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Article Summary

If a government supplier quietly ignores vital rules but still bills taxpayers as if it had complied, can it be held liable under the federal False Claims Act — even if it never directly lies about its compliance? In yesterday’s arguments in Universal Health Services Inc. v. United States ex rel. Escobar, the U.S. Supreme Court heard two diametrically opposed views.

This article by TELG managing principal R. Scott Oswald was published by The National Trial Lawyers on April 21, 2016. The full article is .

Excerpted from:

Supreme Court Is Poised to Endorse ‘Implied Certification’ in FCA Cases

If a government supplier quietly ignores vital rules but still bills taxpayers as if it had complied, can it be held liable under the federal False Claims Act — even if it never directly lies about its compliance?

In yesterday’s arguments in Universal Health Services Inc. v. United States ex rel. Escobar, the U.S. Supreme Court heard two diametrically opposed views. There was little doubt about which side the justices preferred; their resulting debate was limited to sorting out the details.

The less-favored argument — advanced by Roy T. Englert, Jr. for UHS, a mental healthcare provider accused of fraud under the law — held that the whole notion of “implied certification,” under which suppliers are held accountable for following important rules, is “a theory made up by the plaintiffs’ bar [that] has run amok.”

Englert had trouble convincing the justices, who kept hearkening back to the venerable origins of the False Claims Act (FCA) — a law signed by Abraham Lincoln in response to Civil War contractors who had billed the Union Army for shoddy equipment and rancid rations.

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