Ninth Circuit Adopts Implied Certification Theory
The Ninth Circuit recently joined the Second, Sixth, Tenth, and Eleventh Circuits in endorsing the theory of implied certification under the federal FCA. See Ebeid ex rel. United States v. Lungwitz et al., No. 09-16122, 2010 WL 3092637 (Aug. 9, 2010). The implied false certification theory was first recognized by the Court of Federal Claims in Ab-tech Construction, Inc. v. United States, 31 Fed. Cl. 429 (Fed. Cl. 1994), aff’d mem., 57 F.3d 1084 (Fed. Cir. 1995), and is “based on the notion that the act of submitting a claim for reimbursement itself implies compliance with governing federal rules that are a precondition to payment.” United States ex rel. Mikes v. Straus, 274 F.3d 687, 699 (2d Cir. 2001).
The implied certification theory is derived from and shares common limitations with the express certification theory. As the Ninth Circuit explained, “[e]xpress certification means that the entity seeking payment certifies compliance with a law, rule or regulation as part of the process through which the claim for payment is submitted. Implied false certification occurs when an entity has previously undertaken to expressly comply with a law, rule, or regulation, and that obligation is implicated by submitting a claim for payment even though a certification of compliance is not required in the process of submitting the claim.” Under both theories, “it is the false certification of compliance which creates liability when certification is a prerequisite to obtaining a government benefit.” Materiality is satisfied under both theories “only where compliance is a sine qua non of receipt of state funding.”
After establishing that a relator may bring a claim of implied certification in the Ninth Circuit, the Court dismissed the relator’s claims under Fed. R. Civ. P. 9(b). In doing so, the Court noted that even though the relator’s complaint “invokes the framework of an implied false certification claim, it fails to plead this claim with the particularity required by Rule 9(b).” A copy of the relator’s complaint can be found here.
