Supreme Court Endorses Implied Certification Theory of Liability But Establishes “Demanding” Materiality Standard Under the False Claims Act

June 17, 2016

Yesterday, the United States Supreme Court decided Universal Health Services, Inc. v. United States ex rel. Escobar et al., holding that the so-called “implied certification” theory is viable under the False Claims Act (“FCA”), but with stricter constraints than had been applied by the courts below (and many others). Drawing on principles of common law fraud, the Court held that a false certification of any kind—express or implied—may subject a defendant to FCA liability if the alleged false statement or omission was material to the Government’s payment decision and made with the requisite scienter.

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