Litigation Practice Group Publishes Alert about U.S. Supreme Court’s Expansion of False Claims Act Scope

Any company doing business with and making payments to the federal government must clearly understand what may or may not be considered actionable under the False Claims Act (FCA), which imposes civil and criminal liability on parties that knowingly present or cause to be presented false or fraudulent “claims” to the government. In Universal Health Care Servs., Inc. v. United States ex rel. Escobar, 579 U.S. --- (2016), the Court recognized that theory of liability, holding that a claim is false or fraudulent when the submitting party knowingly fails to disclose its non-compliance with statutory, regulatory, or contractual requirements that are material to the Government payment decision. Significantly, the Court held that the non-compliance need not be with an expressly designated condition of payment, but rather may be with any requirement that the submitting party knows is material to the Government’s payment.

Freeborn Litigation Practice Group members James J. Boland, Katheleen A. Ehrhart and Alexander S. Vesselinovitch recently authored a client alert that explains the significance of the decision, as it both expands liability under the FCA while also adding uncertainty to its precise scope. The alert is titled “Supreme Court Expands Scope of False Claims Act.”

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