Third Circuit Adopts Less Demanding FCA Pleading Standard

Last week, the Third Circuit reversed a New Jersey district court's decision to dismiss a False Claims Act (FCA) qui tam law suit, holding that the court applied an overly demanding pleading standard to relator Thomas Foglia's complaint.  The Third Circuit's decision joins the growing debate that has split the circuits as to whether whistleblowers have to provide specific examples of false claims to survive a 12(b)(6) motion to dismiss.

In his complaint, Foglia alleged that his former employer overcharged Medicare for vials of a hyperparathyroidism drug by using vial overfills for treatments of more than one patient.  Foglia alleged that his employer failed to follow U.S. Department of Health and Human Services guidelines for use of single-use vials for multiple treatments.  Although Foglia did not identify specific overpayments made by Medicare, the court concluded that his allegations established "an opportunity for the sort of fraud" he alleged.