Civil False Claims Require New Materiality Standard

False claim relators are now required to prove materiality in all cases, according to one federal circuit court. In a landmark ruling, a federal court of appeals incorporated for the first time the materiality standard from "false certification" cases into a "factual falsity" case under the False Claim Act (FCA), 31 U.S.C. §§ 3729–3733.

The U.S. Supreme Court first required proof of materiality in a false certification case in Universal Health Servs., Inc. v. United States ex rel, Escobar, 136 S.Ct. 1989 (2016). Expanding Escobar, the U.S. Court of Appeals for the Fifth Circuit held in United States ex rel., Harman v. Trinity Industries, Inc., No. 15-41172 (5th Cir. September 29, 2017). that in a factual falsity case a relator must prove materiality, a first for a federal court of appeals.