The U.S. Supreme Court decision in Universal Health Services Inc. v. United States ex rel. Escobar on June 16 held that the implied false certification theory can be a basis for False Claims Act liability. Although the decision expanded the scope of potential FCA liability in circuits that had not yet embraced the implied false certification theory of liability, the claim of victory by the government and relators’ bar may ultimately prove empty. The remainder of the opinion favors potential FCA (and other) defendants by imposing a much more “rigorous” and “demanding” materiality standard in FCA cases and others where materiality must be proved.
As we will explain, there are important lessons here for companies and their lawyers.
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