There is a split among the circuits regarding what a whistleblower must plead to survive a motion to dismiss in False Claims Act (FCA) cases. The U.S. Court of Appeals for the Third Circuit has now spoken for the first time on the issue. In June, the Third Circuit decided Foglia v. Renal Ventures Management, 754 F.3d 153 (3d Cir. 2014). In its decision, the Third Circuit reversed a district court order granting a motion to dismiss for insufficient detail in the pleadings. In so ruling, the Third Circuit sided with those circuits adopting the less demanding of the competing FCA pleading standards.
The purpose underlying the FCA is to encourage “whistleblowing” by private citizens aware of fraudulent claims for payment being made upon the U.S. government. Private plaintiffs, who often are employees or former employees of the defendant, may commence the lawsuit on behalf of the government to recover damages resulting from someone presenting a false claim for reimbursement or payment. If, as frequently happens, the United States does not assert its statutory right to take over the case from the private plaintiff, the whistleblower plaintiff can recover between 25 and 30 percent of any money recovered by settlement or judgment, plus reasonable attorney fees and costs.
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