Washington, D.C. partner Jesse Witten was quoted in three publications regarding the Supreme Court ruling in Universal Health Services v. Escobar, which specified when defendants can be liable under the False Claims Act for regulatory compliance. This is an issue of great importance to health care providers, defense contractors, and other government contractors operating in highly regulated areas.
In a Law360 article, “Attys React To High Court's FCA Liability Ruling,” Jesse explained the significance of the decision:
“Today’s decision is a total upheaval of how parties and courts have approached implied certification cases. The court rejected the competing legalistic interpretations advanced by the parties and adopted by the lower courts. Instead, the court held that noncompliance with a regulation or contractual term can serve as the basis for FCA liability if the violation was ‘material’ to the government’s decision to pay — and adopted a common-sense approach to the question of materiality. According to the court, if the government regularly pays claims despite knowledge that certain requirements were violated, that is ‘very strong evidence that those requirements are not material.’ Government lawyers should now be prepared to respond to discovery demands by defendants seeking evidence that particular violations were not material to the decision to pay a claim.”
In a Bloomberg BNA Health Care Daily Report article, titled, “Unanimous Supreme Court Sets Outer Limit on FCA Liability,” Jesse noted that the decision blurred whatever rule there may have been in shifting liability focus. He elaborated that “[t]here will be a great deal of discovery now over prior government payment practices in the context of particular regulatory violations,” and that that in future litigation, “[f]ormer and current government employees will be important witnesses in these cases, and they will be called upon to testify about government program payment practices more so than ever before.”
In a Report on Medicare Compliance, titled, “Door Is Open to More FCA Cases With High Court Ruling on Implied Certification,” Jesse stated that he could not decide “whether to celebrate or mourn this decision,” because while it endorsed the Government’s theory that companies can be liable for impliedly certifying compliance with regulations, it also imposed a “rigorous” standard that the Government must prove to show that the compliance with a particular regulation was truly material to the Government’s decision to pay the claim. Jesse commented that the Supreme Court in Escobar “did not get hung up on all the False Claims Act jargon and legalistic formulas that the lower courts had adopted over the years. From that standpoint, I think it is welcome even though it does not answer all the questions or provide any black and white lines to follow.”
Read “Attys React To High Court's FCA Liability Ruling” in Law360.
Read “Unanimous Supreme Court Sets Outer Limit on FCA Liability” in Bloomberg BNA’s Health Care Daily Report.Read “Door Is Open to More FCA Cases With High Court Ruling on Implied Certification” in Report on Medicare Compliance.