Pleadings sufficient in FCA retaliation claim.


Byline: Barry Bridges

In a split decision, a three-judge panel of the 1st U.S. Circuit Court of Appeals has reiterated that the pleading standard for a retaliation claim under the federal False Claims Act differs from the standard applicable in a suit alleging an actual false claim.

The FCA prohibits any person from "knowingly present[ing] or caus[ing] to be presented, a false or fraudulent claim" to the federal government and also bars an employer from retaliating against an employee who acts to prevent FCA violations.

A U.S. District Court judge granted the defendants' motion to dismiss Thomas Guilfoile's retaliation complaint, finding the plaintiff did not put forth sufficient facts to show that he was engaged in protected conduct within the meaning of the FCA.

But writing for the panel's majority, Judge Kermit V. Lipez disagreed and vacated the dismissal, noting the "crucial" difference in the standards.

"Put colloquially, rather than plausibly pleading the existence of a fire the actual submission of a false claim a plaintiff alleging FCA retaliation need only plausibly plead a reasonable amount of smoke conduct that could reasonably lead to an FCA action based on the submission of a false claim," Lipez wrote.

Retaliation plaintiffs need not meet Federal Rule of Civil Procedure 9(b)'s heightened pleading requirements for cases pertaining to fraud, the judge added.

The 45-page decision is Guilfoile v. Shields, et al., Lawyers Weekly No. 01-010-19. The full text of the ruling can be found here.

Retaliation standard

FCA practitioner Louise A. Herman said the ruling's value lies in its reaffirmation of the distinction between what is required to be put forth in a retaliation claim versus an action alleging a false claim.

"It appears the lower court held the plaintiff to a more stringent standard, which is not required in a retaliation case," the East Providence lawyer said. "Retaliation claims in general are brought under a variety of statutes, none of which require the Rule 9(b) standard of particularity."

With Rule 9(b) requiring a party to spell out the who, what, where, when and why of an alleged fraud, Herman said an FCA plaintiff often will plead with as many examples as possible of the false claims that were made to bolster that specificity requirement.

"But for retaliation it is different. It's just like any other complaint that needs to satisfy the Twombly plausibility standard," she said, referring to the U.S. Supreme Court's...

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