supreme court iStock_000000865139_LargeCourt Rejects the First Circuit’s “Expansive View” of the Theory by Articulating “Rigorous” Standards of Materiality

Yesterday, the U.S. Supreme Court issued a long-anticipated decision on the viability of the “implied certification” theory of liability under the False Claims Act (FCA). In Universal Health Services, Inc. v. United States ex rel. Escobar, a unanimous Court affirmed the viability of the implied certification theory, which had been split among the circuit courts. Implied certification is a judicially created theory under the FCA that establishes liability for a contractor or provider, who although delivered or performed the materials or services claimed, violated a contract, statute or regulation as a condition of payment even though the provider or contractor did not expressly certify compliance with the contract, statute or regulation as a condition of payment. In a move certain to spur further litigation, however, the Court may have softened that blow by restricting the theory’s reach in establishing a more “rigorous” and “demanding” materiality standard. Read more >>