Supreme Court To Decide False Claims Act "Implied Certification" Theory

On December 4, 2015, the U.S. Supreme Court granted certiorari in Universal Health Services, Inc. v. United States ex rel. Escobar, No. 15-7, to review the so-called "implied certification" theory of liability under the federal False Claims Act (FCA). That theory, which both the federal government and private "relators" have invoked with increasing frequency, finds an FCA violation for those who seek funds from the government while in violation of a legal or contractual obligation—even when they have not expressly verified their compliance with that legal or contractual obligation. Given the breadth of circumstances in which the implied certification theory has been, and can be, applied, the Court's ruling in Universal Health Services could bring far-reaching changes to the scope of FCA liability.