New FCA Materiality Definition Enters Time Warp, Influences Interpretation of 1986 Statute

The civil False Claims Act (FCA) prohibits using false statements related to a false claim. (Other types of FCA liability include presenting a false claim, concealing an obligation to pay money to the government, and conspiring to violate the FCA.) In the recent FCA amendments, Congress explicitly added materiality as an element of FCA false statement liability. Not surprisingly, it also adopted a weak, pro-plaintiff definition: materiality means “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.”

Among the questions raised by the amendments are (1) whether courts will adopt the weak definition of materiality for non-false statement FCA cases, and (2) whether courts will retroactively apply the materiality definition to pending cases.

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