Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The False Claims Act After <b><i>Escobar:</i></b> A Three-Part Test

By Stanley A. Twardy, Jr. and Elizabeth A. Latif

In a unanimous opinion in Universal Health Servs. v. United States ex rel. Escobar, 195 L. Ed. 2d 348 (U.S. 2016), the Supreme Court provided a new framework for assessing false certification liability under the False Claims Act (FCA). The FCA creates civil liability for any person who knowingly submits a false claim to the government or knowingly makes a false record or statement to get a false claim paid by the government. It defines a “claim” as a demand for money or property made directly to the federal government or to a contractor, grantee, or other recipient if the money is to be spent on the government's behalf in anticipation of reimbursement by the government.

The false certification theory of liability arises when a government contractor fails to comply with contractual provisions, statutes, or regulations, and the contractor has either expressly or impliedly certified such compliance. Escobar sets forth a new framework for such claims, which can be summed up in a three-part test:

  • Does the request for payment contain a “specific” representation about the goods or services provided?
  • If yes, a) Was it false? or b) Did the representation omit that the requestor had not complied with a statutory, regulatory or contractual requirement, such that it made the representation a half-truth?
  • Was the misrepresentation material to the government's payment decision?

Background

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.