News & Analysis as of

Material Misrepresentation

Escobar: Year One

Universal Health Services, Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016) was a landmark case in FCA jurisprudence. In Escobar, the Supreme Court held that the implied false certification theory can be a basis for...more

Fourth Circuit Affirms Health Care Fraud Convictions for Billing Insurers for Medically Unnecessary Services

by Seyfarth Shaw LLP on

Seyfarth Synopsis: The Fourth Circuit found that the medical necessity of a given service constitutes a material element of representations regarding submissions for payment, potentially providing payors with another legal...more

Contingency Fee Multipliers: Florida Supreme Court Rejects Rare and Exceptional Circumstances Requirement

Contingency fee multipliers increase attorney fee awards substantially. The general custom in American law is that each party is responsible for his or her own attorney’s fees, regardless of the outcome of the action. See...more

With Zenefits Settlement Award SEC Demonstrates Continued Commitment to “Unicorn” Scrutiny Despite Administration Change: Same Old...

Last week the SEC announced it had reached an agreement with privately-held company Zenefits, and its co-founder and former CEO Parker Conrad, to settle allegations that Zenefits materially misled Series B and C investors....more

Implied Certification Theory Loses Some of Its Fangs, but Is Another False Claims Act Theory Lurking Just Around the Corner?

Federal courts across the country are wrestling with the uncertainty caused by the Supreme Court’s holding in Universal Health Services, Inc. v. United States ex rel. Escobar regarding the requirements to state an implied...more

Sixth Circuit: Technical Physician Signature Deficiencies not "Material" to Reimbursement Claims

by Jones Day on

The District Court for the Middle District of Tennessee held on June 22, 2017, that the timing requirements related to a physician's certification of need for home health services were not "material" to the Centers for...more

Insurance Bad Faith – Insurer Cannot Rescind Policy Because Insured Answered Application Questions Correctly

by Low, Ball & Lynch on

Victor Duarte v. Pacific Specialty Insurance Company - Court of Appeal, First Appellate District (June 12, 2017) - Under the legal principle of “rescission,” an insurance company can rescind an insurance policy if the...more

Eastern District of California: No Policy, No Bad Faith (in California)

John Cordell Young, Jr. put Progressive on notice of a claim for the theft of his missing motor home, which was later found submerged in a canal with a pole wedged against the accelerator. Progressive’s investigation turned...more

U.S. Supreme Court Tightens Criteria for Revoking Citizenship

The U.S. Supreme Court has ruled unanimously that naturalized American citizens cannot be stripped of citizenship if a lie or omission in the application process was irrelevant to the government’s decision to approve the...more

Eastern District of California Dismisses Bad Faith Action, Where Misrepresentation Voids Policy

by Cozen O'Connor on

On June 6, 2017, the U.S. District Court for the Eastern District of California found, consistent with longstanding California precedent, that a material misrepresentation made in the course of a coverage investigation voids...more

SEC Prevails on Summary Judgment In Manipulation Case

by Dorsey & Whitney LLP on

The SEC prevailed on summary judgment in a manipulation case centered on the shares of a firm which operated under the name Marley Coffee — a name which linked back through Rohan Marley to his famous father, Bob Marley who is...more

Delaware Chancery Court Dismisses Breach Of Fiduciary Duty And Quasi-Appraisal Claims Under Corwin

by Shearman & Sterling LLP on

On May 3, 2017, Vice Chancellor Joseph R. Slights of the Delaware Court of Chancery declined to dismiss a lawsuit brought by the buyer of EMSI Holding Company (“EMSI”) asserting post-closing claims for indemnification against...more

Ninth Circuit Extends Omnicare to Section 10(b) Overturning Prior Falsity Standard for Opinion Statements

by Dechert LLP on

As popular targets for investor suits, officers and directors of public companies have another tool to defend against securities class actions, and specifically claims relating to the recording of goodwill. On May 5, 2017, in...more

Southern District Of New York Dismisses Putative Class Action, Holding That Claims Are Precluded By SLUSA

by Shearman & Sterling LLP on

On April 1, 2017, District Judge John G. Koeltl of the United States District Court for the Southern District of New York dismissed a putative class action against brokerage firm E*TRADE Financial Corporation and E*TRADE...more

Misstated Summons Did Not Create FDCPA Violation

A summons which stated the consumer had thirty days to answer a debt collection suit did not violate the FDCPA when the state rules of civil procedure only provided for twenty days. In Bryant v. Kass Shuler, P.A., the...more

Texas District Court Dismisses SOX Whistleblower Claim For Lack of Protected Activity

On March 21, 2017, the Northern District of Texas dismissed a former employee’s whistleblower retaliation claim on the ground that her allegations of fraud were too far removed from potentially harming the shareholders of a...more

Escobar's Impact: Recent Application of "Materiality" in Ninth Circuit

Last year, a unanimous U.S. Supreme Court decided Universal Health Services, Inc. v. United States ex rel. Escobar (Escobar), 136 S.Ct. 1989 (2016), creating important implications for Federal False Claims Act (FCA) cases...more

Chris Lazarini Discusses Heightened Pleading Standard Under Rule 9(b)

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini discussed the heightened pleading standard for claims of fraud under Rule 9(b) in an auction rate securities case....more

Dechert survey: Developments in securities fraud class actions against U.S. life sciences companies

by Dechert LLP on

Life sciences companies continued to be popular targets of securities fraud class action lawsuits filed in 2016, and prudent life sciences companies should take heed of the results of this year’s decisions. In 2016,...more

Innocent or Unintentional Mistake in Application is Irrelevant: NY’s Second Department Finds Rescission Appropriate and Affirms...

When an insurer finds that the insured misrepresented a material fact in an application for insurance, the insurer may rescind the policy of insurance, and take the position that no coverage exists for a claimed loss. In a...more

“Implied Certification” Theory Allowed Under the False Claims Act

by Farrell Fritz, P.C. on

The Supreme Court recently allowed liability through the implied certification theory of the False Claims Act (FCA), which was raised and upheld in Universal Health Services, Inc. v. United States ex rel. Escobar. The...more

Are Federal Courts Increasingly Likely to Grant Rescission of Insurance Contracts?

Recent court decisions across a variety of industries highlight the importance of submitting complete and accurate insurance applications and renewals. When submitting an application for insurance, the applicant should...more

Materiality Under FCA: The Lower Courts Grapple With Escobar’s Meaning

by WilmerHale on

The Supreme Court’s decision in Universal Health Services v. Escobar ex rel. United States sought to clarify the standard for materiality under the False Claims Act, but lower courts have already begun to adopt different...more

Chris Lazarini Provides Insight on Application of Scienter in Securities Exchange Act Claim - Thought Leadership - Bass Berry

by Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini provided insight on case in which class plaintiffs allege certain company officers knowingly made misleading statements about a drug's potential adverse effects which, when later...more

Universities Are Prime Targets for False Claims Act Liability

by McCarter & English, LLP on

Colleges and universities receive billions of dollars in federal funds, whether through research grants or student financial aid, or even by billing Medicare or Medicaid for services rendered at academic medical centers. As a...more

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