Remedies — False Claims Act

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U.S. Court of Appeals
For the Seventh Circuit

Civil

Remedies — False Claims Act

Where a pharmacist’s allegations under the False Claims Act were implausible, the case was properly dismissed.

“Because Thulin’s FCA claim lacks a legal basis as pleaded, it is inherently implausible and properly was dismissed. For the sake of completeness, we briefly address Thulin’s argument concerning the adequacy of his allegations that Shopko ‘knew’ it was submitting false claims. To be liable under the FCA, Shopko must have acted with ‘actual knowledge,’ or with ‘deliberate ignorance’ or ‘reckless disregard’ to the possibility that the claims it submitted were false. King-Vassel, 728 F.3d at 712; 31 U.S.C. § 3729(a)(1)(A), (b). Thulin contends that his complaint plausibly suggested that Shopko acted with ‘reckless disregard’ as we defined the term in King-Vassel, 728 F.3d at 712-13, because he alleged that Shopko is a ‘sophisticated,’ ‘multi-regional’ business that developed and programmed the PDX system and should have been aware of federal statutes and regulations governing the submission of claims to Medicaid. In reaching a contrary conclusion, Thulin contends, the district court must have ignored King-Vassel’s explication of ‘reckless disregard.’ We disagree. Thulin’s allegations would not be sufficient to satisfy his pleading requirement even if Shopko’s billing practices were contrary to the ‘Federal Assignment Law.’ Although ‘[m]alice, intent, and other conditions of a person’s mind may be alleged generally,’ Fed. R. Civ. P. 9(b), vague allegations that a corporation acted with reckless disregard—i.e., grossly negligently or with reason to know of facts that would lead a reasonable person to realize that it was submitting false claims, see King-Vassel, 728 F.3d at 713—simply by virtue of its size, sophistication, or reach do not clear even this lower pleading threshold. Such allegations may suggest a possibility that Shopko acted with reckless disregard, but they do not ‘nudg[e]’ Thulin’s claims ‘across the line from conceivable to plausible.’ Iqbal, 556 U.S. at 680.”

Affirmed.

13-3638 Thulin v. Shopko Stores Operating Co., LLC

Appeal from the United States District Court for the Western District of Wisconsin, Conley, J., Dow, J.

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