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November 4, 2016

04 November 2016

Ninth Circuit Asked To Clarify Scope of Falsity and Materiality Post-Escobar

In Escobar, the Supreme Court held that implied certification liability under the FCA may exist where the following two conditions are met: (1) the claim does not merely request payment, but also 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.  This has come to be referred to in post-Escobar briefing as the “two-part test.”  However, DOJ has been engaged in an aggressive campaign of filing statements of interest in courts throughout the country arguing that the two-part test is not the exclusive means of establishing implied certification liability post-Escobar, seeking to maintain an expansive scope for the implied certification theory.  The hook for DOJ’s argument is the statement elsewhere in Escobar that “We need not resolve whether all claims for payment implicitly represent that the billing party is legally enti­tled to payment.”  District courts have split on whether Escobar’s two part test is the exclusive means of establishing implied certification liability.

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