The United State District Court for the Eastern District of New York recently dismissed an FCA complaint for failing to plead materiality under the standard announced in Universal Health Services, Inc. v. U.S. ex rel. Escobar, the Supreme Court’s landmark FCA opinion issued in June of this year. The case, U.S. ex rel. Lee v. Northern Adult Daily Health Care Center, 13-cv-4933, 2016 WL 4703653 (E.D.N.Y. Sept. 7, 2016), becomes one of the first to substantively apply Escobar and highlights the barrier the FCA’s materiality requirement poses to FCA relators in the wake of the Supreme Court’s ruling. It also suggests ways in which courts already are divided in their interpretation of Escobar.
Bass, Berry & Sims’ Inside the FCA blog features news, commentary and thought leadership covering FCA, healthcare fraud and procurement fraud.
Law360 repurposed this blog content for an article titled “How Escobar Is Already Affecting FCA Litigants,” published on September 29, 2016, that is available online.