Two recent court decisions ruled in favor of relators on the issue of materiality under the standard set forth in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989, 2001 (2016). On May 7, 2019, the Fifth Circuit reversed a decision by the Southern District of Texas, which had held that relators had failed to sufficiently plead materiality. And on May 8, 2019, the Eastern District of California denied a motion to dismiss premised on failure to adequately plead materiality.
A recent decision out of a California district court rejected an attempt by a former employee of a provider organization with nationwide operations to obtain nationwide discovery based on alleged misconduct occurring at the particular facility where the former employee worked. The court’s thorough analysis is a model for other courts being asked to allow relators to subject defendants to expensive nationwide discovery based on generalized allegations that purported wrongdoing at a particular location was part of a nationwide pattern or practice.