U.S. ex rel. Rose v. Stephens Institute: The Ninth Circuit Considers Escobar and its Materiality Mandate

Stephen_Wood_03032014Featured Expert Contributor, False Claims Act

Stephen A. Wood, Chuhak & Tecson, P.C.

Ed. Note: This is Mr. Wood’s inaugural post as the WLF Legal Pulse‘s latest Featured Expert Contributor. Mr. Wood is a Principal in Chuhak & Tecson’s Chicago, IL office and chairs the litigation practice group. He has authored numerous WLF publications over the past five years on the False Claims Act and other complex litigation matters.

Ever since the Supreme Court issued its opinion in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), the lower courts have wrestled with the interpretation and application of the Supreme Court’s holding. The United States Court of Appeals for the Ninth Circuit became one of the latest reviewing courts to consider Escobar and its effect on that Circuit’s existing False Claims Act precedent.  The result in United States ex rel. Rose v. Stephens Institute, No. 17-15111, 2018 WL 4038194 (9th Cir. Aug. 24, 2018) was mixed.  The Court of Appeals held that Escobar overruled one precedent, but, in a sharply divided opinion, not another, thus demonstrating that Escobar continues to divide courts, especially over the element of materiality, foreshadowing further Supreme Court involvement in False Claims Act jurisprudence.  That involvement could come soon given that a petition for writ of certiorari is pending based on the Ninth Circuit’s decision in United States ex rel. Campie v. Gilead Sciences, Inc., 862 F.3d 890 (9th Cir. 2017), a case that also turned on whether the defendant’s claimed violations were material.  Continue reading U.S. ex rel. Rose v. Stephens Institute: The Ninth Circuit Considers Escobar and its Materiality Mandate”