7th Circ. Rejects FCA Implied False Certification Theory

Law360, New York (July 1, 2015, 10:25 AM EDT) -- On June 8, 2015, the U.S. Court of Appeals for the Seventh Circuit rejected the doctrine of implied false certification in a False Claims Act lawsuit, U.S.ex rel. Nelson v. Sanford-Brown Ltd. In a welcome decision for government contractors, the court held that the FCA is "not the proper mechanism" for government enforcement of regulations. Instead, regulatory violations should be handled by the appropriate government agency — not the courts.   Under the implied false certification doctrine, an invoice submitted to the government impliedly certifies compliance with applicable laws, regulations and contract terms. A number of circuits, including the Fourth, Ninth, Tenth and D.C. Circuits, have adopted the implied false certification theory. In Sanford-Brown, however, the Seventh Circuit rejected the theory and more clearly differentiated a breach of contract from the submission of a false claim....

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