Category Archives: Materiality

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Materiality Part IV: Labels Matter, But Not As Much As They Used To

Before Escobar, some courts held that implied certification cases could survive a motion to dismiss only if the statute, regulation, or contractual provision that was allegedly violated was a “condition of payment,” as opposed to a “condition of participation.” The idea was that payments to contractors in connection with government programs (e.g., Medicare) were conditioned … Continue Reading

Materiality Part III: It Is Not Enough That The Government Could Refuse Payment—The Question Is Whether The Government Would Refuse Payment

In Part II of our series, we discussed government knowledge. When the government knows of a claim’s falsity, but nevertheless pays the claim, the falsity of the claim is not material to the government’s decision to pay. In other words, the falsity of the claim must not matter to the government and, consequently, there can … Continue Reading

FCA Materiality: It’s One thing to Proclaim but It’s Another Thing to Prove

In United States, et al., ex rel. Ruckh v. Salus Rehabilitation, LLC, et al., Case No. 8:11-cv-1303-T-23TBM (M.D. Fl. Jan. 11, 2018), a federal district court judge offered a thoughtful, cogent analysis of both the letter and spirit of the Supreme Court’s decision in Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016) … Continue Reading

Head on Collision: 5th Circuit Crashes Into Massive $663M Guard Rail Jury Verdict on Materiality Grounds

The story behind the Trinity Industries False Claims Act (FCA) litigation is one that is becoming too familiar for companies that do business with federal and state governments. Luckily, that story now has some silver lining, after the Fifth Circuit recently overturned a massive $663 million jury verdict against the company.… Continue Reading

Materiality Part I: Distinguishing Important Representations from the Minor or Insubstantial

Editor’s Note: This is the first in a five-part series on how U.S. district courts and courts of appeal have applied the materiality standard set forth in Universal Health Services, Inc. v. U.S. ex rel. Escobar. In Escobar, the Supreme Court described several factors that a district court should consider in assessing whether a particular … Continue Reading

First Circuit on Escobar Remand: Relators’ Allegations of Regulatory Violations Sufficiently Material to State a Claim Under the FCA

On remand from the Supreme Court’s Escobar decision, the First Circuit holds that Universal Health Services’ (UHS) alleged failure to adequately staff its facilities in compliance with Massachusetts health care regulations is sufficiently material to survive UHS’s motion to dismiss.  The decision is not a complete surprise, but is nevertheless noteworthy because it reflects the … Continue Reading

The Government’s Take on Materiality After Escobar

Following the Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), we expected significant False Claims Act litigation over the Act’s materiality standard.  Such litigation is a direct consequence of Escobar’s holding, which does not limit the implied certification theory to violations of conditions of … Continue Reading
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