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# 2nd Circuit Enforces ‘Rigorous’ Materiality Standard
- URL: https://www.fdaweb.com/2nd-circuit-enforces-rigorous-materiality-standard/
- Published: 2018-01-18T12:00:00.000Z
- Updated: 2026-09-14T23:14:57.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5140534

Three Jones Day attorneys say in an online blog [post](https://www.lexology.com/library/detail.aspx?g=11dd9cfa-755b-4fcf-a63a-b3c593b9b9ec&ref=fdaweb.com) that the 2nd Circuit Court of Appeals has joined several other circuits in enforcing the “rigorous” materiality standard for False Claims Act cases set forth by the Supreme Court in its 2016 *Escobar* decision. The 2nd Circuit ruled in a case involving Amgen’s Epogen (epoetin alfa) in which a whistleblower claimed that the drug’s packaging was misleading and induced government healthcare programs to pay claims they otherwise would not have paid.

A federal district court dismissed the case on public-disclosure grounds and the whistleblower appealed to the 2nd Circuit. “Instead of addressing the public-disclosure arguments,” the attorneys write, “the 2nd Circuit affirmed on alternate grounds of materiality.” They say the court emphasized that a complaint must present concrete allegations from which it may draw the reasonable inference that the misrepresentations in Epogen’s packaging and marketing materials caused the government to make the reimbursement decision.

The court said the whistleblower’s suit “relies on a conclusory assertion that Amgen’s failure to disclose \[a\] study to the Centers for Medicare and Medicaid Services was material to, or in effect caused, payment.” The attorneys say the court found that the whistleblower’s assertion was not enough.

“*Coyne* is the latest evidence that courts are taking seriously the Supreme Court’s statements in *Escobar* that the False Claims Act’s materiality requirement is ‘rigorous,’ that it is not ‘sufficient for a finding of materiality that the government would have the option to decline to pay if it knew of the defendant’s noncompliance,’ and that the standard is not too fact-sensitive to be enforced on a motion to dismiss,” the attorneys conclude. “Applying *Escobar*’s ‘rigorous’ standard, *Coyne* shows that materiality must be alleged with some detail and bolsters the growing consensus that the government’s decision to continue paying claims with knowledge of the misrepresentation precludes a finding of materiality.”