Sarah P. Kelly, a partner in the Litigation Department, and Katy O. Meszaros, an associate in the department, published “1st Circ. Takes Broad View of 'False' Under FCA” in Law360’s “Expert Analysis” section on April 16. The article discusses the recent decision in United States ex rel. Escobar v. Universal Health Services, in which the First Circuit again warned businesses in highly regulated industries that a broad range of regulatory violations could potentially serve as the basis of False Claims Act liability.
Sarah and Katy note that critics of the First Circuit’s approach will argue that the court is simply allowing the government (and relators) to use the FCA as a vehicle to enforce increasingly minor regulations with harsh penalties. The First Circuit’s approach, however, relies on the plain language of the FCA without the technical baggage that comes with the alternative approaches, namely the implied certification test, which is found nowhere in the text of the statute.
They point out that the U.S. Supreme Court will likely need to weigh in on the dispute soon, to define the term “falsity” and to determine whether, as it has said in the past, the FCA is truly an “expansive” statute, intended to “reach all types of fraud, without qualification, that might result in financial loss to the government.” Until that time, the “fact-intensive and context-specific inquiry” mandated by Escobar will make the First Circuit an increasingly difficult place for defendants with potential False Claims Act liability to litigate.
To read the article, click here.