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Category: Implied Certification

Fraud-in-the-Inducement / Implied Certification / Settlements

19 May, 2021

Northern District of Texas Refuses to Enforce Purported Pre-Filing Qui Tam Claim Release on Public Policy Grounds

On April 30, 2021, a Northern District of Texas judge denied a motion to dismiss an FCA qui tam action alleging “a fraudulent scheme to obtain Government subcontracting opportunities reserved for eligible small businesses under the Small Business Act.” United States ex rel. Haight v. RRSA (Commer. Div), LLC, 3:16-CV-1975-S, 2021 U.S. Dist. LEXIS 82894, at *1-4 (N.D. Tex. Apr. 30, 2021). In the complaint,...

Enforcement / Healthcare / Implied Certification / Insurance Coverage

14 Feb, 2019

DOJ Levels False Claims Act at Pharmacies to Combat Opioid Crisis

This month the Department of Justice brought a “first of its kind” action against two pharmacies, their owner, and three pharmacists for allegedly dispensing and billing Medicare for prescriptions in violation of both the Controlled Substances Act (CSA) and the False Claims Act (FCA).  See United States v. Oakley Pharmacy, Inc., et al., No. 2:19-cv-00009 (M.D. Tenn).  The action, seeking both injunctive relief and civil...

False Statement / Implied Certification / Relators

31 Jan, 2018

Two Recent Justice Department Memoranda May Have Significant Consequences for Pending and Future False Claims Act Enforcement

In recent weeks, the United States Department of Justice (“DOJ”) issued two memoranda that might change the calculus of False Claims Act (“FCA”) cases.  The memoranda at a minimum provide organizations with new—or at least invigorated—defenses to qui tam actions and civil enforcement matters. First, on January 10, Michael Granston, Director of DOJ’s Civil Frauds section, issued a memorandum encouraging DOJ trial attorneys to consider dismissing...

Healthcare / Implied Certification

22 Jan, 2018

HIPAA As a Basis for FCA Liability? One Court Says Yes

Until very recently, no case existed in which FCA liability arose from a violation of the Health Insurance Portability and Accountability Act (“HIPAA”). But in United States v. America at Home Healthcare and Nursing Services, Ltd., Judge John Robert Blakely of the United States District Court for the Northern District of Illinois, Eastern Division, allowed an FCA claim premised on a HIPAA violation to survive...

False Statement / Implied Certification

24 Feb, 2017

Supreme Court Applies Escobar to Reinstate Implied Certification Suit Against Bank Based on Compliance With Fed Rules

On Tuesday, February 21, 2017, the Supreme Court summarily vacated the judgment in Bishop v. Wells Fargo & Co. and remanded the case to the Second Circuit in light of the Court’s recent decision in Universal Health Servs. v. United States ex rel. Escobar, which recognized the implied certification liability theory in FCA suits. In Bishop, the plaintiffs originally brought FCA claims against Wells Fargo,...

Express Certification / False Statement / Implied Certification

12 Jul, 2016

District Court Grants Motion to Dismiss Relators’ Claims in One of the First Post-Escobar Decisions

The District Court for the Eastern District of Washington recently granted the defendants’ Motion to Dismiss relators’ claims in a consolidated False Claims Act lawsuit against Monaco Enterprises, Inc. (“MEI”). MEI provides security and fire detection products, installation, and services to a variety of customers, including the U.S. military. The lawsuit, brought by former employees of MEI, alleges that MEI fraudulently overbilled the government, charged...

Healthcare / Implied Certification

30 Jun, 2016

Implied Certification, Escobar, and the Impact on Healthcare Providers

On June 16, 2016, the Supreme Court issued a unanimous decision in Universal Health Services, Inc. v. United States ex rel. Escobar upholding the “implied certification” theory of liability under the False Claims Act (“FCA”) but adopting a rigorous materiality standard for determining liability in such cases.  This case is a game changer.  For years, the government and plaintiffs have argued that the federal FCA...

Implied Certification

16 Jun, 2016

Supreme Court Upholds Implied Certification Theory of Liability; Imposes Limitations on its Reach

In a unanimous decision, the Supreme Court today charted a middle course between competing interpretations of the scope of False Claims Act.  Universal Health Servs., Inc. v. United States ex rel. Escobar, Case No. 15-7 (June 16, 2016).  The Court upheld the viability of the so-called “implied-certification” theory under the FCA, but simultaneously clarified the contours of the theory and imposed significant limitations on its...

False Statement / Implied Certification

16 Jul, 2015

D.C. Circuit Determines that Physical Possession of Medicare Records Not Required in Implied-Certification Claim Against the District of Columbia

On Friday, the U.S. Court of Appeals for the District of Columbia Circuit reversed a district court’s grant of summary judgment in favor of a relator based on the district court’s finding of a violation of the False Claims Act.  United States ex rel. Davis v. District of Columbia, No. 14-7060 (D.C. Cir. July 10, 2015). The relator’s FCA theory–implied-certification liability–relied on his allegation that...

False Statement / Implied Certification

7 Jul, 2015

Seventh Circuit Rejects Implied Certification Theory of FCA Liability

Deepening a circuit split, the Seventh Circuit has joined the Fifth Circuit in rejecting the implied false certification theory of liability under the FCA.  United States v. Sanford-Brown, Ltd., No. 14-2506 (7th Cir., June 8, 2015).  The Fourth, Ninth, Tenth and District of Columbia Circuits have allowed implied false certification claims. The implied false certification theory holds that when an entity enters into an agreement...