December 18, 2017 Articles

Escobar and the False Claims Act: Clearer after a Year of Interpretation

In the year since the U.S. Supreme Court’s Escobar decision, lower courts have provided guidance on open questions regarding falsity and materiality

by Joshua S. Bolian

The U.S. Supreme Court's opinion last year in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), answered open questions about the False Claims Act (FCA). It held that government contractors could be liable for "implied false certification"—requesting payment when the good or service provided violates an applicable statutory, regulatory, or contractual requirement. Escobar also held that the requirement need not be a condition of payment to satisfy the FCA's materiality element.

In answering old questions, however, Escobar posed new ones. What must an "impliedly false" certification state to satisfy the FCA's falsity element? If status as a condition of payment is not dispositive, where should courts draw the line on the materiality element?

In the year since Escobar came down, lower courts have provided guidance on these important questions.

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