9th Circ. FCA Ruling Undermines Escobar
In United States ex rel. Rose v. Stephens Institute, a Ninth Circuit panel ruled that False Claims Act relators must satisfy the two-part test for implied false certification claims set out in Universal Health Services Inc. v. United States ex rel. Escobar. At first glance, this seems like welcome news to FCA defendants. But a closer look reveals that the panel's defective application of Escobar's implied false certification test and materiality standard overshadows this holding. The Ninth Circuit professed to follow Escobar, but its decision ultimately undermines Escobar's fundamental principles by allowing garden-variety regulatory breaches to proceed as FCA cases. If followed, the Ninth Circuit's decision will subvert, rather than effectuate, the FCA's purpose by effectively removing the safeguards Escobar imposed on implied false certification claims.
Read 9th Circ. FCA Ruling Undermines Escobar, Law360
