On June 4, 2026, The United States Court of Appeals for the Fourth Circuit issued a decision affirming the dismissal of a False Claims Act (FCA) suit for failure to meet Rule 9(b)’s pleading requirements—i.e., failing to state with “particularity the circumstances constituting fraud or mistake.” The decision marks an important victory for FCA defendants faced with vague or imprecise allegations of wrongdoing.

Recent Rise in FCA Recoveries and Qui Tam Claims

For fiscal year 2025, settlements and judgments under the FCA exceeded $6.8 billion, the highest single-year amount in the statute’s history. During that same period, the FCA also saw a record number of lawsuits filed by relators—private citizens who bring suit on behalf of the government as permitted under the FCA. In 2025, relators filed 1,297 qui tam suits. Relators stand to gain anywhere from fifteen to thirty percent of the funds secured through successful FCA litigation or settlement.

As we have described on the False Claims Act Insights podcast, the qui tam device has been subjected to increased scrutiny. The Department of Justice, for instance, recently launched its FOCUS initiative to address the number of qui tam claims pursued by data miners ostensibly seeking a quick profit. But as illustrated in the Fourth Circuit’s recent decision, an even more basic solution to meritless qui tam suits lies in vigorous enforcement of the heightened pleading standard for FCA claims.

The Kyer Case

In United States ex rel. Kyer v. Thomas Health System, Inc., the relator, a former nurse, alleged that a “dizzying kaleidoscope” of defendants affiliated with hospitals in West Virginia committed fraud by violating the Stark Law and the Anti-Kickback Statute 178 F.4th 119 (4th Cir. 2026)(alleging that the five defendants (1) presented false claims, (2) made false statements material to false claims, (3) conspired to violate the False Claims Act, and (4) concealed or avoided an obligation to pay the government).

The defendants moved to dismiss, arguing that although the relator provided the court with “numerous pages and exhibits,” her “attempt to inundate the court with data and broad allegations did not overcome the basic requirement that her claims of fraud must be specific.” Br. for Appellee at 1, United States ex rel. Kyer v. Thomas Health System, Inc., No. 25-107 (4th Cir.).

The District Court agreed. In granting the defendants’ motion to dismiss, the court stated that “[w]hen a complaint like this fails to ‘connect the dots’ between ‘the alleged false claims and government payment,’ [the] Relator fails to meet Rule 9(b)’s heightened pleading standard.” United States ex rel. Kyer v. Thomas Health System, Inc., 756 F. Supp. 3d 75, 87 (S.D.W. Va. 2024). The District Court identified three concepts undergirding its dismissal. First, the court noted that “FCA claims operate at high stakes,” and “guardrails are necessary for such high-octane litigation.” Second, the court observed that, because of the high monetary award available under the FCA, “FCA claims have exploded in popularity,” and therefore “this popular legal mechanism for massive economic recovery must be subject to a serious, demanding standard.” Finally, the court expressed concern over “the litigation burden on defendants when a relator alleges a ‘scheme’ unconnected to claims.” “This concern,” the District Court elaborated, “is rooted in Rule 9(b).” The District Court held that the relator’s complaint “d[id] not meet this bar,” and declined to subject the defendants to “further litigation under the shadow of a haphazardly pled 82-page complaint.”

The Fourth Circuit affirmed. In so holding, the Court reiterated that, because FCA claims “must be linked in some way to presenting a claim for payment to the government,” the relator must plead this “presentment” element with particularity. According to the Court, the roughly 30 pages of tables attached to the relator’s complaint provided “the who, the what, the where, and the when” of payments being made, but they were nonetheless “missing ‘how’—indeed, whether—any claim was fraudulent.” The Court further took issue with the relator’s apparent reliance on purely inferential allegations: “Perhaps what [relator] means to suggest is that each allegation is smoke; combined, there must be fire somewhere. Sometimes that is so. But that is not how the law works. The complaint must identify the fire.” The relator’s complaint at most made accusations of “nefarious schemes and sinister dealings that, when stripped of inflammatory rhetoric and conclusory labels, are consistent with running a lawful healthcare business.”

Key Takeaways

The Kyer decision reinforces the potency of Rule 9(b)’s heightened pleading standard, at least in the Fourth Circuit. See Kyer, 756 F. Supp. 3d at 89 (describing “lenient approach” employed in the Second, Third, Fifth, and Eighth Circuits). The case serves as a useful reminder that courts should not let relators “drag a defendant into discovery when a complaint fails to allege the details of fraud—causally linked together—to form a plausible and particular claim.” And the decision coincides with the government’s policy goal of focusing on meritorious FCA cases, while culling specious and opportunistic ones.

Written with the assistance of C.J. Pfanstiel, summer associate in Husch Blackwell’s Kansas City office.