Featured Expert Contributor, False Claims Act
Stephen A. Wood, Chuhak & Tecson, P.C.
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In 2016 the U.S. Supreme Court handed down its decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), a watershed in False Claims Act jurisprudence. The Petitioner asked the Court to decide whether the statute permitted liability for falsely certifying compliance with federal requirements where that certification was not expressly stated, but implied by a defendant’s conduct. On that issue, the High Court held unanimously in the affirmative, resolving a conflict among the courts of appeals.
In response to defense arguments that the theory would dramatically expand the scope of False Claims Act liability, the Court sought to reassure government contractors that certain pleading and proof principles applicable to these cases would constrain post-Escobar expansion of False Claims Act liability. Expansive liability “‛can be effectively addressed through strict enforcement of the Act’s materiality and scienter requirements.’ Those requirements are rigorous.” Escobar, 136 S. Ct. at 2002 (citations omitted). The Court’s statements regarding the element of materiality in particular have spawned significant litigation in federal courts throughout the country over what type and quantum of evidence bears on the question of whether a claimed violation is material. Continue reading “A Material Change: FCA Defendants Confront Altered Pleading Standard in Ninth Circuit after Rose and Campie“