TJOFLAT, Circuit Judge:
This is a qui tam action brought in the United States District Court for the Northern District of Alabama by a physician, the relator, against two physicians and several health care providers under the False Claims Act, 31 U.S.C. § 3729, et seq. The district court dismissed the relator's complaint, and he now appeals. The questions lying at the heart of this appeal are whether the complaint's allegations of fraud have been made with the "particularity" required by Federal Rule of Civil Procedure 9(b) and, if not, whether the district court abused its discretion in not granting the relator leave to amend his complaint to cure such deficiency. We answer these questions in the negative and therefore affirm.
The relator, Dr. Patrick Atkins, is an Alabama physician who specializes in adult psychiatry. His private practice includes providing psychiatric services to residents of Alabama skilled nursing facilities ("SNFs") who are eligible for Medicare and Medicaid.
In March 2003, while Atkins was seeing residents at the Park Manor Nursing Home, a SNF in Tuscaloosa, Alabama,
In June 2003, after examining entries Lachman and McInteer had made in the medical records of residents at Park Manor and other SNFs, Atkins brought this False Claims Act ("FCA") qui tam action against fifteen parties: McInteer, Lachman, YHAP, and twelve corporate owners/operators of SNFs.
The court dismissed Atkins's FCA claims, in Counts One and Two, on two grounds. First, although the defendants had not moved to dismiss Counts One and Two for lack of subject matter jurisdiction under 28 U.S.C. § 1331,
Second, assuming the presence of § 1331 jurisdiction and that, as a matter of notice pleading, Atkins's complaint asserted a cause of action cognizable under the FCA, the court held that his allegations of fraud failed to satisfy the requirements of Rule 9(b). The court dismissed Count Three of the complaint on the ground that Atkins lacked standing as a private attorney general under Alabama law to sue on behalf of the United States.
Atkins now appeals the district court's judgment. He presents the following arguments: (1) the district court has subject matter jurisdiction under 28 U.S.C. § 1331 because he is asserting a claim under the FCA; (2) the allegations of his complaint are sufficient to state a claim for relief; (3) if his allegations are insufficient to state a claim for relief or to satisfy Rule 9(b)'s requirement that they be "stated with particularity," we should vacate the judgment and remand the case with the instruction that the district court grant him leave to amend his complaint. We consider Atkins's arguments in order.
In resolving this appeal, we address first, in part II, the subject matter jurisdiction issue. We conclude that the district court had jurisdiction under 28 U.S.C. § 1331 and then consider, in part III, the question of the legal sufficiency of Atkins's complaint to state a claim for relief. The district court held that if Totten were inapplicable and thus did not require dismissal for lack of jurisdiction, the complaint still failed to meet the pleading-with-particularity requirement of Rule 9(b). We similarly conclude that the complaint failed to satisfy the contours of Rule 9(b). In part IV, we take up the question of whether the district court abused its discretion in failing to grant Atkins leave to amend his complaint to cure the Rule 9(b) deficiency. Part V summarizes our holdings.
The district court read Totten for the proposition that if a plaintiff fails to state a claim under the FCA, his action does not arise under the laws of the United States; therefore, his complaint must be dismissed for lack of subject matter jurisdiction.
The False Claims Act subjects to civil liability "[a]ny person who knowingly presents, or causes to be presented, to . . . the United States Government . . . a false or fraudulent claim for payment or approval," 31 U.S.C. § 3729(a)(1), as well as "[a]ny person who conspires to defraud the Government by getting a false or fraudulent claim allowed or paid," 31 U.S.C. § 3729(a)(3). "The submission of a [false] claim is . . . the sine qua non of a False Claims Act violation." United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1311 (11th Cir.2002) (citation omitted). "Without the presentment of . . . a claim, . . . there is simply not actionable damage. . . ." Id. In the healthcare context such as the one before us, "[t]he False Claims Act does not create liability merely for a health care provider's disregard of Government regulations or improper internal policies unless, as a result of such acts, the provider knowingly asks the Government to pay amounts it does not owe." Id.
FCA claims must also be stated with particularity pursuant to Rule 9(b). Clausen, 290 F.3d at 1308-09 ("Rule 9(b) [applies] to actions under the False Claims Act."). Particularity means that "a plaintiff must plead `facts as to time, place, and substance of the defendant's alleged fraud,' specifically `the details of the defendant['s] allegedly fraudulent acts, when they occurred, and who engaged in them." Clausen, 290 F.3d at 1310 (quoting Cooper v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 567-68 (11th Cir.1994) (citing Durham v. Bus. Mgmt. Assoc., 847 F.2d 1505 (11th Cir.1988))).
Clausen, 290 F.3d at 1311 (quoting Rule 9(b)).
Clausen, 290 F.3d at 1312 n. 21. Rather, "if Rule 9(b) is to be adhered to, some indicia of reliability must be given in the complaint to support the allegation of an actual false claim for payment being made to the Government." Clausen, 290 F.3d at 1311 (first emphasis added). As the district court stated in its order dismissing Atkins's complaint, "[t]he whistle must be blown not only loudly, but with Rule 9(b) particularity in the complaint before the courts will listen." United States ex rel. Atkins v. McInteer, 2004 WL 3998029 (N.D.Ala.2004) (emphasis added).
Although the relator stated with particularity the circumstances comprising the elements of the alleged scheme to defraud, his complaint "failed to meet the minimum pleading requirements for the actual presentment of any false claims." Id. at 1315 (emphasis added). "No amounts of charges were identified. No actual dates were alleged. No policies about billing or even second-hand information about billing practices were described, . . . [and not one] copy of a single bill or payment was provided." Id. at 1312. We held that although Rule 9(b) "does not mandate all of [that] information for [each] alleged claim[,] . . . some of [the] information for at least some of the claims must be pleaded in order to satisfy Rule 9(b)." Id. at 1312 n. 21; Corsello v. Lincare, 428 F.3d 1008, 1013 (11th Cir.2005) (holding that "[b]ecause it is the submission of a fraudulent claim that gives rise to liability under the False Claims Act, that submission must be pleaded with particularity and not inferred from the circumstances").
On the other hand, in Hill v. Morehouse Med. Assoc., Inc., 2003 WL 22019936 (11th Cir. Aug.15, 2003) (unpublished),
Hill, at *4.
In the case at hand, the complaint fails rule 9(b) for want of sufficient indicia of reliability to support the assertion that
In his complaint, Atkins does not profess to have firsthand knowledge of the defendants' submission of false claims. He is a psychiatrist responsible for the provision of medical care, not a billing and coding administrator responsible for filing and submitting the defendants' claims for reimbursement. He rotated through a single facility where he heard rumors from staff and observed records of what he believed to be the shoddy medical and business practices of two other psychiatrists. He then brought suit against those two psychiatrists, their company, and the SNF's where, he alleges, those two psychiatrists had provided psychiatric care over a three-year period.
The Hill relator, by contrast, personally observed the behavior of which she complained during the seven months she spent in her employer's billing and coding department, and then brought her action against her employer. Atkins's complaint not only fails to contain an indicia of reliability approaching the level of reliability found in the Hill allegations, it sweeps with a much broader brush by naming as defendants SNF's into which Atkins never stepped foot. Faced with these pleading deficiencies, we would be hard pressed to say that Atkins's complaint satisfies the particularity requirement of Rule 9(b).
The public policy underpinnings of Rule 9(b), the FCA, and qui tam actions mandate this conclusion. "The particularity rule serves an important purpose in fraud actions by alerting defendants to the `precise misconduct with which they are charged' and protecting defendants `against spurious charges of immoral and fraudulent behavior.'" Durham, 847 F.2d at 1511 (quoting Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir.1984)).
Clausen, 290 F.3d at 1314 n. 24. "The particularity requirement of Rule 9 is a nullity if Plaintiff gets a ticket to the discovery process without identifying a single claim." United States v. Lab. Corp. of Am., 2001 WL 1867721, at *1 (N.D.Ga. May 16, 2001), quoted in Clausen, 290 F.3d at 1307.
United States ex rel. Clausen v. Lab. Corp. of Am., 198 F.R.D. 560, 564 (N.D.Ga.2000), aff'd, 290 F.3d 1301 (11th Cir.2002).
Requiring relators to plead FCA claims with particularity is especially important in light of the quasi-criminal nature of FCA violations (i.e., a violator is liable for treble damages). Rule 9(b) ensures that the relator's strong financial incentive to bring an FCA claim—the possibility of recovering between fifteen and thirty percent of a treble damages award—does not precipitate the filing of frivolous suits.
The nature of the qui tam action supports our view of this case as well. The qui tam relator brings the action on behalf of the federal government. The relator stands in the government's shoes— in neither a better nor worse position than the government stands when it brings suit. Accordingly, we cannot furnish a qui tam relator with an easier burden than the government would bear if it intervened and assumed the prosecution of the case. Permitting a qui tam relator to go forward with his complaint, when we would not allow the government to proceed, might encourage the government to evade its burden by merely recruiting a willing relator to file a qui tam action.
In fine, the public policies behind Rule 9(b), the FCA, and qui tam actions required the district court to dismiss Atkins's complaint under Rule 9(b); for it lacks sufficient indicia of reliability to haul the defendants into court.
Atkins contends that the district court abused its discretion in failing to
In its order granting the defendants' motions to dismiss, the court made no mention of Atkins's request for leave to amend. The court's failure to mention the request yields two inferences: (1) the court failed to notice the request at all, or (2) the court noticed the request and denied it sub silentio. Atkins could have ascertained what the court thought about the merits of his request by moving the court pursuant to Federal Rule of Civil Procedure 59(e) to alter or amend its judgment,
We pose this condition because, under Federal Rule of Civil Procedure 7(b)(1), a party obtains a court order granting it relief by filing a motion. The Rule states, in pertinent part: "[a]n application to the court for an order shall be by motion which, unless made during a hearing or trial, shall be made in writing, shall state with particularity the grounds therefor, and shall set forth the relief or order sought."
If, for example, a plaintiff wants to amend his complaint (prior to the entry
In Long, as in the case before us, the request for leave to amend was included in a memorandum the plaintiff filed in opposition to the defendants' motions to dismiss the complaint, and, as here, the plaintiff failed to attach the proposed amendment or set forth the substance of the proposed amendment. Long, 181 F.3d at 1279.
In conclusion, we hold that the district court had subject matter jurisdiction under 28 U.S.C. § 1331 to entertain the complaint in this case. Turning to the merits of this appeal, we conclude that the complaint is insufficient under Rule 9(b) and that the district court did not abuse its discretion by dismissing Atkins's complaint with prejudice, i.e., without leave to amend.
The FCA authorizes any private person, called a "relator," United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d 1301, 1308 (11th Cir.2002), to bring a qui tam action in the name of the United States against anyone who files a claim proscribed by the FCA. The relator's complaint is filed in camera, 31 U.S.C. § 3730(b)(2), remains under seal for at least 60 days, and is not served upon the defendant until the court so orders. 31 U.S.C. § 3730(b)(2).
After filing his complaint, the relator provides the federal government with a copy of the complaint and a written disclosure of substantially all material evidence and information the relator possesses. 31 U.S.C. § 3730(b)(2). Upon receipt of the complaint and the written disclosure, the government has 60 days to intervene in the case. 31 U.S.C. § 3730(b)(2). If the government intervenes, it has "the primary responsibility for prosecuting the action. . . ." 31 U.S.C. § 3730(c)(1). "If the Government elects not to proceed with the action, the [relator has] the right to conduct the action." 31 U.S.C. § 3730(c)(3).
The relator stands to gain significantly from bringing a qui tam action. If he successfully prosecutes the case, the court awards him between 25 and 30 percent of the recovery proceeds. 31 U.S.C. § 3730(d)(1). If the government prosecutes the action, the relator still receives between 15 and 25 percent of the recovery proceeds. 31 U.S.C. § 3730(d)(2).
In this case, the government elected not to intervene, leaving Atkins to prosecute the action alone.
Pleading claims in this fashion imposes a heavy burden on the trial court, for it must sift each count for the allegations that pertain to the cause of action purportedly stated and, in the process, disregard the allegations that only pertain to the incorporated counts. We have condemned this sort of pleading on several occasions. See, e.g., M.T.V. v. DeKalb County Sch. Dist., 446 F.3d 1153, 1156 n. 1 (11th Cir.2006); Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1296 nn. 9-10 (11th Cir.2002) (observing that "the aggregate negative effects of shotgun pleadings on trial courts have been noted with great concern by the court"). When faced with a shotgun pleading, the trial court, whether or not requested to do so by the party's adversary, ought to require the party to file a repleader. See, e.g., Byrne v. Nezhat, 261 F.3d 1075, 1133 (11th Cir.2001).
We note, however, that the government already possesses the claims—false or otherwise—a potential defendant has submitted for payment. The government can, therefore, access those claims on its own and evaluate any FCA liability that it believes should attach before determining whether to bring suit or intervene in a relator's qui tam action.
Accordingly, unlike qui tam relators, when the government brings an FCA action or intervenes in a qui tam action, we may assume that it does not do so solely to use the discovery process as a fishing expedition for false claims, for it already possesses that which the qui tam relator may need discovery to find. That is not to say, as noted above, that the government's absence from the fray means that the relator's cause is meritless.
In his response to the defendants' motions to dismiss his complaint, Atkins claimed that he could cure any Rule 9(b) insufficiencies the court might find, and he contends on appeal that the court abused its discretion in not granting him leave to amend. We address this issue, which was not presented to the Conley Court, in part IV, infra.