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The Supreme Court's decision in Universal Health Services, Inc. v. United States ex rel. Escobar renewed the viability of a defense of materiality against allegations of civil False Claims Act (FCA) violations.
Warren Hamel, Chair of Venable's Investigations and White Collar Defense Practice, and Rebecca Pearson, Partner, Government Contracts, discuss the impact of the Escobar decision on the defense against allegations of civil False Claims, including the current test of materiality, how the decision has constrained the government’s ability to argue that a claim is false because of an implied certification, and the utility of summary judgment motions. We also will discuss how the changed materiality test impacts a contractor’s decision on whether it has credible evidence of a civil False Claim such that it has a duty to disclose to the agency Office of Inspector General. Finally, we examine "best practices" for documenting communications with the government related to disputes during contract performance to avoid FCA allegations.