The U.S. Supreme Court’s ruling last term in Universal Health Services Inc. v. United States ex rel. Escobar received a lot of attention because of its implications for False Claims Act (FCA) litigation. Many commentators have focused on the court’s materiality holding: that the alleged failure to disclose a statutory, regulatory or contractual violation must be “material to the Government’s payment decision.” This was, indeed, a significant limitation in several respects. The court made clear not only that materiality is a demanding standard, but also that lower courts may consider the absence of sufficiently plausible and particularized materiality allegations as grounds for dismissal at the motion to dismiss stage, rather than a jury question.
But another aspect of the Escobar decision has received comparatively less attention. The Escobar court also focused on an important aspect of implied false certification cases: the “specific representations about the goods or services provided” that contractors make when entering into a contract or submitting claims for payment.
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