Materiality

This week marks the four-year anniversary of the Supreme Court’s landmark False Claims Act decision in Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016).  In Escobar, the Supreme Court confirmed that the question of government knowledge lies at the heart of FCA liability determinations, but it did not specifically address

Earlier this month, the United States Court of Appeals for the Tenth Circuit issued a decision that provided further clarity on the False Claims Act’s standard for materiality.  The decision, United States ex rel. Janssen v. Lawrence Memorial Hospital, further demonstrated that materiality should be viewed through the eyes of the government customer rather than an hypothetical bystander.  The decision also reconfirmed that the FCA is not a “general antifraud statute” and that contractual or regulatory language conditioning payment on compliance will not necessarily prove that noncompliance was material.  Lawrence therefore serves as an important reminder to government contractors, practitioners, and other stakeholders about the significance of the materiality element in FCA litigation.
Continue Reading Tenth Circuit Provides New Material on FCA’s Materiality Standard