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# False Claims Act Expands in 2016: Hogan Lovells
- URL: https://www.fdaweb.com/false-claims-act-expands-in-2016-hogan-lovells/
- Published: 2017-03-14T12:00:00.000Z
- Updated: 2026-09-14T22:11:26.000Z
- Author: David McFarland
- Tags: Drugs, Devices, #legacy-id-D5138195

Hogan Lovells attorneys say that 2016 was a year of expansion for the False Claims Act (FCA). The firm’s first annual [review](http://ehoganlovells.com/rv/ff002f1706f8eb3aa2573251c94e90c4bcd5cb46?ref=fdaweb.com) of the act and its whistleblower provisions says there were “very significant changes to the way courts apply the FCA.” It references in particular a 6/16/16 Supreme Court decision that “may prove to be its most significant FCA decision to date.”

In *Universal Health Services v. U.S. ex rel Escobar*, the court dealt with a split among circuit courts on the statute’s core liability provisions, the report says. Specifically, the court addressed the issue of “implied false certification” liability, which the attorneys say is a theory that had become a favorite of attorneys representing whistleblowers and also of the Justice Department as a means to expose and police violations of rules and regulations that are not explicitly referenced on the face of a claim. “The *Escobar* decision is significant because it both validated and circumscribed the theory, focusing the inquiry on the nature and materiality of particular ‘implied false certification\[s\]’ in ways destined to increase the scope and complexity of FCA investigations and litigation,” they write.

The court also looked at the scope of the statutory seal imposed on whistleblowers while their complaints are under investigation, the report says, and held that the FCA does not mandate dismissal of a whistleblower’s suit when he or she discloses the existence of the complaint in violation of the law’s seal provision. The court acknowledged that district courts have discretion to grant dismissal or other sanctions to remedy reputational harm that can flow from such violations.

The attorneys report that potential FCA penalties grew exponentially because of little-noticed budget legislation, and the threat of individual liability grew as a matter of Justice Department enforcement policy. Nearly $5 billion was recovered by the government in 2016, its third highest total to date.

“Even with the change in administration, there is likely to be little let-off in enforcement efforts, particularly in healthcare cases,” the report projects.