January 8, 2015
from the United States District Court for the Eastern
District of Wisconsin. No. 12-cv-00775 - J. P. Stadtmueller,
Bauer, Manion, and Rovner, Circuit Judges.
Manion, Circuit Judge.
matter is before us on remand from the United States Supreme
Court for reconsideration in light of its recent decision in
Universal Health Services, Inc. v. United States,
136 S.Ct. 1989 (2016). See U.S. ex rel. Nelson v.
Sanford-Brown, Ltd., 136 S.Ct. 2506 (2016). The only
part of our previous opinion, United States v.
Sanford-Brown, Ltd., 788 F.3d 696 (7th Cir. 2015), that
is affected by the holding in Universal Health is
part IV(B)(2), which addressed the plaintiff-relator's
false presentment claim under 31 U.S.C. § 3729(a)(1)(A)
of the False Claims Act. We readdress that claim here in
light of Universal Health and substitute the
following discussion for part IV(B)(2) of our earlier
opinion. The remainder of our previous opinion is reinstated,
and we once again affirm the district court in all respects.
plaintiff-relator's false presentment claim is based on a
theory of "implied false certification." In
Universal Health, the Court held that the implied
false certification theory can be a basis for liability where
two conditions are met: "first, the claim does not
merely request payment, but also makes specific
representations about the goods or services provided; and
second, the defendant's failure to disclose noncompliance
with material statutory, regulatory, or contractual
requirements makes those representations misleading
half-truths." Universal Health Servs., Inc.,
136 S.Ct. at 2001 (footnote omitted).
condition is met here. Nelson (the plaintiff-rela-tor)
offered no evidence that defendant Sanford-Brown College
(SBC) made any representations at all in connection with its
claims for payment, much less false or misleading
representations. Nelson's bare speculation that SBC made
misleading representations is insufficient to survive summary
judgment. See Bass v. Joliet Pub. Sch. Dist. No. 86,
746 F.3d 835, 841 (7th Cir. 2014) ("Speculation is no
substitute for evidence at the summary judgment
also entitled to summary judgment because Nelson failed to
establish the independent element of materiality. As the
Universal Health Court explained, "a
misrepresentation about compliance with a statutory,
regulatory, or contractual requirement must be
material to the Government's payment decision in
order to be actionable under the False Claims Act."
Universal Health Sews., Inc., 136 S.Ct. at 2002
(emphasis added). The Act's materiality requirement is
"rigorous" and "demanding." Id.
at 2002-03 & n.6 at 2004. To establish materiality, it is
not enough to show that "the Government would have the
option to decline to pay if it knew of the defendant's
noncompliance." Id. at 2003. Instead,
"materiality looks to the effect on the likely
or actual behavior of the recipient of the alleged
misrepresentation." Id. at 2002 (emphasis
added) (internal marks omitted).
Nelson has offered no evidence that the government's
decision to pay SBC would likely or actually have been
different had it known of SBC's alleged noncompliance
with Title IV regulations. On the contrary, as we previously
noted, the subsidizing agency and other federal agencies in
this case "have already examined SBC multiple times over
and concluded that neither administrative penalties nor
termination was warranted." Sanford-Brown,
Ltd., 788 F.3d at 712; see also Universal Health
Servs., Inc., 136 S.Ct. at 2003 ("[I]f the
Government pays a particular claim in full despite its actual
knowledge that certain requirements were violated, that is
very strong evidence that those requirements are not
material."). At bottom, even assuming Nelson's
allegations are true, the most he has shown is that SBC's
supposed noncompliance and misrepresentations would have
entitled the government to decline payment. Under
Universal Health, that is not enough. See
Universal Health Servs., Inc., 136 S.Ct. at 2004
(explicitly rejecting the view that "any statutory
regulatory or contractual violation is material so long as
the defendant knows that the Government would be entitled to
refuse payment were it aware of the violation").
reconsidered our previous opinion in light of Universal
Health Services, Inc. v. United States,136 S.Ct. 1989
(2016), we once again affirm the district court in all
respects. With the exception of part ...