Brian Tully McLaughlinJason M. CrawfordSarah Hill

On January 26, 2017, the Fourth Circuit heard oral argument in United States ex rel. Omar Badr v. Triple Canopy, one of four False Claims Act decisions that the Supreme Court vacated and remanded for further consideration in light of the Court’s June 2016 holding regarding the implied certification theory in Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016).  In Triple Canopy, the relator alleges that a security contractor responsible for ensuring the safety of an air base in a combat zone knowingly employed guards who allegedly falsified marksmanship scores, and presented claims to the government for payment for those unqualified guards. The defendant prevailed on a motion to dismiss at the district court after demonstrating that the government failed to plead that it ever reviewed — and therefore ever relied on — the allegedly false scorecards. United States ex rel. Badr v. Triple Canopy, Inc., 950 F. Supp. 2d 888 (E.D. Va. 2013). The Fourth Circuit reversed, explaining: “Common sense strongly suggests that the Government’s decision to pay a contractor for providing base security in an active combat zone would be influenced by knowledge that the guards could not, for lack of a better term, shoot straight … If Triple Canopy believed that the marksmanship requirement was immaterial to the Government’s decision to pay, it was unlikely to orchestrate a scheme to falsify records on multiple occasions.” 775 F.3d 628, 637–38 (4th Cir. 2015).

As the authors predicted in a recent “Bloomberg Law Insight,” the panel on remand focused on the similarities between the guards who couldn’t shoot straight and an analogy used by the Supreme Court in Escobar—i.e., that if the government enters into a contract for the purchase of firearms, the ability of the guns to shoot is a material condition regardless of whether it is spelled out in the contract.  Counsel for the defendant attempted to distinguish the facts in Triple Canopy from the analogy in Escobar—but if the comments from the panel are any indication—defendant’s efforts to get the Fourth Circuit to affirm the lower court seem to have missed the mark.