Government Contracting Law Report Publishes Robert Salcido Article on FCA Actions Post-Escobar
Government Contracting Law Report has published “Under What Circumstances Can a Private Qui Tam Plaintiff Overrule Government Agency Experts’ Use of Administrative Discretion to File False Claims Act Actions in the Post-Escobar World?” The article, written by Akin Gump health partner Robert Salcido, explains how appellate courts have applied the Supreme Court’s ruling in Universal Health Servs. v. United States ex rel. Escobar in subsequent False Claims Act (FCA) cases.
In Escobar, the Supreme Court rejected the distinction between conditions of payment and conditions of participation in FCA cases—a distinction, Salcido writes, that ensured “that relators would not be able to supplant the exercise of administrative discretion in the enforcement of regulations.” In its place, the Court set forth a textually based “demanding” materiality standard to ensure that the FCA would not be a “vehicle for punishing garden-variety breaches of contract or regulatory violations,” and instead would only apply when there is evidence that the defendant knows that the government consistently refuses to pay claims in the typical case based upon noncompliance with the particular statutory, regulatory or contractual requirement.
Salcido proceeds to outline several questions that defendants should ask in light of the decision in Escobar. He concludes by writing that in any FCA action, “defendants should take discovery to inquire into the government’s actual conduct after it learned of the underlying allegations.” By doing so, he adds, defendants will ensure that “nonexpert, financially self-interested relators who believe that the government should recover treble damages based upon a regulatory infraction will not be able to displace executive branch agency experts who are charged with enforcing and administering the law, and believe that no repayment should be made.”