1st Circ. Set To Weigh In On FCA First-To-File Rule

Early next year, the United States Court of Appeals for the First Circuit will likely issue a significant False Claims Act ruling in United States ex rel. Heineman-Guta v. Guidant Corp. The Guidant court will become the latest federal appeals court to determine whether a previously filed, but legally insufficient, FCA complaint satisfies the "first-to-file rule." Regardless of how the Guidant court rules, but especially if it reverses the district court, its decision will only deepen an existing circuit split, and will increase the odds of the U.S. Supreme Court ultimately resolving this issue.

The First-To-File Rule, Guidant and the Existing Circuit Split

Pursuant to the FCA, "no other person other than the Government may intervene or bring a related action based on the facts underlying the pending action."1 Known as the first-to-file rule, this provision of the FCA is intended to prevent duplicative FCA awards covering the same behavior. The rule completely bars a later filed FCA allegation if it states all the essential facts of a previously filed claim or the same elements of a fraud described in an earlier suit.

In United States ex rel. Heineman-Guta v. Guidant Corp., 09-11927 (D.Mass. July 5, 2012), the plaintiff alleged that Guidant, later Boston Scientific Corporation, violated the anti-kickback statute (42 U.S.C. § 1320a-7b) by offering kickbacks to physicians to influence them to implant cardiac rhythm management devices and refer patients for implantation of the devices.

The Massachusetts district court, however, dismissed the complaint finding that that a previously filed complaint in the District of Maryland (the "Maryland complaint") concerning the same alleged scheme was the first filed, even though the plaintiff and government voluntarily dismissed the Maryland complaint because it failed to satisfy the heightened pleading requirement required under Federal Rule of Civil Procedure 9(b).

In dismissing the complaint, the Massachusetts district court adopted the D.C. Circuit's ruling in Batiste, which held that the first-filed complaint need not meet the specificity requirements of Fed. R. Civ. P. 9(b) to bar a second-filed complaint.2 In contrast, the Sixth and Ninth Circuits have held that to qualify as a first-filed complaint, the first complaint must be jurisdictionally sound and not otherwise barred by the Federal Rules of Civil Procedure, including Fed. R. Civ. P. 9(b).3 The plaintiff appealed to the First Circuit.

In her...