The Supreme Court of the United States issued decisions in three cases today:

Universal Health Services, Inc. v. United States ex rel. Escobar, No. 15-7:  Yarushka Rivera, a teenage beneficiary of Massachusetts’ Medicaid program who was receiving counseling services at a mental health facility owned and operated by a subsidiary of petitioner Universal Health Services, died after an adverse reaction to medication that was prescribed to her. Respondents Carmen Correa and Julio Escobar, Yarushka’s mother and stepfather, later learned that many of the employees at the facility, including those that treated Yarushka, were not properly licensed to provide mental health counseling.  Respondents then brought suit under the False Claims Act on an “implied false certification” theory, i.e., that when Universal Health Services submits a claim, it impliedly certifies compliance with all conditions of payment, and thus a failure to disclose any violation of a material statutory, regulatory, or contractual requirement makes a claim “false or fraudulent” under 31 U.S.C. §3729(a)(1)(A).  The District Court granted Universal Health’s motion to dismiss, but the First Circuit reversed in relevant part.  Today, the Court vacated and remanded setting forth the following standard:  (1) liability can attach when the defendant submits a claim for payment that makes specific representations about the goods or services provided, but knowingly fails to disclose the defendant’s noncompliance with a statutory, regulatory, or contractual requirement, and the omission renders those misrepresentations misleading; (2) what matters for liability is not whether the Government has expressly designated a requirement as a condition of payment, but whether the defendant knowingly violated a requirement that the defendant knows is material to the Government’s payment decision; and (3) such a misrepresentation must be material to the Government’s payment decision in order to be actionable under the False Claims Act.

The Court's decision is available here.

Kingdomware Technologies, Inc. v. United States, No. 14-916:  Petitioner Kingdomware Technologies, Inc. is a veteran-owned small business that was unsuccessful in its bid for a federal contract from the Department of Veterans Affairs.  That Department is subject to the “Rule of Two,” a statutory provision stating that the Department “shall award” contracts to veteran-owned small businesses when there is a “reasonable expectation” that two or more such business will bid for the contract at “a fair and reasonable price that offers best value to the United States.”  38 U.S.C. §8127(d).  The Court of Federal Claims granted summary judgment to the Government and the Federal Circuit affirmed, with both concluding that the Rule of Two only needed to be followed when necessary for the Department to satisfy its annual goals.  The Court today reversed, holding that the Department must use the Rule of Two when awarding contracts, even when the Department will otherwise meet its annual minimum contracting goals.

The Court's decision is available here.

Kirtsaeng v. John Wiley & Sons, Inc., No. 15-375:  Respondent John Wiley & Sons, an academic publishing company, sold virtually identical textbooks in Thailand as in the United States, but at a much cheaper price abroad.  Petitioner Supap Kirtsaeng, a Thailand citizen living in the United States, took advantage of this by having family and friends buy the foreign editions and ship those books to him in the United States, where he resold them and turned a profit.  Wiley sued Kirtsaeng for copyright infringement, and the Supreme Court, resolving a circuit split, found for Kirtsaeng, holding that the “first-sale” defense applied abroad.  Kirtsaeng then sought to recover more than $2 million in fees under Section 505 of the Copyright Act, which provides that a district court “may . . . award a reasonable attorney’s fee to the prevailing party.”  The District Court denied the fee application and the Second Circuit affirmed, with both giving substantial weight to the objective reasonableness of Wiley’s position.   The Court today vacated and remanded, holding that the court must also give due consideration to all other circumstances relevant to granting fees; and it retains discretion, in light of those factors, to make an award even when the losing party advanced a reasonable claim or defense.

The Court's decision is available here.