United States Ex Rel. Hirt v. Walgreen Co.
846 F.3d 879
| 6th Cir. | 2017Background
- Relator Andrew Hirt, owner of Andy’s Pharmacies, sued Walgreens under the False Claims Act (qui tam) alleging Walgreens paid $25 gift cards to Medicare/Medicaid beneficiaries to transfer prescriptions to a Willow Walgreens location (Nov 19, 2012–Aug 25, 2014).
- Hirt alleged the gift cards violated the Anti‑Kickback Statute and induced Walgreens to submit false claims for federal reimbursement.
- The United States declined to intervene; Walgreens moved to dismiss for failing to plead fraud with particularity under Federal Rule of Civil Procedure 9(b).
- The district court dismissed the complaint; the Sixth Circuit reviewed whether Hirt’s complaint satisfied Rule 9(b) and related FCA pleading requirements.
- The complaint did not identify any specific false claim, claimant, dates of prescription fills, or dates of claims submitted to the government; Hirt alleged only that some of his customers accepted gift cards and moved their business.
- The Sixth Circuit affirmed dismissal, holding Hirt failed to plead a false claim with the specificity Rule 9(b) requires and rejecting any broad relaxation of that requirement in this case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint satisfied Rule 9(b)’s particularity for FCA claims by identifying at least one false claim | Hirt argued his allegations that Walgreens gave gift cards to Medicare/Medicaid recipients and those customers moved business to Walgreens sufficiently alleged induced false claims | Walgreens argued the complaint lacked specifics of any false claim, claimant identity, dates, or submission details required by Rule 9(b) | Court held Rule 9(b) not satisfied; complaint failed to identify any specific false claim or necessary particulars and was properly dismissed |
| Whether an exception allowing a relaxed particularity requirement applies when plaintiff lacks access to claim specifics | Hirt implied he could not access claim submission details but argued allegations made it likely claims were submitted | Walgreens argued no basis to relax Rule 9(b); plaintiff must plead specifics or have personal knowledge showing a claim was submitted | Court refused to adopt a relaxed standard here; noted limited prior references to a possible exception but declined to apply it absent factual predicates like personal knowledge of billing/submission processes |
| Whether HIPAA/privacy concerns justify using non-identifying descriptors rather than specific claimant information | Hirt suggested privacy limits could restrict identifying claimants | Walgreens contended privacy concerns do not excuse lack of required specifics | Court held HIPAA concerns did not excuse failure to provide particularized allegations; relator could use initials, dates, or non‑identifying descriptors |
Key Cases Cited
- U.S. ex rel. Poteet v. Medtronic, Inc., 552 F.3d 503 (6th Cir.) (discusses limits on opportunistic qui tam suits and public disclosure bar)
- U.S. ex rel. Bledsoe v. Community Health Sys., Inc., 501 F.3d 493 (6th Cir.) (Rule 9(b) requires identification of at least one false claim; discussed possibility of limited relaxation)
- Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir.) (applies particularity standard to FCA claims; describes when allegations can make submission of claims highly likely)
- U.S. ex rel. Prather v. Brookdale Senior Living Comtys., Inc., 838 F.3d 750 (6th Cir.) (applied relaxed pleading principles where relator had direct knowledge of claims submission processes)
- U.S. ex rel. Marlar v. BWXT Y-12, LLC, 525 F.3d 439 (6th Cir.) (explains Rule 9(b) requirements for describing who, what, when, where, and how a false claim was submitted)
- U.S. ex rel. Advocates for Basic Legal Equal., Inc. v. U.S. Bank, N.A., 816 F.3d 428 (6th Cir.) (explains original-source exception to public-disclosure bar)