The Court next week will hear oral arguments in what may be the highest-stakes (at least in terms of dollars potentially at stake) case of the Term, Universal Health Services v United States ex rel. Escobar. At issue is a question of great import to government contractors: whether a claim submitted to the government for payment is actionably “false or fraudulent” under the so-called “implied certification” theory of falsity.

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For those who don’t specialize in government contracts law, the False Claims Act is a Civil War-era statute that provides for treble damages against government contractors that “knowingly presen[t] . . . false or fraudulent claim[s] for payment.” What makes it interesting is its “qui tam” provision, which authorizes “relators” – private individuals whom government contractors characterize as bounty hunters – to bring suit if they notice a false claim that has not come to the attention of the government. If their suit turns out to unearth a claim that is actionably false, the relators get to retain a large share of the proceeds of the suit.

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The government also draws support from numerous amici, including most notably Stanford law professor David Engstrom, the author of pathbreaking empirical studies about the FCA. Engstrom argues that concerns about burgeoning FCA litigation and high recoveries rest on scattered anecdotes inconsistent with what we can observe from accurate data about the system as a whole.