2017 ABA False Claims Act Trial Institute Day 1

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The ABA’s 2017 False Claims Act Trial Institute kicked off yesterday at the Washington School of Law at American University. Of course, the first panel of the Institute examined the effect of U.S. Supreme Court’s 2016 decision in Universal Health Services v. U.S. ex rel Escobar on False Claims Act jurisprudence. The panel discussed a number of the issues that have arisen since Escobar.

  1. Is Intervention Relevant to Materiality? The panel discussed the recent circuit court decisions in United States v. Triple Canopy, Inc., in which the court noted that the government’s decision to intervene was evidence of materiality, and United States ex rel. Petratos v. Genentech Inc., in which the court found the government’s decision not to intervene suggested a lack of materiality.
  2. How Much Should the Government’s Payment of Claims Matter to the Materiality Determination? On a related issue, the panel discussed Escobar‘s discussion of the government’s payment of claims despite knowledge of potential violations. The panel recognized that there are many factors that may cause the government to continue making payments despite knowing about possible legal violations, particularly where practical issues preclude the government from simply stopping payments. The panel seemed to agree that the specific facts of the case will determine whether the government’s continued payments are pertinent to the materiality analysis and that continued payment is not dispositive.
  3. Discovery on Materiality Issues? The panel also discussed discovery issues relating to the materiality factors set forth in Escobar. In particular, Escobar‘s recognition that the government’s response to similar violations in the “mine run” of cases is relevant to materiality suggests that some discovery into the government’s actions in similar cases should be allowed.

The second panel discussed the working relationship between relators, relators’ counsel, and government counsel to develop and prosecute cases. Conversely, the third panel addressed False Claims Act case development from the defendant’s perspective.