Insights

Dan Wenner and Danielle Corcione authored an article, "Escobar's Effect On False Claims Act Qui Tam Actions; Region By Region," for Business Crimes Bulletin, an ALM publication covering financial and white-collar crime. The article discusses Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (U.S. 2016), which altered the landscape for False Claims Act (FCA) litigation. As Wenner and Corcione explain in the article, the FCA is designed to prevent private companies contracting with the government from knowingly submitting false or fraudulent claims for their services. The Act allows actions to be filed against the alleged wrongdoers in federal district court, and provides an incentive for whistleblowers to come forward and make such claims. These qui tam plaintiffs must be the "original source" of the information about the false claims and are rewarded by receiving a percentage of the ultimate payout.

As the article discusses, in Escobar, the Supreme Court instructed lower courts to scrutinize the materiality of the false statements to the government's decision to pay a claim; in doing so, the Court raised the bar for successful prosecution of qui tam claims. The authors explore key opinions throughout the country that discuss Escobar and its impact. In conclusion, Wenner and Corcione write, "Different circuits have started to take different tacks with claims based on the Supreme Court's opinion in Escobar. The opinion is relatively recent, so there will undoubtedly be more to come. But for now, qui tam litigants should be mindful of the changes to the pleading rules in their particular jurisdiction because of Escobar's lineage."