Federal courts are showing diminishing tolerance for perpetual False Claims Act (“FCA”) litigation. Years-long seal periods, one-sided discovery and serial amendments are wearing thin. The Fifth Circuit’s recent decision in United States ex rel. Gentry v. Encompass Health Rehabilitation Hospital of Pearland, L.L.C., 157 F.4th 758 (5th Cir. 2025) (“Gentry“) reflects this shift and offers a blueprint for courts confronting repeated motions to amend.

The Gentry Decision

In Gentry, a terminated sales representative (the “Relator”) sued Encompass Health Rehabilitation Hospital of Pearland, LLC (“Encompass”), an inpatient rehabilitation facility. The Relator alleged that Encompass submitted false Medicare claims by allowing nonclinical staff to participate in preadmission screenings and by permitting physicians to approve admissions without exercising independent medical judgment.

The district court dismissed the complaint—twice. When the Relator sought leave to amend yet again, the court denied the request and dismissed the case with prejudice. The Fifth Circuit affirmed.

Pleading and Amendment Standards Matter

FCA claims sound in fraud and must satisfy Federal Rule of Civil Procedure 9(b). That rule requires particularity: who committed the fraud, what was false, when it occurred, where it happened and how the scheme operated. General accusations will not suffice.

Amendments are governed by Rule 15. A relator may amend once as of right within 21 days after filing or service of a responsive pleading. After that, the amendment requires leave of court. Courts may deny leave for undue delay, futility or prejudice. And once the 21-day window closes, the relator must also demonstrate good cause for the delay.

In Gentry, the district court concluded that further amendment would be futile. The complaint failed to plead falsity and materiality—core FCA elements. After granting two opportunities to amend, the court denied a third and dismissed the case with prejudice. The Fifth Circuit agreed, emphasizing that courts need not grant endless chances to salvage a deficient pleading, particularly after extended delay.

Why Courts Are Losing Patience

FCA cases often remain under seal for years while the government investigates. During that period, relators typically obtain extensive information without adversarial discovery.

Courts increasingly expect that, once the seal lifts, relators will file complaints that satisfy Rule 9(b). Yet many relators continue to seek serial amendments after dismissal, often invoking newly discovered facts or evolving theories of liability.

Judges are pushing back. Courts increasingly deny leave to amend based on futility, lack of diligence and prejudice. The message is clear: the litigation clock does not restart with each failed complaint.

Gentry reflects a broader impatience with FCA actions that linger for months—or years—without producing a viable claim.

Emerging Circuit Trends

Across the circuits, courts increasingly deny repeated amendments and dismiss FCA complaints with prejudice after two or three failed attempts, frequently citing futility and lack of diligence. Courts also recognize that relators often seek repeated amendments after conducting unilateral discovery during lengthy seal periods.

Most circuits now take a restrictive approach. The First, Fourth and Ninth Circuits routinely deny leave to amend based on futility or undue delay and often affirm dismissals with prejudice following multiple unsuccessful pleadings. Courts in the Fourth Circuit occasionally permit amendment where prejudice is minimal.

For example, in United States ex rel. Flanagan v. Fresenius Medical Care Holdings, Inc., 142 F.4th 25 (1st Cir. 2025), the First Circuit affirmed the denial of leave to amend where the relator waited two years to seek amendment—after surviving an initial motion to dismiss—and offered no evidentiary justification for the delay. That delay followed a six-year government investigation conducted under seal.

By contrast, in United States ex rel. Wheeler v. Acadia Healthcare Co., Inc., 127 F.4th 472 (4th Cir. 2025), the Fourth Circuit reversed the denial of leave to amend where the relator adequately pleaded several counts and the district court improperly dismissed others. Notably, the complaint remained under seal for less than one year before the defendant received notice of the allegations.

The Sixth Circuit remains comparatively permissive, often allowing multiple amendments before concluding that further amendment would be futile. For instance, in United States ex rel. Ibanez v. Bristol-Myers Squibb Co., 874 F.3d 905 (6th Cir. 2017), the court permitted three amended complaints following a three-year seal period before denying a fourth.

The D.C. Circuit remains the clearest outlier. Courts there frequently allow three or four amendments, reflecting a strong preference for resolving complex government-contract disputes on the merits. In United States ex rel. Hawkins v. ManTech International Corp., 752 F. Supp. 3d 118 (D.D.C. 2024), the court allowed four amendments following a nearly two-year seal period before denying a fifth. Similarly, in United States ex rel. Scott v. Pacific Architects & Engineers, Inc., 270 F. Supp. 3d 146 (D.D.C. 2017), the court allowed three amendments after government intervention following a two-year seal period before denying a fourth.

Practical Takeaways for Providers

  • Relators frequently seek multiple opportunities to cure defective pleadings. Providers should challenge deficient FCA complaints early and decisively.
  • Emphasize Rule 9(b)’s particularity requirements. Press arguments grounded in futility and undue delay. Highlight the burdens imposed by protracted litigation and the interests of judicial economy. Carefully timed and targeted motions to dismiss can narrow claims, limit discovery and reduce litigation costs.
  • The era of endless amendment may be ending. Courts increasingly expect relators to plead viable FCA claims from the outset—or not proceed at all.

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Special thanks to Summer Associate Kelsey Linzell for her assistance with the preparation of this article.

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.

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