Issues of Material Fact – False Certifications

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7^th Circuit Court of Appeals

Case Name: United States of America v. Robert S. Luce

Case No.: 16-4093

Officials: WOOD, Chief Judge, and RIPPLE and ROVNER, Circuit Judges.

Focus: Issues of Material Fact – False Certifications

The United States brought this action against Robert Luce under the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., and the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), 12 U.S.C. § 1833a. It alleged that Mr. Luce had defrauded the Government by falsely asserting that he had no criminal history so that his company could participate in the FHA’s insurance program. The district court granted summary judgment in favor of the Government.

Mr. Luce now submits that his false certifications were not material and that lingering issues of material fact preclude summary judgment. Furthermore, Mr. Luce urges that the Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (“Escobar”), requires that we depart from our traditional “but-for” FCA causation standard. Although we conclude that Mr. Luce’s first two submissions are not persuasive, we believe that there is merit to Mr. Luce’s view on causation. Escobar did not overrule explicitly our circuit precedent, which requires “but-for” rather than proximate causation. Nonetheless, it does provide significant guidance and deserves our respectful and careful consideration, especially when all other circuits to address the issue have chosen a path different from our own.

Reversed in part and Remanded in part

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.