False Claims Act Materiality Standard Applied To Dismiss Implied Certification Claims

A federal judge in the District of Columbia recently reaffirmed the prior dismissal of "implied certification" False Claims Act claims brought against a materials supplier over body armor durability issues that the company allegedly kept hidden, saying the U.S. Supreme Court's holding in Escobar was not a sufficient basis to amend the previous findings. The authors of this article explain the decision and its implications.

The U.S. Supreme Court's June 2016 decision in Universal Health Services v. U.S. ex rel. Escobar was widely read as providing new support for the theory of "implied certification" liability in cases brought by government prosecutors and qui tam relators under the federal False Claims Act ("FCA"), as it held that a contractor that requests payment without disclosing "violations of statutory, regulatory, or contractual requirements" may be making a false claim against the government.