Justin A. Chiarodo and Stephanie M. Harden
The Department of Justice’s (“DOJ”) bombshell statement last month that it would seek dismissal of the Gilead False Claims Act (“FCA”) suit—a qui tam suit alleging misrepresentations and concealments regarding active ingredient sources and quality for HIV medications—surprised many in the government contracts community. Though DOJ had signaled earlier last year in the so-called “Granston memo” that it may seek dismissal of certain FCA cases, the fact that DOJ sought to do so while a case was on appeal to the Supreme Court—and without consulting relators—was unexpected.
Continue reading “Breaking Camp(ie): Supreme Court Sends Gilead FCA Case Back for Likely Dismissal, Postponing Escobar’s Return”
The U.S. Supreme Court has granted a 
Over two years ago, the Supreme Court in Universal Health Servs. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016) upheld the implied certification theory of liability under the federal False Claims Act (“FCA”). Applying a two-part test, the Court stated that implied liability would attach where “at least two conditions” are satisfied: (1) the claim makes specific representations about goods or services provided and (2) the defendant’s failure to disclose noncompliance with a material statutory, regulatory, or contractual requirement renders those representations “misleading half-truths.” Courts interpreting Escobar have disagreed as to whether this two-part test is the exclusive means for establishing liability under the implied certification theory, or whether other circumstances might also trigger liability. For example, several courts have noted that Escobar’s reference to “at least two conditions” implies that other, unspecified factors might also be sufficient to create an implied certification claim. The Fourth Circuit, along with several other district courts, have adopted this more liberal view. Most other circuits that have addressed this issue, however, have found the two-part test to be mandatory. The First, Third, Fifth, and Seventh Circuits, as well as many district courts, have either explicitly or implicitly held that Escobar’s two-part test is the exclusive means of establishing implied certification. 
Hurricane Harvey’s damage to Texas and other areas is virtually unprecedented and is already estimated to be in the tens of billions of dollars. And Hurricane Irma, hurtling towards Florida, could likewise cause catastrophic damage. Though every disaster presents unique recovery challenges, a common theme in disaster relief efforts is the key role of the Federal Emergency Management Administration (“FEMA”) and a federal law known as the Stafford Act. Contractors eager to assist with relief and rebuilding efforts should pay close attention to the legal landscape underpinning the public funding behind disaster relief efforts, particularly given the scrutiny these efforts will receive in the wake of Hurricane Katrina.