Discovery-Informed Pleading Survives: Eleventh Circuit Clarifies that Rule 9(b) Does Not Bar Use of Discovery-Derived Allegations at the Motion-to-Dismiss Stage

Introduction

The United States Court of Appeals for the Eleventh Circuit, in Sedona Partners LLC v. Able Moving & Storage Inc., No. 22-13340 (decided 25 July 2025), confronted a recurring tension in False Claims Act (“FCA”) litigation: how to reconcile Rule 9(b)’s heightened pleading requirement with the reality that many qui tam relators learn crucial details only after discovery commences. The panel (Judges Jill Pryor, Newsom and Lagoa) held that neither the text of Federal Rule of Civil Procedure 9(b) nor the policy concerns underpinning that rule permit a court, at the motion-to-dismiss stage, to disregard allegations merely because they stem from information obtained during discovery. Consequently, a district court may not strike such allegations under Rule 12(f) on that basis alone.

The decision reverses the Southern District of Florida’s dismissal of Sedona’s second amended complaint and expressly rejects reliance on the Eleventh Circuit’s unpublished decision in Bingham v. HCA, Inc., thereby establishing a precedential rule that will shape FCA and fraud-based pleadings in the Circuit and beyond.

Summary of the Judgment

Issue: Whether, at the Rule 12(b)(6) stage, allegations derived from discovery may be ignored or struck because Rule 9(b) requires a plaintiff to plead fraud with particularity.
Holding: A court cannot disregard or strike discovery-based allegations simply to enforce Rule 9(b). Nothing in Rule 9(b) limits the source of a plaintiff’s information, and imposing such a limitation would contravene the Rule’s text and the Supreme Court’s guidance against ad-hoc pleading standards.
Disposition: (1) Order striking the discovery-based allegations reversed. (2) Order dismissing the second amended complaint vacated. (3) Case remanded for further proceedings, including reconsideration of leave to amend.

Detailed Analysis

A. Precedents Cited and Their Influence

Bingham v. HCA, Inc., 783 F. App’x 868 (11th Cir. 2019) (unpublished)
District court relied heavily on this case to strike Sedona’s allegations. Bingham suggested that allowing discovery-derived facts at the pleading stage “may not be appropriate” if they circumvent Rule 9(b). The panel distinguished and declined to follow Bingham, noting its non-precedential status and lack of textual analysis.
United States ex rel. Clausen v. LabCorp of America, 290 F.3d 1301 (11th Cir. 2002) & United States ex rel. Atkins v. McInteer, 470 F.3d 1350 (11th Cir. 2006)
Frequently cited for the proposition that relators must plead actual false claims prior to discovery. The Court clarified that these cases addressed dismissals before discovery and do not authorize discarding allegations once discovery has commenced.
Universal Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016) & Leatherman v. Tarrant Cnty., 507 U.S. 163 (1993)
Cited for the Supreme Court’s directive that federal courts may not craft heightened pleading rules beyond those contained in the Federal Rules.
Miscellaneous Authorities
Other recent Eleventh Circuit decisions—Gose v. Native American Services Corp., 109 F.4th 1297 (2024); Olhausen v. Arriva Med., LLC, 124 F.4th 851 (2024)—were referenced for Rule 9(b) standards but were not in conflict with the new rule announced.

B. The Court’s Legal Reasoning

Textual Analysis of Rule 9(b).
The Rule requires only that fraud be pled “with particularity.” It does not restrict how a plaintiff acquires the information— whether by public sources, whistle-blower tip, or discovery. Embedding a source-limitation in the Rule would add words Congress and the Rules Committee did not include.
Interaction with Rule 15.
Rule 15(a)(2) broadly allows amendments “when justice so requires.” Parties routinely refine pleadings as new facts emerge; that policy would be frustrated if discovery-derived facts were disallowed.
Supreme Court Guidance Against Ad-Hoc Pleading Rules.
Cases such as Leatherman, Hill v. McDonough, and Jones v. Bock emphasize that supplementary pleading requirements must come through the formal rule-making process, not judicial invention.
Rule 12(f) Misapplied.
The district court used Rule 12(f) to excise material that was not “redundant, immaterial, impertinent, or scandalous.” The only perceived defect was its origin in discovery, an impermissible criterion under the Rule.
Policy Considerations Rebutted.
While Rule 9(b) aims to protect defendants from reputational harm and fishing expeditions, the Court reasoned that once discovery has begun (often with judicial permission), those concerns recede and cannot override the Rules’ text.

C. Potential Impact on Future Litigation

Broader Access to Discovery-Based Amendments.
FCA relators—and plaintiffs in other fraud actions—may safely incorporate documents and deposition information into amended pleadings without fear that the allegations will be ignored.
Limitation on Rule 12(f) Usage.
Attempts to strike factual allegations strictly because they were acquired in discovery will likely fail in the Eleventh Circuit.
Strategic Considerations for Defendants.
Motions to stay discovery in FCA cases may become more critical; defendants seeking to forestall discovery must now emphasize undue burden rather than Rule 9(b) arguments alone.
Persuasive Authority for Other Circuits.
Although some circuits have hinted at similar views, this is the first published appellate decision squarely holding that discovery-derived facts are permissible for Rule 9(b) pleading. Other circuits may adopt or distinguish the Eleventh Circuit’s reasoning.
Rule-Making Implications.
The decision underscores that any alteration to Rule 9(b)’s scope must come through the formal amendment process, inviting stakeholders to address perceived abuses through the Advisory Committee rather than litigation.

Complex Concepts Simplified

False Claims Act (FCA): Federal statute allowing the government (and private whistle-blowers called “relators”) to sue those who defraud federal programs. Violators can be liable for treble damages and civil penalties.
Qui Tam Relator: A private individual or entity that files suit on the government’s behalf under the FCA and can receive a share of any recovery.
Rule 9(b) Particularity: A special pleading requirement for fraud or mistake: the complaint must specify the “who, what, when, where, and how” of the fraudulent conduct.
Rule 12(f) Motion to Strike: Allows a court to delete parts of a pleading that are redundant, immaterial, impertinent, or scandalous. It is considered a drastic and disfavored remedy.
Discovery-Based Allegations: Facts added to a complaint after they are revealed through discovery tools like document requests, interrogatories, or subpoenas.

Conclusion

The Eleventh Circuit’s decision in Sedona Partners establishes a clear, bright-line rule: Rule 9(b) restricts the level of detail required to plead fraud, not the source of the detail. Consequently, district courts may not strike or ignore well-pleaded allegations simply because they were gleaned from discovery materials, nor may they invoke Rule 12(f) to achieve the same result.

This precedent restores symmetry between FCA relators and other litigants, harmonizes Rule 9(b) with Rule 15’s liberal amendment policy, and curtails judicial creation of heightened, ad-hoc pleading hurdles. Practitioners defending FCA and other fraud cases must now rethink early-stage strategies: motions to dismiss remain potent, but the window to block discovery has narrowed. The judgment also signals to rulemakers that any further refinement of fraud-pleading standards should occur through the Rules Enabling Act process rather than through sporadic judicial innovation.