Supreme Court Decision Alert - June 17, 2016

Yesterday, the Supreme Court issued a decision, described below, of interest to the business community.

False Claims Act—Implied Certification

Universal Health Services v. United States ex rel. Escobar, No. 15-7

Yesterday, in Universal Health Services v. United States ex rel. Escobar, the Supreme Court held that a claim presented to the United States for payment can be false or fraudulent for purposes of the False Claims Act under an "implied certification" theory. The Court sought to allay any "concerns about fair notice and open-ended liability" by emphasizing the strict application of the FCA's materiality and scienter requirements, clarifying the meaning of these requirements, and rejecting the Government and Second Circuit's interpretation of implied certification as "extraordinarily expansive." It remains to be seen whether the Court's descriptions of the materiality and scienter requirements will provide meaningful protections to government contractors,