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FCA Qui Notes
March 19, 2019

SCOTUS Again Declines to Revisit Escobar

Qui Notes: Unlocking the False Claims Act

While all eyes are on the Supreme Court today for the oral arguments in Cochise Consultancy, Inc. v. United States ex rel. Hunt, the Court quietly made additional False Claims Act news yesterday as it denied certiorari in Brookdale Senior Living Communities, Inc. v. United States ex rel. Prather. This marks the second time in as many months that the Court has declined to provide further guidance on the metes and bounds of Escobar's materiality standard.

In Prather, the relator alleged that the defendant's untimely certification of the need for homebound Medicare benefits rendered its claims for those services false. The Sixth Circuit held that the relator adequately pleaded materiality under Escobar because the timeliness requirement was an express condition of payment, the government did not know of the noncompliance when it paid the claims, and the timeliness requirement was designed to be a "mechanism of fraud prevention" and therefore went to the "essence of the bargain." The defendant sought certiorari on whether the failure to plead facts relating to past government practices weighed against a finding of materiality and whether an FCA allegation fails when the relator does not plead that the defendant knew that the alleged violation was material.

With yesterday's certiorari denial, FCA watchers will have to wait likely until at least 2020 for the Supreme Court to again weigh in on materiality.

Stay tuned for a recap of today's argument in Cochise.

© Arnold & Porter Kaye Scholer LLP 2019. All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.