Strictly Enforcing Rule 9(b), Second Circuit Affirms Dismissal of FCA Claim Based on Allegedly Defective Medical Devices

The Second Circuit affirmed dismissal of an FCA qui tam based on allegedly faulty medical devices, an area marked for particular FCA scrutiny by the DOJ-HHS FCA Working Group, as discussed here.  The Second Circuit held the relator failed to plead either a claim or materiality with the requisite specificity and affirmed the dismissal pursuant to Rule 9(b).  Wood v. Siemens Med. Sols. USA, Inc., No. 25-864, 2026 WL 504530 (2d Cir. Feb. 24, 2026).

The relator’s primary theory was that the defendants submitted and caused third parties to submit to the government claims for in vitro diagnostic devices (“IVDs”) that the defendants’ shipping practices rendered “dangerously unreliable.”  But the relator did not identify “a single example” of a device “actually rendered unreliable” by the defendants’ conduct.  Instead, she alleged merely that all of the millions of defendants’ IVDs sold in the relevant period “were shipped defectively.”  Without specifying any particular defective shipment containing an unreliable device, however, she did not offer “‘plausible allegations creating a strong inference that specific false claims were submitted to the government.’”  Further, the relator did not identify any of the defendants’ customers that submitted Medicare claims for IVDs to the government.  Instead, she alleged merely that because the defendants sold so many IVDs, claims for IVDs “must have” reached government insurers.  “But those allegations are not enough for Rule 9(b),” according to the Second Circuit.

As to materiality, while the relator alleged that the defendants “falsely certified [their] compliance with particular regulations or contract terms to the government,” the court again noted that the relator was merely speculating that some IVDs “shipped to the government may have become unreliable.”  So the relator did not demonstrate that the defendant “‘deprived the government of the intended benefits’ of its contracts.”  Any “noncompliance with the terms of those contracts was thus ‘not material to the government’s payment decision.’”

A copy of the Second Circuit’s opinion can be found here.

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