) in the Federal Rules of Civil Procedure) and how it differs between federal and Florida false claims cases. With that in mind Tony Munter is not licensed in the jurisdiction of Florida.

Gary: The other real problem we’re having in the federal system, with all due respect to the four circuit panels including the 11th circuit who decided it this way, I just think its frankly ludicrous to comply with a rule of pleading, in this case Rule 9(b). The rules state that fraud must be pled with particularity. Half of our Circuit Courts of Appeal have interpreted that requirement as requiring a Relator in order to satisfy Rule 9B to come forward with an actual claim paid by the government. When you’re talking about off label marketing or durable medical equipment or other types of false claims involving healthcare, you’ve got incredibly strong law on the privacy rights of those patients. So to satisfy a rule of pleading these courts are saying we must violate a substantive law and have a patient’s actual claim, false claim that was submitted and paid by the government in order to satisfy Rule 9(b).

Tony: Then if you have such a document the defense will turnaround and say how did you get that?
Gary: Right.
Tony: You know Rule 9(b) is particularly stringent where you are I believe. Does the fact that the Florida State False Claims Act includes following State civil procedure? Does that offer a little relief from that or not?
Gary:  I don’t think our rules of civil procedure and the pleading requirement for fraud (a) have been interpreted quite as stringently as Rule 9(b) has in the federal system overall, but (b) we don’t have any case law holding along the line that I just described to satisfy or state the civil procedure rule for pleading… First of all, a false claim is something different than fraud.
Tony: Of course.
Gary: Fraud by definition requires detrimental reliance. The whole idea of a false claim… False claims are more like deceptive trade practice statutes. They’re not like fraud. The Unfair and Deceptive Trade Practice Act and the FTC act at the federal level were implemented specifically to cover cases where you couldn’t prove fraud and where there was no proof of detrimental reliance. To put it in simplest terms you don’t ask the car dealer whether the car you’re buying as a new car was actually in a bad wreck and had been repaired. You didn’t ask that question so you didn’t detrimentally rely on any lie by the car dealer. Yet it was unfair and deceptive of him not to tell you that affirmatively. So I think they’ve stretched the definition of fraud to an unreasonable extent and then further harm taxpayers really in the ability to hold people accountable when the Courts say you have got to violate something of law to meet this extended pleading version of fraud.

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