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# Gilead Asks Supreme Court Review of FCA Case
- URL: https://www.fdaweb.com/gilead-asks-supreme-court-review-of-fca-case/
- Published: 2018-01-18T12:00:00.000Z
- Updated: 2026-09-14T23:15:05.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5140531

Gilead is asking the Supreme Court to hear its appeal of a 9th Circuit Court of Appeals decision in a False Claims Act (FCA) case involving several of its HIV drugs that the company says is inconsistent with the Supreme Court decision in a 2016 case (*Escobar*) involving a question of “materiality.” Attorneys **Roger Abbott** and **Marcia Madsen** (Mayer Brown) write in an online [post](http://www.mondaq.com/unitedstates/x/663652/White+Collar+Crime+Fraud/Gilead+Seeks+Supreme+Court+Review+Of+Outlier+Ninth+Circuit+FCA+Ruling?ref=fdaweb.com) that the case “has significant implications for the government contracts community as the 9th Circuit’s approach dilutes the protections offered by *Escobar* to FCA defendants.”

In *Escobar*, the Supreme Court unanimously held that the implied certification theory of falsity “can be a basis for liability if **(1)** the claim does not merely request payment, but also makes specific representations about the goods or services provided; **(2)** the defendant’s failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths; and **(3)** the misrepresentation is material to the government’s decision to pay,” the attorneys write.

Abbott and Madsen say that unfortunately the high court did not give a clear rule or standard for determining whether an FCA allegation is material, and thus the materiality requirement has been the subject of active litigation over the past 18 months. While appeals courts have generally found that payment of a claim by government officials when officials are aware of non-compliance is sufficient to prove that compliance was not material, the 9th Circuit departed from that developing consensus to revive a whistleblower suit against Gilead that had been dismissed by a federal district court. The court held that the question of materiality should be considered at trial and not in a motion to dismiss the suit.

The post says the split among appeals courts and the potential impact on contractors and grantees are good reasons for the Supreme Court to hear the case. Alternatively, it says, the case could be a strong candidate for summary reversal, given the fact that its ruling cannot be reconciled with *Escobar*.