Escobar and the False Claims Act
Understanding Universal Health Servs. v. United States ex rel. Escobar, and what it means for your False Claims Act case as a whistleblower. 136 S. Ct. 1989 (2016).
If you are a qui tam relator with an lawsuit involving false claims for payment, you and your lawyer need to make sure you understand a case commonly known as Escobar. Escobar is a United States Supreme Court case dealing with the Federal False Claims Act. Escobar involved a claim of fraud related to the Massachusetts Medicaid program. In the lawsuit, it was alleged that a company had submitted claims for payment even though it had not lived up to the requirements of the Federal program that authorized payment. The United States Supreme Court held that “the implied false certification theory can be a basis for liability.” Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989, 1995 (2016).
The Court stated in the opinion, written by Justice Thomas:
“Specifically, liability can attach when the defendant submits a claim for payment that makes specific representations about the goods or services provided, but knowingly fails to disclose the defendant’s noncompliance with a statutory, regulatory, or contractual requirement. In these circumstances, liability may attach if the omission renders those representations misleading.
We further hold that False Claims Act liability for failing to disclose violations of legal requirements does not turn upon whether those requirements were expressly designated as conditions of payment. Defendants can be liable for violating requirements even if they were not expressly designated as conditions of payment. Conversely, even when a requirement is expressly designated a condition of payment, not every violation of such a requirement gives rise to liability. What matters is not the label the Government attaches to a requirement, but whether the defendant knowingly violated a requirement that the defendant knows is material to the Government’s payment decision.
A misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be material to the Government’s payment decision in order to be actionable under the False Claims Act.” Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989, 1995-96 (2016).
The opinion resolved a split amongst the Circuit Courts of Appeals about what the applicable law was, as the First and Seventh Circuit Courts of Appeals had reached different conclusions of law regarding the issue. In its decision, the Court relied in part on common-law jurisprudence to reach its decision. Id at 1999.
In the Opinion, the Court held specifically “that the implied certification theory can be a basis for liability, at least where two conditions are satisfied: first, the claim does not merely request payment, but also makes specific representations about the goods or services provided; and second, the defendant’s failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths.” Id at 2001.
If you are looking to file a Qui Tam action under the Federal False Claims Act, you need to hire a lawyer who can help you assess your potential claim in light of Escobar. Are you aware of claims for payment that were made with specific representations and the person or business requesting payment failed to disclose noncompliance with material statutory, regulatory, or contractual requirements such that the representations were misleading half-truths? Contact Saluda Law today to talk to an Attorney about your case. Contact the firm through the web or by calling the firm at 803-939-6927.
Saluda Law handles False Claims Act cases. If you are looking to file a qui tam action for false claims for payment of government money or fraud in the inducement of government contracts, contact Saluda Law. Let an Attorney help you report fraud against the Federal Government.
Content last updated on July 17, 2021. Any information posted about the firm’s cases is intended only to be representative of the firm’s practice. These examples are not intended to, and cannot be relied upon, to predict the results in any other case. Information or interaction on this page should not be construed as establishing a client-attorney relationship or as legal advice. For advice about your specific situation, please contact Saluda Law, LLC. The Statements contained within this page have been reviewed and approved by Mr. VanSyckel.
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