Seventh Circuit Applies Escobar Standard To Once Again Reject False Claims Act Liability Based On Implied False Certification Theory

On October 24, 2016, the Seventh Circuit applied the standard announced by the Supreme Court in United Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), for False Claims Act ("FCA") liability under an implied false certification theory, illustrating in practice the challenges relators may face in meeting Escobar's heightened standard for liability, at least in some circuits. In United States v. Sanford-Brown, 840 F.3d 445 (7th Cir. 2016) ("Sanford-Brown II"), on remand, the Seventh Circuit once again affirmed summary judgment in favor of defendant Sanford-Brown, Inc.

Background

Relator Brent Nelson, a former Director of Education at Sanford-Brown College ("SBC"), a for-profit college, filed suit in July 2012 in the United States District Court for the Eastern District of Wisconsin on behalf of the United States against SBC, alleging that SBC had committed violations of a variety of Title IV and other regulatory requirements and