June 20, 2016 - False Claims Act

Universal Health: The Supreme Court Approves Implied Certification; Focus on Materiality Provides a Mixed Blessing to Defendants in False Claims Act Cases

On JuneFCA 16, 2016, a unanimous Supreme Court blessed the implied false certification theory of False Claims Act (FCA) liability, resolving a circuit split on the theory’s legitimacy. The Court held that implied certification will succeed as a theory of liability where (1) the claim makes specific representations about the goods and services being provided and (2) the defendant’s failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those misrepresentations misleading. The Court then provided guidance on the appropriate materiality standard, which will most certainly dominate FCA litigation in the coming years.

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