{"id":979,"date":"2016-08-18T11:12:48","date_gmt":"2016-08-18T15:12:48","guid":{"rendered":"https:\/\/www2.law.temple.edu\/10q\/?p=979"},"modified":"2016-08-18T11:12:48","modified_gmt":"2016-08-18T15:12:48","slug":"scotus-raises-bar-materiality-false-claims-act-lawsuits","status":"publish","type":"post","link":"https:\/\/law.temple.edu\/10q\/scotus-raises-bar-materiality-false-claims-act-lawsuits\/","title":{"rendered":"SCOTUS Raises the Bar on Materiality in False Claims Act Lawsuits"},"content":{"rendered":"

The implied false certification theory of liability under the False Claims Act (FCA) is premised on the notion that a person who does business with the federal government, by the very act of submitting a claim for payment, has impliedly certified compliance with the often numerous statutes, regulations, and contract terms that govern the contractual relationship.\u00a0 Government prosecutors and private whistleblowers have used this theory to assert that any noncompliance is sufficient to trigger FCA liability, regardless of whether the claimant made an express false statement, how minor the noncompliance was, or even whether sufficient goods and services were provided at fair value.\u00a0 The Circuit courts were split on the viability and scope of the theory.<\/p>\n

The United States Supreme Court\u2019s unanimous decision in Universal Health Services, Inc. v. United States ex rel. Escobar<\/em>, No. 15-7, 2016 U.S. LEXIS 3920 (June 16, 2016), resolved the Circuit split by recognizing the implied false certification theory, while at the same time seemingly curtailing the FCA\u2019s reach by proclaiming that only material<\/u><\/strong> noncompliance with statutory, regulatory or contractual requirements can support such a claim.\u00a0 In other words, a mere technical violation of an arcane regulation would not trigger FCA liability absent proof that the violation \u2013 if known to the government \u2013 would have actually influenced its decision to pay the claim.\u00a0 The Supreme Court characterized this materiality requirement as both \u201crigorous\u201d and \u201cdemanding.\u201d<\/p>\n

The Supreme Court\u2019s discussion of what is, is not, or might be, material illustrates that materiality is not subject to a bright-line rule, and must be assessed on a case-by-case basis.\u00a0 For example:<\/p>\n