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New Materials? Jury Instructions on Materiality in Post-Escobar False Claims Act Cases

American Bar Association

In this article, Sarah Barney, Brian Hill, and Jason Workmaster explore the status of materiality as an element of a False Claims Act (FCA) case and the potential factors implicated in making a materiality determination. They suggest that for cases involving jury instructions on the various elements of an FCA claim, the evolving standard for materiality following the Supreme Court's decision in United Health Services, Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016), has created new questions about the content and scope of those instructions. With the U.S. Department of Justice (DOJ) touting over $5.6 billion in settlements and judgments from civil cases involving the FCA in 2021, the importance of clear and accurate jury instructions cannot be overstated. The authors also explore the proposed legislation that would affect materiality instructions and offers model jury instructions on materiality that encapsulate the current state of case law under the FCA. This amendment, currently in front of the Senate, would eliminate the ability to argue that the government's continued payment to a contractor, with the knowledge that the alleged fraud was occurring or that there was a violation of a payment condition, is a dispositive factor in determining materiality when alternative explanations for payment exist. False Claims Amendments Act of 2021, S. 2428, 117th Cong. § 1.