Jul 292025

Eleventh Circuit Reverses Qui Tam Dismissal, Holds Facts Obtained in Discovery Can Be Used to Satisfy Rule 9(b)

Jaime L.M. Jones and Matt Bergs
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The FCA’s qui tam provisions are intended to incentivize individuals who have legitimate information about fraud on the government that would otherwise go undetected to bring those issues forward. Increasingly, “whistleblowers” – including entities established for the sole purpose of seeking qui tam bounties – are filing lawsuits with sweeping but vague allegations and seeking to fill the gaps through discovery. Unfortunately, the Eleventh Circuit recently enabled this conduct in United States ex rel. Sedona Partners LLC v. Able Moving & Storage Inc., No. 22-13340 (11th Cir. July 25, 2025). There, the court reversed a dismissal of a qui tam complaint and held that relators can leverage discovery-based allegations to overcome Rule 9(b).

The relator, Sedona Partners LLC, alleged that multiple transportation service providers engaged in a decade-long scheme to defraud a federal shipping program administered by the General Services Administration. The defendants moved to dismiss Sedona’s amended complaint and stay discovery. The district court denied the defendants’ motion to stay, and Sedona then used information obtained in discovery from the defendant and third parties, including details regarding 96 allegedly fraudulent shipments, to file a second amended complaint. The defendants moved to dismiss that pleading and to strike the new allegations, arguing that Rule 9(b) prohibits relators from using discovery to cure pleading deficiencies. Relying on an unpublished Eleventh Circuit decision, Bingham v. HCA, Inc., 783 F. App’x 868 (11th Cir. 2019), the district court granted the defendants’ motion.

On appeal, the Eleventh Circuit found that Bingham was neither binding nor persuasive and that neither the text of Rule 9(b) nor Supreme Court precedent supports disregarding allegations solely because they are based on information obtained in discovery. As a result, the Eleventh Circuit concluded: “There is no restriction on the source of the information that may be used to satisfy [Rule 9(b)]. To the contrary, the Federal Rules of Civil Procedure permit a party to amend its pleadings to reflect information gained from any source.”

Importantly, at least one Circuit has held otherwise. In U.S. ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370 (4th Cir. 2008), the Fourth Circuit held that allowing FCA claims “to rest primarily on facts learned through the costly process of discovery . . . is precisely what Rule 9(b) seeks to prevent.” We will continue to monitor this emerging circuit split.

A copy of the Eleventh Circuit’s decision can be found here.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Jaime L.M. Jones

Chicago

jaime.jones@sidley.com

Matt Bergs

Chicago

mbergs@sidley.com

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