District Court Rules that Claims Without Specific Misrepresentations Fail to Meet Escobar’s Test But Can Proceed Based on Fraudulent Inducement

In its decision in Escobar, the Supreme Court upheld implied certification claims “at least where two conditions are satisfied,” namely specific misrepresentations and noncompliance with a material requirement.  Some courts have interpreted this phrase as defining two necessary conditions to establish implied certification liability under the FCA, but others have interpreted the Supreme Court's language as introducing one potential path to liability, where specific misrepresentations are not required.  Citing what has emerged as a “majority view” among district courts in the Second Circuit that the two conditions are mandatory, the Southern District of New York recently deepened the divide.