What follows is the promised second guest post from Reed Smith’s Lindsey Harteis concerning the UHS v. Escobar False Claims Act case. Lindsey’s first post set the stage. The Supreme Court decided Escobar yesterday, so now she’s back with her take on the version of FCA “implied certification” that the unanimous Supreme Court recognized.
As always our guest posters deserve all the credit, and any blame, for the contents of their posts.
To someone born in 1984, the phrase “Elvis Lives” is tough to figure out. We don’t know what things were like back when he was alive and on TV (from the waist up). But we do get the general concept that something can live on after death, just in a different way. And we definitely enjoyed the trio of violin-playing Elvises in a Coldplay music video a few years back. So, Elvis is still around. Just in a different way.
Unfortunately for us defense bloggers, so is the implied certification theory. Yesterday the Supreme Court handed down its opinion in Universal Health Services, Inc. v. Escobar, No. 15-7, slip op. (U.S. June 16, 2016). This is the pending Supreme Court decision we blogged about last month (here) that has determined both the scope and validity of the implied certification theory of False Claims Act liability. While the theory survived, the opinion is not all bad news. In fact, it should have relators all shook up more so than defendants. So we’ll get going with a little less conversation and try to ease your suspicious minds about how a case that allows a pro-relator theory of liability to survive can actually still be good.
The case is overall good for FCA defendants because the Supreme Court emphasized just how rigorous the materiality threshold is in these cases. The bad news is that the implied certification theory is still (at least in some circumstances) valid. (As a quick refresher, implied certification cases are founded on the idea that when a provider submits a claim for payment to the Government, that claim impliedly certifies compliance with all conditions of payment. Thus, the theory goes, if the claim fails to disclose the defendant’s violation of a material statutory, regulatory or contractual requirement, that claim is false and actionable under the FCA.)
Continue Reading Guest Post – FCA Implied Certification, the Slim, Early Elvis Version