In this episode, hosts Mana Lombardo and Jason Crawford talk with Sarah Hill, an associate in the firm’s Government Contracts Group, about False Claims Act cert petitions pending at the Supreme Court. “Let’s Talk FCA” is Crowell & Moring’s podcast covering the latest developments with the False Claims Act.

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In Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016) (discussion by C&M attorneys here), the Supreme Court held that an implied false certification can be a basis for False Claims Act (FCA) liability, “at least where two conditions are satisfied:” (1) the claim makes specific representations about the goods or services provided and (2) the defendant’s failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths.  (Emphasis added).
Continue Reading Ninth Circuit’s Rose Decision Could be a Thorn in the Side of Relators (At Least for Now)

Recently, in United States ex rel. Hunt v. Cochise Consultancy Inc., the Eleventh Circuit widened a split in authority regarding the applicability of the tolling provision of the False Claims Act’s statute of limitations, holding that it is applicable to qui tam actions even when the government declines to intervene.  The court also found that the period is triggered by a government official’s knowledge of the fraud. 887 F.3d 1081 (11th Cir. 2018).  In so holding, the Eleventh Circuit disagreed with the Fourth, Ninth, and Tenth Circuits’ interpretation of the statutory language and arguably extended the filing period for relators within its jurisdiction.
Continue Reading Just When You Thought It Was Over: Eleventh Circuit Deepens Disagreement on FCA’s Tolling Provision

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).
Continue Reading The Gang That Couldn’t Shoot Straight: Post-Escobar Application of the Materiality Standard in the Fourth Circuit

Congress amended the civil False Claims Act in 1986 to give the statute more teeth as a fraud enforcement tool. Thirty years later, FCA litigation is as active as ever with more than 800 new cases filed in 2016, which is the second highest number of new cases on record. Not only was 2016 a

On November 1, 2016, the Supreme Court heard oral arguments in State Farm and Casualty Co. v. United States ex rel. Rigsby on the question of what standard should govern the decision whether to dismiss a relator’s claim for violation of the False Claims Act’s (“FCA”) seal requirement, which mandates that any FCA action brought by a whistleblower be filed with the court under seal and not publicly disclosed until the government has had an opportunity to investigate the allegations in the complaint and determine whether to intervene.  This is the third year in a row that the Court has heard a case involving the FCA and, while Rigsby is not likely to be a blockbuster ruling like last year’s implied certification decision in Escobar (description available here), the case presents an opportunity for the Court to address a three-way circuit split.

When deciding on the standard that should govern, the Court will have to weigh competing policy considerations. On the one hand, relators and their counsel should not be allowed to act with impunity by violating the seal in bad faith in order to gain a tactical advantage in settlement talks.  At the same time, the Court during the argument seemed to recognize that the government only has the resources to intervene in select cases and so the government relies heavily on relators to pursue recoveries.  As such, the government’s interests could be harmed if a relator is automatically dismissed from a case because of an insignificant or technical violation of the seal.  Indeed, the Rigsby case illustrates the tension between these competing policy considerations.  Here, relators’ counsel violated the seal in bad faith, but he then withdrew from the case, and the relators went on to win a judgment against State Farm.  Should that violation have caused the relators’ action to be dismissed altogether?  If not, was any type of sanction warranted?  Those questions and others were before the Court at oral argument.Continue Reading Should Loose Lips Sink Qui Tam Suits? Supreme Court to Decide Whether FCA Seal Violations Should Result in Dismissal

In a decision that will impact Government contractors, health care providers and all institutions that accept federal dollars, the U.S. Supreme Court this past week offered a qualified affirmation of the validity of the implied certification theory of False Claims Act liability. In Universal Health Servs. v. U.S. ex rel. Escobar, the Court unanimously

On April 19, 2016, the Supreme Court heard oral argument in U.S. v. Universal Health Servs., Inc., which concerns (1) whether the implied certification theory of legal falsity under the FCA is ever viable; and (2) if it is, whether a contractor’s reimbursement claim can be legally false under that theory if the contractor fails