Second Circuit: “Representative Sample” Pleading Suffices Under False Claims Act

by Gregory Feit

Recently, in United States ex rel. Gallian v. AmerisourceBergen Corp. (Aug. 28, 2026), the Second Circuit issued a significant clarification relating to claims asserted under the federal False Claims Act.

The court ruled for the first time that when such claims are predicated on the knowing submission to the government of false or fraudulent claims for payment (so-called “direct FCA claims”), plaintiffs alleging a broad scheme of such conduct need not provide detailed factual allegations with respect to every specific instance of the acts underlying the fraudulent scheme.  Instead, as the court held, the heightened pleading standard applicable to direct FCA claims will be deemed satisfied even if the plaintiffs provide specific details merely as to a “representative sample” of the conduct underlying that scheme.

Case Background & Types of FCA Claims

In Gallian, the whistleblower plaintiff Patsy Gallian alleged that defendants US Bio and related entities (collectively, “US Bio”) overcharged certain government agencies and healthcare programs; that US Bio hid those overpayments in its internal accounting systems; and that US Bio then converted those overpayments to corporate revenues rather than reimbursing the government for the funds owed to it.  Gallian said she discovered this alleged misconduct while working at US Bio as a reimbursement manager, and that she reported the practice to internal auditors and corporate security and regulatory compliance officers.  She further alleged that, despite an internal audit’s confirmation of her report, US Bio’s overpayments-related violations continued.

In May 2016, Gallian filed claims in federal district court against US Bio under the False Claims Act, 31 U.S.C. §§ 3729-3732 (“FCA”).  The FCA imposes penalties on those who defraud the federal government, and both the U.S. government and private parties can enforce the statute.  When private parties do so, they act as so-called “relators” and proceed by filing civil qui tam actions in the name of the government.

FCA claims may be broken down into two types.  Generally speaking, “direct” FCA claims seek to impose liability for classic fraud-on-the-government, where the defendant is alleged to have presented (or caused to be presented) false or fraudulent claims to the government in order to obtain payment or approval from the government.  “Reverse” FCA claims, by contrast, cover claims involving money that is owed back to the government (rather than payments made by the government), and they hinge upon false records or statements material to an obligation to pay the government, concealing that obligation, and avoiding or decreasing that obligation.

Although Gallian brought both types of claims against US Bio, this article focuses solely on the Second Circuit’s holding regarding her direct FCA claim.

Second Circuit’s Holding on Direct FCA Claims

Direct FCA claims, like other claims sounding in fraud, trigger the heightened pleading standard set forth in Federal Rule of Civil Procedure 9(b).  As the Second Circuit has elsewhere established, Rule 9(b) generally requires that a plaintiff “(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.”  In the Second Circuit and in certain other federal circuits, however, application of Rule 9(b) is subject to a case-by-case approach and to some significant caveats.

In evaluating Gallian’s direct FCA allegations, and in keeping with a nuanced approach to Rule 9(b), the Second Circuit for the first time expressly held, as some other federal circuit courts have similarly concluded, that “for FCA claims involving fraudulent misstatements, where a relator pleads a complex or far-reaching fraudulent scheme with particularity, and provides examples of specific false claims submitted to the government pursuant to that scheme, a relator may proceed to discovery on the entire fraudulent scheme.”

In other words, the court ruled that, when it comes to direct FCA claims, Rule 9(b) should not be understood as requiring that a complaint specifically identify every alleged instance of fraudulent conduct where a broad scheme is alleged.  Pleading a “representative sample” of the alleged fraudulent conduct will suffice to state a claim.

Takeaways

The Second Circuit’s holding in Gallian provides a significant clarification regarding “direct” FCA claims.  It is now clear that a relator’s claims asserting direct FCA liability will survive a motion to dismiss in the Second Circuit if the complaint alleges a broad fraudulent scheme and also alleges the specific details of at least some representative examples of that larger scheme.

Gallian thus formally rejects the notion, at least in the Second Circuit, that FCA plaintiffs must detail all instances of the fraudulent misstatements underlying an allegedly complex or far-reaching fraudulent scheme.  The formal adoption of this “representative sample” standard effectively eases the burden on plaintiffs in qui tam actions involving direct FCA claims and broad schemes.

Nonetheless, such plaintiffs must still remember to plead with particularity at least some specific examples of false claims that are representative of the alleged scheme.

This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Attorney Gregory Feit who counsels clients on employment law, litigation, arbitration, negotiation, and trial advocacy. Mr. Feit is admitted to practice in New York.