Recent Decision Requiring More Precision in Pleading FCA Reverse False Claims Could Help Employers

Takeaways

• In United States ex rel. Anil Kini v. Tata Consultancy Services, the D.C. Circuit affirms the heightened pleading standard under Rule 9(b) of the FRCP applies to FCA reverse false claims, requiring claims to specify the obligation to pay the government and detail the time, place, and content of the alleged fraud.
• Courts will dismiss reverse false claims if plaintiffs do not specify defendants’ obligation to pay for purposes of the FCA.
• The decision will help defendants test reverse false claims early in litigation.

Related link

• United States ex rel. Anil Kini v. Tata Consultancy Services, Ltd.

Article

The government and relators bringing claims under the False Claims Act (FCA) must meet the heightened pleading standard under Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) requires the party bringing the claim to plead “with particularity” the facts “constituting fraud or mistake.” A recent decision from the U.S. Court of Appeals for the D.C. Circuit reaffirmed this standard when applying it to reverse false claims alleging a defendant fraudulently avoided an obligation to pay the government what was owed. United States ex rel. Anil Kini v. Tata Consultancy Services, Ltd., No. 24-7032 (Aug. 8, 2025).

A “reverse false claim” alleges the defendant’s actions affected an “obligation” to pay or transmit money or property to the government. The crux of a reverse false claim is whether the defendant owed such an “obligation” and avoided payment.

Background

Relator Anil Kini alleged in his FCA qui tam action that his employer, Tata Consultancy Services, had fraudulently obtained L-1 and B-1 non-immigrant visas for information technology employees instead of sponsoring the employees under the H-1B visa program, allowing the company to evade higher payroll taxes and application fees.

The district court dismissed Kini’s complaint, holding that he failed to state a claim for a reverse false claim under the FCA because the company was not obligated to pay higher payroll taxes or application fees for visas it never sought.

D.C. Circuit Decision

The D.C. Circuit affirmed the district court’s dismissal of the reverse false claim. It explained that, to overcome dismissal, “Kini must allege the fraud ‘with particularity’” under Rule 9(b). He was required to spell out Tata’s “obligation” to pay or transmit money or property to the government “and its effect(s),” as defined in 31 U.S.C. § 3729(a)(1)(G). He also had to lay out the “time, place, and content of the fraud” and “identify the individuals allegedly involved.” 

The court reasoned that, although the relevant federal regulation requires an employer to pay H-1B employees specified wages, it does not mandate payment to the government. As Tata never secured H-1B visas requiring higher fees, the company was not required to pay those fees within the meaning of the FCA. Since Kini could not identify an obligation Tata owed the government, his reverse false claim necessarily failed to meet the stringent Rule 9(b) threshold.

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To satisfy Rule 9(b)’s heightened pleading standard, the government and relators bringing reverse false claims under the FCA must identify the precise obligation the defendant owes the government and explain how it requires the defendant to pay or transmit money or property. Those raising this type of claim should thus expect their pleadings to be tested early in litigation.

Please contact a Jackson Lewis attorney in our Government Contracts and Compliance Group if you need help responding to FCA claims or ensuring compliance and strengthening your organization’s compliance posture to protect against such claims.