7th Circuit Defines "Worthless Services" Under The False Claims Act

"Services that are 'worth less' are not 'worthless.'"

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That's the upshot from U.S. ex rel. Absher v. Momence Meadows Nursing Center, Nos. 13-1886 & 13-1936 (Aug. 20, 2014), a recent decision from the Seventh Circuit (authored by Judge Manion) that addressed the worthless-services theory of liability under the False Claims Act.

The worthless-services theory is the idea that a qui tam relator could prove a violation of the False Claims Act if the defendant was reimbursed for products or services that had a value equal to zero. To obtain reimbursement for providing something truly worthless would seem to be the essence of a "false claim." The theory has been adopted by the U.S. Courts of Appeals for the Second, Sixth, Eighth, and Ninth Circuits. But it hasn't been adopted by the Seventh Circuit, though the court considered it at length in Absher. Ultimately it was Absher's facts that caused the Seventh Circuit to stop short.