• United States ex rel. Roop v. Hypoguard USA, Inc., et al. No. 07-3781 (8th Cir. Mar. 17, 2009)
  • May 5, 2009 | Authors: Karen A. Gibbs; Bernadette M. Stafford
  • Law Firm: Crowell & Moring LLP - Irvine Office
  • The Eighth Circuit Court of Appeals held that a relator who brought allegations under the federal False Claims Act (“FCA”) against Hypoguard USA, Inc. (“Hypoguard”) failed to plead fraud with sufficient particularity. The Court concluded that the relator’s complaint and amended complaint did not satisfy federal pleading standards because it contained no specific instances of fraud in cases where Hypoguard sought reimbursement from the government.

    The relator—who brought his claims pursuant to provisions of the FCA that permit a private individual to sue on behalf of the government—claimed that Hypoguard’s blood glucose monitors were defective. The relator alleged that this product defect caused the medical device distributors that sold Hypoguard’s product to submit false Medicare reimbursement claims (since Medicare otherwise would not have paid for a defective product).

    The district court found that the relator’s complaint failed to meet the standard for asserting fraud under the federal rules and denied the relator’s request for leave to amend. The district court concluded that all of the claims “failed to meet the particularity requirements.” The district court also denied the relator’s later motion to amend the judgment to permit him to proceed with an amended complaint.

    The Eighth Circuit affirmed both the district court’s initial dismissal and its decision to deny the relator’s request to amend or alter the court’s judgment. First, the Court agreed with the district court that it would have been futile to permit the relator leave to amend his complaint since the relator did not state any particular circumstances constituting fraud. Even in the case of an alleged systemic fraud, the Court found that the relator is obligated to present at least “some representative examples” of the fraud at issue. The Court also concluded that it was not an abuse of discretion to deny the relator’s request to amend the judgment in order to file an amended complaint. The relator’s proffered amended complaint did not clear up the particularity issues with regard to fraud and the district court was “not obligated to ferret out well-hidden changes in a post-judgment amended pleading” after its judgment.