Sixth Circuit revisits, reaffirms dismissal of qui tam suit against Ford on particularity grounds

by Ben Vernia | September 7th, 2010

In a September 1 decision in U.S. ex rel. SNAPP v. Ford Motor Co., the Sixth Circuit revisited a qui tam suit it had previously found lacking in particularity in a 2008 decision. The case was brought by an alleged former small/minority-owned shell subsidiary of Ford Motor Co., and alleged that the carmaker had defrauded the government by misrepresenting the extent of its contracting with small and minority-owned firms.

The District Court dismissed the relator’s first amended complaint on Rule 9(b) grounds and denied it leave to file a second amended complaint. In the 2008 decision, the Sixth Circuit affirmed the 9(b) dismissal, but remanded for the district court to consider whether to exercise its discretion to permit the relator to file the second amended complaint, which listed the government contracts allegedly affected. The district court, the Sixth Circuit then reasoned, did not have the benefit of a subsequent decision (U.S. ex rel. Bledsoe v. Community Health Systems, Inc., 501 F.3d 493 (6th Cir. 2007) (“Bledsoe II), which permits whistleblower to satisfy their particularity obligations by providing specific examples characteristic of the class of allegedly fraudulent claims.

On remand, the district court reasoned that the Bledsoe II decision did not change its decision, and the Sixth Circuit agreed, concluding that none of that decision’s holdings affected the district court’s original decision. Specifically, the relator had not – as Bledsoe II permitted – pleaded at least one claim with specificity. Instead, the relator had offered specific contracts it alleged were affected, but these were not “claims” within the meaning of the FCA.

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